Tuesday, 25 June 2024

TUESDAY, 25 JUNE 2024

TUESDAY, 25 JUNE 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.

Obituaries

Barbara Stewart

Keith Locke MNZM

SPEAKER: I regret to inform the House of the death on 2 June 2024 of Barbara Stewart, who served as a list member from 2002 to 2008 and from 2011 to 2017. During her membership of this House, she was a member of the Social Services Committee, the Health Committee, and the Business Committee.

Members, I also regret to inform the House of the death on 21 June 2024 of Keith Locke MNZM, who served as a list member from 1999 until 2011. During his membership of this House, he was a member of the Foreign Affairs, Defence and Trade Committee, and the Law and Order Committee.

I desire, on behalf of this House, to express our sense of loss and sympathy with the relatives of the late former members. I now ask members to stand with me to observe a period of silence as a mark of respect to their memories.

Members stood as a mark of respect.

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

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

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

CLERK:

Petition of Alex Johnston requesting that the House accelerate the phase-out of free industrial allocations in the emissions trading scheme to end free credits by 2030

petition of Catrina McGregor requesting that the House initiate a full investigation into the promotion, funding, distribution, and prescription of all Essure devices for New Zealand women

petition of Mark Potter requesting that the House inquire into the pace and content of changes proposed for the early childhood education sector

petition of Tanya Dunstan requesting that the House pass legislation to require a public hearing into judicial conduct when eight or more members of the public make a complaint about the conduct of a judge

petition of Chlöe Swarbrick requesting that the House urge the Government not to reverse the ban on oil and gas exploration and note that 36,062 people have signed a similar online petition.

SPEAKER: Those petitions stand referred to the Petitions Committee. Ministers have delivered papers.

CLERK:

New Zealand Productivity Commission annual report for 2023-24

New Zealand Symphony Orchestra Ltd annual report for 2022-23

Lotto New Zealand statement of intent for 2025 to 2029; statement of performance expectations for the year ending 30 June 2025

Orillion statement of corporate intent 2025 to 2027

Treasury strategic intentions for 2024 to 2028

Ministry of Business, Innovation and Employment strategic intentions for 2023 to 2028

Government responses to the petitions of Brian Webb and petition of Focus on Iran

Second Protocol to amend the agreement establishing the ASEAN-Australia-New Zealand Free Trade Area together with the national interest analysis

exchange of letters reaffirming an agreement between the Government of New Zealand and the Government of Australia on the application of the agreement establishing the ASEAN-Australia-New Zealand Free Trade Area

four agreements on the Indo-Pacific economic framework for prosperity together with the national interest analysis

report of the Electoral Commission on the 2023 general election enrolment and voting statistics from the general election held on 14 October 2023.

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

CLERK:

Report of the Environment Committee on the Hauraki Gulf / Tīkapa Moana Marine Protection Bill

reports of the Finance and Expenditure Committee on the:

Employment Relations (Protection for Kiwisaver Members) Amendment Bill

and the Supplementary Estimates of Appropriations for the year ending 30 June 2024

the report of the Foreign Affairs, Defence and Trade Committee on the briefing on the international treaty examination process

report of the Intelligence and Security Committee on the Supplementary Estimates of Appropriations for Vote Communications Security and Intelligence and Vote Security Intelligence for the year ending 30 June 2024

reports of the Justice Committee on the:

Family Proceedings (Dissolution for Family Violence) Amendment Bill

Local Government (Electoral Legislation and Māori Wards and Māori Constituencies) Amendment Bill

Office of the Ombudsman, OPCAT reports

report of the Attorney-General under the New Zealand Bill of Rights Act 1990 on the Parole Amendment Bill

and on the Victims of Family Violence (Strengthening Legal Protections) Legislation Bill

reports of the Petitions Committee on the:

petition of Bharat Guha

petition of Christine McCarthy

petition of Kevin Scott

petition of MyMahi, and the

petition of Niru Wijesundara

report of the Social Services and Community Committee on the Residential Property Managers Bill.

SPEAKER: The bills are set down for second reading. The reports on the Supplementary Estimates, the briefing, the OPCAT reports, and the Attorney-General’s report are set down for consideration. The Clerk has been informed of the introduction of bills.

CLERK:

Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill, introduction

Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, introduction

Social Workers Registration Amendment Bill, introduction

Sentencing (Reinstating Three Strikes) Amendment Bill, introduction

Education and Training Amendment Bill, introduction

Therapeutic Products Act Repeal Bill, introduction.

SPEAKER: Those bills are set down for first reading.

Amended Answers to Oral Questions

Question No. 6 to Minister, 22 May

Hon CHRIS BISHOP (Minister of Housing): Point of order, Mr Speaker. I seek leave to correct an answer I gave to oral question No. 6 on Wednesday, 22 May 2024.

SPEAKER: Leave is sought. Is there any objection to that course of action? There appears to be none.

Hon CHRIS BISHOP: Thank you, Mr Speaker. In my answer to the Hon Kieran McAnulty’s supplementary question asking whether 10,000 first-home buyers received the First Home Grant last year, I incorrectly responded with the number of homes purchased as part of the scheme, rather than the number of individuals who have relied on the scheme. For clarity, 11,483 people received a First Home Grant last year, whereas 7,870 homes were purchased using the scheme.

Urgent Debates

Grounding of Aratere Ferry—Government Response

SPEAKER: I’ve received letters from Tangi Utikere and Chlöe Swarbrick seeking to debate under Standing Order 399 the running aground of the Interislander ferry Aratere and the Government’s response to it. This is a particular case of recent occurrence for which there is ministerial responsibility. The ferries are an integral part of our national infrastructure; a serious incident involving them and the Government’s response to it warrants the attention of the House today. I received Tangi Utikere’s application first and will call on him to move that the House take notice of a matter of urgent public importance, at the conclusion of question time. [Loud noise]

Chlöe Swarbrick: It’s the ferry running aground.

SPEAKER: There you go. Yeah, it could well be. Just a little sensitive, being likened to a ferry though.

Oral Questions

Questions to Ministers

Question No. 1—Finance

1. SAM UFFINDELL (National—Tauranga) to the Minister of Finance: What recent announcements has she made about personal income tax?

Hon NICOLA WILLIS (Minister of Finance): In the Budget, I announced an adjustment to personal income tax thresholds. Thresholds will rise from $14,000 to $15,600, from $48,000 to $53,500, and from $70,000 to $78,100. The effect of these increases is to reduce a person’s income tax by up to $40 a fortnight. The changes will apply from 31 July. They are the first positive changes to personal income rates or thresholds for 14 long years.

Sam Uffindell: What other tax relief was announced in the Budget?

Hon NICOLA WILLIS: From 31 July, the in-work tax credit, which helps support low to middle income working families with children, will increase by $50 a fortnight. Depending on their family size and income, working families will therefore get up to $50 a fortnight extra. Eligibility for the independent earner tax credit has also been extended, from $48,000 a year to $70,000 a year of income. This credit is for people who do not get a benefit or Working for Families—the squeezed middle, if you will. Extending the credit will help an estimated 420,000 additional people, most of whom will get the full $20 a fortnight. This, of course, is on top of the new FamilyBoost childcare payment I announced in March that will give parents and caregivers up to 25 percent back in their early childhood education fees to a maximum of $150 a fortnight. We on this side of the House are proud to have given tax relief to hard-working New Zealanders. Members opposite voted against it.

Sam Uffindell: How much will people receive in tax relief?

Hon NICOLA WILLIS: The Budget material contains various scenarios. For example, a couple earning an average household income of $125,000 will benefit by up to $102 a fortnight. People’s individual and family circumstances differ widely, however, which is why there is a tax calculator on the Budget website, which I’m advised more than 400,000 New Zealanders have visited. Treasury modelling shows that an estimated 727,000 households will benefit by at least $75 a fortnight; 187,000 will benefit by at least $100 a fortnight. On average, households with children will benefit by $78 a fortnight. I’ve occasionally heard people say that tax relief only benefits the well-off. Well, they are misinformed. Our changes to the in-work tax credit and introduction of FamilyBoost tilt the benefits of the tax package to low to middle income working families with children.

Sam Uffindell: How is this tax relief funded?

Hon NICOLA WILLIS: Well, tax relief in this Budget puts $3.7 billion a year back into the pockets of New Zealanders. As the Budget documents clearly show, this tax relief is fully funded by $3.7 billion of offsetting savings and revenue measures. This funding is broadly as set out in the National Party’s fiscal plan, with a handful of changes to reflect coalition commitments. As it is fully funded, there is no borrowing for tax relief. We have made the savings so New Zealanders can have more in their bank accounts.

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 especially this Government’s decision to fund an additional $604 million in medicines for Pharmac. Every New Zealander knows someone, a friend or a family, who has been affected by cancer and is fighting it, and we made a promise at the election we would support them in their fight and we are keeping that promise. This Government is funding 26 treatments for cancer as part of a package of 54 more medicines, supporting around 175,000 New Zealanders in the first year of the policy, and we are very proud of that.

Rt Hon Chris Hipkins: How many Kiwi families will be disadvantaged over the next three years as a result of his Government’s decision to abolish the First Home Grant?

Rt Hon CHRISTOPHER LUXON: Again—we’ve spoken about this before. We have decided to make sure that we can access 1,500 more community housing provider spaces rather than continuing with a programme that actually was not as effective as other options for that money.

Rt Hon Chris Hipkins: Point of order, Mr Speaker.

SPEAKER: No, it was a very specific question. I think an answer to the question would be helpful.

Rt Hon CHRISTOPHER LUXON: If the member would like to put that question in writing, I will give him a proper answer.

Rt Hon Chris Hipkins: Does he not know how many people will be disadvantaged by the First Home Grant being abolished, or does he not care?

Rt Hon CHRISTOPHER LUXON: There was about 7,000 people from memory, but I want to be able to give you a proper answer.

Rt Hon Chris Hipkins: Has the contract for the purchase of two new inter-island ferries been formally terminated; if so, what penalties did KiwiRail have to pay to terminate the contract?

Rt Hon CHRISTOPHER LUXON: Again, they’re ongoing commercial conversations between KiwiRail and the provider, but what I’d say to that member is we are not going to do what that previous Government did, which is basically say to the New Zealand people we’ll build you a house for $750,000 and it costs $3.2 million.

Rt Hon Chris Hipkins: Point of order. Mr Speaker, there were two parts to the question. One was whether the contract had been terminated and the other was whether there were any penalties. The Prime Minister hasn’t addressed either of those. You could argue he’s addressed the second one by saying that it’s commercially sensitive—or couldn’t release that commercially—but whether or not there’s still a contract in place cannot be commercially sensitive.

SPEAKER: Well, that would be for the Prime Minister to determine, but the Prime Minister may wish to expand or to re-answer the question.

Rt Hon CHRISTOPHER LUXON: KiwiRail have repudiated the contract, but there’s ongoing commercial conversations.

Rt Hon Winston Peters: Supplementary question.

SPEAKER: Supplementary, Rt Hon Chris Hipkins.

Rt Hon Winston Peters: He’s had three.

SPEAKER: I know that, I know that—but, look, sorry, we’ve been through this before.

Rt Hon Winston Peters: Yeah, I know, but you were wrong then and you’re wrong now.

SPEAKER: Tell you what, it’s not a good idea to start the conversation from your seat like that. This is how it’s operated for quite a number of years and we’re going to continue.

Rt Hon Chris Hipkins: Has the contract been formally terminated?

Rt Hon CHRISTOPHER LUXON: They are subject to commercial conversations.

Rt Hon Winston Peters: Could you, Prime Minister, let us know as to whether or not the person asking these questions, the Rt Hon Chris Hipkins, right now, saw the contract about which he is demanding now to know more information?

SPEAKER: No, that’s not a question that the Prime Minister can answer.

Rt Hon Winston Peters: Well, I’m asking him to confirm whether he knows that or not. That’s not difficult, is it?

SPEAKER: Oh, I see. OK.

Rt Hon Winston Peters: It’s axiomatic. If we’re talking details, we need to know what we’re talking about, and I want to know whether this Prime Minister here has been told that the previous Prime Minister saw that contract.

SPEAKER: Very good. Ask the question again so we’re all clear what it is.

Rt Hon Winston Peters: Right, very slowly: Prime Minister, has the previous Prime Minister advised you or anyone in your Cabinet that he saw the contract about which he is now complaining?

Rt Hon CHRISTOPHER LUXON: Well, you’d have to assume he has, but the bottom line is he didn’t manage the contract and we saw a massive cost blowout from $750 million to $3.2 billion and rising—another piece of the Labour Government’s economic mismanagement.

Rt Hon Chris Hipkins: Is the Prime Minister aware of which Minister announced the deal to buy two new mega-ferries; if so, who was it?

Rt Hon CHRISTOPHER LUXON: I have no recall on that.

Rt Hon Winston Peters: Has the Prime Minister been told—

SPEAKER: Just a minute. We’ll wait till you get a fair go from the whole House.

Rt Hon Winston Peters: I quite agree. Has the Prime Minister been advised as to the Minister who made the announcement that two ferries were to be purchased, but what was the prescription that was put around at the time, not as being described erroneously to the media by the Rt Hon Chris Hipkins?

Rt Hon CHRISTOPHER LUXON: I’m sure—knowing that Minister, how financially responsible he is and how well bounded he is—it would have been very well framed. But subsequent, what I’d say is that Government let it get out of control.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. That answer from the Prime Minister simply cannot be compatible with the answer he gave immediately previous to that where he said he didn’t know who the Minister was when he’s now subsequently answered a question defending Winston Peters, who, of course, was the Minister who set up that deal.

SPEAKER: Well, I think you made your point. You get another supplementary.

Rt Hon Chris Hipkins: Will he guarantee that any new inter-island ferries purchased will cost less than the contracted purchase price of the two ferries the Government has cancelled the order for?

Rt Hon CHRISTOPHER LUXON: Look, what I can guarantee and reassure that member about is that this Government knows how to run economics. We know how to manage projects, right? Unlike that Government, who somehow thought it was perfectly reasonable to go spend $750 million, which turns into $3.2 billion and rising. You have no economic credentials, no economic record; you haven’t been able to deliver a pizza, let alone ferries.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. If the Prime Minister is so great on economics, I’m sure he can answer the question, which is whether the new ferries are going to be more expensive than the ferries that he cancelled the contract for.

Rt Hon CHRISTOPHER LUXON: I can tell you it’s going to be a lot less than $3.2 billion.

Hon Nicola Willis: Can the Prime Minister confirm that by the time Project iReX was repudiated, the cost of the ferries themselves was only 21 percent of the total project cost; that is, the garage was going to cost four times as much as the ship that was going in it?

Rt Hon CHRISTOPHER LUXON: I can; 80 percent of the cost were now associated with port redevelopments in Wellington and Picton, for big ships that actually didn’t work.

Question No. 3—Prime Minister

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

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes, I do, and especially this Government’s work to take action on housing, including by freeing up the rules on granny flats. I’m particularly proud that we’re consulting on how those rules can enable Māori communities to develop papakāinga and kaumātua housing on their own land. After years of neglect that saw the number of Kiwis living in emergency motels spike, we’re taking action to deliver more choices on housing and more opportunities for Kiwis to get into a home of their own.

Debbie Ngarewa-Packer: What is his response to native Hawaiians who are urging New Zealand to withdraw from the Rim of the Pacific Exercise (RIMPAC), which provides a forum for Israel to sell surveillance equipment and military training to other countries, and—

Hon Shane Jones: Oh, tell us about Manurewa.

SPEAKER: Listen—just a minute. Those outbursts are not helpful. When a question is being asked, the House is silent. Now, the member gets quite a degree of leeway with other interjections, so let’s not transgress into the land of the question. Please start again.

Debbie Ngarewa-Packer: Thank you. What is his response to native Hawaiians who are urging New Zealand to withdraw from RIMPAC, which provides a forum for Israel to sell surveillance equipment and military training to other countries and directly profit from destruction of their native lands?

Rt Hon CHRISTOPHER LUXON: I haven’t seen those comments.

Debbie Ngarewa-Packer: Does he accept that participating in these military exercises with Israel makes New Zealand complicit in Israel’s war crimes in Palestine?

Rt Hon CHRISTOPHER LUXON: I’d just say to the member I’m not sure what she’s referencing, but I’m very happy to take further questions on it and come back with a more considered answer.

Debbie Ngarewa-Packer: What does he believe New Zealand’s role is in upholding the human rights of our Pacific neighbours in Kanaky and West Papua who are fighting for their lives against oppressive colonial occupations?

Rt Hon CHRISTOPHER LUXON: Well, what I’d say to that member is that I have—you know, the Pacific Islands Forum (PIF) is the central body by which Pacific leaders resolve Pacific challenges. On all of those issues, we try and use the centrality of PIF as the reason by which we resolve our regional issues, and we’ll continue to do that when we meet together in Tonga at the Pacific Island leaders’ forum.

Debbie Ngarewa-Packer: What action, if any, will his Government take against Indonesia for their role in killing over 500,000 West Papuans in the last 60 years?

Rt Hon CHRISTOPHER LUXON: Again, we have a series of regional architecture where we raise regional issues and we develop regional solutions to those issues.

Rawiri Waititi: How can he justify cutting the minimum wage subsidy for workers with disabilities when it will lead to hundreds of disabled workers being paid less than the minimum wage—some as low as $2 per hour further?

Rt Hon CHRISTOPHER LUXON: Well, again, what we want to do is make sure that, actually, disabled people who want to work can work. Many of them actually receive the minimum wage today, but for those that are more severely disabled that actually want to participate in work, we want to encourage them to be able to do so. There’s obviously other support packages that are available to people from the system.

Rawiri Waititi: Supplementary. [Interruption]

SPEAKER: Just wait. Thank you.

Rawiri Waititi: What is his response to organisations like the Auckland City Mission, who will need to cut annual food parcels to families in need from 50,000 to 20,000 at a time when food insecurity is at an all-time high as a result of this Government’s Budget?

Rt Hon CHRISTOPHER LUXON: Well, that has been a function of a significant uplift of spending through the COVID period that was time-limited, and those funds have now come to an end. What we are doing incredibly hard in this Government is to make sure that we actually deal with the underlying cause of the challenges, which is inflation. We want to drive inflation down so we can drive interest rates down so we can grow the economy and keep people in work.

Rawiri Waititi: Can he name any reports or evidence he has seen that shows policies such as the three-strikes legislation, military boot camps, and longer sentences will reduce crime rates in Aotearoa?

Rt Hon CHRISTOPHER LUXON: Well, I can tell you the last six years showed us that carrying on doing more of the same didn’t work, and those results are utterly unacceptable. No New Zealander wants to see a 33 percent increase in violent crime, a 100 percent increase in retail crime, a quadrupling of ram raids. This Government is determined to try things and do things differently to get different results. We make no apologies for being tough on crime and being tough on making sure we support young people who need to change the course of their lives.

Rt Hon Winston Peters: Can I ask the Prime Minister as to whether he has seen any evidence that those on disability and being supported by the State were happy to receive the employment rates that they were getting until the previous Government interfered with it, and, consequently, so many of those disabled people then lost their job?

Rt Hon CHRISTOPHER LUXON: Well, the thing is we want to make sure that employers are encouraged to take on disabled people who want to be able to work, but, again, we have other support services through the beneficiary system to support those people.

Rawiri Waititi: Does he agree with the evidence that shows that increased poverty and economic inequality is the leading cause of increased crime rates?

Rt Hon CHRISTOPHER LUXON: Sorry, I missed the last word in that question?

SPEAKER: “Crime rates”.

Rt Hon CHRISTOPHER LUXON: Crime rates—oh, right. Well, what I can tell you is that accepting that crime as it is not acceptable to this Government. We actually are saying there is a major problem in crime in New Zealand. After six years of a “soft on crime” Government, we’re going to do something very different about it. So, yes, we’re going to continue to work on poverty by making sure we rebuild this economy, lower the cost of living, and actually grow the joint, and we’re going to make sure that we restore law and order so New Zealanders feel safe in their homes, their businesses, and their communities.

Question No. 4—Health

4. Dr HAMISH CAMPBELL (National—Ilam) to the Minister of Health: What recent announcements has the Government made about increasing access to medicines?

Hon Dr SHANE RETI (Minister of Health): Yesterday, the Government delivered on our commitment to fund more cancer treatments, with an unprecedented and transformative investment in cancer and other treatments. This substantial injection will allow Pharmac to fund up to 26 cancer treatments alongside a further 28 other treatments. Increasing access to vital medicines is the right thing to do. I want to thank Associate Minister of Health the Hon David Seymour for his role in this announcement, and also New Zealand First, whose coalition agreement included increasing the Pharmac budget each year.

Dr Hamish Campbell: What does this transformational announcement mean for New Zealanders?

Hon Dr SHANE RETI: Up to 175,000 New Zealanders will benefit from the overall expanded package of up to 54 medicines in the first year alone. The announcement means that not only will treatments for all the cancer types in the pre-election manifesto list be covered but also a number of other treatments, including for blood cancers and other tumours. This major announcement adds to a number of other cancer announcements that we have already made. We have set a target of 90 percent of patients to receive cancer management within 31 days of the decision to treat. We have also increased breast-screening eligibility to 74-year-olds; funded PET scanning accessibility for pathology, like prostate cancer; expanded infusion services in Whanganui; invested in the new radiotherapy machine at Whangārei Hospital; and provided an extra $18 million a year to help people who need to travel for cancer treatments.

Dr Hamish Campbell: What are the next steps to ensure New Zealanders can access these treatments?

Hon Dr SHANE RETI: As a Government, we have worked hard to ensure that this announcement was not just one of new funding but also one of delivery. We had to make sure that we got the implementation right. That is why further funding to deliver and administer these new treatments has been made available for both Pharmac and Health New Zealand, further to our record investment of $16.68 billion into health as part of Budget 2024. New Zealanders should expect to see some of the newly funded cancer treatments become available from October-November this year, with more being phased in over the next year. This announcement shows that we’re a Government committed to delivering on health, and specifically around cancer, which we know impacts many New Zealanders and their families each year.

Dr Hamish Campbell: What feedback has the Minister seen about this announcement?

Hon Dr SHANE RETI: The feedback that we have received has been overwhelmingly positive. Patient Voice Aotearoa chair Malcolm Mulholland has called this announcement a “game-changer” and “fantastic news for patients”, saying that he is chuffed that 175,000 Kiwis will get access to the medicines that they so desperately need. Patient advocate Melissa Vining has said that she is “just so happy that patients won’t have to face that burden of mortgaging their homes or setting up a Givealittle [page] to receive treatment that is available in comparable countries.” Rachael Hart, chief executive of the Cancer Society of New Zealand, says that “This is a momentous day for New Zealand.”, and other front-line oncologists have described this announcement as “truly a historic level of investment”.

Question No. 5—Finance

5. Hon Dr MEGAN WOODS (Labour—Wigram) to the Minister of Finance: Does she stand by her statement that “I can swear, better times are ahead”; if so, how many additional people will be unemployed in 2025 according to her Budget?

Hon NICOLA WILLIS (Minister of Finance): To the first part of the question, yes. It is a particularly difficult time right now for New Zealanders, as high interest rates are required to bring down the rampant inflation that flourished in 2022 and 2023, but the economy will pick up and better times are ahead. To the second part of the question, there is no information in the Budget update itself about the number of people forecast to be unemployed. It does show forecasts, however, of the rate of unemployment, which has been rising since 2021. However, to be helpful, I am advised that Treasury’s background forecasts not contained within the Budget show that the number of people unemployed in the September quarter of 2025 is expected to be 1,000 fewer than the number of people unemployed in the September quarter of 2024, and that, after that, the number of people unemployed continues to decline each quarter out to the end of the forecast period. I can swear better times are ahead.

Hon Dr Megan Woods: How can better times be ahead for the 204,000 people who will be on jobseeker support when those people see no benefit of the tax cuts and there is nothing in the Budget for beneficiaries?

Hon NICOLA WILLIS: Well, as I’ve just articulated, if the member listened, the number of people unemployed is set to decline between the September quarter of this year and next year, which is good news, I would have thought, by any read. I think perhaps what the member may be referring to is the spectacular achievement of the outgoing Government, which managed to have job seeker numbers increasing even while unemployment was reducing. Well, on this side of the House, we view it as an achievement to support people into work, and that is what Louise Upston is working very hard on doing.

Hon Dr Megan Woods: Are better times ahead for the approximately 140,000 children who are currently in poverty and the additional 20,000 children who will be in poverty as a result of her Budget?

Hon NICOLA WILLIS: Well, when you look at the child poverty report, it shows quite clearly that the rate of child poverty by one measure will reduce because of the initiatives in our Budget. What it also shows is that when you deliver tax relief to lower and middle income families with children, those households have more income as a result, and that is good for those kids. I just wish members opposite weren’t so hard-hearted that they voted against that relief.

Hon David Seymour: Can the Minister confirm that expenditure on welfare, excluding New Zealand super, is $18 billion or thereabouts, and only the Labour Party would describe that as nothing in the Budget for beneficiaries?

Hon NICOLA WILLIS: Well, on that side of the House with the Labour Party, they believe that the sign of success—

SPEAKER: No, no, no—the Minister can’t answer for another party. The Minister can only answer the first part of that question.

Hon NICOLA WILLIS: A very good question. Actually, on this side of the House, what we believe is that the sign of success is how many people you help into employment, not simply how much you spend on servicing their unemployment.

Hon Dr Megan Woods: Are better times ahead for first-home buyers when their hopes of buying a home have been stripped by this Budget?

Hon NICOLA WILLIS: I completely reject the characterisation in the member’s question.

Hon Dr Megan Woods: Are better times ahead when the New Zealand Construction Industry Council’s Tommy Honey has said, “We’re going to see a lot more construction companies at risk of going to the wall if they can’t get the work that they’ve been getting over the last few years.”?

Hon NICOLA WILLIS: Well, there are a couple of things going on here. The first is that, as the member knows, interest rates have been high for a year. That has a very real impact on those in sectors that rely on borrowing. Now, what is important is that we do our bit to ensure that we’re not adding fuel to the inflation fire, as that Government did so rampantly, causing interest rates to go higher than would have otherwise been the case. The second thing—

Hon Dr Duncan Webb: Point of order. The member has had swipes at the former Government’s policies throughout her answers and that is just another one, and it’s entirely out of order.

SPEAKER: No, there are two aspects. I’ve looked at this quite extensively. Reporting of historic facts or factual information is not unreasonable in an answer, but when it comes to answering for another party or making a suggestion about another party’s policy, that is unreasonable.

Hon Dr Duncan Webb: She said “rampant”.

SPEAKER: I’m not going to rule the word “rampant” out of order, but I would suggest that the Minister speaks about her own Government’s performance more than a previous Government’s performance.

Hon NICOLA WILLIS: So as I said, two things going on: one, you’ve got to get the fundamentals right, which is actually about getting low, stable inflation so interest rates can decline, which helps everyone in the economy. Sorry to give you an economics lecture, but that is the truth of it. The second thing is about the Government’s role in infrastructure investment. I’m advised that over the next five years, we will be investing $68 billion in infrastructure. Here’s a critical difference: when we talk about investing in infrastructure, we don’t mean visualisations of a light rail train on the front page of the New Zealand Herald. What we mean is actual people in hard hats with actual diggers and spades repairing potholes, fixing roads, and getting things built.

Rt Hon Winston Peters: Could the Minister of Finance confirm that if house prices are stabilised, inflation and interest rates come down, and more homes are built, then it’s very likely that first-home buyers will be massively advantaged?

Hon NICOLA WILLIS: I can confirm exactly that, and what the Deputy Prime Minister conveys is a much deeper understanding of the housing market than the members opposite, who thought they’d fix it by building 100,000 KiwiBuild homes. Well, how did that work out?

Hon Dr Megan Woods: Are the only group that can expect better times ahead landlords, who get a $2.9 billion tax cut?

Hon NICOLA WILLIS: Well, the member would do well to dwell on the facts in my little tax book which says 3.5 million households benefit from tax relief, and she voted against it.

Question No. 6—Health (Pharmac)

6. LAURA TRASK (ACT) to the Associate Minister of Health (Pharmac): What announcements has he made about delivering more medicines to New Zealanders?

Hon DAVID SEYMOUR (Associate Minister of Health (Pharmac)): It’s an excellent question. Yesterday, in collaboration with my friend and fellow Whangārei-n Dr Shane Reti, the Minister of Health, our Government’s announced $604 million of extra money to buy medicines for New Zealanders over four years. This has been described as a game-changer, and in a country that has under-invested in medicines and treatments for far too long, it most certainly is. And Pharmac advised that this kind of money will help up to 175,000 people with medicines they wouldn’t have otherwise had: 54 medicines; 26 of them aimed at cancer. That is a real change in our approach to healthcare in New Zealand.

Laura Trask: Is he confident that Pharmac will be able to continue delivering improved access to medicines?

Hon DAVID SEYMOUR: I have spoken with the chief executive of Pharmac and they accept that making sure that this huge uplift in funding is spent well, to get value for money for all New Zealand patients, is a challenge, and they have been allocated additional money in the range of $2 million to $3 million a year to help them with this enormous procurement task of more medicines for Kiwi patients. However, this is what Pharmac are good at. They are an entity filled with people—skills in finance and pharmacology and negotiating to get the best possible deal for Kiwi patients, and I’m very confident that’s what they will do with these additional funds.

Laura Trask: Why is it important that the Pharmac model is used to deliver new medicines?

Hon DAVID SEYMOUR: As I’ve said, Pharmac is filled with people with, I think, extraordinary ability and I’m very proud to be the Minister responsible for this Crown entity. They have people with the skills and abilities, they know the pharmaceutical market, they know the developing technology, they know how to negotiate, and they know what value for money looks like. They are also an entity that is on a growth curve, improving its listening to patient voice and improving its agility and dexterity at delivering and funding medicines faster as the Government works through Medsafe to consent them faster. For all of those reasons, I think it’s an excellent entity and it’s going to do a very good job at delivering these extra medicines for Kiwi patients.

Laura Trask: What else will he be doing to improve access to medicine?

Hon DAVID SEYMOUR: Well, we are reforming Medsafe and the way that it consents new medicines—in particular, putting in place the rule of two where a pharmaceutical or treatment that is consented in two other peer countries must be consented in New Zealand within 30 days of application to Medsafe. We have already ensured that medicines which are being consented with Medsafe can begin consenting for funding with Pharmac simultaneously, saving time getting medicines for market so they can start making New Zealanders well more quickly. This is the kind of thinking and innovation that is required in order to get better outcomes for the patient and may actually save the taxpayer money elsewhere in the healthcare system by allowing New Zealanders to return to work and live more active lives, which is good for the taxpayer and good for them.

Question No. 7—Prime Minister

7. CHLÖE SWARBRICK (Co-Leader—Green) to the Prime Minister: Does he stand by his Government’s statements and actions?

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes, but I just also want to acknowledge co-leader Marama Davidson and wish her and her family well in the struggle and challenge that she’s going through at this time. Look, yes, especially the Government’s action to restore law and order, and crime has skyrocketed in recent years, and Kiwis, frankly, are sick of it. I’m sick of it, and everyone is. After years of neglect, this Government is finally taking action. We’re going after the gangs. We’re bringing back three strikes. We’re putting limits on judicial discounts, and, on Sunday, we announced there’ll be more cops on the beat in Auckland Central from 1 July, fighting violent and retail crime. I’d just say to that member: if she cared about crime in Auckland and if she cared about keeping Kiwis safe, she’d back those policies and finally deliver better results for her constituents.

Chlöe Swarbrick: How does he reconcile the statement of Christopher Luxon “We are fixated on making sure that we deliver on net zero carbon 2050” with his Government’s decision to reopen oil and gas exploration?

Rt Hon CHRISTOPHER LUXON: Well, I’d just say to that member: we need to make sure that we actually have gas in this country as part of our energy mix. It’s really important. What we have inherited is a whole bunch of bumper stickers and announcements for an oil and gas ban—no follow-through, no plan, and now we have an energy security challenge in this country. So we need to reverse the oil and gas ban, and I’d encourage that member to support us.

Chlöe Swarbrick: Is the Prime Minister aware that the average time for offshore oil and gas development, from exploration permit to first production, is 16 years?

Rt Hon CHRISTOPHER LUXON: And that’s why it had quite a chilling effect when that Government just announced the bumper sticker, under some political pressure, without thinking through the next steps. We are in a situation where we have a shortage of gas in this country. That’s going to impact some of our businesses, and as a result of poorly thought-through policy, now we’re dealing with the consequences. But we’ll clean it up.

Chlöe Swarbrick: So can the Prime Minister then confirm the purpose—what is the purpose?—of the Government’s plan to open up new oil and gas exploration?

Rt Hon CHRISTOPHER LUXON: Well, energy security would be number one. The second thing would be to avoid using coal, so we can use gas. It’s better than coal but not as good as renewables.

Chlöe Swarbrick: What special data and evidence does the Prime Minister have access to in order to disagree with the International Energy Agency that “To achieve net zero, no new oil and gas fields are required beyond those already approved for development as of 2021”?

Rt Hon CHRISTOPHER LUXON: I’m worried about this country’s energy security—hospitals, schools, and businesses running out of gas because of a poorly thought-through bumper sticker, Post-it note policy from the previous administration.

Rt Hon Winston Peters: Could the Prime Minister confirm that the policy he’s enunciating is in line with that of our closest economic partner, Australia, led by a Labor Party Government and Prime Minister, Anthony Albanese, on the interest of gas being used in the transition, which is a realistic position, not one with the fairies?

Rt Hon CHRISTOPHER LUXON: The reality is that we need gas as a transitory source of energy for this country’s energy security.

Chlöe Swarbrick: How does he reconcile drilling for more oil and gas with what Christopher Luxon, National Party leader, campaigned on, as I read from the National Party website: “To deliver on New Zealand’s climate goals, we need whole sectors of the New Zealand economy to switch to clean electricity. It makes no sense to encourage the shift to electric vehicles if the power comes from burning coal. New Zealand must have enough renewable electricity to meet the rising demand.”?

Rt Hon CHRISTOPHER LUXON: Well, I’m really excited to hear the members enthusiasm for driving and doubling the amount of renewables in this country, and what I’d just say to you is that I’d encourage you to support our fast-track legislation, because what we want to do is double the amount of renewables, and I welcome your support, because if you cared about climate change, you’d back that. If you actually cared about climate change, you’d reverse the oil and gas ban. If you cared about actually mining for critical minerals that actually drive our climate change, come and support us.

Chlöe Swarbrick: Dig that hole!

Hon Shane Jones: Drill, drill!

SPEAKER: We’re just going to wait while the House calms down a bit. That sort of outburst is not particularly well received by the public who do watch this question time. So I would suggest that while passions run high over topics like climate change, some little bit of decorum might be well worth holding on to.

Question No. 8—Social Development and Employment

8. Hon CARMEL SEPULONI (Labour—Kelston) to the Minister for Social Development and Employment: Does she stand by all her statements made at the Estimates hearing of the Social Services and Community Committee on 19 June?

Hon LOUISE UPSTON (Minister for Social Development and Employment): Yes. In particular, my statement that when this Government took office, we inherited a welfare system that was supporting about 70,000 more people on jobseeker benefit than six years earlier, despite having gone through periods where workers were in high demand.

Hon Carmel Sepuloni: Does the Minister stand by her statement that she received no advice regarding the 9,000 beneficiaries who will be worse off as a consequence of the tax changes?

Hon LOUISE UPSTON: Yes.

Hon Carmel Sepuloni: Is the Minister aware that this information was in the regulatory impact statement finalised on 24 April, and did the Minister not read the advice provided to her or read it but not understand it?

Hon LOUISE UPSTON: In terms of any of the policies around the tax changes, they are the responsibility of the Minister of Finance.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. That answer cannot be allowed to stand. This is a question about a statement that the Minister herself has made and the advice that she has received. She can’t simply say that’s another Minister’s responsibility. She’s responsible for her own statements.

SPEAKER: OK, we’ll have the question again.

Hon Carmel Sepuloni: Is the Minister aware that this information was in the regulatory impact statement finalised on 24 April, and did the Minister not read the advice provided to her or read it but not understand it?

Hon LOUISE UPSTON: I did not receive or seek advice directly about a tax change, because it is the responsibility of the Minister of Finance.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. Regulatory impact statements go to all Cabinet Ministers, so the Minister’s answer simply cannot be correct.

SPEAKER: Well, it’s probably a pedantic point, with all due respect. The Ministers in that case will be receiving multiples of impact statements. Now, I’m sure that Ministers in the member’s Government probably read all of them, but I have to take the member’s word in this case, and the House will make its own conclusions about that answer.

Hon Priyanca Radhakrishnan: Why did the Minister state that disabled people would lose their jobs if the minimum-wage exemption was scrapped, given over $11 million a year was budgeted by the previous Government to subsidise the employers to pay decent wages to those workers?

Hon LOUISE UPSTON: The minimum wage exemption that exists supports a number of often severely intellectually disabled people that receive the supported living payment and, in addition to that, have the opportunity to work through disability enterprises. They have provided feedback to me directly that what was proposed by the previous Government would not be successful and they would risk not being able to continue to employ disabled people.

Helen White: What, if any, strategy does the Government have in place to respond to an increasing demand for food being experienced by groups like the Auckland City Mission, the Salvation Army, and other providers?

Hon LOUISE UPSTON: Mr Speaker, that’s not within the scope of the primary question, but I could answer it if you wish me to.

SPEAKER: Well, I think the member should have a go at answering it.

Hon LOUISE UPSTON: So there are obviously some very challenging times at the moment, which is why the Government’s priority is rebuilding the economy, is reducing the cost of living crisis, and is providing tax relief so that New Zealanders are able to afford food. And in terms of demand for the provision through food banks, which is concerning, we are providing assistance to them and will continue to work with them to see if that demand goes further.

Hon Carmel Sepuloni: How can beneficiaries, the working poor, and disabled people have any confidence in a Minister who doesn’t remember or ignores advice she received, chooses to cut $11 million a year that was to be used to pay disabled people a minimum wage, and doesn’t prioritise funding of social services who are feeding our most vulnerable during a challenging time?

Hon LOUISE UPSTON: We are clear on this side of the House that we want to reduce the cost of living so more New Zealanders who are working get tax relief and don’t require the support of places like food banks. We want to ensure that those who are severely disabled who receive the supported living payment continue to have the opportunity to be in employment, and we want to see a lot fewer job seekers than that former MP oversaw joining the beneficiary ranks.

Question No. 9—Education

9. Dr VANESSA WEENINK (National—Banks Peninsula) to the Minister of Education: What recent announcements has she made about specialist schools in New Zealand?

Hon ERICA STANFORD (Minister of Education): I was incredibly proud to recently announce a landmark $89 million investment in specialist schools that will improve the condition of classrooms around New Zealand for some of our learners with the most diverse, complex, and fragile needs. This funding secures the rebuild of Sommerville, Maitai, and Sir Keith Park specialist schools, in addition to a $26 million investment in 17 new satellite classrooms based in mainstream schools around the country. This Government believes in parental choice and, by upgrading and expanding specialist schools, we are providing this choice. To the 681 families who are on a waiting list to access specialist schools, this investment will mean more enrolments. I am delighted that our Government has been able to provide targeted investment to upgrade and expand the offering of our specialist schools to better meet the needs of families and their tamariki.

Dr Vanessa Weenink: What reports has she seen that are supporting her announcements?

Hon ERICA STANFORD: A recent report released by the Education Review Office (ERO), entitled Built in, not bolted on, highlighted some of the most vulnerable learners in our classrooms around the country that are in a terrible state. The ERO report quotes that they are not suitable to meet the needs of students. It’s heartbreaking to learn of specialist classrooms that have been closed due to the growth of black mould and mushrooms, knowing the impact that this could have on the health and wellbeing of some of our most vulnerable learners. ERO also noted that there have been no new specialist schools built in the last 50 years, despite a 62 percent increase in their roll since 2013. The Special Education Principals’ Association president said the announcement came after years of under-funding and she’s grateful that this Government has strongly positioned specialist education as being part of the continuum of choice for parents, backed up with investment in property, which is long overdue.

Dr Vanessa Weenink: What other changes did the Minister announce as part of this investment?

Hon ERICA STANFORD: Well, this announcement is just the start and it signals this Government’s firm commitment to specialist education provision and parental choice in education. ERO’s report noted that specialist schools offer students a highly adapted programme of learning tailored to their abilities and interests and that all 27 specialist day schools employ a specialist workforce who support students’ overall development. In line with ERO’s recommendations, this Government will include specialist schools and satellite classrooms in network planning to better reflect demand and reduce wait times for this type of provision. The expansion of satellite classrooms will also make more of the specialist support available in mainstream settings and foster collaborative practice amongst our teachers.

Dr Vanessa Weenink: What feedback has she seen about this announcement?

Hon ERICA STANFORD: I’ve received strong support from across the sector. The principal of Blomfield Special School said she was delighted with the announcement of two new satellite teaching spaces at Bay of Islands College and felt relieved for whānau in the mid-North who did not have anywhere for current satellite students to go after primary school. I wish to just share a quick message with the House from a parent of a seven-year-old who has autism. They are on a waiting list for access to a specialist satellite classroom. She wrote: “It will be life changing for our son if we can get him into a unit.” She spoke of the benefits of being able to work with specialist teachers and aids, with the hope that he will be able to attend school full time for the first time in his life. Those stories and those parents are why our Government has made this investment, and it is just the start.

Question No. 10—State Owned Enterprises

10. TANGI UTIKERE (Labour—Palmerston North) to the Minister for State Owned Enterprises: Can he guarantee that the Government’s replacement ferries for the Cook Strait will be cheaper than those to be delivered in the cancelled iReX project; if not, why not?

Hon PAUL GOLDSMITH (Minister for State Owned Enterprises): While the Government has not made a formal decision around the purchase of new ferries, as the Prime Minister has said, “The Government is absolutely committed to ensuring that we can get great new ships on the Cook Strait”. And, in doing so, we definitely expect the total cost of any such project to be significantly less than the $3 billion, which was the cost of Project iReX when it was cancelled by KiwiRail.

Hon Dr Duncan Webb: Point of order. That question was about the cost of the ferries, quite clearly, not the cost of the overall project. The Minister’s answer referred only to the overall cost of the project but not the ferries themselves.

SPEAKER: That’s true, but the question—

Rt Hon Winston Peters: Mr Speaker, can I help here? Please.

SPEAKER: Well, look—I realise I’m fairly remedial in this job.

Rt Hon Winston Peters: Look, Mr Speaker, he’s a lawyer; he got—

SPEAKER: Hang on, I haven’t called you.

Rt Hon Winston Peters: The iReX project wasn’t just for the ferries; it was for the other infrastructure, and that’s what he should have read in the first place.

SPEAKER: Good, OK. Look, so I think the Minister’s answer started with “There’s been no formal Government decision”. At that point, it’s hard to expect that there would be a further qualification inside the answer.

Tangi Utikere: Has the cancellation of iReX specifically related to the ferry build part of the contract actually been actioned; if not, why not?

Hon PAUL GOLDSMITH: The contract has been repudiated and ongoing discussions are continuing around the exit cost of that. The ferries will not be coming because we’re not going to spend $3 billion on an overall project.

Tangi Utikere: Can he confirm that indicative costs associated with the wind-down and cancellation of the build to date will total more than the $551 million figure for the build locked in by the previous Government?

Hon PAUL GOLDSMITH: No, I cannot confirm that, and I won’t be making any comments about ongoing negotiation. The simple point is that it is a painful exercise we’re going through, and it is one of the very many financial bombs that this Government discovered on coming into office—that we had a project that went from $700 million to more than $3 billion and it was unaffordable and inappropriate, and that’s why this Government stopped that project.

Tangi Utikere: Will the Government deliver new ferries by 2026, the date the new ferries were due to be operational; if not, when can New Zealanders expect to be using new ferries?

Hon PAUL GOLDSMITH: Well, we’re still considering options on replacement ferries and we have every expectation that we’ll make progress well before the 2029 date that has been considered for the current ferries. And so what we’re working through is dealing with a situation where we had a project that blew out unbelievably over the course of the past few years, which the previous Government didn’t manage, and this Government is fixing up their mess.

Hon Nicola Willis: Can the Minister confirm that even if the ships had arrived, there were still very real questions about where they would berth as they were too large for the berths, and can he also confirm that the harbour master had questioned whether they could actually safely go through the Tory Channel?

Hon PAUL GOLDSMITH: There were a wide range of issues with that project, and the primary one was that because the ships were so much bigger than the current ships and were rail-enabled, it required enormous costs to be put into the port’s infrastructure. Now, as those prices escalated, the previous Government had many opportunities to deal with this matter. They didn’t. They left it for this Government to deal with, and we have.

Tangi Utikere: Was the ministerial advisory group’s initial advice, upon their appointment, to continue with the contracted iReX ferry build?

Hon PAUL GOLDSMITH: The ministerial advisory group has given us plenty of advice and I’m not going to go into the details of that because we continue to have ongoing discussions about those issues.

Tangi Utikere: Has KiwiRail warned the Government that due to reputational damage of breaking the contract, it may not be able to procure new ships for decades and that it could also impact other Government ship procurements?

Hon PAUL GOLDSMITH: Well, we are having ongoing discussions around procuring new ships and I have not received any advice that it is impossible to get new ships. It’s just a question of time, and we’re working our way through that process.

Question No. 11—Children

11. TAMATHA PAUL (Green—Wellington Central) to the Minister for Children: Does she agree with the Chief Children’s Commissioner, who said on the creation of the Young Serious Offender category and military-style bootcamps that she wants “to see an approach that helps to rehabilitate these young people and help them on to a better pathway, rather than labelling them”; if not, is she taking an approach that will have “unnecessarily punitive impacts” on young people?

Hon DAVID SEYMOUR (Associate Minister of Justice) on behalf of the Minister for Children: I wish to say that I actually do agree that it’s important that we have an approach that helps to rehabilitate these young people and help them on a better pathway. That is exactly what the Young Serious Offender declaration and military-style academies will do. It will learn from previous initiatives, and it will ensure that young people who may have gone a bit off the rails are actually given the support and the encouragement and, frankly, the discipline to allow them to become positive contributing citizens again in our country for their benefit and the benefit of all. In answer to the second part of the question, that there will be unnecessarily punitive impacts, well, no, I don’t agree with that, but what I do sense from the member’s question is that they still believe we should live in a world where no action has any consequence. Well, I’m sorry but if you’re a young person that creates a serious offence—such as a ram raid, such as an assault, such as we saw in Papatoetoe over the weekend—well, I’m sorry but there are consequences. One of the consequences might be that somebody labels you as a “Young Serious Offender” because that’s what you are. If the Opposition can’t understand actions and consequences, then no wonder we have had such a crime wave in the last six years under their leadership.

Tamatha Paul: Does she agree with the Prime Minister’s view on her approach to youth justice that “I don’t care what you say about whether it does or doesn’t work.”, and, if so, is that why she is proceeding with an approach which domestic and international evidence shows does not work?

Hon DAVID SEYMOUR: Well, first of all, on behalf of the Minister for Children, I find that the Prime Minister has enormous wisdom and sometimes it comes out more fully when he is—

Steve Abel: You’ve already made a speech. Just answer the question.

Hon DAVID SEYMOUR: I beg your pardon?

Steve Abel: You’ve already made a speech. Just answer the question.

Hon DAVID SEYMOUR: Well, I tell you what: that member is a long way from ever answering a question in this House. You know, he’d be more likely to be answering his questions from up a tree. The simple fact is that we have an approach here which is learning from previous experience. For example, the previous approach: actually, the evidence was that when students—when offenders, sorry—were in residence, actually, they had their—

Chlöe Swarbrick: They are students.

Hon DAVID SEYMOUR: Well, they’re often students that aren’t attending school, and that’s one of the problems that we’ve inherited from the previous Government. But the evidence is that, actually, during the previous programme from 2010 to 2016, actually the offenders did improve while in residence. It was taking them back to the community where often things went wrong and they ended up reoffending. That’s why the pilot of the new programme will have three months out of 12 in residence and focus for the subsequent nine months on proper wraparound support and rehabilitation. I believe that that will work. But if you’d like to see evidence of what doesn’t work: the previous six years, which led to a crime wave so bad even some MPs were getting in on it.

Tamatha Paul: Why is she rejecting official advice that military-style activities do not work to reduce offending, and going ahead with her political experiment that will only cause more harm to young people?

Hon DAVID SEYMOUR: I completely reject the assertion in the member’s question. If she wants to talk about a political experiment, how’s this? Six years of thinking, “If only we’re kind to criminals, they’ll start being kind back if we just wait long enough.” That was a political experiment undertaken by that Government.

Hon Dr Duncan Webb: Point of order. That was simply an attack on the previous Government. It had no substance; it didn’t refer to any concrete policies; it was just a swipe. It’s usual David Seymour behaviour, but at that point—

SPEAKER: Hang on. Points of order are heard in silence, whether you like them or not. So the member can start his point of order again.

Hon Dr Duncan Webb: Those statements by the member were simply a list of allegations about the previous Government that didn’t refer to any previous policies or facts and were entirely out of order.

SPEAKER: I totally disagree with you—

Hon DAVID SEYMOUR: Speaking to the—

SPEAKER: No. I’m ruling. I disagree with you because of the nature of the question that was asked. David Seymour—unless he’s finished, which would be quite good.

Hon DAVID SEYMOUR: No, no. I could always give you a bit more. Would you like—no?

Hon Paul Goldsmith: Has he visited the stores and shops and spoken to the owners, victims of youth crime, like I have, and has he heard the repeated chorus that we’ve heard from many of them, “There are just no consequences for these young kids, who have caused me and my family enormous cost”, and does he not agree that there is a basic requirement to have real consequences for these young offenders?

Hon DAVID SEYMOUR: Well, on behalf of the Minister for Children, I have observed Karen Chhour as one of the hardest-working Ministers, who gets around the country, goes and talks to the people that her ministry is responsible for, goes to the facilities, finds out what is wrong, and fixes it in a practical way. And, yes, she also, I am sure, visits and has many occasions to talk to the people who are the victims of crime, and that, among many strands of her rich and authentic life experience—which drives the left mad, might I add—is her motivation to make a difference in this Government and this House.

Tamatha Paul: Does she accept advice from experts that when traumatised young people are subjected to harsh discipline in bootcamps, they are likely to associate their treatment with the abuse caused to them in the past, causing further anxiety and stress?

Hon DAVID SEYMOUR: Well, again, there’s some difficulty because the member seems to have a sort of paint-by-numbers, cartoonish approach to characterising the Government’s policy. What she is describing is not what this Government is putting in place. We are putting in place a pilot programme that will take the most serious offenders—those who have done assaults, who have done ram raids, between the ages of 14 and 17; those who go and hit people with hammers in their retail stores—and actually put them in a place where they get structure and discipline and have an opportunity to build self-esteem by making a real difference in their own lives. In order to do this, you need something called “values”—the idea that each person is equal in their dignity and able to make a positive difference, given the structure and the opportunity. That’s what they’ll be getting.

Tamatha Paul: To what extent is a bootcamp programme that is going to involve just 10 young people at a cost that would never be scaled a genuine and serious solution to a problem, or is it just politicking with young people’s lives for the sake of appearing to be tough on crime?

Hon DAVID SEYMOUR: Wow, look, I think—it’s like a cliché machine that’s taken the pseudoephedrine! This is a very serious matter. Youth crime has got out of control over the last six years. Lacking the values to give young people structure and discipline, having nowhere to take them—having them climb up on the roof and having to be bribed down with KFC actually made a mockery of the values that underpin this country. Now we have a Government that is putting approximately $5 million into a pilot, and, yes, the pilot will cost a lot more than the programme. That’s because we’re learning, because we’re collecting evidence and data about how to do better for a very serious problem, including for those students. So my advice to the member is to stop the paint-by-numbers cliché machine and pay attention to the detail of what’s actually being proposed, not what sounds good to her Wellington mates.

Tamatha Paul: If the point is to do what works, why not invest in a pilot programme that was evidence-led, not retrofitted to a failed bootcamp model?

Hon DAVID SEYMOUR: Once again, the member has a caricature of what the Government is doing which is simply untrue. This is a programme that will take young serious offenders and put them in a place where they get structure and discipline and opportunity to build self-esteem. That is three of the 12 months of the programme. The remaining nine months are outside of that facility, in the community, being rehabilitated, learning to live as good, honest citizens again—totally different from the caricature that the member has in her mind. And I can only say to her one more time: try focusing on what the Government is actually doing, not the caricature she’s built in her mind.

Hon Carmel Sepuloni: Save it for the ACT Party conference.

SPEAKER: Thank you for that, Carmel Sepuloni; that’s most useful.

Question No. 12—Police

12. TOM RUTHERFORD (National—Bay of Plenty) to the Minister of Police: What recent announcements has Police made about deployments in our city centres?

Hon MARK MITCHELL (Minister of Police): On Sunday, Police announced the establishment of community beat teams in major cities across New Zealand, as well as Operation Safer Streets in Auckland to target antisocial behaviour and crime in the CBD. From 1 July, 21 additional staff will be joining the beat team in Auckland CBD, with the intent to move to a 24/7 beat patrol model. This is part of the wider community beat teams deployment, over two years, of 63 staff to Auckland, 17 to Wellington, and 10 to Christchurch, to provide the public with reassurance and to deter and disrupt antisocial behaviour and retail crime. Sunday’s announcement, alongside the announcement of the National Gang Unit and district gang disruption units, builds upon the work Police is doing to deliver on my letter of expectations and, more broadly, this Government’s plan to restore law and order.

Tom Rutherford: Why did he make police being highly visible in communities one of his expectations of the Police Commissioner?

Hon MARK MITCHELL: I talk regularly with retail shop owners, business owners, and the public, and have had dozens of public meetings around the country, both as Minister and before. The number one piece of feedback—and I completely agree with it—is that the public have not in recent years had a sense that police are present in their communities. As police Minister, my focus is on ensuring that police are getting back out on the beat, providing reassurance, and deterring offending.

Tom Rutherford: Does he agree with the Queens Arcade property manager, who believes that the announcement will help bring down crime in the Auckland CBD?

Hon MARK MITCHELL: Yes, I do. I’m confident that having police highly visible in the CBD as part of Operation Safer Streets will ensure that the public get a sense that police are keeping them safe, and will give offenders a sense that their activity will not be tolerated. While it’s heartening to see that Police are saying crime in the central city is starting to trend in the right direction, it is still at an unacceptable level and the public are still exposed to it and feel unsafe. This Government is focused on clamping down on crime.

Tom Rutherford: Does he agree with the Wellington Chamber of Commerce chief executive that it is “surprising what [these] kind[s] of interventions can do.”?

Hon MARK MITCHELL: I agree with what he says. Because of my own experience, I’ve seen the positive effect of highly visible beat constables in their communities.

Hon Ginny Andersen: Why does Christchurch have to wait two years for just 10 additional beat constables?

Hon MARK MITCHELL: Well, Christchurch haven’t had to wait for constables being more visible in their communities, because there’s changes taking place already. As part of the established beat teams, there’s going to be an additional 10 dedicated police constables that will be put into Christchurch.

Hon Ginny Andersen: Sorry, point of order, Mr Speaker. My question was: why does Christchurch have to wait two years for just 10 more police officers? I got that they are waiting for two years, but he didn’t explain the reason behind that.

SPEAKER: No, no—think about the whole question that was asked. The Minister’s opening statement was that they don’t have to wait two years. So you can’t be more definitive than that.

Urgent Debates

Grounding of Aratere Ferry—Government Response

TANGI UTIKERE (Labour—Palmerston North): I move, That the House take note of an urgent item.

We all know that the Interislander known as the Aratere ran aground just out of Picton on Friday evening with 47 people aboard.

SPEAKER: Can I just interrupt the member, please. Those who are leaving the House, do so quietly and without conversation on the way through. The member’s time will start again.

TANGI UTIKERE: Thank you, Mr Speaker. The Interislander that we all know as the Aratere ran aground just out of Picton on Friday evening with 47 people aboard, and that was a very distressing sight for all of us to see and to take note of what occurred over the coming hours. The primary focus, of course, at that time was on the safety and on the wellbeing of everyone who was on board. I want to acknowledge the efforts that were made to ensure that those who were on board were safe throughout the incident—particularly those who were seen as the first responders, the Maritime Union of New Zealand and other local MPs, including my colleague Rachel Boyack, who was there as well. There will be, no doubt, many lines of inquiry into what went wrong, and they will work through their processes for sure.

What I can say is that I’m sure all members of this House will know that it is extremely fortunate that we are not here this afternoon referring to an incident that had an outcome that would be much more devastating, much more dire, because it could have. If that vessel had made its way out of the location where it was into the Tory Channel or, indeed, into the Cook Strait proper, the outcome could have been one of devastation. Those are notorious water bodies, and everyone knows that. It is only luck that this breakdown was not more serious. It ran aground in relatively safe, calm waters. As we know, the Cook Strait ferries are massive machines. They are huge vessels often actually carrying hundreds of passengers and people, and they travel that expanse of water with swells and winds, and a malfunction in the wrong place could be nothing short of fatal.

This latest incident not only further enforces the need for a reliable and sustainable Cook Strait ferry option but also the need for ferries that are built to last. The current Government-owned Interislander ferries, that are owned by the State-owned enterprise KiwiRail, are either at or past the end of their lives. They are limping along, and the cost of keeping them in a seaworthy state is large, and that continues by the day.

I think, if there was a further disaster, you wouldn’t need much more of an inquiry to determine perhaps what went wrong, and Government Ministers need to take responsibility in this space. They are the ones who run KiwiRail, in terms of setting the priorities and providing the financial envelope for them to function, and they need to make sure that they are taking responsibility for this.

There were, last week, questions in the Transport and Infrastructure Committee that were put to Simeon Brown as the Minister of Transport around the nature of the ferry fleet. My colleague Arena Williams and I put very squarely to Minister Brown these questions. Now, this grounding came the very day after those questions were put to the Government to respond. Minister Brown pushed back on concerns that we raised relating to the need for an immediate replacement and that costs would actually continue to grow beyond the $551 million that the former Government was able to lock in as a suitable replacement. Not only that but also the increasing nature of maintenance costs that some have established could be in the region of $65 million a year from next year. The Minister did not believe that there was a lot of substance to that, and just 24 hours after those questions, we have this unfortunate situation where we still have no options in terms of what the replacement might look like moving forward.

Of course, National have a habit of doing this. They have a habit of, effectively, switching out the lights and keeping people in the dark, and they simply need to front up to the communities of interest all around Aotearoa New Zealand to give certainty around what the future ferry options look like for the Cook Strait. We do not have time to continue to dilly-dally around and to wait for them to actually get their ducks in a row and to share with the community and to share with this House what their options will be. Nicola Willis, Simeon Brown, and Paul Goldsmith have placed us in this exact uncertainty that we find ourselves in.

The solution to all of this was the ferries related to iReX, a brand-new set of ferries that were being built—actually were starting to be constructed by the Korean Hyundai Mipo Dockyard back in 2021, when this was commissioned. They were to be delivered in February 2026, to avoid the business summer season. Now, the finance Minister, at the end of last year, indicated that she would simply cancel the contract, and she has been dragging her heels for the last six months while this Government has tried to sort themselves out about what the replacement option will be. One thing I will say is if the Government can prioritise nearly $3 billion in tax cuts for landlords, they can prioritise a resilient, safe, and reliable ferry service between the North and South Islands.

We are being seen as the laughing stock in maritime circles, not just here in New Zealand but all around the world. All one needs to do is to look at the imagery and the photos of that 24-hour period to indicate why it is that New Zealand is seen as the laughing stock, where we are not taking any action in this particular space. What is really important is that the Government seems to like to talk about cost overruns and blowouts and all of these sorts of things. The situation is this: what occurred on Friday evening was in the context of having no plan B.

Arena Williams: No plan B.

TANGI UTIKERE: No plan B. We are still waiting to hear what their plan is going to be.

Glen Bennett: Plan C.

TANGI UTIKERE: So what then did—plan C. Actually, I think Kiwis wouldn’t mind plan D at this rate. I know that Nicola Willis says she does not want to have a Ferrari. OK. She said she prefers a Toyota Corolla. All right. I think people, at this stage, would settle for a Mini. They would settle for a Suzuki Swift. They would settle for a replacement that is going to meet the needs of communities to connect the two islands of Aotearoa New Zealand.

Prior to the election, there had been a lot of work that was going on in this space. There had been work with KiwiRail on a more suitable and sustainable solution. That was then over to the Government to pick up that conversation and to pull together a plan. What they have done is they have made cancellation the priority, although we actually heard in question time today that cancellation may actually not have been actioned. We hear repudiation is where things are at, at the moment. The Government have said that, actually, it is cancelled, but I don’t know. I’m none the wiser as to whether or not the contract has actually been cancelled, and it’s over to the Government to share with us whether that is the case or not.

We also hear that it is possible that the reputation of New Zealand in being able to secure future contracts in terms of ship builds could be compromised. It could be. I don’t know, but it could be. All we need to do is think about that. When you are engaging with a partner as a form of business and someone wants to withdraw from a transaction that has been locked in back in 2021, then surely there must be some reputational risk to New Zealand as a result of that. But this is also a financial envelope that, just for the ferry build itself, is continuing to grow—the lock-in of $551 million for the ferry build itself. We don’t know the full wind-down costs of that particular exercise. It could be $200 million; it could be $300 million. We don’t know what the actual break penalty clause is as a result of cancelling these two ferries. It could be $100 million; it could be $200 million. That is on top of the wind-down costs.

Then, of course, we have the shipyards that may still very well be building these ships all the way through to completion, because they started the build when the Government virtually signalled that they were going to cancel the build. Then if they sell them, there is an opportunity that the cost would actually be, over that three-year period, significantly higher. So possibly three to four times higher as a build. So already the financial cost that is being drawn as a relation to this is probably much significantly higher than the $551 million just for the build itself, because the ferries, of course, were just a small component of that.

It is unfortunate that there is no certainty for New Zealanders and for Kiwis around what a resilient service will look like between the North and South Islands. We continue to wait while this Government drags its heels. I thought, actually, maybe yesterday that we would have heard something, the Cabinet had come together and maybe had a chat and may have had a chance to actually think—

Hon Peeni Henare: Where’s the urgency?

TANGI UTIKERE: You know what, where is the urgency? Well, there does not seem to be urgency from this Government in terms of providing a safe, secure, resilient, and sustainable connection for the future. We cannot wait to 2029 as Nicola Willis has said. She seems to think that it’s all right; it’s only a few years. Well, a few years are a few years far too late. We had a plan. We were prepared to deliver a safe, reliable, and sustainable option. This is a Government that is not prepared to do that, and despite the activities and actions of the last week or so, they continue to be no further down the road.

Hon SIMEON BROWN (Minister of Transport): Well, thank you, Mr Speaker, for the opportunity to respond in this debate. As is well known, on Friday, 21 June, the Aratere ran aground at 9.56 p.m. just outside of Picton, with a total of 47 aboard: 39 crew and eight passengers. It is a relief to everyone that there was no one injured during this incident, and as it was a freight sailing, the usual travelling public were not aboard and not impacted by this event. I also want to acknowledge the swift action from the emergency response agencies to ensure that those aboard were safe, and the actions which led to the successful refloating of the vessel late on the evening of 22 June, the following day.

The operation to refloat Aratere on Saturday night was successful and the vessel is now berthed in Picton. Now the ship has been safely refloated, investigations can begin into the incident and how KiwiRail can ensure that this does not happen again. There are three investigations under way at this stage. KiwiRail is undertaking its own internal investigation. Maritime New Zealand, as the regulator, is undertaking an investigation. This investigation may result in administrative action or prosecution in regard to the issues. The Transport Accident Investigation Commission will also be undertaking an independent safety investigation. This investigation will determine the circumstances and causes of accidents and incidents with a view of avoiding similar occurrences in the future, rather than to ascribe blame to any person.

The debate from the other side of the House is trying to put this perspective forward—that the incident that took place on Friday night would have all been fixed if iReX hadn’t been cancelled. Well that is, quite frankly, completely untrue—completely untrue—and the point that they’re trying to make is completely untrue. The reality is this is an issue that KiwiRail, as the owners and operators of those ferries, must take responsibility for. They are responsible for the maintenance of their ferries, and the reality is, over the last number of years, when the last Government was in charge, there was so much focus on the big shiny new ferries, they lost sight of the focus on actually maintaining what they already had—they lost sight of what they already had.

So the focus was on the new thing—the new berths, the new flashy big ferries that the last Government signed up to, and the billions of dollars they were planning to spend—and they lost sight of the fact that their number one job is to keep New Zealanders safe going across the Cook Strait on those ferries. We’ve seen incident after incident in that regard where the safety of New Zealanders has been put at risk by KiwiRail and by Interislander when that is their number one job.

Unfortunately, on Friday night, the latest incident took place in relation to what we saw on the Cook Strait. As the member said earlier, we are grateful that it took place in the circumstances that it did and that no one’s life was lost. But what this highlights, and what the shareholding Ministers for the State-owned enterprise KiwiRail have made very, very clear, is that this Government’s expectation of KiwiRail is that the maintenance and the resilience and the safety of their existing ferries must be the number one priority for the board of KiwiRail—that must be the number one priority for the board of KiwiRail.

Those expectations have been made abundantly clear by the shareholding Ministers—the Hon Paul Goldsmith and the Hon Nicola Willis—to KiwiRail in terms of their expectations, and the concerns that they have made has led to action being taken by KiwiRail in relation to the maintenance of those ferries. But the reality is not enough has been done. There has been work done by KiwiRail in relation to getting independent ferry safety experts in to actually ensure that they are undertaking full safety operations of those ferries, but there is more work that needs to be done. The reality is that, regardless of the iReX decision, these ferries have to run for at least another two years, and so that work is critically, critically important.

When I was in Picton on Saturday, we discussed these issues, and the Transport Accident Investigation Commission made this point, which I think is a very important point. They made the point in the meeting that there are a large number of ships of this age which operate around the world and which operate safely. So that is the point that needs to be debated here today. It is the need for KiwiRail and Interislander to ensure the safety and operation of those services. The reality is that this does also raise questions in relation to the future. The member opposite—Tangi Utikere—tried to make the point that “Well, the ferries were only going to cost $550 million.” Well, the iReX project was blown out to over $3 billion.

The reality is that when it started, the project was worth $750 million. Now, that sounds perfectly reasonable. The analogy you could use is buying a house and land package, and you’ve signed the contract for $750,000. Well, you come back five years later and, whilst the house is still only worth $550,000, the land’s gone up to $2.25 million, and suddenly it’s worth $3 million. No one would continue to be signed up with that type of deal, but that is exactly what the last Government let happen. The landside, port-side infrastructure went from being around $200 million to being over $2.2 billion as part of that particular project.

I have a letter here which the former finance Minister Hon Grant Robertson sent to KiwiRail on 19 September 2023, saying, “We note that KiwiRail under-scoped the landside infrastructure in 2021, meaning the decision to procure two large rail-enabled ships at the time was premature. To date, we are yet to see a satisfactory explanation for why this was the case.” So—

Dana Kirkpatrick: Who was the Government?

Hon SIMEON BROWN: The Government at the time was the Labour Government. It was making the point which we were then shown when we became Government, which is that the cost of the landside infrastructure, which was being foisted on to the Crown, was being driven because of the fact that it was under-scoped due to the size of the ferries and also due to the fact that they were rail-enabled, leading to significant cost escalations on the port-side infrastructure.

Tough decisions did have to be made when we came into Government. In fact, the time line that was released by the Minister of Finance when the decision was made showed that between early November 2023—before the Government had been formed, but we were briefed during the negotiation phase. The incoming Government was informed of the most recent cost escalation in early November 2023, and that it would be $2.6 billion. When we became Government, we were advised it was $3 billion. In less than a month, the cost had blown out by over $400 million—over $400 million. It would be, frankly, irresponsible to have continued with that project.

This Government is committed to having a safe and resilient Cook Strait. We are committed to new ferries. The Minister of Finance and the Minister for State Owned Enterprises have a ministerial advisory group which has, just as of last week, provided a report with further advice on how we can assure the safety and resilience of the Cook Strait. There are options that will be considered. Decisions will be made in an affordable and cost-effective manner to ensure the resilience of this critically important part of our supply chain.

Those are decisions which we will make in the appropriate time to make sure that we make those appropriate decisions, and we won’t make the mistakes the last Government made where they let this project go from being $750 million to over $3 billion and counting, and they refuse to take responsibility and accountability over those things. We will make the tough decisions on this side of the House, and we will ensure the resilience of the Cook Strait. Thank you very much.

CHLÖE SWARBRICK (Co-Leader—Green): E te Māngai, tēnā koe. Tēnā koutou e te Whare. I think, just there, members of the New Zealand public have seen a shining example of why it is that we have an approximate $200 billion infrastructure deficit in this country. We constantly see the chopping and changing of legacy parties in charge, binning projects that the other one did not like, with no meaningful plan on the horizon.

I just here want to refer to a document from 2020, and I want to quote from it, if I can. It says—and I quote—“This Government is committed to restoring rail to its rightful place in New Zealand. Bigger, better ships, with new technology are yet another step on that journey … These will be the first brand-new purpose built ferries New Zealand has had in over 25 years. Of the current ships, only the Aratere is rail-enabled, and an unwillingness from previous governments to invest properly in New Zealand’s rail infrastructure has meant the Aratere has had a number of costly technical and mechanical issues. It is vital that we act now to ensure our Main Trunk Line between the North and South Islands is resilient and well-provisioned [into] the future”. That is, of course, a quote from the Rt Hon Winston Peters, who then was acting in his capacity as Deputy Prime Minister, in a press release from 27 May 2020 titled “Government investment supports the acquisition of new Interislander ferries”.

Unfortunately, how times have changed, because what we’ve just heard there from one of the shareholding Ministers for KiwiRail, one of our State-owned enterprises, is that despite all of this bluster and approximately 10 minutes in a speech, we have no meaningful plans whatsoever for what is to happen in 2026 and beyond.

Look, the Green Party can absolutely agree with the point from the Minister, as actually was reflected in this press release from the former Deputy Prime Minister and the now new Deputy Prime Minister or co-Deputy Prime Minister, that these are not new problems. We have known for a really long time that our ferry infrastructure, the Interislander ferries, need an upgrade. They need proper and meaningful investment. That is why the lead times exist on these kinds of investments. It is not a new problem and these investments could be requisitely made.

This Government likes to talk a lot about how they are, for some reason, great financial managers. Let’s dig into the detail on that specifically for this problem, which so well is an emblem of a lot of these issues that we have with the infrastructural deficit in this country. You’d tend to say that when you are a good financial manager that you invest early in an issue to stop it escalating.

Well, as we already know, based on the hearings that other speakers have alluded to, we have already spent $424 million on this iReX project, yet we are now also not all too transparent from this Government when it comes to the cost of the cancellation fees. Yet, as I understand it, on Breakfast television this morning, the Minister was not rebutting a figure in the arena of $300 million on the cancellation of that. We also, of course, have the cost of refloating the ferries every time they run aground because, as we’ve seen, this is not a new problem, and it is likely to continue out into the future.

The Government also passed up the opportunity to futureproof the fleet. We had a guarantee of delivery in 2026, but now we are looking at an approximate at least 40 percent increase in inflation in the cost of purchasing those new ships. On top of that, we’ve also passed up the opportunity to double capacity not only for passengers but also for freight. We also have passed up the opportunity to reduce carbon emissions of that fleet by 40 percent and to accommodate alternative fuel sources as they develop, not to mention a 100-year lifespan for both of the ports, and to get greater rail capacity, something that New Zealand First used to be proud of and campaign for, to get trucks off the road, and ultimately not only to reduce those carbon emissions but to reduce congestion, not least for rural Aotearoa New Zealand.

The Minister Simeon Brown just before was saying that he has expectations that the fleet keeps up with maintenance. I’m sure that’s something that actually everybody in this House would fundamentally agree with—I didn’t see any disagreement whatsoever on that basis—but the question for the Minister and for Government members is to show us the money, to show us the plan and the contribution, because right now we are left with far more questions than we have answers to as to what occurs in 2026.

That bill is going to continue to climb, not only because, based on the fact that I’ve just well canvassed that this is not a new problem, we are likely to see more groundings of these ships; we are likely to see more issues eventuate; and we also are going to continue to see price inflation for the purchasing of these new ships. To that effect, I think it also needs to be noted that as far as we’re aware, there are only about 20 of these ships in the world, none of which are currently in action—

ASSISTANT SPEAKER (Teanau Tuiono): Thank you. The member’s time has expired.

CAMERON LUXTON (ACT): Thank you, Mr Speaker. What we saw occur with the Aratere on Friday night was extremely concerning. It was a great relief, however, that there was no loss of life and everyone on board the ship was able to get off safely. But this actually does raise some serious concerns about KiwiRail and KiwiRail’s mismanagement. In ACT’s view, KiwiRail’s 100 percent Government ownership has been a contributing factor to the general mismanagement of the Cook Strait ferry service in recent years.

ACT’s policy is to add KiwiRail to the mixed-ownership model. By selling 49 percent of the Government’s shares, this would ensure KiwiRail has the accountability and flexibility needed to keep the ferry service running properly—100 percent Government ownership means KiwiRail isn’t subject to commercial accountability; KiwiRail’s investment decisions are dominated by politics rather than commercial realities.

Right now, KiwiRail’s commercial performance is monitored by a small, overworked team at Treasury. In Budget 2024, the budget for Crown company monitoring—that’s all Crown companies; not just State-owned enterprises (SOEs)—was roughly $5 million, whereas the net asset value of SOEs alone was roughly $40 billion. That’s a management fee of 0.1 percent. Even the cheapest private equity funds charge around 1 percent plus performance fees. Either the Government is getting a bargain of the century or many taxpayer assets are being seriously under-managed.

By contrast, the partially owned electricity companies and Air New Zealand have dozens of analysts from private sector investment funds and stockbrokers poring over their quarterly returns and other performance data. Those financial companies often have their own skin in the game, as shareholders and would-be shareholders. Their analysts can ask executives questions, and when they are truly dissatisfied with their performance, they can send a clear signal by selling their shares or advising their clients to do so. The stock price gives a signal to executives as to whether the market supports their business plan. That means things like maintenance schedules, capital investment programmes are rigorously monitored.

With all the will in the world, the Public Service has neither the incentive nor the means to subject their portfolio companies to such scrutiny. Moreover, the SOE Act, quite properly, prevents Ministers from getting directly involved themselves. The investment statement prepared by Treasury in 2022 helps confirm this. The Government stake in listed companies significantly outperformed their cost of capital, whereas Government stakes in unlisted companies underperformed. That’s even with the then COVID-afflicted Air New Zealand being counted amongst the listed companies. That means the Government has lost taxpayers’ money by leaving it in these unlisted companies, relative to the equivalent risk investments elsewhere.

A more closely monitored KiwiRail may well have made fewer disastrous investments and maintenance choices. In addition to better accountability, partially private ownership would have given KiwiRail more flexibility to make decisions based on economics rather than politics. When the mixed-ownership or private companies need more capital—like KiwiRail has asked for with the ferry programme—they prove the case not to the Cabinet but to private investors. That means that access to capital is determined by the rates of return on offer rather than the Government’s political or fiscal position. That makes it easier for good projects to go forward and bad projects to be stopped. Private investors have no incentive to throw good money after bad simply to avoid embarrassment. Private investors can move quickly when needed, rather than forestalling a decision for political convenience, as the previous finance Minister seems to have done. The involvement of private investors would have allowed for alternative financing of the ferry programme to be considered.

Private and partially private transport companies are not immune from accidents, but they do tend to make fewer white elephant investments like iReX that delay and distract from the real solutions to ageing machinery. A 49 percent privatised KiwiRail would be more accountable, more flexible, and possibly better capitalised. That would make it less likely for a comedy of errors, like this ferry debacle has been, to occur. Thank you, Mr Speaker.

ANDY FOSTER (NZ First): Thanks, Mr Speaker. Look, we all agree that the Cook Strait crossing is an essential part of New Zealand’s transport infrastructure, and we all know it’s a problem, which is why we’re having the debate that we’re having at the moment. However, Tangi Utikere opened this debate by, essentially, stating that plan A is still the right plan, is still a good plan—two large ferries. I’ll come back to that in just a moment. But I say to him and to the Opposition: let’s stop playing politics with this; let’s work together to try and find the solution.

Plan A was fundamentally flawed. We know that the cost of iReX project had blown out enormously. I would take that as an illustration that what we’ve got to stop doing is saying, “We think that a project is going to cost”—in this case—“$750 million.” before we’ve done any of the design assessment, before we’ve done any of the geotechnical work, and before we have actually any real idea of what it’s really going to cost. But, no, we go and say, “It’s going to cost $750 million.”, and then, a few years later, it turns out to be “It’s $3 billion and counting.” So the initial thing we should do with all of these projects is to be putting money aside to look at options, to look at feasibility, to look at geotech—to look at all those things—and then we’ve got some vague idea of what the cost is going to be. But that’s not what happened in this case.

The Opposition has told us that the ferry deal was a very good one. Actually, the ferry deal was a good one. It was a good one because it was done during COVID, it was done at a time when ship builders didn’t have a lot of market, but the problem was that this is a package. It’s not just a ferry; it is also a ferry and all the land-based infrastructure. We’ve already heard from the Minister Simeon Brown there that the cost, effectively, of the land-based infrastructure exploded not by a factor of one, but a factor of 10 times—10 times more expensive. You can’t have the ferries without the land-based infrastructure as well.

So, Tangi Utikere, we had a plan, but the problem is that the plan was deeply flawed. Even—

Hon Dr Duncan Webb: Your plan.

ANDY FOSTER: —the then Minister of Finance Grant Robertson knew that it was a flawed plan. I don’t think that he signed off on it, did he, Mr Webb? He didn’t sign off on it either.

The big problem here was that KiwiRail, I think, were exceedingly arrogant. I think that what, basically, they assumed is that everybody was going to jump to their tune. That was their assumption, and I’m going to come to some illustrations on that. They ordered the ferries before they had anywhere to put them—they ordered the ferries before they had anywhere to put them. I can remember, at the time when that was news, thinking that is extraordinarily brave—extraordinarily brave—to the point of being reckless.

The other piece of information that we’ve had more latterly is that the port of Marlborough harbour master hadn’t even given approval—in fact, I don’t think, at that point, he’d even been asked to give approval—for whether these larger ferries would be able to operate in Tory Channel. He gave the indication that, in fact, he wasn’t going to give that approval. So an extraordinary piece of work from KiwiRail.

So let’s talk about the port infrastructure at either end. At both ends, they are very difficult construction environments—at the Wellington end, particularly the seismic and sea-level rise. So look at this, an overall package: roughly one-sixth of the package is for the ferries; one-sixth is for the port of Marlborough end; and a whopping four-sixths—two-thirds of it—is for the port of Wellington end. That reflects the complexity of that end. It was $3 billion and counting. So either the incoming Government wrote a blank cheque and said, “Look, just keep going. However much it’s going to cost, keep going.”—and we know the business case for that would have been appalling—or push pause and think about that.

Those of us who are members of the Transport and Infrastructure Committee would recall that KiwiRail appeared before us in February as part of their annual review, and both the chair and the CEO made the point that they had only come to the company in 2022. When they came to the company, they said, actually, they were alarmed at what they saw, and they alerted the then Minister of Finance to their concerns. So it’s not as though the new administration of KiwiRail was saying this was all beer and Skittles; they had real concerns. What I saw KiwiRail having done is wasting years and years of time that should have been used constructively to deliver an outcome.

So let’s take the Wellington end. They wanted to bring large, new ferries into the inner harbour of Wellington, didn’t mind about any other users; no mind about the impact on CentrePort’s business—they were stuck right in the middle of CentrePort; they were, effectively, destroying the business—and no mind about the impact on the road network from having road and rail services at a new location. They didn’t mind about any of that; they just assumed that everybody was going to jump to their tune. They did exactly the same thing at the other end with the port of Marlborough, as well, to the extent that the port of Marlborough said, “Yours. Your project. You work it out.”

So we have a fundamental problem here. It’s a problem that we need to work together on. I’m really looking forward to seeing the outcome of the ministerial working group. That is the basis on which we should be moving forward from this. Anything else, at this stage, is speculation.

ASSISTANT SPEAKER (Teanau Tuiono): Before I move to the next speaker, just for the awareness of the House, if a party does not take their allocated call and there is no indication that they have transferred it, any other member who has not yet spoken may seek that call at the end of the debate.

ARENA WILLIAMS (Labour—Manurewa): This knee-jerk, political point-scoring, “shoot from the hip” Government has the chutzpah to come down to this House and give the Labour members a lecture on working together. This Government, who got out in front of the cameras at their first opportunity and said, “Look at us—we’re so cool. We’re going to get these chief executives who have been running up the costs by cancelling the contract.” They’re cancelling a contract which that member Andy Foster just told this House was a good deal: $551 million for ferries, which will enable a resilient crossing of the Cook Strait—a resilient crossing of the Cook Strait that that Minister of Transport, who spoke earlier in this debate, came to the Transport and Infrastructure Committee on Thursday and promised that committee in his answers. Further, the Prime Minister stood in front of cameras on Monday and promised New Zealanders a resilient crossing of the Cook Strait because it is nationally significant infrastructure, not only to the South Island but to all New Zealanders who rely on that for the economic benefits it gives to everyone.

This is such an important piece of infrastructure investment in the hands of a Government that does not believe it is responsible for it—a Government that will stand here and kick the KiwiRail board. Those members will say they are reckless, will say that they are exceedingly arrogant, and will do everything that it can to undermine the public’s trust in a State-owned enterprise and to push responsibility as far as they can away from this Cabinet, which is making decisions to undermine that resilient crossing that they are promising New Zealanders out one side of their mouth and undermining in the Cabinet room.

We know, and we have confirmed today—not only the Minister for State Owned Enterprises but the Minister of Transport have told this House that they have had the advice back from their ministerial advisory group, that they have had a discussion about it around the Cabinet table, and that they know what the recommendations of that ministerial advisory group are. They actually have a solution in their heads. They are sitting through this debate, refusing to tell New Zealanders how we will have a resilient Cook Strait connection, and are instead blaming the KiwiRail board, saying that they need to prioritise safety. Well, the KiwiRail board have been asking for an upgrade of their infrastructure, which is causing a lack of safety to the people who they provide this business for, and they have a Cabinet here who haven’t backed them. They have a Cabinet here who are pushing responsibility away for those infrastructure investments and have no plan B.

When Andy Foster comes to this House and he says, “Well, Tangi Utikere wants plan A.”, we just want anything. At this point, we would be grateful for a boat that could cross the Cook Strait and a Minister who was happy to be in charge of that. But, instead, they are here today and they are pushing responsibility as far away from themselves as they possibly can. We still don’t know if the contract has been formally cancelled for those $551 million boats, but KiwiRail is already out in the market trying to procure other boats. We don’t know if New Zealanders are not only on the hook for that $551 million contract or however many hundreds of millions it will cost to break it, and another hundreds of millions of dollars’ worth of some other project because Cabinet have decided to keep that information from New Zealanders and will not share it in this debate. They will not give us any clarity about the important decisions going forward which are in front of them.

So the questions as I see them are these: has the contract for the new Interislander ferries been terminated, and, if so, what is that penalty? We don’t have that information—that hasn’t been offered by the Government. We also don’t know if those Ministers have had those discussions and what options they are considering next. We have certainly heard from the ACT member that it is the ACT Party’s position, and probably the ACT Ministers’ around the Cabinet table, that they would sell it—either all of it or part of it. So New Zealanders should remember that that is also a decision which is being considered by this Government and we deserve answers on that—answers which have not been provided by Government Ministers in this debate. I see the Minister for State Owned Enterprises here, so I hope he will take a call and explain his position on everything the ACT member has raised earlier in this debate.

We also need to know whether this option to procure more ships is being explored at the same time as we are trying to exit that contract because this Government represents us in these international agreements with Hyundai Mipo. We ask whether New Zealand is on the hook for one contract while also entering into a second contract. We need to know what future generations of New Zealanders are being signed up to in terms of serious debt. There is so much more to discuss on this topic. I look forward to the Minister for State Owned Enterprises taking a call.

Hon PAUL GOLDSMITH (Minister for State Owned Enterprises): Thank you, Mr Speaker. This is an urgent debate on the grounding of the MV Aratere at 9.56 p.m. on Friday, 21 June, and the Government’s response to the issue. Now, the grounding—and we’ve heard a lot of speechifying on a whole range of other topics in relation to this, but what we’re talking about is the unfortunate grounding of a ship and whether or not some ferries might be coming in a couple of years’ time or afterwards is of interest, I suppose, and the broader question around ferries, but not specifically relevant to what happened on Friday, 21 June, and the safety of everybody involved.

There were 47 people on board; 39 crew and eight passengers. Obviously the primary reaction to this is relief that the situation didn’t happen in a more dangerous spot, and that it was resolved in this relatively—that it didn’t lead to a more dramatic disaster and heaven forbid any injuries. So we’re relieved that it was a freight-only sailing and that not many members of the public were on board.

We did also note the swift action of the emergency services in responding to ensure that people were safe and the actions led to the successful refloating of the ferry on the 22nd. I understand there was no water entering the vessel or oil going into the marine environment. So we were lucky. But obviously the primary issue in relation to this is that our safety infrastructure is working appropriately. So the absolute primary response of the Government in the broadest sense is that the Transport Accident Investigation Commission and Maritime New Zealand both have statutory functions to conduct inquiries and investigations into the circumstances and causes of marine accidents and incidents with a view to avoiding similar occurrences in the future.

Both of those agencies, the Transport Accident Investigation Commission and Maritime New Zealand, have confirmed their intention to inquire into or investigate the event in line with their statutory functions, and they are expected to take several months to continue. So in New Zealand, we mercifully have had very few serious accidents, but we’ve had a few over the years. Each time anything happens, there is a thorough inquiry into what happened and lessons are learnt and operators are expected to deal with that. So we recognise the importance of the Cook Strait connectivity.

Chlöe Swarbrick: What are you going to do about it?

Hon PAUL GOLDSMITH: Well, like I say, the proper investigatory agencies are looking into what caused this particular trap and how it’s going to be dealt with. Then of course KiwiRail and their board are directly responsible for the safety of those ships.

The question then sort of lends itself to the question: “Well, what’s going to happen in terms of the replacement of ageing ferries?” Well, of course, as has been well canvassed, one of the reasons why this Government is having to deal with an horrendous financial and fiscal situation is that the previous Government was out of control in its spending, and no more simple example of that was the fact that the replacement of ferries blew out from $700 million to over $3 billion. It was in relation to the larger size of the ferries, the rail enablement, and all the work that needed to be done on the two port sites.

We, as any responsible Government and every New Zealander would expect the responsible Government to do, stopped that because it was unsustainable. We’ve gone back and we’re getting advice on alternatives. One of the very simpler alternatives is not to build—not to take on much larger ferries that require different port infrastructure, but, actually, to get ferries that fit in within the current port infrastructure so that we do not have to spend so much money on what is an important event. So we’re very focused on making sure that the investigation is done properly, firstly. Secondly, we’ve got some decent process in place in order to provide replacements.

ASSISTANT SPEAKER (Teanau Tuiono): The member’s time has expired.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora, Mr Speaker. Thank you to the Minister for taking a call. I think it’s really important that as the Minister for State Owned Enterprises, he does front up. It’s important to recognise that the Minister of Transport and the Minister for State Owned Enterprises are responsible. This is happening on their watch.

I do want to say, though, that there’s been some pretty feisty debate here, but this is too important to be politicking about. That was a really significant event when that vessel ran aground. It ran aground for reasons that we don’t yet know, but if it happened elsewhere, it would have been catastrophic. If it had happened with a passenger ferry in Tory Channel or at Barrett Reef, there could conceivably have been massive loss of life. That’s the risk we’re facing. That is why this Parliament and that Government needs to get it right.

When we see what they’ve done, there’s a word that’s been bandied about in respect of the iReX ferries: they’ve “repudiated” them. Now, it’s an interesting word to use—you don’t see it very often. Here’s what it means: we’re refusing them; we’re unilaterally declining to take them. Now, what I read into that is that the Government is now in a dispute resolution process, trying to find out how much they have to pay in damages for illegally breaking their contract. Now, that’s going to be very expensive. There is a real risk here about our commercial reputation. New Zealand, as a sovereign nation, has a very good reputation for not breaking our promises. We’ve just broken a $550 million promise with a major commercial player in the marine and wider heavy industry sector. The Hyundai Dockyard is not going to rush to build us our new vessels.

Now, look, I do want to be clear: I was the former Minister for State Owned Enterprises; iReX was very, very difficult. It’s accurate to say that the costs blew out—they did. But I’m convinced that pulling the rug on that contract is not the best thing for New Zealand, because that stretch of water, that most difficult stretch of water, is a lifeline connection to the South Island. I can tell you that South Islanders are feeling left out, left behind, and ignored by a Government that says, “It’s all too hard. We’ll kick that can down the road. We’ll take some advice.”

There was a solution there. It was a lasting, long-term solution. I accept it was a solution that needed cost control. The documents that are now in the public domain will show that I as Minister for State Owned Enterprises, the Minister of Finance, and the Minister of Transport were continually putting disciplines around KiwiRail, both in cost savings and to make sure that they were using their own balance sheet to fund what was possible. But what we heard was a proposal which brought our ferry system into the 21st century, that was rail-enabled so that we can utilise our rail network to its best capacity, that had vessels that were low carbon, highly efficient, and extremely seaworthy, and port-side infrastructure that wasn’t aging and falling apart but earthquake resilient. That’s where a lot of the money was going: in Wellington port that would stand up to a major event.

What we’ve got now is a Government that has thrown its hands up—and I’ve seen the figures. I’ve got a pretty good take on the fact that these new ferries—smaller ferries, three of them—are going to be $300 million each. So that’s the best part of a billion dollars already. Getting out of the contract’s another 200 million. And the ports still need upgrading, and will be we left with an outdated roll-on, roll-off system that is not a strong, safe, and resilient connection.

So I do say to this Government, let’s work hard on this. Let’s not just dismiss it because it was expensive and the last Government’s idea. Let’s look carefully at the real options, and let’s not under-invest in our infrastructure. Let’s make sure we have a genuinely strong connection between our islands, which is genuinely safe, because the risks of not doing it are too great.

Hon CHRIS BISHOP (Minister for Infrastructure): That is a curious rewriting of history by the former Minister, the Hon Dr Duncan Webb. Here are the facts: the Government came to office—actually, even before the Government took office, briefings were provided to incoming Ministers about the iReX project. The situation was extremely alarming. Ministers had to confront the reality that a project that started life as a sensible ferry investment—which we all agree is a good idea, for the reasons the member outlines: the freight connection and passenger connection between the North and South Islands. We had to confront a situation where a project that started life as sensible, at least on the face of it, had grown to the point where the Crown was up for the thick end of $3 billion, possibly more.

As it transpired, as Ministers dug into the detail—a thing that, I might add, the previous Government clearly had not done—it was not just two big new ferries; the consequence of that decision meant that the Crown was up for a massive amount of money on the land-side infrastructure to support those ferries. So members opposite are wilfully deluding themselves when they pretend that the Government had any other option but to repudiate the contract with Hyundai, because no one had done the hard work about the land-side infrastructure costs required. What’s more, there are real questions about whether the size of the ferries purchased by KiwiRail, or intended to be purchased, could traverse the Cook Strait—in particular, the Tory Channel.

Now, I’m not a shareholding Minister in relation to this—I’m not an expert on it—but those are the facts as they appear to be. So members might want to rewrite history and say they did a good job of getting into the detail; the reality is they didn’t—the reality is they simply did not—and the new Government, or newish Government, has had to confront fiscal reality. That is why we have made the decision we have done. We’re committed to ferries across the Cook Strait. It’s very important for the reasons Dr Duncan Webb mentions, but the Government is not up for a blank cheque. I am someone who is a believer in the ferry service across the Cook Strait, but the proposition that has been put to the Crown is simply not acceptable, and that is why the Government has made the decisions we have made.

RACHEL BOYACK (Labour—Nelson): Thank you, Mr Speaker. Just after 10 o’clock on Friday night, I received a phone call from the Maritime New Zealand official based in Nelson, who covers the top of the South—Holly Payne—to tell me that the Aratere Interislander had run aground just after leaving the port of Marlborough. During that phone call, it became clear that Holly needed to get herself to Picton, and so we made the decision to drive over the hill across State Highway 6 through to Picton, where we proceeded to speak with some of the KiwiRail staff based at the terminal about what had happened.

Over the coming nearly 24 hours, we spent time talking to KiwiRail staff and we also spent time with the crew and the passengers who had been on the ship when it went aground. As other members have noted today, there will be an inquiry, there will be multiple inquiries into what happened. But what is clear to me, and what is clear to the people across Te Tau Ihu, the top of the South, is that the Government’s decision to cancel the contract for the new ferries was the wrong one.

People are incredibly, incredibly frustrated that we now have an Interislander service that is at risk. This is a really serious matter, and, for me, it’s very personal. My grandfather Edgar Boyack was the Minister’s adviser on the Wahine inquiry. He was the most senior nautical advisor at the time during that inquiry. One of the things that inquiry found was the need to have tugs that were able to haul stricken ships to safety, and we got those. Those tugs were replaced between 2009 and 2014 with more powerful tugs, but, unfortunately, they’re not actually able to safely take a ship out of open water and to safety.

There are a number of things that we need to get right to ensure that we have a safe and sustainable and resilient Interislander service going forward. The people of the South Island, and particularly the people at the top of the South, rely on the service. We rely on it for tourism. The service brings people to our region who travel around, attend events, and spend money in our region. We also rely on it to bring goods back and forth between the North Island and South Island, and whenever the ferries are out of action, our small businesses in Nelson often face delays at getting goods that they are able to sell through their retail shops. It’s a very real and pressing issue.

We actually had a great deal on those ferries—$551 million for ferries—and members on the Government benches continue to push the false assertion that those ferries wouldn’t have been able to traverse the Tory Channel. That is not correct. Those ferries were being custom-built specifically to be able to navigate the perils. Those ferries would have been delivered from next year, operational from 2026, and the people of the South Island want to know what the Government’s plan is. The Government has continued to spend time in a blame game. Meanwhile, all the people of the South Island want is to know what the plan is.

We currently only have one ferry in operation. The Kaiarahi is under maintenance, and who knows what is going to happen to the Aratere. It is incredibly frustrating for us to watch Government Ministers fly in, fly out, play blame games, and not actually listen to the people of the South Island about the need for this service to be operational, for it to be safe, and for it to be sustainable.

I want to finish by acknowledging the crew, the many crew who I spoke to who were so professional during what was a very frightening incident that could have led to a large maritime disaster. They deserve better, the passengers who travel on these ships deserve better, and we in the South Island deserve better from this Government. We need to stop with the heckling and the blame games and have a proper plan so that we can actually get across the strait safely and resiliently.

The debate having concluded, the motion lapsed.

Budget Debate

Bills

Appropriation (2024/25 Estimates) Bill

Debate resumed from 30 May on the .

Hon CHRIS BISHOP (Associate Minister of Finance): Thank you very much, Mr Speaker. Well, I adjourned the Budget debate—when was it?—two or three weeks ago. A lot has happened since then, and we were about to begin Budget urgency. But the debate on the Budget—a very good Budget produced by my good friend and colleague the Hon Nicola Willis—continues. I wanted to run through some of the highlights, as I see it, from the Budget because it was a very good Budget. It was a challenging Budget delivered in challenging times for New Zealand.

I want to start with that proposition because it is clear to anybody out there, walking around outside of Parliament in the real world, that it is challenging out there. Interest rates are high. The official cash rate is at elevated levels. Inflation is still outside the band, at over 4 percent. There is a palpable sense out there in the public that there are tough economic times, and people are feeling that. We acknowledge that on the Government benches, and I make the point that better times are ahead but it will be tough for quite some time because we are dealing with the hangover after the night before.

We are dealing with the feeling that happens when you wake up a bit late, at 11 o’clock on a Sunday morning and you start craving hash browns, bacon, and sausages and, in my case, a bit of black pudding, and you think, “Oh gee, last night I had a bit too much pinot noir from Central Otago.”, or, in my case, some whiskey, and that’s kind of what happened to New Zealand. We printed a lot of money and Mr Robertson came along and spiked the punch at the same time, and fiscal policy was not a friend to monetary policy. In fact, we just went full tilt on the accelerator. We printed a lot and we spent a lot, and every year that Grant Robertson was the Minister of Finance, he exceeded his Budget allowance. So he’d always turn up at the Budget Policy Statement towards the end of the year and say, “Next year, I’m going to spend a certain amount of money”. It was normally about $2 billion to $3 billion, and every year he would exceed it—every year.

It’s a bit like my diet. I always wake up on New Year’s Day and say, “Oh, this year I’m going to really get down to 90 kilograms.”, and it never happens. It’s a bit like that with Grant Robertson—he never met his allowances. As a result, the spending just rolls on, and, as financially literate members know—they’re normally on this side of the House—those numbers just cascade on top of each other. So, over time, you end up with enormous fiscal largesse. That’s how we ended up with an 80 percent increase in Government spending in six years—because he just added to the allowances every year. They just built and built and built and built, and we’ve ended up in the fiscal situation we’re in, to the point where—and this is in the Budget documents—Treasury advised there is a structural deficit. There is a structural deficit.

The first thing this Budget does is it starts the process of fiscal restraint, and that is extremely important. I find the attitude of members opposite towards this bizarre, because on the one hand—and Chris Hipkins is the sort of past master of this—Chris Hipkins says, “Well, Nicola Willis is borrowing all this money—tut, tut, tut. What about all the debt?” In this sort of new-found road to Damascus conversion of the friend of fiscal policy, he pretends to be worried about the debt, and then, on the other hand, he says, “But you’re cutting funding to this. You need to increase spending here. What about this? What about that?” He’s never seen something that’s a Government programme he doesn’t want to increase spending on.

Well, actually, Government is about hard decisions. Government is about making tough choices, and the last Government pretended that they could just continue to increase spending and never confront trade-offs. As a result, the money hose just kept being spouted and money just continued to flow, to the point where we had an 80 percent increase in spending and we have massive debt that we are going to need to repay. So there are lower allowances in this Budget and we intend to stick to them.

We start the process of fiscal restraint and we have gone through, line by line, and made a series of savings as a result of this Budget. Some of those decisions were hard. I’ve talked publicly about the First Home Grant decision, where we had to make the difficult choice to end first-home grants as low-value expenditure and reprioritise that money to social housing expenditure. Members are sort of crying a bit opposite, but they know I am right when it comes to effective public—

Hon Jo Luxton: You’re not right.

Hon CHRIS BISHOP: Oh, I am right—I am right. This is effective public policy. Subsidising demand for housing does not create new houses. The way in which you create new houses is by fixing the building system, fixing the resource consent system, opening up land—

Chlöe Swarbrick: Changing incentives, Bish.

Hon CHRIS BISHOP: —and funding infrastructure, and that is what we are focused on. And I know Chlöe Swarbrick agrees with me. Isn’t it interesting that the Labour Party have not promised to bring back the First Home Grant? They’ve criticised us for cutting it, but they have not promised to bring it back, and I find that intriguing.

The second thing this Budget does—and it flows from the first—is it reprioritises funding from the back office to the front line. We are unashamed about reducing the size of the bureaucracy and making sure we employ more nurses and doctors and police officers.

One of the best investments in this Budget—and I want to give a shout-out to the hard-working New Zealand First on this, and my good friend and colleague Casey Costello—is the commitment to hiring 500 new police. We saw the first fruits of that on the weekend with the new police on the beat in our CBDs, and isn’t that going to be a wonderful thing? When I go out there into the real world, people say to me, “We want to see cops on the beat. We want to see them walking down our main streets—we want to see them out and about.”, and that is a real way of deterring crime in and of itself.

That is just one example of the kinds of prudent and sensible investments you can make when you prioritise your resources. When you do the opposite, and you just pretend that money is free and that there’s a magical fairy at the bottom of the garden who can just keep inventing money, essentially, you don’t confront those tough trade-offs and you end up in the situation we’re in, which is a real situation of fiscal crisis where we have to make hard decisions.

The other thing this Budget does is deliver tax cuts—tax relief for hard-working New Zealanders. Now, there were a few people out there during the lead-up to the Budget—commonly, they’re commentators—saying things like, “Well, the Government should really cancel the tax cuts.” It’s an interesting proposition—it’s an interesting proposition. The thing about that proposition is it would have required the Government to break the central policy that the Government campaigned on.

So I just think it’s worth reflecting on—I mean, the Labour Party never believed in tax cuts in the first place. They’ve never seen a tax increase they weren’t in favour of and they’ve never been in favour of tax relief ever—ever. When the Government books are not going so well, they say, “Now is not the time for tax cuts.” When the Government books are doing well, they say, “Now is not the time for tax cuts. We should really do something else with the money.” You can never win.

They’ll never be in favour of tax relief, and it goes to the central difference between the parties. On this side of the House, between the ACT Party, the National Party, and the New Zealand First Party, we believe in letting New Zealanders keep more of their own money because it’s their money, and we believe they can spend it, generally, better than the Government can.

We also believe in this: we believe that after 14 years of fiscal drag, it’s time to remedy that situation. More and more people are pushed into higher and higher tax brackets, paying more and more of their money to the Government every year, to the point now where for people on the minimum wage, towards the end of their take-home pay, some of that money is in the middle-income tax brackets. That is wrong. That is crazy. Sensible countries do something about it, and we are now doing that.

As I say, the Labour Party need to remember who they purport to represent, because most of these tax relief benefits flow to low and middle income New Zealanders. On average, households benefit by 60 bucks a fortnight; households with children, $78 a fortnight; 94 percent of households will benefit from the tax package in this Budget.

I was so proud to see that legislation go through straight away on Budget night, because I know that come 31 July, a huge number of New Zealanders are going to wake up with more in their back pocket as a result of that package. They’ll be able to afford things they weren’t able to afford before: new school shoes for their kids, music lessons, and actually making it easier to pay the rent on time. Those things are important. That’s what the Budget package does, and that’s why I commend this Budget package to the House.

Hon Dr MEGAN WOODS (Labour—Wigram): The Minister, Chris Bishop, who has just sat down, told us that Government is about hard choices. Well, we certainly saw those harsh choices that this Government has made in the Budget that was delivered in what seems like a lifetime ago now, given how much has been written about it. This is a Budget of broken promises, it is a Budget that is taking New Zealand backwards, and it is a Budget that exemplifies the wrong choices that our Government is making on behalf of New Zealanders.

Now, New Zealanders were promised much on the campaign trail—not least $250 a fortnight in tax cuts from the National Party on the hustings. What have most New Zealanders who have gone to the calculator to find out what they’ll be receiving found? They’ve found that it is way short of that. And what’s more, they’ve found out they had to start shelling out for bus fares, because the previous investment in having free bus fares has gone. They’ve found they’ll have to be paying for prescriptions again in many cases, because that is a choice that this Government has made to slash the funding in that area. They’ve found that, in their case, the free lunches in their child’s school will be reduced to nothing more than a snack. And these are, once again, things that are going to come out of the back pocket of hard-working New Zealand families. New Zealand families realise the wool was pulled over their eyes and they are worse off as a result of this Budget and not better off.

We have a Minister of Finance who is insistent on telling us that she hasn’t borrowed for her $10 billion tax cut package, despite borrowing $12 billion to pay for measures in the Budget. New Zealand’s debt as a percentage of GDP has risen. If the Government had not chosen to deliver $10 billion worth of tax cuts, the need to borrow that $12 billion would not exist. But, over and over again, we have a Minister of Finance and a Prime Minister who are intent on telling New Zealanders that black is white and they have not borrowed for their tax cuts. That simply is not true.

But what we do see as a result of this Budget is laid bare. I think one of the most interesting reads of any Budget is the Budget Economic and Fiscal Update. That tells us a great deal about what Treasury is saying the impacts of the Budget being delivered are. They tell us that house prices are going to continue to rise. They tell us that there is going to be upward pressure on rents because of the removal of interest deductibility. We also see in the analysis of the Budget that child poverty will rise. These are the results of the Budget and the choices that the members of the Government have made in a Budget that they are delivering to us. We know that it will take so many hard-working New Zealand families backwards and they will be worse off.

If I have a look at what this Government is doing in terms of climate—and what they are not doing, more to the point—this is a Government in which the best they can say about their positive vision for addressing climate action is, “Well, we didn’t cut that line of the previous Government’s work.” There is $3 billion worth of initiatives and climate action carved out in this Budget. There is $3 billion of investment that was about securing New Zealand’s security, New Zealand jobs, and New Zealand’s future that this Government has taken the knife to, to pay for tax cuts and give tax benefits to landlords. That’s the kind of self-interest we are seeing from members on the other benches. We’ve seen money to partner with New Zealand businesses to reduce industrial emissions and keep jobs in New Zealand slashed by a Government saying it doesn’t want corporate welfare but has absolutely no plans to do anything about industrial allocation of emissions trading credits. What they are saying is they would rather go out and pay other countries $100, $200—who knows how many hundreds—per credit rather than cut emissions at home.

Well, I can tell members—the economic geniuses, self-proclaimed, on the other side of the House—the New Zealand Steel deal delivered for New Zealand emissions reductions at $18 a tonne. Go out and find me an international credit anywhere that will deliver emissions reductions so cheaply and will benefit New Zealand in so many ways. But what was laid bare when we had the chance to scrutinise the Minister of Climate Change, the Minister for Energy, and any of the Ministers involved in this work was that is no plan, there is no vision, and, frankly, there is no understanding of how New Zealand needs to get to where it needs to get.

We’ve seen money stripped out of the Warmer Kiwi Homes programme, a programme that returns so much more than it puts in. We’ve seen money pulled out of the Community Renewable Energy Fund, a programme put in place by our Government to work with communities to not only generate badly needed renewable electricity but also to create community resilience. Support for the energy, education, and communities programme—a programme that was working with some of the most vulnerable New Zealand households about how to reduce their power bills—is gone because this Government would rather fund $2.9 billion in tax relief for landlords than helping some of our most vulnerable families pay the bills and get by. The just transition programme and any money for us to stimulate a hydrogen industry in New Zealand is gone from a Government with no foresight who thinks economic development is selling houses to each other and then claiming interest deductibility on it. That’s the kind of choices that are laid bare in this Budget.

One of the things that we do know about the kinds of choices that this Government has made is that they are not interested in what will take New Zealand forwards. It is a Budget that consistently looked over its shoulder. It is a Budget that only is intent on taking New Zealand backwards. And let’s look at some of the other markers that just show how far back this Budget is taking New Zealanders.

Unemployment, according to the Budget, is due to peak this year at 5.3 percent, and I want everyone just to pause: 5.3 percent doesn’t sound like a big number, but that represents hundreds and thousands of New Zealanders who will be without work and that will need to make ends meet. Was there anything in this Budget for them? No, there was not. What we’ve seen is we’ve seen the minimum wage exemption for disabled people cut. There was money actually taken out of the Budget to make sure that we were paying disabled people the minimum wage, and we’re told that we can’t do that, otherwise disabled people will not be employed. No, they won’t. There was money in the Budget to subsidise employers to ensure that dignity of work and good pay could be given to those people.

What we are seeing is a set of choices laid bare. It is not, as we would be told by the Minister of Finance and the Prime Minister, a Budget that is giving the biggest boost to working people. No, it is not. It is taking working people backwards. It is taking money out of the back pockets of working New Zealanders to pay for $2.9 billion worth of tax relief for our landlords. It is taking money out of our children’s future by scrapping climate initiatives. If there was ever a greater testament to the lack of vision and the lack of ambition for New Zealand that a Government could carry, it was contained in the pages of the Budget that was delivered by this Government two or three weeks ago. It is a Budget that will not benefit those that need it the most; it is a Budget that is making the wrong choices and taking us backwards.

Hon LOUISE UPSTON (Minister for Social Development and Employment): The member who resumed her seat, the Hon Megan Woods, doesn’t believe that 3.5 million New Zealanders believe tax relief—doesn’t believe hard-working New Zealanders should get tax relief. Now, that’s a sad place to start, because, in reality, the Budget that was delivered by the Minister of Finance, Nicola Willis, on 30 May prioritised hard-working New Zealanders.

I want to tell the House this, because that side of the House does not think those 3.5 million New Zealanders get it. They do. They absolutely get it. They know that each and every day that they are struggling, that they are doing it tough, they know, although we might still see some months ahead, it will actually get better, and they know why. They know, because they voted in a coalition Government at the election last year that they could depend on for delivering their promises. They knew that there was a Minister of Finance who not only delivered a Budget on 30 May but also delivered a mini-Budget before Christmas, literally weeks after coming in, to actually lay the foundations for what our country needs, not just in the days and weeks ahead but the months and years ahead.

That side of the House thinks that New Zealanders don’t get it. They think New Zealanders don’t get it, but, actually, what are they doing at home? They are thinking about how they take more care with their weekly budget, how they balance it. Actually, for far too many, it is too tough. Some of them might have to borrow to get through this period of time, but they are not wasting their money on frivolous things that don’t lead to a better life for them.

The other side of the House don’t think that hard-working New Zealanders get what our Government is doing for them. So the 3.5 million New Zealanders who understand—and as Minister Bishop quite rightly laid out, he described it in other terms. I’m going to describe it as the sugar hit—the sugar hit of the previous Government spraying money away around everywhere, not caring whether it landed, not caring whether it actually delivered anything or delivered any outcomes. But you know what it’s like when you’ve had too much sugar. If you stop sugar, it’s a crash and you feel rotten, your head hurts, and you feel sick, but, actually, once you’ve got through that period without the sugar, you are actually way better off. That’s exactly the period of time. Unfortunately, based on Treasury’s forecasts, it could be sort of six months—hopefully not too much longer than that—but this Government is up front with New Zealanders about the position we are in and what we have inherited, but, more importantly, the steps we are taking to resolve it.

It was fascinating—scrutiny week last week was the opportunity for the Opposition to grill Ministers on their budgets and on their estimates, and, gosh, wasn’t that surprising. There were actually very, very few opportunities for the Opposition to land a hit, because at the end of the day, New Zealanders everywhere, from one end of this country to the other, are contacting their new MPs—and we’ve got some fantastic new MPs in this House—and they are contacting Ministers and they are saying, “Keep going. We know the decisions you’re taking are tough, but please keep going.”, because they absolutely know they are the right decisions.

The member that resumed her seat before me was somewhat interesting when she talked about the Budget Economic and Fiscal Update and the fiscal update that was provided by Treasury and talked about the unemployment rate rising to 5.3 percent. If we can hold it at 5.3 percent, despite these absolutely dire economic situations and circumstances we have inherited, that’s actually a win.

Here’s the thing: despite there being very low unemployment, that side of the House, when they were in Government, managed to clock up an extra 70,000 people on the jobseeker benefit—

Hon Member: Outrageous.

Hon LOUISE UPSTON: Absolutely outrageous. At a time when many businesses everywhere were desperate for staff, it is just unbelievable that they were so successful in doing that.

So, instead, this Government lays out a clear plan—it will be ambitious—for reducing the number of people on the jobseeker benefit by 50,000. But if we just picked a number out of the air and said, “Oh, well, sounds like a good number. Sounds like a good slogan.”—no, there’s a detailed plan that goes with it, because the coalition Government, every Minister, every MP that’s working hard on the ground knows that it is our job, even in tough times, to improve the lives of the people we represent.

In social development and employment, it’s reducing the number on the jobseeker benefit. So what have we done? First and foremost, we do believe, on this side of the House, that there are rights and responsibilities. If somebody’s on the jobseeker benefit, they have the right to get welfare support, but they have the responsibility to take steps that they should be taking to improve their chances of finding a job, so if they don’t, there should be a consequence. It’s called a sanction.

What else have we done to make the welfare system more active? We’ve introduced Kōrero Mahi, so if somebody signs on for the jobseeker benefit, within two weeks we want them back at a seminar connecting with the Ministry of Social Development, talking about what steps they are taking to find a job—actually, not that kind of shocking or stunning, right?

When we announced it, one of the journalists was like “But surely that already happens.”, and, like, no, unfortunately, it doesn’t. After signing on for a benefit, somebody could go for up to 12 months with zero contact—zero. So, instead, we are a Government that is focused on supporting people into employment. It will be hard, these times, particularly the next six months, and we do recognise in the Treasury documents that the numbers are due to increase. But rather than just say, “Oh, you know, that’s tough.”, no, we will double our efforts to support more Kiwis into work. That is exactly what this side of the House will do.

Another group of New Zealanders that we are supporting in this Budget is, of course, disabled New Zealanders. Unfortunately, what we’ve seen, and this is a classic example, in the creation of Whaikaha - Ministry of Disabled People—the previous Government set it up with a big fanfare and they set these wildly high expectations but actually didn’t address the fundamental issues of funding the disability support service that they knew and were in the establishment Cabinet paper yet did nothing. They did nothing to address it, so this Government comes along and inherits a mess.

Do we just surrender? No, we are doing the work; we have a review to understand exactly what has happened but, more importantly, what we need to do to solve it, because disabled New Zealanders, their carers, and their families deserve better than what the previous Government set up the ministry to do. I’m absolutely committed that Whaikaha will be successful. Disabled New Zealanders need them to be. They need us as a coalition Government to deliver better. Whether it’s access, whether it’s employment, whether it’s ensuring there are sufficient care and support workers, our Government is focused on improving the lives of disabled people, their families, and carers.

I want to return to where I started and say this is a Government who is absolutely delivering for New Zealanders. So, even in challenging times, we focused on New Zealanders being able to keep more of what they earn. The other side of the House doesn’t think they deserve it. They don’t think they deserve it. It’s outrageous—that is absolutely outrageous. They think they can spend it better than taxpayers can. Well, actually, no, we trust and we back New Zealanders. That’s why we’ve allowed 3.5 million New Zealanders to keep their own money, and we will be incredibly careful with what they provide in tax. That’s why every Minister has been very careful in looking at expenditure, focusing on the front line—is it delivering results or is it not? Yes, that means some tough choices, but if you think about this Budget, it’s delivering more in health, more in education, more in disability, and in keeping our community safe.

CHLÖE SWARBRICK (Co-Leader—Green): E te Māngai, tēnā koe. Tēnā koutou e te Whare. There are things that none of us could do alone. There are few New Zealanders who have the individual wealth to build schools or hospitals or pay the $20 billion annual superannuation cost that we have as a country. That is why we form society. It is why we decide to come together to help to pay for things, whether that be the infrastructure or the services that all of us fundamentally agree and value and say that we need. That is the point of a representative democracy—the point of all of us, as 120-odd MPs in this place, coming together to make decisions on behalf of New Zealanders about how we best make decisions in the collective.

Unfortunately, the discussion that we are having tonight, on the bill which implements the spending announcements in Budget 2024, is that we are not so much grappling with vision for the future of this country, let alone the present day; what we are grappling with is a shredder. There are no foundations in this Budget for the flourishing or the wellbeing of people or the planet.

There are a lot of different places I could start on this, so I’ll start just firstly by responding to two Ministers who have so far contributed to this debate—the former, the Hon Louise Upston, who just said she thinks this side of the House thinks that New Zealanders just don’t get it. And I’d really like to respond to that point, because this is something which I’ve been banging on about for the last six or seven years that I’ve had the privilege of occupying a seat in this Parliament. I think New Zealanders are a heck of a lot smarter than a lot of politicians and a lot of the mainstream media give them credit for. I think New Zealanders can see through a lot of the nonsense and the bluster and the slogans that come out of this place. So I just want to address that right upfront: New Zealanders are actually tired of the nonsense that comes out, probably in most people’s perspective, of every single political party that’s represented in this place.

The best that any of us could do or hope for with the privilege of our position is to engage in a robust, evidence-informed debate. To that effect, I’d just like to put it on the record, for the sake of the House’s knowledge, that I wrote to the Minister of Finance in the wake of the Budget and asked for her to carry on with the work that she had promised she would do in Opposition—that is, to pursue the independent policy costings unit, which, of course, the former Minister of Finance, the Hon Grant Robertson, and the Hon James Shaw, as associate finance Minister in our first term, in that relationship with Labour, tried to get across the line but was shot down by National. So we’re hoping to revive that for the sake of transparency and independence, so that we can have a meaningful and informed, evidence-based debate on Budgets, least of all on a universal set of figures.

Now, there have also been some statements from the likes of the Hon Chris Bishop, who was speaking about how this Budget is occurring in the context of unconventional monetary policy, especially post-COVID-19. For the uninitiated, unconventional monetary policy was the programme by which the Reserve Bank decided to basically print more money—

Hon Paul Goldsmith: Money-printing.

CHLÖE SWARBRICK: —yes, the Hon Paul Goldsmith—through programmes like the Large Scale Asset Purchase programme and Funding for Lending. Interestingly enough, back in 2020, Treasury and the Reserve Bank of New Zealand advised the Government—and the Greens actually went on about this quite a lot too over the last few years—that the pursual of this unconventional monetary policy without mitigating fiscal policy would result in what the Reserve Bank and Treasury called “distributional impacts” but what the rest of us in the real world call “greater inequality”. That is something which the Greens are on the record, time and again, asking the former Government to meaningfully address. We cannot pretend that what the Reserve Bank did happened in a vacuum back then, and we cannot pretend that what they are doing now also operates in a vacuum. Monetary and fiscal policy are supposed to operate hand in glove.

We also heard commentary about the Budget Economic and Fiscal Update, and there’s a really interesting point in this, actually—that is, that we know, based on the projections from this Government’s operating allowance that they’ve handed themselves, that they have said, in this window of the next two years, they are going to have $2.4 billion of new operating allowances for each of those next two years. But guess what! What Treasury, what the Government’s own officials say, is that you need at least $2.5 billion. That’s $100 million more than the Government has already allocated themselves just to keep the lights on—that is, with the level of services that New Zealanders are accustomed to and expect. So that might be why it is that we are starting to hear, out of our nurses and our doctors and our medical profession, that there’s, effectively, a hiring freeze on at the front line. And do you know what that does? When you don’t invest in issues as they arise, those costs accumulate. That is in direct contradiction to all of the bluster and nonsense that we have heard from this Government—that they are somehow good economic or fiscal managers. You don’t get to have that reputation simply by saying it, especially when the facts operate in entire contradiction to that.

What this Budget does is, in fact, actually set us up for austerity. It sets a bunch of programmes up to fail, so that the Government can ultimately end up cutting those programmes or privatising those programmes. We see hints of that in the changes to the school lunches programme, which takes the average cost per child from approximately $8 to $2. I can point to a number of schools within my constituency who have written and pleaded with the Associate Minister of Education that this will not work for them and asked whether there is any wiggle room or discretion whatsoever. These are the hard choices that the Government keeps telling us about. Its hard choices are to cut school lunches for our kids and to hand $2.9 billion in tax cuts to landlords. Those are some really hard choices for this Government!

We’re also seeing the can kicked down the road on climate change, and the Hon Megan Woods spoke a little bit about this.

Hon Simon Watts: What a load of rubbish.

CHLÖE SWARBRICK: I’m so glad that the climate Minister is here in the House to actually hear the recounting of his inability to answer any straightforward questions at scrutiny week last week. We heard from that very climate Minister that the market was working properly, when the emissions trading scheme (ETS) auction failed last week. Do you know what that does? It puts a $700 million hole in their revenue plan and the Budget that is unable to now be directed, not into the Climate Emergency Response Fund—because they cut that; they’re not interested in decarbonising industry. What it does is it cuts $700-odd million from the revenue that they need to fund their tax cuts for landlords. Make it make sense!

On top of that, we also heard both from the Minister of Climate Change and from the Minister of Finance that they are still committed to our nationally determined contribution on the Paris Agreement. This is a really important point, and if I can drill into it, because the Minister of Climate Change, of all people, should be interested in this: our contribution as a country, as one of 196 countries under the Paris Agreement, is to say that we are going to keep below 1.5 degrees of warming. And as the UN Secretary-General put it just this past week, that is not just some airy theory, abstract target; that is the scientific fundamentals for retaining life on Earth as we know it—in fact, the climate necessary for growing food, which this Government constantly tells us it cares about. And do you know what? What we have from the Ministry for the Environment and from Treasury last year, in approximately November 2023, was an estimate paper that they pulled together to try and put some kind of figures on the amount of money that we are liable to be on the hook for, up to the year 2030, as a country, regardless of who’s in Government. And do you know what they estimated?

Our offshore liabilities are looking to be somewhere between $3.7 billion and $24 billion for offshore mitigation. That is a necessary figure, to the tune of however many billions of dollars, even if we were to meet our very own emissions reductions budgets, that we will have to pay others to reduce their emissions. Meanwhile—riddle me this—this Government has also made decisions knowing full well on their own official advice that their Budget will also increase emissions. But they haven’t budgeted for those offshore liabilities, to the tune of billions of dollars to 2030—again, kicking the can down the road on that. And, on top of that, alongside shredding the work programme that was already under way at the Climate Change Commission to price agricultural emissions—the only sector in our economy that is currently not priced under the ETS but also represents 5 percent of our GDP and half of our emissions—they’ve also set up their own working group to apparently do this work by 2030, which, as we discovered at scrutiny week with the Minister of Climate Change, has no budget allocated to it. They can’t tell us the terms of reference, who the members are, or how much this new working group is going to cost.

We’re left scratching our heads, and, again, in a position where we are dealing with a ticking time bomb, whether it is on the front of climate change or whether it is on the front of inequality or child poverty. There is so much more that could be said about the fact that this Government is just leaving the infrastructural deficit to continue eroding away at the quality of life that New Zealanders deserve. Different choices could be made. And I’d note, interestingly enough, that the Government itself and the Minister of Finance referred to the need for us to do fiscal consolidation. To that effect, there are tons of international bodies, the likes of the International Monetary Fund and the OECD, who have pointed out one of the key things we could do is fix our tax system with a capital gains tax.

Hon SIMEON BROWN (Minister of Transport): Thank you, Madam Speaker, for the opportunity to talk about the 2024 Budget, and what a great Budget for New Zealanders this Budget was. It’s quite interesting when you follow the Green Party over there, because every single speech they end with has to be “A new tax—a new tax.” It’s all about more tax. They haven’t seen something yet that they don’t want to tax. Everything they see, they want to tax, and that’s their modus operandi.

But this Budget was about tax, and it was about tax relief for hard-working New Zealanders, who, by the way, haven’t had tax relief since 2010—14 years. The other side have been happy to let inflation erode people’s real incomes, let tax creep continue to take its toll on people’s incomes, and they didn’t do anything about it. In fact, I think it’s really important to note that whilst it’s been 14 years since New Zealanders have had tax relief, it would be a lot sooner if the last Government hadn’t repealed the tax relief that the last National Government put in place in 2017. Because, of course, in 2017, the Hon Steven Joyce legislated tax relief, and the very, very, very first thing the Labour Party did when they came into power was to repeal the tax relief that New Zealanders had received under that National Government.

That is exactly how that last Government operated: tax, tax, tax, spend, spend, spend, and not worry about the future, while this Government is now having to clean up the fiscal mess left behind by the last Government. And what a mess it is, a mess all over the place: the borrowing, the borrowing, and the spending. In fact, us as Ministers, going through our portfolios, having to clean up our portfolios and find the savings and make the tough decisions is exactly what the New Zealand public have been expecting of us.

That is exactly why the New Zealand public voted to get rid of that last Government—because they could see the reckless spending that they were going down. Spending like drunken sailors, not worrying about the future, borrowing money and nothing to show for it—nothing to show for it. Then they have the audacity to stand up and say, “Oh, well, we have to be, you know, worrying about the $3 billion iReX project.” Well, I’m sorry; again, nothing to show for it. Nothing to show for it, even after six years in Government. So, this Budget was about giving New Zealanders the tax relief that they need to ensure that New Zealanders can address the cost of living crisis. I’ve heard members on this side speaking in this debate about the pain that New Zealanders are currently feeling—and it is real, it is real. The economy is in a tough position left behind by the last Government who had no plan for the economy, who had no plan other than to tax, spend, borrow, tax, spend, borrow.

Well, this Government has inherited that mess and we’re having to make the tough decisions, but the first and number one priority for this Government is to provide that tax relief for working families, so that New Zealanders can just keep a little more of what they earn—the principle of keeping a bit more of what they earn. [Interruption] I tell the members on the other side of the House: they don’t believe in it; they just want to take it. If they ever get back into Government—if they ever get back into Government—I can guarantee New Zealanders that the first thing they will do is increase taxes. The first thing they will do is increase taxes because that’s exactly what every single Labour Government does. They get in and they increase taxes on working New Zealanders. [Interruption] They know it—they know it. They can feel it deep in their hearts. They can feel it. They feel the desire to keep taxing New Zealanders. It’s bubbling away as they interject in my speech. They can’t wait—but they won’t because the public of New Zealand can see right through it. The public of New Zealand won’t let them ever get hold of the Treasury benches ever again, because they know that this country has fundamental challenges which need fixing: the cost of living crisis, crime, public services—making sure that public services actually work for New Zealanders—and, of course, infrastructure.

I heard the member who sat down just before, Chlöe Swarbrick, talk about the infrastructure deficit. Well, billions of dollars were borrowed, and what have we got to show for it? They cancelled the roads of national significance—gone. We think about the Northland Expressway up to Whangārei—cancelled. No planning done for the last six years. I came in and asked the NZ Transport Agency what major roading projects across the country had been consented. Well, the good news is—the good news—there’s one. It’s Warkworth to Te Hana, going north of Auckland. The bad news? There’s only one: Warkworth to Te Hana. The pipeline of infrastructure was stopped by the last Government, other than, of course, the pretty pictures: the pretty pictures of “Auckland Light Fail” and Let’s Get Wellington Moving. The beautiful pictures and slogans which they spent hundreds of millions of dollars on; they couldn’t even deliver a business case—they couldn’t even deliver a business case. An absolute fail.

We have inherited an infrastructure deficit that we are tackling in this year’s Budget, and I’m proud of the investment that we’re putting into roads, into rail, into fixing the potholes on our roads, improving public transport for New Zealanders. This Budget delivers for infrastructure in New Zealand. As Minister of Transport, of course I’m incredibly proud of the $2.68 billion increase in investment in roads and rail and public transport to support the Government Policy Statement on Land Transport: another billion dollars to advance the roads of national significance and major public transport projects—isn’t that great for the regions of New Zealand where roads are what are critical to unlocking the economic growth and productivity of our country?—and $939 million for the recovery of the roads which were damaged by the East Coast, North Island weather events. That is going to make a huge difference to the State highways and the local roads. And $266.9 million for rail in our metropolitan rail networks. This is going to mean that the City Rail Link in Auckland is able to be opened, with the rail rebuild completed in 2026.

This is going to make a huge difference to Auckland. For six years, talking about Auckland light fail, whilst the last National Government made the tough decisions to start the City Rail Link, which would double the capacity of our rail network in Auckland. That is real change for our public transport network. That will make a real difference to congestion and getting Aucklanders moving. The last Government didn’t even deliver a business case, let alone some pretty pictures. Another $200 million to support KiwiRail to carry out maintenance and renewals of the national rail network; money for the Civil Aviation Authority so we can keep the important work they do going; money for Surf Life Saving in the Coastguard to help them on the critical safety work that they do. We have made a huge investment here as well in decarbonising the bus fleet, which is going to make a big difference in terms of lowering emissions in our public transport system.

This additional $2.68 billion goes on top of the already announced draft Government policy statement, which includes over $20 billion of investment in the next three years. I’m proud of the decisions already made by the NZ Transport Agency to invest a 91 percent increase in pothole prevention and maintenance on our State highway network, and an increase of 50 percent of pothole prevention on local roads. It’s not just about making sure there’s increased funding—we need it—but also making sure that there are outcomes delivering for New Zealanders. We have set very clear expectations around how we want that money to be spent and the targets that we want the agency to be delivering against.

This Budget delivers for the infrastructure that New Zealanders need. This Government understands the infrastructure challenges New Zealand has, and we’ve also set aside an increase in the multi-year capital allowance, increasing it to $7.5 billion because we do know there are other challenges and other decisions that need to be made in terms of infrastructure in the coming years. We’ve obviously had the conversation earlier today around the ferries; there’s other major roading and rail projects and other infrastructure challenges this country faces. We will face up and make the tough decisions, invest in the infrastructure that New Zealanders rely on so we can grow our economy, boost productivity, and help New Zealanders get where they need to go quickly and safely. This Government’s Budget delivers for infrastructure. Thank you, Madam Speaker.

Hon Dr DEBORAH RUSSELL (Labour): A Budget represents a series of choices that are made by a Government. A Budget makes a series of claims about what a Government is doing. But when we dig down into those choices, when we dig down into those claims, then the character of the Government is revealed. What is revealed in this Budget is something that I can only think of as being devious. It is a Budget that alleges that it gives with one hand, and then it takes with away with the other. It makes a whole series of choices that leave ordinary New Zealanders worse off. They talked up large, they promised they would deliver, but what have they done? Public transport subsidies: gone. Free prescriptions: gone. Bare minimum wages for people with intellectual disabilities: gone. Proper school lunches: gone. The second year of the Apprenticeship Boost: gone. All these things, small amounts—a bit here, a bit there—but they all make a real difference to families.

That Government over there talked up large about the tax threshold changes, talked up large about what that might do for families. But, on this side of the House, we’ve had family after family contact us, sending us messages, talking about the increased cost of public transport, talking about the prescription fees that they will now have to pay, talking about how they will be worse off as a result of the choices that that Government has chosen to make in this Budget. So they’ve made very small changes, on one hand, in the tax thresholds, and then they have taken them away on the other. Not only that, they have derided—they have derided—ordinary New Zealanders for the things that they choose to spend money on. A Minister talked about the “frivolous” things that people spend money on. Frivolous things like prescription charges, frivolous things like public transport, frivolous things like food for their children—characterised them as “frivolous” things. How outrageous. It is going to be so much tougher for so many people because of this Budget.

On Friday evening—Thursday evening or Friday evening—1News featured a story about food banks. I took particular notice because Lady Maliena Jones was featured in one of them; she runs a food bank in West Auckland. As it turns out, the Ministry of Social Development sends people along there for food parcels when they need them. On the one hand, people are struggling to get by, looking for Government assistance, but they get sent to a food bank—a food bank which is no longer receiving Government assistance itself. Taking away with one hand—sorry, allegedly giving with one hand, and taking away with the other. It is so hard for people out there.

So when we look at this Budget, the word for it is “devious”. That deviousness extends right through, into some of the stuff that has gone on in the Budget documents—right into this document I’m holding. Sitting in the Budget document, sitting in the revenue strategy, is a claim that a good tax system is one that rewards effort and individuals’ investment in their own skills. Sitting in the regulatory impact statement for the tax threshold changes is the revelation that some people, as a result of this Budget, will face a personal income tax rate of 128 percent. For every single extra dollar they earn, they will be taxed $1.28 because of the changes that have been put in around the tax thresholds and the abatement rates and so on—it’s a complicated place in there. But that example, sitting in the Government’s own documentation, shows that they do not set out to reward hard work and effort. Instead, they create real barriers for ordinary people. That is a devious Budget.

When we dug into the Budget numbers even further, we found that the examples of families were made-up—created through modelling, while someone tapped away on a calculator. They could not tell us how many families would actually receive each of these alleged changes in the tax threshold. Devious hidden charges on ordinary people. This is a shameful Budget.

Hon PEENI HENARE (Labour): Tēnā koe, Madam Speaker. Thank you. First, I want to acknowledge all of our tamariki mokopuna who have descended upon Nelson—beautiful part of the country—who are performing in their national secondary school kapa haka competitions that started today. My nephew performed today. We wish them all the best and we want them to know that they are champions to all of us already.

I also want to acknowledge the other champion team—the Blues—much to the disgust of a lot of Wellington members. I am very proud of the Blues team. But I want to come back to the kapa haka. The reason why I want to come back to the kapa haka is that if the members on the other side of the House simply listened to what our young people are saying—and they’re performing it on the national stage that took place today and will take place over the next couple of days—they are clearly sending a message to this Government that the cuts, that the direction that this Government is taking this country in isn’t the right one for future generations. It is one that looks towards the now and doesn’t look towards the future.

When we look towards the Budget, what became abundantly clear to members on this side of the House is that there are two ways to make an impact on the Budget if you’re in the Government. The first one is to be a Minister and bungle a decision, and then, all of a sudden, the Minister of Finance has to scramble to find money and do a pre-Budget announcement because of a bungle by a Minister. That’s one way to do it. The other way to do it is to, simply, break a promise during the election campaign, realise that people’s lives depended on that particular promise, realise the mistake, and then, all of a sudden, start scrambling for next year’s Budget money and make an announcement around the treatment of cancer patients.

This has been a shambolic Budget process from this Government. We heard repackaged Labour announcements introduced again in this Budget. I want to talk about defence. One of the pre-Budget announcements was “Oh, we’re going to invest in remuneration.”, which is fantastic. We support that. We started a lengthy process to increase remuneration for our New Zealand Defence Force (NZDF) personnel. However, the next announcement was “And we are replacing the Pinzgauer and Unimogs.” That was already well under way under the Labour Government. In fact, we received the first tranche of those replacement vehicles while still in power. Yet we’ve had this repackaged, old announcement put into this Budget.

The next announcement that came out was: “Oh, we’re going to continue an investment into the Linton logistics hub.” That was already started, well under way; in fact, the Rt Hon Dame Jacinda Ardern broke ground on that particular project, and it was under way in my tenure as a defence Minister. Now we’ve seen it repackaged again in the appropriations in the most recent Budget. So that tells me that the defence spending from this Government has decreased. It’s simple mathematics. It will decrease to below 1 percent of GDP. Now, on that side of the House, we’ve heard numerous statements from the Prime Minister and members and Ministers saying that, “We’ve got to replace the 757s. We value the NZDF; they do this amazing work.” They’re just not prepared to invest in them. If we found the way that decision making happens in this Government, what we can do is continue to keep the pressure up to make sure that this Government puts their money where their mouth is when it comes to the replacement of the 757s.

I heard today from the Prime Minister that we’ve got to try something new and we’ve got to try something different. In order to pay for the matters that they’ve announced in the Budget, they’ve taken away. One of those things they took away was something new, something different, something innovative, and it was Te Aka Whai Ora. It was made very clear that if you want different results, you had to actually do something different, and that’s what Te Aka Whai Ora was. It was the ambulance at the top of the cliff—or the fence at the top of the cliff, in this case—and not the ambulance at the bottom. I’m really saddened by the decision from this Government to cut that and to put the money elsewhere, when I know that that was going to make a significant difference.

Some of the words I heard through scrutiny week—cute language, by the way. For example, when questioned on why they were cutting allowances for NZDF personnel to be able to go on and do further study, which is a huge incentive for our NZDF personnel, these were the words that were offered back to me: “We aren’t making cuts; we are simply limiting the allowance.” Hmm! Cute language, to me. That tells our NZDF personnel that this Government doesn’t care about them, will not invest in them, and will not invest in their future, and that can only mean that the NZDF is going backwards. Tēnā koe, Madam Speaker.

Hon SIMON WATTS (Minister of Revenue): Thank you very much, Madam Speaker. It’s an absolute pleasure to be back in the House and listening to the dreary stories coming from the other side. It sort of just makes you remember and go “Well, actually, didn’t we just have a Budget 26 days ago which actually provided significant relief to hard-working New Zealanders?” And that is the case. That was the reality 26 day ago. We had an absolutely superb Budget. Nicola Willis, our finance Minister, delivered on our promises to those families across this country. Hard-working Kiwi families are now going to get hard-earned tax relief after a decade of waiting. And this coalition Government has delivered upon its promise to make that a reality. I’m proud of that. I’m proud to be part of a coalition Government that is delivering because, gee, I must say after six long years of non-delivery and neglect, we are now having to tidy up that mess. But I’m proud that we are, and we are embarking on that process.

You know what? The average-income household will be $102 a fortnight better off from 31 July. That is a real addition to those families and for an average-income household it’s going to make a real significant impact. What’s interesting, though—[Interruption] Right; that’s pretty reasonable. That’s a contribution. Do you think that side of the House voted in support of that happening?

Hon Member: Did they?

Hon SIMON WATTS: No. No, they didn’t. Labour, the Greens, and Te Pāti Māori voted it down, voted against the tax cuts, and that’s proof that on that other side of the House, they are not facing the reality of what households in this country are facing.

The Budget analysis also showed that 727,000 households will benefit by at least $75 a fortnight and 187,000 will benefit by at least $100 a fortnight. That is a significant element of a contribution versus the status quo. And let’s remember, the status quo is no tax relief and it would have been no tax relief under Labour, Greens, and Te Pāti Māori. But this coalition Government has delivered upon the promises that we made. The sum of $3.7 billion is the amount of tax relief that is going back into the back pockets of hard-working Kiwis. And that is real change and real effect for what is an incredibly important part. And I’m pleased to be part of a Government that has delivered that aspect.

I also am proud, as the Minister of Revenue, that the Inland Revenue Department, who have responsibility to make this a reality, are working very hard to be prepared to do that. They’re doing a great job, and I am looking forward to a matter of weeks away when that money starts to flow into the back pockets of those individuals in particular, and that is going to be great.

The other aspect, in regard to the relief that we provided, was also in the area of FamilyBoost, and that is acknowledging that a significant element of the amount of money that families with young children spend is on early childhood education—a significant amount. And, again, this Government heard and listened in terms of the challenges and pressures that those families were under and took the leadership required to be able to provide relief to those families. And so, again, they are going to be able to claim up to about $900 or so a quarter to be able to provide relief to pay for those funds. And that is targeted again to families under a household income of $180 grand. And that is real. That is real money going into the back pockets. Again, in comparison to the status quo of what was being offered on that other side, that was zero. And so that is the reality again for that aspect.

The other aspect in terms of the Budget that has been announced previously, as we’ve noted, is that it was against the backdrop of some pretty significant fiscal mismanagement. I mean, it’s hard to sort of explain the reality of what we have inherited in regard to fiscal mismanagement. But every corner you turn—or one turns—there is a significant amount of challenges and issues, and there is wastage all over the place.

But this Budget is a clean-up job. It is a clean-up job to make sure that after six years of New Zealand being neglected financially, we are able to start turning around that economic mismanagement and get back on the tracks to making sure that this economy will grow and prosper. And hard-working Kiwis who do that hard work for this country are going to be rewarded as part of that. And that is the right outcome for them.

In regard to some of the key elements within this Budget, there is $1 billion for cyclone relief and resilience. I acknowledge the Hon Mark Mitchell for the work that he does in that portfolio—really, really important. But I tell you what, Minister Mark Mitchell has been on the ground in the regions, continuously working with those communities and $1 billion to sort that is significant. And I acknowledge the work that you have done.

On my left, or on my right, we’ve got the investment of $2.5 billion of investment in roads, rails, and public transport. The Hon Simeon Brown has led that, and he has inherited a basket case. I think that’s probably the most polite way that you could explain what he has inherited. But he has delivered $2.5 billion of investment, and I know that people in my community of the North Shore and in Auckland and around this country are thankful for the fact that they have actually got, at long last, someone in that seat that actually knows what they’re doing, are going to deliver for hard-working Kiwis, and get more roads built for this country to let this economy get ahead. Isn’t that great to hear?

Law and order: well, again, jeez, Mark Mitchell is doing a sterling job in that area with $2.92 billion of extra funding to restore law and order; $69 million of youth offending funding; $194 billion in terms of corrections, and $226 million importantly—importantly—on 500 additional police. I acknowledge the announcements you’ve also made this week about more police on the beat, because I know my community in the North Shore are sick and tired of the crims working like they run our streets. Well, I’m sorry, Minister Mark Mitchell is now back. We have got funding of $2.93 billion extra funding—crims, we’re coming to get you and your period of the happy life is over, and Mark’s going to deal with that and make sure the funding’s there.

Those are just a couple of the examples which show the importance. But in my portfolio of climate change, I am very proud that we have been able to ensure that we’ve got additional funding, particularly in the areas of climate adaptation. We know the implications of the impacts of climate change in our regions, in our provinces, in our cities. We saw that last year with the Auckland floods in the aspects around Tairāwhiti, Hawke’s Bay, and Gisborne, etc., and $200 million for flood resilience is an excellent start in what is going to be an area that we are going to need to continue to invest in.

It’s $2.6 billion of climate change investment that we have continued. We’ve done an assessment in terms of what was being spent previously. I’ll be clear: we did stop quite a lot because it wasn’t adding any value. It wasn’t reducing emissions. On this side of the House, we are focused on outcomes and reducing emissions, and we’ve got $2.6 billion to make sure that we deliver on that. We are going to be releasing a clear plan in terms of how we deal with the actions around climate change in a matter of weeks. We do have a plan and we do have a strategy, and that is two things that the other side didn’t have. So I can tell you what: who owns climate change and who is taking action and who is going to deliver the outcomes? This side of the House are making the implications and the actions required. And they know it. You can hear them, they know this—they know the reality. I am proud to be able to be part of that and the investment in this Budget is making that a reality.

So we’ve covered off a number of key aspects in regards to that—just a flavour, just a sampler, a sampler within that Budget, and I didn’t even talk about education. In education, under Minister Erica Stanford, there’s $2.93 billion of additional investment to lift educational achievement, and, my goodness, hasn’t it dropped over the last six years? But Erica Stanford’s back in that seat, she is getting into that area, and as a father of young children within the education system, I am, again, proud that we are investing in order to lift educational achievement.

I’ll tell you what, what all that sums up, what all of that says to me and to New Zealanders, no doubt, is that this Government is getting this country back on track. And isn’t that a great thing. Isn’t it great to be part of a Government that’s getting stuff done, getting stuff done that matters to hard-working Kiwis and getting our country back on track, and that is why I’m proud to be part of this Government.

LAURA TRASK (ACT): Thank you, Madam Speaker. This Budget lays the foundation of what ACT campaigned for—real change. You know, travelling up and down the country campaigning, there were two key issues that New Zealanders were facing: cost of living and crime. I’m very proud to say that this Budget addresses those things. This Budget is for the change makers of New Zealand, those people who wake up before dawn to tend to the farm, the people who take a risk to start their own businesses, and the parents who send their children off to school expecting a world-class education.

My kids were here during the Budget urgency, and when I asked them about what they would do in their Budget, they said, “Free ice cream for all kids.” Well, guess what, kids! We’ve got something better than that; we’ve got $153.3 million to establish charter schools to give you a real good quality choice when it comes to your education. This Budget brings back charter schools to finally give New Zealand families a real choice when it comes to their education. One size does not always fit all, and charter schools will provide the ability for communities to innovate, create education facilities that work for their children—Māori, Pacific, rural; any community you can think of. Communities know what our children need, and now we will unlock their ability to do so.

Of course, the Labour Party revelled when they shut down our charter schools, because they believe that the unions and the Post Primary Teachers’ Association (PPTA) know what works for children’s education more than the communities of the children in question. I’ll listen to the success stories of the children who felt betrayed by the public school system and went on to charter schools and realised their true potential over the PPTA any day.

There is $477.6 million to continue the healthy school lunch programme for two years. All of this drama created by the Opposition that we were axing the free lunches for school was just a big ruse. The reality is we were actually saving the programme. The previous Government didn’t even budget or forecast for the coming years. It was a fiscal cliff, like many that the previous Government left us. Not only is the programme continuing but it’s going to be more efficient and more cost-effective.

After the many years of economic vandalism committed by the Ardern and Hipkins - led Government, we are finally on the right track to empowering our economy once again and supporting Kiwis where it really counts. For the first time in 14 years, we have delivered tax relief to hard-working New Zealanders, letting Kiwis decide how they spend their own money. Radical isn’t it, guys? The Labour Party would disagree with this, thinking that they know better than Kiwis when it comes to how they spend their money. Well, the election results show us that Kiwis are sick of this mind-set. The Government is doing what Kiwi families have been doing—tightening our belts. We’re cutting the back-office bureaucracy bloat in the Public Service, and we’re getting back to the core focus on outcomes for New Zealanders.

The ACT Ministers have been finding savings everywhere. Just to name a couple, in internal affairs, the Hon Brooke van Velden saved $421 million, eliminating unnecessary programmes and expensive initiatives such as three waters and fair pay agreements. Oranga Tamariki: the Hon Karen Chhour shifted the focus to front-line staff, saving $319.6 million. Education savings: the Hon David Seymour saved $107 million in the school lunch programme. And this is just some of the savings that we have.

We are cutting the bureaucracy and red tape across this country; removing agricultural emissions from the emissions trading scheme; bringing back mortgage interest deductibility because—guess what!—owning a property and renting it is actually a business and you should be entitled to the benefits of running a business; opening up education opportunities with charter schools, bringing back three strikes; and much, much more in order to get New Zealand back on the right path.

There is $668.7 million to address youth offending, including a military-style academy pilot. Crime has been out of control in New Zealand. In my suburb alone, robberies and ram raids have just gone out of control under the last Government. Cashmere, Z; the Warehouse, Barrington; Mobil, St Martins; Hornby Mall, Subway, Wigram are just some of the places that have been affected. “Between January 2017 and January 2024, there was a total of 2,186 ram raids,” Chris Cahill, the New Zealand Police Association president, was quoted last year as saying in response to youth crime in Christchurch. Police are really struggling to deal with this recidivist group of the most serious offenders. Front-line officers feel hamstrung. Well, guess what! Six years of cuddling criminals and playing tag and release is over under this Government.

We are calling time on the free ride home after a hard night of ram raiding, creating harm and destruction within our communities. Serious youth offenders will now be held accountable for repetitive criminal behaviours, and our children’s Minister, the Hon Karen Chhour, has done an excellent job in this space. Her announcement on Sunday shows how committed she is to giving our young people the right path and a brighter, more productive, and more positive future. We will never accept that it is a normal part of New Zealand life to see headlines about children as young as 11 involved in ram raids. In Christchurch, there were some kids as young as eight, even, which is actually quite outrageous.

ACT will always go further, whether it is spending reduction or tax reduction. However, we can say with confidence that this Government’s Budget has gone further with ACT as a leader in the team. This Budget is not for the politicians, but for you, the New Zealanders, the change makers who innovate, achieve, and work tirelessly to build a better life, a better country, and a better future for New Zealand. So thank you, Madam Speaker.

Hon Paul Goldsmith: Mr Speaker—Madam Speaker.

ASSISTANT SPEAKER (Maureen Pugh): I call the late Hon Paul Goldsmith.

Hon PAUL GOLDSMITH (Minister of Justice): Well, I thought I had three minutes to go and here we go. It’s great to be here talking in this Budget debate after what has been, I think, a very well-received Budget up and down this country, where people have noticed the feel and experienced the pressures that are on many households after a long period of slow growth with higher interest rates and inflation that we’ve experienced as a country for a long while now.

We now have a new Government that is determined to change that and turn that around. But first get inflation under control, which, longer term, leads to lower interest rates and allows people to get more for their money—their weekly pay packet—after all the housing costs that they experience. So that’s the primary reason why this Budget has been a very disciplined Budget after a period of ill-discipline from that fellow called Grant Robertson, that used to hold that post.

Secondly, for the first time in 14 years, this Government, under Nicola Willis, with the leadership of Christopher Luxon and the rest of the coalition team, including my good friend and colleague Shane Jones sitting down the aisle there, is about offering the first tax relief in 14 years so that New Zealanders have more money in their pockets. A lot of people have had adjustments for inflation over the last few years, apart from taxpayers, and they’ve had to pay more and more.

Now, I’m keen to talk about the investment in restoring law and order in this country that comes from this Budget, because the number one issue on the doorsteps was a concern around the cost of living, particularly in Auckland and the Waikato and the northern parts of New Zealand, but also around many parts of New Zealand was a concern around law and order and public safety. People want to feel safe in their communities, and they keep seeing ram raids, retail crime, violent crime increasing, gangs intimidating the population and taking over towns, and they feel unsafe and they’re concerned about the safety of their community.

They want a firmer response, and that’s what this Government is delivering through its legislative programme and what it has allowed for in its Budget through extra resources for the police in order to go and catch people. Because one of the most important ways to deal with violent crime—we have a target to reduce the number of victims of crime by 20 percent—is to increase the chances of being caught, and, secondly, once you’re caught, being held to account.

The first part of that is about giving extra resources to the police to go out there—500 extra police out on the streets—and making it more likely that people are going to be caught. Secondly, of course, we heard the refrain time and time again when we visited the victims of crime, when we go to the dairies, when we go to the sports shops and the many other retailers around the place who have been the victims of violent crime—the number one message that we hear over and again is, “Well, there’s just no consequences. These kids, they caused $50,000 worth of damage to my shop. My insurance has gone up. I’ve been knocked about. We live in fear. We’re feeling put upon and we’re working our guts out trying to just make a go of this country and make a living to look after our kids and we’re getting set upon time and time in by the same mob and there’s no consequences for them.”

So we heard that message and we want to change that. That’s why we’re making changes in so many areas, such as stopping the gravy train cottage industry around cultural reports that have happened. Secondly, we’re giving the police the extra powers that they need to go after gangs, banning gang patches, stopping them sort of gathering in groups, being able to give extra powers to deal with organising crime, and also dealing with the firearms that so threaten our safety in our society.

Then we’re going to bring back the three-strikes legislation. Now, one of the consequences of bringing three strikes is that it holds our worst repeat offenders in custody, out of harm’s way, for longer. That’s the purpose of it: that if you are a repeat serious offender who has had violent crimes over an extended period of time, we want you off the street so that you can create fewer victims. That’s the purpose of it and that’s what we’re going to do.

Then, secondly, we’re going to deal with the youth crime situation that we’ve inherited. Even—what was the name, Jacinda Ardern?—Jacinda Ardern admitted that we need extra tools to deal with the repeat youth offenders. Because it’s blindingly obvious to everybody that there is a small group—I’ve got four young people in my family; most people in this country, most young people don’t go anywhere near the court system. Actually, overall, youth crime has been falling over the last few decades. Most people do well; they don’t get in trouble. Everything’s fine.

There’s a small group who do get in trouble and for the majority of that group, the light-touch rehabilitative focus approach that we have—not dragging them through the courts, but actually giving them every opportunity to recognise the gravity of what they’d done and move on—works well. So the vast majority never go near the courts and the vast majority of the ones that do get into trouble, they do it once and they’re never seen or heard of again. So the light-touch system works.

But there is a small group—a small group—where that doesn’t work. They are the serious repeat youth offenders who are doing the ram raids in our community, bringing in aggravated attacks with hammers, and causing chaos in our retail space, in particular. That’s the group where we need some different tools, and that’s why we’re introducing the Young Serious Offender category which dials up the consequences for them. It may, instead of a pat on the head and “We’ll see you again next weekend”, be an ankle bracelet or it might be juvenile facilities because there has to be consequences for serious crime. Secondly, we’re providing for some military academies. Again, it’s a different approach, another tool, that the judiciary can use.

Now, people will say, “Oh well, you’re only interested in punitive reactions.” Well, yes, a little bit of punitive reaction is required, but nobody has ever suggested that’s the only thing we’re doing, because we’re also focused on dealing with those long-term issues of crime. But you got to do both: you can’t do one or the other.

You can’t just focus on long-term issues and think that everything is going to be solved, because you’ve got to deal with the problem right here, right now, on our streets and in our shops—those who are wielding the claw hammer and causing the damage. But long term, we’ve got to deal with a catastrophic rise in truancy that we’ve seen and the fact that 3,000 kids are waking up in emergency accommodation. And we need to work on those long-term housing, mental health, and addiction issues as well. So that’s what this Government is certainly focused on.

I just want to also just mention the arts before the end of my speech. I just want to just make the point that against a strong ripping tide where it has been a tough Budget, we held our ground. One of the great contributions we made was through Te Matatini and the kapa haka, and I was up in Ruatōria and I met with Tā Selwyn Parata this weekend and they’re very proud of that and we’re pleased to make that contribution. Thank you, Mr Speaker.

Hon SHANE JONES (Minister for Resources): My contribution to this debate is framed in the way I grew up—a product from the school of hard knocks. This Budget most certainly was designed to enable us to put our hands around the throat of expansionary expenditure of an operational nature.

Now, just remember where we’ve come from: monetary policy that sunk to a global low; money printed as if a fiddler’s elbow was turbocharged; fiscal policy that was loose as a goose. The Budget now is constructed in very straitened circumstances: number one, there is no monetary saviour coming our way. It’s evident from the Governor of the Reserve Bank that he is going to hold the line and that interest rates are only going to drop bit by bit. And the Crown, through this Budget, is confronted by the fact that if we continue the profligate approach enjoyed by the last regime, the ratings agencies will come knocking.

So, then, what is the Government to do? First, strip unnecessary regulatory barriers from those who are willing to invest—boost their confidence, grow the certainty so that they will invest. How do we do that? As reflected in the expenditure items of the Budget, move on with a far more permissive resource management process that gives people the confidence when they make a commitment, they’ll actually get an approval before they get the gold card.

Secondly, give a greater degree of confidence to people that already have businesses that they will actually be able to invest without suffering too many penalties. And what’s the response to that? The response is the fast-track bill, which, by the way, now has a majority of New Zealanders supporting it. Forget about all the apocryphal tales from the other side of the House. Forget about the fact that they left the deadweight hand of bureaucracy upon the economy. We are stripping all that away and we are introducing investors back to our natural legacy of mining, of fishing, of horticulture, where we are going to meet what the world wants. The world wants food, the world wants rare minerals.

Now, of course, I can hear it now. My opponents, large in volume, small in number, will cry that somehow we’re compromising Papatūānuku by actually going on to the Department of Conservation (DOC) estate and mining. The DOC estate covers an inordinate amount of New Zealand and it’s overrun by rats and weasels and pests, etc. It’s tailor-made for a new approach so that extractive sector investments can take place in appropriate places on the DOC estate, and this Budget, by contributing to the costs of passing the fast-track legislation, improving the Resource Management Act, is going to deliver an overdue dividend for regional New Zealand.

Yes, there will be a loud number of minority voices, but they are only a tiny fraction of the New Zealand public. Yes, there were people covered in Gaza scarves and other such detritus walking up Queen Street. They don’t represent New Zealand; they represent that tiny portion of the public who want to dislodge this Government. We are not going to allow the economy to be continually assailed by all of these catastrophising stories. We are going to turn on the engines of growth. How we’re going to do that is not only through stripping red tape; we are going to work on a process of co-investment. And it falls to me, with my characteristic modesty, to remind everyone that we have the $1.2 billion fund which will help boost the productivity, develop the resilience of the regions of our motu.

Now, there were a few critics who didn’t quite like the administration of an earlier fund. Fortunately, now they’re my dearest friends. In fact, I feel a whole lot of applications coming from certain members who may have had a doubting Thomas approach in the past. Oh, the winds of change, they do bring various beneficial offerings from time to time.

Another thing I’d like to focus on is that we can’t create a prosperous economy unless we modernise our infrastructure. But how do we modernise our infrastructure unless we can give investors, contractors, a sense of confidence that they’ll not only get an approval but there is an agenda to blend private and public capital to accelerate the delivery of infrastructure. But what is the community looking for, in a commercial sense? It’s looking for a long-term, broad range of projects so that capital can be mobilised, labour can be mobilised. And we have a long-term pipeline that will be delivered through the fast-track legislation which is wending its way through the Environment Committee.

As I said to a number of loud but largely dislocated voices in Thames the other day, improvements—I don’t want to mention any names—

Hon Mark Mitchell: Catherine.

Hon SHANE JONES: Apparently I’m not allowed to refer to that person by that name. But those who were present, and, in particular, the person that you mention, their criticism of modernising infrastructure, I’ve described as belonging to the “Flintstone School of Economics”. And what is their response when I go out and I actually meet with that tiny minority of loud Luddites who do not want us to develop mining, who do not want oil and gas? What do they say to me? Something akin to “yabba dabba do”. We cannot back down when our economic circumstances are so dire.

I want to finish my contribution off on the Māori side, beyond this Budget. The Waitangi Tribunal is overdue for a haircut, what we call in Kaitāia a “kinacut”. It not only needs better members, it needs a writ that brings it up sharp very quickly. In my view, it has no business entertaining concepts or undertaking inquiries to do with the constitution. That’s the business of directly elected parliamentarians such as ourselves. So I look forward, during the course of the life of this Budget, to work taking place to bring the Waitangi Tribunal to a spot where, hopefully, both sides of the House can accept that it may have a role, but it is not the wandering, not the convolvulus, not the expansionary writ it is giving itself. And stop saying that the Treaty should only be known as Te Tiriti. The Treaty of Waitangi cannot be dismembered. The Treaty of Waitangi is a bilingual, bicultural, inseparable document. And this dangerous ideology pushed around by the party who’s currently engulfed in about five or six reviews—so they’re going to be busy on other matters for a while to come—should not gather traction in terms of how we view the future.

Similarly, a change that, no doubt, will be ushered through during the course of this Budget, paid for by this Budget, will be reframing what is the extent, what is the width and the breadth of the seabed and foreshore legislation. That legislation, decisions made under that legislation, cannot continue if they have the effect of chilling, undermining, infrastructure development. The notion that when we expand our ports, as is the case of Tauranga, they are consistently and constantly having to pay a toll in order to keep the local claimants of the Takutai Moana brigade happy is not only offensive, it must be halted immediately.

The final thing I’d say on this matter to do with Māori elements and the Budget: co-governance is gone; co-investment is in. If you want to know one reason why we’re sitting here and they’re sitting there, they allowed that viral, intimidating, undermining policy of co-governance to go into the recesses both of the State and policy where it didn’t belong. Consequently, it will no longer blight or undermine the delivery of policy. I say again, the Treaty, our citizenship, is indivisible. Kia ora tātou.

Hon Dr AYESHA VERRALL (Labour): Here’s four things about this Budget’s impact on the health system that all New Zealanders need to know. The first is that the Government has been shamed into keeping its cancer medicine promise. I want to shout out to all the patient advocates who held their feet to the fire for three long weeks post-Budget, who demanded that they meet their commitments, and who pointed out the cruel and manipulative thing that has been done: making a promise to people with terminal illness during the election campaign and not following through. But has it kept its promise? Actually, no. It is not purchasing the 13 named medicines. It’s giving Pharmac medicine to work down the options for investment list. Whose promise was that? That was Labour’s promise.

In fact, when I went up and down the country with Dr Reti, pointing out the problems with his commitment, pointing out that he had left out haematology patients, pointing out that it would undermine the independence of Pharmac, pointing out that it would reduce the ability to strike a good deal, what did he do? He ignored it. What did he do when he came into Government? He ignored it. He persisted with his idea that he could do things differently. What was he saying at the Health Committee up until a few days ago? That he was going to do this some other way, that he was still contemplating an alternative. Well, every single week he did that meant people didn’t get their medicines. It was foolish and it was unnecessary. Now it’s left the finance Minister in the position of rewriting Budget 2025 three weeks after she’s delivered Budget 2024. This is a coalition of chaos.

The second thing you need to know is that funding for the health system has come down in real terms. Each New Zealander is getting 4 percent less spent on them in their healthcare than they were in the last Budget. That is because the Government did not take new advice on the true cost pressures on the health system when they came into Government. Te Whatu Ora told us at annual review that the true cost pressures have increased from those estimated before the election, but the Government didn’t fund it. The Minister of Health couldn’t give a straight answer to our select committee on that, but the Council of Trade Unions have done the work: a 4 percent cut for every New Zealander.

The third thing every New Zealander needs to know about the health system in this Budget is that as a result of the previous funding cut, there is a hiring freeze in public hospitals, there is a hiring freeze for back-office staff. That means that doctors and nurses are having to find their own notes, schedule their own clinics, do all the admin that takes them away from caring for people. We also hear reports of clinical vacancies, front-line roles being cut, vacancies not being filled, critical shortages at Palmerston North oncology department not being filled. Remember the promise that this Government was going to put money towards the front line? Well, it seems like that is not the case in the health system. There’s a surgical hospital on the North Shore of Auckland that they cannot staff because of this hiring freeze in public hospitals, and when they do staff it, they’re going to move staff from one ward, in an existing hospital, to another. There’ll be no increase in capacity.

Half the funding for medical students they promised—no nursing and midwifery bonding scheme. By the way, if you’re a graduate nurse, the Government can’t give a clear answer on what your chance of getting a job in a New Zealand hospital is. It’s a disgrace. This Government campaigned on there being a workforce crisis, and now the workforce is going backwards.

The fourth thing you need to know is that it’s going to cost you more to go to the doctor—that’s right. Dr Reti made lots of hints about funding primary care more, the ACT Party campaigned on a 13 percent increase for primary care, and what have they delivered? Four percent. And practices are allowed to, in compensation, put their prices up. So that’s costs on to the people at home—you’re going to pay more to go to the doctor because of this Government’s underfunding of the health system.

Now, look, I get it; running the health system is hard. We face so many challenges with the workforce, with rising demand. It is a very tough job. In that situation, why wouldn’t you use the best science and expert advice to run the system better? Why wouldn’t you keep world-changing smoke-free legislation so that you’d have fewer people coming in for smoking-related illnesses? Why wouldn’t you keep free prescriptions? Why wouldn’t you support nutritious, healthy lunches? This Budget is taking New Zealand and its health system backwards.

Hon JAN TINETTI (Labour): Very much like what’s happening in the health system, the education system is also suffering from this Budget. It’s only just on an hour ago, when I was talking to a parents’ support group of young people with neurodiverse needs, that they were practically crying on that Zoom call to me about the lack of support that they have seen in this Budget for them and their young people. In fact, many of them on that call said to me that this Budget has nothing that will encourage inclusion in their young people’s learning pathways. It was a real, real shame, and I felt such sadness for those people, of the experiences that their young people are facing at the moment, and them as parents as they’re moving towards inclusion.

One of the aspects that I think is absolutely criminal is the letting go of the people that have been supporting them and their young people towards an inclusive education pathway over the last few years. They talked about the work that had been done by the Ministry of Education and Whaikaha to build together towards that very much inclusive system—a system where we want to see young people in their mainstream classrooms, where their teachers understand the needs of those young people, where the support staff understand and are able to include those young people in every aspect of the schooling life, and particularly where those young people feel valued and where they have success in their schooling.

That work had been ongoing, work that had come out of the Highest Needs Review, and yet we know from speaking to the people that were at the Ministry of Education who were leading that work that those people have been let go. I got very—well, non-answers last week from the Minister and the Ministry of Education about where that work is heading. In fact, in this Budget, when you look at target students as a whole, there is $5 million less in this Budget than what there was in the last Budget for our target students. That does not sound to me like a Government that is committed to inclusion and to making certain that every young person in the schooling system, in the education system, will experience success.

Also, Madam Speaker, I heard exactly the same in your home patch yesterday when I was in Hokitika and Greymouth. Principals said to me that they could see nothing in there that was for the young people that they are seeing constantly, on a daily basis, coming through the doors of their schools, and they felt aggrieved that there was no support that was coming through that would help those young people be included within the schooling space, but also to support the teachers with the professional development for those young people. Yet we hear constantly this stream that “We’re a Government that’s committed to including all young people and to learning support.” I’m calling on that—that is not right. When you’re seeing that a Budget has $5 million less than the last Budget, that is not a Government that is committed to learning support in this country.

Then we see that there is no money for that but we have $153 million set aside for charter schools—privatisation by a slow drip. We hear this political distraction: “That will help those young people that don’t fit into school.” Well, we’re talking about a very small student population, but we also know that there’s already people that are lining up and companies lining up to put their interests forward in becoming part of those charter schools—companies that are already making money out of early childhood, which isn’t a slow drip of privatisation; it’s a very fast drip of privatisation in this country. It scares me and so many other people that are very heavily involved in education that we would see this coming through into the compulsory sector as well.

This is going to be the biggest undermining of a quality public education that we would ever see, and I am very much committed to fighting for that quality public education system. How can anybody justify spending that amount of money on a very small number of young people who possibly would succeed in school anyway over those young people who are really struggling to be included in the schooling pathways?

Then the speaker prior to me, my colleague the Hon Dr Ayesha Verrall, talked about the school lunches. I spoke to people in Dobson yesterday about the school lunches and how much of a difference it makes to their young people. Next year, the year 7s and 8s in those schools are going to go without those lunches where the year 0s to 6s will continue on. That is not right. Those year 7s and 8s will be excluded from a programme that is making a huge difference to them at this point in time. It’s gone from a lunch to a snack. This Budget is taking education backwards.

ASSISTANT SPEAKER (Maureen Pugh): Members, this debate is interrupted. We will suspend for the dinner break and resume at 7.30. Thank you.

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

DEPUTY SPEAKER: The House is resumed. Before the dinner break, we were speaking on the Appropriation (2024/25 Estimates) Bill and the amendment proposed to it.

Hon Dr SHANE RETI (Minister of Health): I move, That this debate be now adjourned.

Motion agreed to.

Urgency

Urgency

Hon CHRIS BISHOP (Leader of the House): I move, That urgency be accorded the remaining stages of the Appropriation (2023/24 Supplementary Estimates) Bill and the introduction and passing through all stages of the Imprest Supply (First for 2024/25) Bill; the remaining stages of the Accident Compensation (Interest on Instalment Plans) Amendment Bill; the second reading of the Corrections Amendment Bill; the first readings and referrals to a select committee of the Education and Training Amendment Bill, the Sentencing (Reinstating Three Strikes) Amendment Bill, and the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill; the passing through all stages of the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill; the first reading and referral to a select committee of the Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill; the passing through all stages of the Land Transport (Clean Vehicle Standard) Amendment Bill; and the first reading and referral to a select committee of the Therapeutic Products Act Repeal Bill.

We’re moving urgency tonight to complete three bills left over from Budget night. In addition to that, we’re including other bills that we had scheduled for this week that, due to the nature of the singular sitting week and the Budget debate, are required to be included in this motion. The Supplementary Estimates and first imprest supply bill have to be passed before the end of the financial year; it’s a standard part of the Budget cycle.

The ACC bill makes it explicit that ACC can charge debit interest where levies are paid by instalments; there is some current ambiguity in the legislation, and we did hope to tidy up that part of the law before the House rose just after the Budget. That wasn’t possible for a range of reasons.

The forests log traders bill reduces a regulatory burden and removes unnecessary compliance costs. The land transport bill is required to be done as soon as possible to provide certainty for the vehicle industry.

We’re also sending five bills to select committee: the education and training bill to establish charter schools; re-establishing three strikes; repealing the Therapeutic Products Act, which is, of course, a New Zealand First - National coalition commitment; taking agriculture out of the emissions trading scheme; and making build-to-rent developments easier.

DEPUTY SPEAKER: The question is that—

Hon Dr Duncan Webb: Point of order, Madam Speaker.

DEPUTY SPEAKER: I had just started a vote—I had started a vote. I can take your point of order after the vote, but I had actually started a vote, Dr Duncan Webb.

A party vote was called for on the question, That urgency be accorded.

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Point of order. Thank you, Madam Chair. My point of order was that the Minister, in signalling urgency—which he’s entitled to do under Standing Order 57—ran through a list of legislation and largely told us what it did. It’s a longstanding convention and Standing Order of this House that in respect of each of those bills, he needs to explain why they are urgent. We have five bills—routine bills—going to select committee which don’t have any particular urgency, and, if there is, the Minister certainly didn’t tell us what they were.

Hon CHRIS BISHOP (Leader of the House): Speaking to the point of order. The member’s wrong on two points. Firstly, the requirement for urgency to have reasons is a recent practice. From memory, it came in in the Standing Orders review after 2017. So it’s not a longstanding convention of the House. The member needs to familiarise himself with Standing Orders.

The second point is that Standing Orders requires the mover of the urgency motion to give reasons. I gave extensive reasons. I’d encourage the member to reflect back on past moving of urgency by the Hon Chris Hipkins, in which he just, basically, said words to the effect of “We’re the Government. We can do what we like.” I’ve actually provided a whole range of different reasons.

DEPUTY SPEAKER: Thank you, Mr Bishop.

Bills

Imprest Supply (First for 2024/25) Bill

Introduction

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

CLERK: Imprest Supply (First for 2024/25) Bill, introduction.

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

First Reading

Hon NICOLA WILLIS (Minister of Finance): I move, That the Imprest Supply (First for 2024/25) Bill be now read a first time.

A party vote was called for on the question, That the Imprest Supply (First for 2024/25) Bill be now read a first time.

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Bill read a first time.

DEPUTY SPEAKER: The bill is set down for second reading.

Bills

Appropriation (2023/24 Supplementary Estimates) Bill

Imprest Supply (First for 2024/25) Bill

Second Readings

Hon NICOLA WILLIS (Minister of Finance): I move, That the Appropriation (2023/24 Supplementary Estimates) Bill and the Imprest Supply (First for 2024/25) Bill be now read a second time.

These two bills are quite technical, so I think it would assist the House if I explain what each of them is and what purpose they serve. The overriding principle here, as set out in legislation in the Public Finance Act, is that the Government cannot incur expenses or capital expenditure without Parliament’s authority. The Budget for 2024-25 was released and had its second reading on Budget day, 30 May. However, it won’t actually be passed until later this year. The purpose, then, of the imprest supply bill is to bridge that gap between the start of the new financial year on 1 July and the point at which the House confirms the Budget. More precisely, this bill provides financial authority to incur expenses and capital expenditure for the first three months of the 2024-25 financial year, before the passing of the Appropriation (2024/25 Estimates) Bill.

In addition, it is standard practice for imprest supply bills to cover the possibility that fiscal risks materialise and to also allow for the uncertain timing and spread of expenditure. The overall amount being sought in this bill is consistent with the amounts sought in previous years. The imprest supply bill seeks authority for the Government to incur a maximum of $34 billion in expenses, $6 billion in capital expenditure, and $1 billion in capital injections. So that is the purpose of the imprest supply bill—it is an interim spending authority. As its name reveals, it is the first imprest supply bill for this financial year, 2024-25, and there will be a second imprest supply bill later this year.

The imprest supply bill is forward-looking, whereas the Supplementary Estimates bill is all about the past. It seeks Parliament’s approval of changes to appropriations and some new appropriations which occurred in the 2023-24 financial year. These are changes that the Government agreed to between April 2023, when the 2023-24 Estimates were finalised, and April 2024, when the 2023-24 Supplementary Estimates were finalised. So spending against those appropriations has already been incurred under the authority of imprest supply. However, this spending must then be confirmed by Parliament before the end of the 2023-24 financial year—that is, by 30 June, or four days from now. Otherwise, it becomes unauthorised, which is something I think members would want to avoid, although I can see there’s at least one member sitting opposite me who has been involved in unauthorised expenditure. The Finance and Expenditure—

Hon Dr Deborah Russell: Oh, so unnecessary.

Hon NICOLA WILLIS: Ihumātao comes to mind. The Finance and Expenditure Committee has reported back on the 2023-24 Supplementary Estimates and has no matters, I understand, to bring to the attention of the House. It recommends that these Supplementary Estimates be accepted. I thank the members of the Finance and Expenditure Committee for their prompt scrutiny and their report on this matter.

I said before that the Supplementary Estimates cover changes that the Government agreed to for 2023-24. In fact, there were, of course, two Governments in that financial year, and the change of Government part way through that year makes the Supplementary Estimates bill a little more interesting than usual. In particular, many changes relate to the decisions the coalition Government took at the mini-Budget in December and at the Budget in May.

Together, Budget 2024 and the mini-Budget reduced spending in the 2023-24 financial year. Actually, within weeks of coming to office, this Government managed to make changes that, even with a little bit of that financial year left to go, saved $1.1 billion. That is $1.1 billion, hard earned by New Zealanders working hard in their jobs, their businesses, and their communities. We saved them that money, and those changes are reflected in the Supplementary Estimates bill. In part, the Government was able to make significant savings because, as I said, we got on to things very early with a mini-Budget in December, soon after the coalition was formed, judging the urgency of stopping some programmes of expenditure in order to ensure those dollars could be reprioritised to better uses at a later date, including, for example, uses such as funding cancer medications and funding medicines for New Zealanders who would otherwise miss out—175,000 New Zealanders, no less.

Members may recall that the mini-Budget, among other things, included stopping work on Labour’s so-called industry transformation plans—I’m not sure a tear has been wept for them—stopping work on the Lake Onslow pumped hydro idea, otherwise known as Dr Woods’ white elephant; stopping work on Labour’s income insurance scheme, otherwise known as the jobs tax; repealing mandatory union-style agreements across industries in a back-to-the-1970s move, otherwise called, in Labour’s strange use of the word, “fair” pay agreements; and exiting the Crown’s contributions to the highly controversial Let’s Get Wellington Moving, which had the grand effect of slowing Wellington down.

Other savings that affected the 2023-24 year were made as part of the Budget process, with some being part of the 100-day plan—for example, repeal of the three waters programme. That returned $270 million in the 2023-24 financial year alone. Sadly, we didn’t come into Government in time to save the $1.2 billion—$1.2 billion, ladies and gentlemen—that had already been wasted on that programme.

There are many more changes, both spending and saving, in the Supplementary Estimates. I said at the beginning that these bills are technical. They are technical, but they are also very important to New Zealand’s public finances. They are part of the system that  ensures the Government has the proper authority from Parliament to incur expenditure. I commend these bills to the House.

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

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Speaker. Labour will not be supporting this bill in the House, because what the coalition Government is asking us to do with supporting these two bills that look both forwards and backwards is to cast a vote in favour of a programme of work that is taking New Zealand backwards. This is a programme of work that will not help ordinary New Zealanders, it will not help New Zealanders get ahead, and it is not something that we are willing to support.

Now, what we heard from the Minister of Finance laid out very clearly the technical nature of these two bills and the fact that we do need to pass them because the executive does need Parliament’s consent to continue spending until the Budget is formally passed later in the year, and the Supplementary Estimates is an important document that show those changes to appropriations from when Budgets are set to year end and what happened. Usually, this is a chance to do things like, for example, in the tertiary education Vote. Where an Estimate is made, they are just that: Estimates are about the enrolments that will happen over a period of time, and it’s not until enrolments are there that things do need to be changed.

The Minister of Finance, I see, couldn’t rise above her snark tonight in the House in terms of the need, sometimes, to make corrections in Supplementary Estimates. This is something that is a usual process in terms of the workings of this House, and I think it would do all of us good if the debate could be lifted on this and that we could have a real debate about the choices that are being made.

In both the backwards-looking and the forwards-looking document, we are seeing laid bare the kinds of choices that a newly elected Government makes, because, of course, the Supplementary Estimates, after an election that has brought about a change of Government, really do tell a story about the changes that that Government has brought into being, and the Minister of Finance alluded to that, talking about the mini-Budget and the $1.1 billion that was shaved off there. All of these are contained in the Supplementary Estimates. These are otherwise known as “what the National Government or the coalition Government has cut”, and the list is long. We can see, laid bare, the values of this Government in these cuts. We can see cuts that will increase child poverty, we will see cuts that will increase unemployment, we can see cuts that slice $3 billion worth out of climate action, and we can see cuts that will take New Zealand backwards, and that is what is very clearly laid out in this legislation.

I’m going to focus on a couple of votes that are covered off in the Supplementary Estimates. If we have a look through, one of the most depressing things while reading through the analysis of the Supplementary Estimates is the amount that all of these are decreased by. This is a Government that has cut and has come in and undone. Really, the Budget showed they haven’t got much vision of what they are going to do, and I think we see that reflected by the way New Zealanders are responding to this Government. The majority either believe things are going to get worse for them, or they don’t know what’s going to happen. It is not a Budget that has inspired hope, it is not a Budget that has made New Zealanders feel confident about their future, and it is no surprise when you read through the list of cuts in the Supplementary Estimates.

The Minister of Finance seemed to wear it as a badge of honour that this was an incoming Government that cut a programme of work about New Zealand’s future energy security, because not only did they scrap investigating whether Lake Onslow was a good scheme—fair call. They won an election. It’s their call to make—not one I agree with, but they were elected, and that is their decision to make. But what the Supplementary Estimates lay bare is that they scrapped the entire work programme around fuel storage, around not only what we’re going to do into the future to make sure that we can give New Zealanders the most affordable energy that both their businesses and their homes can receive in the form of renewables but also how we’re going to ensure that the lights stay on.

Now, we hear a lot from this Government—and we heard it from the Prime Minister, today, in question time—showing they really do not understand this issue. The fact that it takes somewhere between 10 and 16 years to bring a newly granted gas exploration permit to fruition of production—they seem to think that that is the sure-fire, quick solution to New Zealand’s energy security.

What that shows is that this is a Government with no plan and it is a Government with no vision, and the fact that we have a Minister of Finance, who is meant to take some kind of long-term view of New Zealand’s security, wearing it as a badge of pride that they have cut in this Budget, as is made formal in these Supplementary Estimates, all the money that was put aside for looking at our future fuel security in terms of the battery project, because it wasn’t all about pumped hydro. It’s about time that we heard a peep out of this Government about what they’re going to replace it with, because I think what New Zealanders are growing very tired of very quickly is hearing only what this coalition Government is going to cut and very little detail—next to no detail—on what they’re actually going to do.

Why are they sitting in those chairs? What is their vision and what do they hope to achieve for New Zealand, because all New Zealanders are seeing is a programme of work that is taking New Zealand backwards—a series of bad choices that are being laid bare.

We also see in here, in the appropriation, decreased by $507 million, the work to partner with businesses to cut our emissions. In these Supplementary Estimates, we have a Government who has made a choice that they are going to go and pay other countries to decrease their emissions in the form of buying international credits at—who knows?—$100 or $200 a tonne, which is probably the best estimate, rather than partnering with New Zealand businesses to keep well-paid, highly skilled industrial jobs in New Zealand, such as at New Zealand Steel. This is no subsidy; this is a good economic deal for the Government. We have yet to hear from this Government where they’re going to go and buy a carbon credit for $18 a tonne, which is what it costs in terms of the New Zealand Steel deal.

But, again, with pride in these Supplementary Estimates, we see this Government that has ripped the guts out of our climate action. We see a Government that has no plan to reduce our emissions at home. We see a Government that is burying its head in the sand when it comes to climate change, and to take $3 billion of climate action out in a single Budget is something about which members opposite need to hang their heads in shame. They need to explain to future generations why it is they are putting their futures in jeopardy, because that is what this Budget and these Supplementary Estimates show: that they are a Government that is intent on taking us backwards.

But, more concerningly, they are putting future generations’ futures at risk by what they are doing. They are putting it at risk in terms of not only the health of our planet but also the future of work and job security—the fact that people can have some security and how it is they’re going to make a living. With swipes of the Minister of Finance’s and the Prime Minister’s pens, they have taken away that security. They have consigned New Zealand to an uncertain future, and they are taking us backwards. I think that those members who are occupying the seats opposite are going to have some explaining to do to future generations about what they did in this moment of history, because it is reprehensible.

That’s just one vote. Then you move on to housing, and you see the kind of money being taken out of Māori housing. You see money being taken out of progressive homeownership, and you see this is a Government that is building fewer State houses than any Government in decades. Take away even just community housing, and the previous Government, every year in six years, built more than 750 community housing places. They are going backwards when it comes to housing. New Zealand was starting to get on top of a housing crisis, but we have a programme of work that has made incredibly bad choices laid bare in these Supplementary Estimates that will be a burden for future generations to bear.

CHLÖE SWARBRICK (Co-Leader—Green): E te Māngai, tēnā koe. Tēnā koutou e te Whare. For those following along at home, we are currently debating two pieces of legislation in this one debate tonight. We are debating the Imprest Supply (First for 2024/25) Bill and the Appropriation (2023/24 Supplementary Estimates) Bill.

Now, as the Minister herself alluded in her introductory remarks as we began this reading, what’s interesting about this Appropriation (2023/24 Supplementary Estimates) Bill is that, typically, it would just be a bit of a clean-up job for extra expenses that had occurred at the end of the Budget period for the Government as it had been coming out of office as one would expect with this transitional change of Government. However, what is rather more interesting and, therefore, concerning to the Greens and why we will be opposing this, among the raft of measures contained within it, is, as the Minister herself spelled out, that particularly this Appropriation (2023/24 Supplementary Estimates) Bill contains within it the financial decisions that the Government made in its mini-Budget at the end of last year, 2023. Those 15 programmes that the Government decided to stop would have made a material impact towards the wellbeing and benefit of New Zealanders and towards people and planet.

I just want to echo some of the sentiments that we’ve heard from the Hon Dr Megan Woods here: this Budget, in its fulsome context, is not a vision for the prosperity, for the future, for the wellbeing of this country and the people that live within it, but this Budget represents a shredder, and nowhere could that be more apparent than in the 15 programmes that were stopped, as included in this Appropriation (2023/24 Supplementary Estimates) Bill. Let’s just go through a handful of those pieces because I think part of what this Government did moving so quickly when it first came into office was that it knew that a lot of the programmes that it was undertaking or that it was cutting—it knew that the stuff that it was doing was, fundamentally, actually unpopular. It’s why, if we recall, they decided to push through as quickly as possible those changes to the smoke-free legislation. But, as contained within this legislation, there are things like the quick and paced removal of the 20 hours free early childhood education. This Government would argue, of course, that they’ve now replaced it with their own policy of FamilyBoost, and I can hear some heckling probably to that effect.

I just wanted to unpack that for context for the House, because we recently, just last week, had something called “scrutiny week”, a new initiative in our House of Parliament, which allows us to speak to Ministers, such as our Minister of Finance and our Minister of Revenue. And in the Finance and Expenditure Committee, we actually spent quite a long time talking about the Government’s policy of FamilyBoost. And I put a pretty straightforward question to our Minister of Revenue, who is responsible for implementing that policy through the Inland Revenue Department—his agency, that he is obviously responsible for as the Minister of Revenue. I asked the Minister if the intention of the FamilyBoost policy—noting that this stands in stark contrast to 20 hours free early childhood education—from the Government side of things is not to lower the cost of living; the intention of the FamilyBoost policy is to pay families who meet the threshold criteria a maximum of $75 per week towards their early childhood costs.

This is a really important difference because this difference belies the fact that the Government is actually not paying any attention whatsoever to whether this policy will result in price gouging by early childhood private providers. That is a really important and salient point here, because it means that the efficacy of that policy can only be judged by the fact that they’re sending $75 out a week per family that is eligible, not by whether the cost of living for New Zealand families has decreased.

So let’s just deal with that—the fact that this 20 hours free early childhood education being removed in this mini-Budget, as represented in the Appropriation (2023/24 Supplementary Estimates) Bill, is diabolical, especially when put in contrast to the evidently ineffectual FamilyBoost policy, which will only serve to bid up the price of early childhood education in this country. Interestingly enough, as was also canvassed in contrast at scrutiny week just last week with the Minister of Revenue as well, this mini-Budget, as represented in the Supplementary Estimates bill, also removed depreciation for commercial buildings. Now, I think that there’s a really interesting parallel here, especially on the brightline test, which is also contained within this, but not the changes that the Government has made when it comes to tax deductibility for landlords.

On the notion or on the argument of tax deductibility for landlords and the ability for that to be applied, the Government’s rationale has been that they believe that—just like any other business where you can have tax deductibility; or interest deductibility, rather—we should have the same apply for those who decide to invest in rental properties as landlords. I put that question to the Minister in contrast to what is contained within this piece of legislation around how—well, if you can see that there is depreciation costings that you can put against any other kind of business, why would you then decide to, if you’re being logically consistent, remove it from commercial buildings.

It would come as no surprise to you or any other member of this House that the Minister of Revenue did not have an answer, and he referred us to the coalition agreements, which once again goes to show that the thing that trumps for this Government is not logical consistency, is not an evidence basis, but it is indeed their political leanings. Also contained within this legislation is the killing off of the likes of the Climate Emergency Response Fund and the Government Investment in Decarbonising Industry funding, which the Hon Dr Megan Woods spent a long time talking about.

This, interestingly, also stands in stark contrast to some questions put to the Minister of Finance, the Hon Nicola Willis, at scrutiny week just last week, on the fact that the Government has said time and time again that they do not like to do what they consider to be corporate welfare when it comes to decarbonising our economy. However, underneath the emissions trading scheme, which is the system that this Government wants to put all of its eggs in the basket of in order to curb our emissions, the Government wants to do the mitigation part of climate action, but they are not willing to remove those free allocation units for polluters to pollute. So, again, we have yet another logical inconsistency where they’re more than happy to remove the funding available in this legislation here. They have made the decision to remove the funding for decarbonising our economy, but then, on the other hand, within the broader Budget, they are retaining the free allocation programme to subsidise our largest polluters.

As was also stated by the Hon Dr Megan Woods, we have here, contained within the Supplementary Estimates bill, the work to stop on Lake Onslow. We also have work stopping on Resource Management Act (RMA) reforms. However, funnily enough, they’ve also started their own work programme on RMA reforms. Riddle me that. We also have the deeply unpopular policy decision from the Government to repeal Community Connect, otherwise known as half-price public transport for young people, and we also have, contained within this bill, the decision to make changes to the indexation of benefits from Consumers Price Index inflation to wage inflation, which is the decision that the Government did not make in a vacuum but with a regulatory impact statement and advice from their own officials that these changes to benefit indexation will push up to 13,000 more New Zealand children into poverty. That’s the legacy that this Government gets to be proud of. That’s the legacy—that is what is contained within this law that they will push through under urgency tonight and tomorrow morning.

But, if I can just hazard a warning to the Government members, we will not take this lying down. What you have from members of the Opposition is a commitment to fight them just as hard tonight, through the morning, and till midnight tomorrow night as we did on Budget urgency where we successfully prevented them from passing three of their seven pieces of Budget night urgency legislation.

I spoke to a few different people around these parts in Parliament who have been around for a lot longer than I have, and they said that they have never seen something like that happen before, where a Government has been stymied from passing its Budget night urgency legislation. And I think that that goes to show that we on the Opposition side are more than willing to put absolutely everything that we have got to making it abundantly clear to New Zealanders who are out there in the real world about the impact of the legislation that they are passing through, because the evidence tells them that it’s going to push more kids into poverty, that it is going to increase our carbon emissions, and that, ultimately, the bloody-minded focus on tax cuts at all costs comes at the expense of the public infrastructure and the social contract that New Zealanders rely on—that all of us rely on—for the sake of our wellbeing.

So, ultimately, as was well canvassed per all of those different iterations of all of the projects that were cancelled under that mini-Budget and with the Government attempting to write themselves a cheque for this imprest supply bill, the Greens will be opposing this, and we will be doing absolutely everything that we can to make it clear to the New Zealand public how these decisions made by this Government—and what the evidence base shows—will make this country a worse and harsher and harder place to live in, because people already know and feel that in their day to day. But we will be making it clear, as we go line by line through this to oppose it.

There’s not really much else to say except to look forward to all of the Opposition members running down the clock with every single inch that they’ve got. Thank you, Madam Speaker.

Hon DAVID SEYMOUR (Associate Minister of Finance): Well, I’ve heard so many wonderful and powerful, thoughtful speeches in this House; I’m sad to say the last two haven’t been either of them. In fact, I listened to Megan Woods talk, and it was actually the marshalling of the thundering cliché again and again—no phrase was used until it had been so thoroughly road-tested that it had lost all traction. Then we heard from Chlöe Swarbrick, who says, “If I just talk about enough detail, people will decide that I must be really smart.” This is the person who uses modern technology to campaign against mining and talks about this Government having contradictions. She said that we shouldn’t be giving money to people to pay for their early childhood education, we shouldn’t have a $75 tax credit, because maybe some of that money will be absorbed by the early childhood centres providing the service. Well, if that was the argument, then we should never put money into social services, because the money might be absorbed by the people that provide the social service.

Actually, there’s some truth in this—there’s some truth in this. It was shown by the previous Government. The previous Government was able to show that if you increase spending by 80 percent in six years, if you increase the amount of money spent per person by 30 percent ahead of inflation—so 80 percent in general, but 30 percent ahead of inflation per person; you know, it’s the real figures—they can actually make social outcomes worse. That is the context that you cannot forget when you talk about this Government’s Budget. Six years of spending more and more every year, racking up $100 billion of debt on top of an ever-growing tax bill—

Camilla Belich: Aren’t you spending more in your Budget?

Hon DAVID SEYMOUR: —and, actually, the social indicators got worse. Camilla Belich is over there, and she’s trying to dispute this. I wonder which statistics she’d like to dispute. Would she like to dispute the victimisation of New Zealanders by violent crime, because according to the Ministry of Justice, after six years of Labour trying this enormous ideological experiment—“If only we try being kinder to criminals, maybe one day they’ll be kind back.” And what happened? Well, according to the Ministry of Justice’s victimisation survey, violent crime towards New Zealanders went up 30 percent in six years. That was the result of a Labour Government that spent so much money.

This is the Labour Party—this is the party of Peter Fraser and Clarence Beeby—the party that believes every single New Zealander should have the opportunity to be extended to the full range of their powers. Whether they’re boy or girl, from town or country, rich or poor, they should all get an education so that they can access the world. That’s what the Labour Party used to stand for. They pumped the cash into the Ministry of Education, they went from 2,600 public servants in the ministry to 4,600 public servants—2,000 extra bureaucrats, and you know what happened? New Zealand students did worse. Worse in attendance—

Hon Peeni Henare: Talk about COVID.

Hon DAVID SEYMOUR: —73 percent attendance—oh, I heard Peeni Henare saying, “Talk about COVID.” Sir, you are coming up. Let me just finish talking about education. They put so much more money into education, and yet fewer students attended and fewer students passed, and New Zealand students in the international league tables—in the Programme for International Student Assessment, in the Trends in International Mathematics and Science Study, and in the Progress in International Reading Literacy Study, the results got worse. So, if Chlöe Swarbrick believes that spending more money is the answer to everything, then why didn’t it work when they increased expenditure from $86 billion to $140 billion in just six short years?

And then Peeni Henare, my old mate from Ngāpuhi up north, he said, “Talk about COVID.” Well, let’s talk about COVID—let’s talk about COVID. COVID-19 was a real catastrophe, but it was nothing like the catastrophe that the previous Government visited on New Zealanders through its overreaction. You know, I remember when Donald Trump was elected and Jacinda Ardern said, “No one marched when I was elected.” Jacinda Ardern claims that she didn’t create any social unrest. Who would have thought that Jacinda Ardern could divide a society so badly that we had fires on the front lawn of our Parliament?

DEPUTY SPEAKER: And can we go back to the appropriation.

Hon DAVID SEYMOUR: We are talking about the appropriation, Madam Speaker. We’re talking specifically about the fact that this is a fiscal clean-up job for enormous amounts of expenditure which has not delivered results. It delivered social division; it delivered half a billion dollars’ worth of rapid antigen tests being stored in a warehouse at enormous expense after they expired and were unable to be used. So if the member wants to talk about COVID—wasted money, social division, $100 billion of debt; nothing to show for it—I’m happy to talk about COVID.

Does anyone on the Labour benches have any area where they think their Government succeeded that they would still like to talk about?

Hon Peeni Henare: Māori housing, champ.

Hon DAVID SEYMOUR: So—oh, oh, Peeni Henare wants to talk about Māori housing. Well, first of all, what on earth is a Māori house? You know what? I think that New Zealanders—human beings—actually living in a house—it doesn’t make a huge difference what race the house is. I find that houses are just houses. You know, we actually believe that a house is just a house. But let’s talk a little bit about houses for Māori and for Pākehā—actually, for New Zealanders of all creeds and races, from all corners of the earth that make their home in this beautiful land. You see, the problem is if they want to talk about housing. Well, I’m sorry, but I’m going to go there. I’m going to talk about KiwiBuild. You see, the reason that we’ve got to cancel so much stupid spending is that the Labour Party brought in so much stupid spending, and somehow they managed to have rents—rents went up $200 in just three years after they started poking around with the taxes on rental housing. KiwiBuild became a byword for failure, and Kāinga Ora took over $2 billion of money, borrowed on the taxpayers’ credit, and started actually—

Hon Dr Megan Woods: Built some houses.

Hon DAVID SEYMOUR: Megan Woods said, “To build houses.” You know what they did? They went out into the housing market, and they bid above the odds to buy land. They bid above the odds for materials and builders and project managers. They actually managed to raise the price of housing even as they tried to build affordable housing. So, Peeni Henare, you want to talk about Māori housing? You want to talk about black, white, Cuban, or Asian housing? We’re very happy to talk about housing, but I don’t think the Labour Party should want to talk about their performance in the housing market—the massive inflation, the massive rent increases, and the massive failures in Government expenditure for people of all backgrounds. Is there anything else the Labour Party candidates would like to talk about?

Camilla Belich: Why don’t you talk about your own Budget?

Hon DAVID SEYMOUR: Here we go. Why don’t we talk about our own Budget? Well, our Budget is busy cutting back the waste. This is the Appropriation (2023/24 Supplementary Estimates) Bill, and as has been pointed out, it is largely about the changes we made when we came into power to reduce wasteful expenditure right across the board. But thank you very much, Camilla Belich, for telling us that nobody in Labour wants to talk about their performance anymore. They’d rather we switch to talking about this Government, and, actually, more and more New Zealanders feel exactly that way.

So what is this Government doing? Well, this Government is reducing expenditure each and every year. And why are we doing that? Because people out there are feeling it tough. You know, I heard one of the people in the Opposition say that this Government’s making bad choices with its Budget. Well, I disagree with that, but even if it was true, it would be better than the previous Government, who made no choices—no choices at all. They just thought, “Never mind, we can borrow a few billion more.” That’s how we got $100 billion into debt. What this Government is doing is tightening its belt, just the way that people up and down this country, around the kitchen table, people in firms and farms and families, have had to actually save money so that they can get through the fortnight to the next payday, surrounded by rising prices caused by the reckless fiscal irresponsibility of the previous Government and the inflation that it caused.

We are now managing our books to take pressure off inflation so that people can breathe again at the end of the financial week, and we’re doing that by cutting wasteful expenditure by around $13 billion, by around—

Hon Peeni Henare: And it’s not working.

Hon DAVID SEYMOUR: Oh, and Peeni Henare says it’s not working. Well, in fairness, it took them six years of fiscal irresponsibility to get us here; we’ve had six months of fiscal responsibility, and, actually, inflation is coming down. People can see it being back in the target band. People can see those interest rates finally dropping, because we’ve got a Government that’s being responsible.

Here’s what else we’re doing: we’re using some of the savings to let people keep more of their own money with lower taxes so they can keep more of their own hard-earned money to get to the end of that fortnight, to get to the next payday without slipping further and further into overdraft. That’s the kind of responsibility that this Government is bringing to financial management. Thank you, Labour, for playing, but by the end of it, you didn’t want to talk about any of your policies, and if I was you, neither would I.

Hon SHANE JONES (Minister for Resources): I don’t want to talk about the last regime. I don’t want to commit cruelty to species that are on the verge of extinction! I want to talk about elements inside this particular bill, the Appropriation (2023/24 Supplementary Estimates) Bill, and I want to start with energy. As was pointed out to me during the select committee process, the scrutiny process, a word and an experience that I wasn’t quite familiar with, certain things happened during the unwanted sabbatical. However, coming back to the topic, I want to talk about the mortal threat that we face in terms of having a robust, adequate source of energy, and the fact that our energy resilience is threatened by a host of wild, untested, expansionary falsehoods, in terms of what was served up about how New Zealand should respond to climate change.

We cannot respond to climate change, in an energy context—whether it’s more sun, more wind, other interventions—unless investors, unless firms, unless farmers, unless manufacturers have the confidence that the lights will stay on and we’ll have enough fuel in the country to continue to grow the economy. I am funding—

Scott Willis: They know that you’re a one-term Government.

Hon SHANE JONES: We’ve heard enough from “Yabba Dabba Doo” over there. This is serious economics. We are talking about the threat to the resilience of our nation in respect of fuel.

Ever since that crazy, dangerous decision was made to imperil the robustness of our military, worsen the resilience of our firms through the closure of the only refinery that we had in New Zealand, it falls to us now to tidy it up—an investment to ensure that our fuel supplies continue to remain at a level where business has confidence in our direction. If we do not have an energy system that can guarantee to keep the lights on, we will not attract new investment, and this notion that somehow just wind, just solar is going to keep the economy turning over—riddle me this: why is it that the 1,500‑megawatt investments that are either going through the system or have already been allocated are not already up and running?

The last regime did nothing to improve the competitiveness of the energy sector, which is why, in the coalition agreement, now funded as a consequence of this Budget, we’re going to drive better competitiveness. Not only are we going to drive better compliance—and I don’t want to talk about the 100,000 New Zealanders whose lives have been blighted by the falling over of one single pylon. Let me come back. There is a clear message in this particular Budget: either we’re going to use our own indigenous resources or we’re going to worsen our vulnerability and throw ourselves at the feet of geopolitical instability.

There is a very bleak story to be told. Whilst previously no one wanted to openly admit that we should use our own gas resources, this politician, this side of the House, is clearly going to trumpet: if you want to invest in gas and in oil in New Zealand, the door is open. The opportunities are here. We are not going to quietly watch the mountains of Indonesian coal grow whilst the only response we hear is “More wind, more solar.” We need hard-headed responses, and as a part of my delivery, we’re going to do that in the context of energy.

Let me talk a wee bit about fisheries, an area that has been continually demonised, continually delegitimised. The industry has now, in our side of the House, not only advocacy but a politician who is not going to acquiesce with the ongoing trivialisation of this important industry and this notion that suddenly we’re going to outlaw bottom trawling—suddenly we’re going to outlaw the majority of the techniques used by our current fishing industry—to suit a tiny minority of activists. It’s not happening. We need to boost the income, boost the revenue from expanding our capacity, derive more livelihood income, more export income from that industry.

Now, let me go on to what was meant to be the key institution to moderate and incentivise changes to behaviour in climate change: the emissions trading scheme (ETS). What happened under the last regime? Well, hopefully, we’ll see the back end of the soon to be retiring chairman of the Climate Change Commission. I can’t comment on the CEO of that organisation, but I go down on bended knee and pray that the next chair deals to that particular person’s inability to deliver what society needs. But what was the inheritance that we ended up with? Gross uncertainty, continual attacks on forestry, and an inordinately negative view as to what role sequestration, what role abatements, what role offsetting should play—to the point that the last regime thought the best way to deal with this was to hand out massive corporate subsidies to recipients in the industrial world. And those who received it—good on you. You played by the rules; you received the pūtea. My message to you: abide by the key performance indicators.

But we’re not going to address the challenges of climate change unless we bring certainty and stability, and a lot of the work that was under way under the last Budget has gone by the way, and there’s a narrow focus this time to enhance certainty and boost stability in terms of the ETS. And this notion that some would have you believe—that we’re going to go away and spend billions of dollars in 2030; that’s what we hear from the “Yabba Dabba Doo Party” over there: that New Zealanders are going to endorse us sending billions of dollars to the Congo—is never going to happen. New Zealanders expect us to invest so that society, so that the community, can adapt to the challenges of changing weather and changing community challenges.

Now, let me finish just on building and housing. Kāinga Ora—and I’m not too fussed by the name. “Kāinga”, from the word “kā”: to light a fire where you built your home; “ora”—sadly, for that lovely Māori word meaning “wellbeing”, most of the experience for organisations with that name in their moniker has been an inverse-related outcome. Kāinga Ora ended up, under the last regime, delivering houses at $6,500 per square metre. No wonder their finances are in a terrible state. In New Zealand, we should be delivering bulk standard houses for at least $2,400 per square metre. And why do I say that? There is no point building the Taj Mahal when what society really requires is to stop spending the $1 million per day in motels and move those people into bulk standard, ordinary whare, not overcompensated and overcapitalised, like many of us grew up with in New Zealand—an ordinary Keith Hay house—or, in the case of the people who grew up in the 1960s, where you could get the same dwelling if you lived in Kaitāia down to Invercargill.

Kāinga Ora, sadly, with a board that lost its way, probably dominated by a very, very overreaching Minister of the time, has worsened housing statistics in New Zealand. The costs blew out to the point that, yes, there is at the moment a pause because we’ve got to get our hands around the throat of how much money we are continually throwing after bad outcomes. And the worst—the worst legacy—is to look at the trajectory of inflated costs associated with delivering housing for the most needy, which is why our modest contribution of the granny flat is already inordinately popular around New Zealand—not only as a response, because it eclipses the Building Act, much of which is unnecessary bureaucracy; it will also have a pathway through the Resource Management Act. It’s common-sense, robust gestures of that nature which will deliver to garden-variety Kiwis a housing solution that is not overcapitalised and does not have the cost structure of the Taj Mahal.

DEPUTY SPEAKER: Celia Wade-Brown; this is a split call—five minutes. Thank you.

CELIA WADE-BROWN (Green): Thank you, Madam Speaker. It’s my pleasure to take a call in this debate on the Appropriation (2023/24 Supplementary Estimates) Bill. What this bill does is look at the wash-up that needs to be done. The Supplementary Estimates reflect the activities of the Government through the period of the year that maybe weren’t foreseen, weren’t part of the original Budget, or, in this case, were the brutal changes caused by a change in Government.

The change in Government treats the majority for the coalition of three rather distinct partners as a total mandate for some of the policies pushed by one or two minor parties—parties of the three-headed taniwha.

Hon Shane Jones: Minor—minor? All-powerful—all-powerful.

CELIA WADE-BROWN: Power and size are not always related. This is legislation that should be a usual and normal part of our parliamentary process, but this set of figures is quite challenging as a change of Government has stopped some very good processes in their tracks—sometimes before their worth has been fully proven.

Now, the Greens supported the 2023-24 Budget. That doesn’t mean we supported every line. We certainly don’t support many of the changes brought in since November. I’d like to draw attention to a few of the specific changes to appropriations listed in Schedule 1 that deserve a bit more of a detailed investigation. Why was $1.5 million—

Hon Shane Jones: Investigation? Where’s Darleen?

CELIA WADE-BROWN: —less spent on apprentice training, when every party here apparently supports—

Hon Scott Simpson: Set Darleen free!

DEPUTY SPEAKER: No, not a good idea, on the right side of the House. We’ll stick to the debate, thank you.

CELIA WADE-BROWN: —training and retraining in positive trades. What a tragedy that the Community Connect programme is $30 million underspent, when those half-price fares were helping people choose public transport. Now, that’s an effective way to support low-income families and reduce congestion far more cheaply than tolled four-lane highways and tunnels ever can. Dropping Community Connect was a deliberate move by the new Government against public transport.

Similarly, planning infrastructure and activities for mode shift, which encourages those who can change—it’s not compulsory. There are certain members of the Opposition and the Government that I cannot imagine ever on a bicycle, but they’re not listening, so it doesn’t matter. That was underspent by $200 million, and I’d like to have addressed at some point: if the spend on national pharmaceuticals was almost $500 million overspent in this Budget already, is this coming year’s Budget actually going to deliver the promised medicines?

Transport congestion, road pavement conditions, health, crime—they’re all susceptible to having—

Hon Shane Jones: Tell us about potholes.

CELIA WADE-BROWN: —yeah—the symptoms addressed. Potholes are a symptom of a bad transport system. The Greens want to address the causes, not the symptoms, and we want to reduce future health costs. Warm, dry, secure housing would solve truancy a lot faster than fining parents.

Hon Shane Jones: No, send them to military camp.

CELIA WADE-BROWN: All 10 of them. These questions, and the Budget as a whole, remind us that poverty, tax cuts for landlords, mitigation of climate change, adaptation to climate change that’s already happening, and protection of our taonga species are political choices.

In conclusion, with the damaging effects of inequality now starkly clear on the health, economy, and environment, I’d like to quote Kate Raworth: “Don’t wait for economic growth to reduce inequality”. Let’s address the causes of inequality, the causes of ill health, and the causes of environmental degradation. Thank you, Madam Speaker.

CATHERINE WEDD (National—Tukituki): I rise to support the Appropriation (2023/24 Supplementary Estimates) Bill, because this Budget is about getting New Zealand ahead, moving us forward out of the dark daily struggle to a brighter future, enabling hard-working New Zealanders to keep more of what they earn, strengthening our economy once again, and delivering that tax relief that people have not seen in New Zealand for 14 years. It’s a fiscally responsible Budget and delivers on our commitments to put more funding into our front-line health services, education, and police. That’s right.

Hon Dr Deborah Russell: What about the Supplementary Estimates?

CATHERINE WEDD: On this side of the House, we’re reducing the ballooning bureaucracy—I am getting to the actual Votes in Estimates—because we are taking money out of the back office and we are moving it to the front line.

I’m an electorate MP standing up every day for the people of Hawke’s Bay, and this Budget respects those hard-working people in provincial New Zealand. Regional New Zealand has been neglected for the past six years, as the previous Government treated provincial New Zealand like a bottomless tax ATM machine, spending the money in Wellington on consultants and ballooning bureaucracy, taxing hard-working people in businesses, and strangling our productive sectors with regulation. Budget 2024 respects provincial New Zealand, because we are aspirational and we reward success.

Our tax-relief package in the Budget will increase the take-home income of 83 percent of New Zealanders—83 percent of New Zealanders. It is in here—this is what the New Zealand public voted for, and this is what this bill will be delivering on 31 July. It’s time that hard-working New Zealanders can keep more of what they earn. Our tax package gives the average-income households up to $102 a fortnight, plus the FamilyBoost childcare of $150 a fortnight. This is significant to many low and middle income - earning families who are really struggling at the moment after years and years of neglect. Our Government is finally taking action to bring down inflation, bring down those interest rates, and strengthen our economy.

Budget 2024 also puts a heavy focus on health. We’re investing in and increasing front-line services such as emergency departments, primary care, medicines, and public health so New Zealanders can have the healthcare they need.

On this side of the House, we’re laser-focused on education. You will see in those Estimates and in our 2024 Budget a heavy focus on education because education creates equality, and we are investing in our children and in the future of New Zealand, looking forwards, not backwards, like the member said earlier. It’s not about lowering the bar; it’s about getting more of our kids above the bar and on a positive pathway to a job and a better future.

This Budget commits—yes, this Budget and the Estimates commit—$1.5 billion for school property building and maintaining classrooms, getting more value out of the money we spend and a real focus on our front-line classrooms, ensuring money is going into our teachers and children, not wasted on the bureaucracy in Wellington. We have committed $67 million to roll out structured literacy across our schools. I have 61 schools in the Tukituki electorate, and I have been out and about visiting these schools, meeting the amazing teachers, seeing how they’ve been rolling out structured literacy, hearing about the huge difference that it is making for our children, seeing them sounding the words, and seeing their faces light up as they can suddenly read. We need to lift performance across education, and this starts by getting our kids back to basics.

Our Government is also committed to cracking down on crime and keeping our communities safe. In this Budget, we are investing $2.9 billion to restoring law and order—more front-line police officers, more support for our police on the beat, $1.9 billion to front-line corrections officers, more prison capacity, and more rehabilitation for offenders and support for the victims of crime. We are focusing on youth offending, including a military-style academy pilot.

Infrastructure is another big area in Budget 2024, because there has been an absolute deficit in our infrastructure, and we’re going to be investing $68 billion in infrastructure over the next five years. This is a record investment in infrastructure, and when we talk about infrastructure, we aren’t visualising and dreaming and thinking ideology of light-rail projects that haven’t seen a metre of track built or of cycleways across the Auckland Harbour Bridge, which, again, is absolute ideology. We are not a Government that talks about it; we are a Government of action and delivery on this side of the House, getting stuff built, fast-tracking consenting, and getting on with the job to tackle the infrastructure deficit in this country.

This is significant for Hawke’s Bay, which is a huge export region and will play a big part in helping us double the value of exports in this country over the next 10 years. This Government’s plans for infrastructure will be life changing for people across our region. Four-laning the Hawke’s Bay expressway is a top priority and is a road of national significance. The Hawke’s Bay expressway is crucial to driving more productivity in our region, getting our apples, wine, meat, and produce to the port more efficiently and off to markets around the world a lot faster.

We are also delivering on our commitment to boost funding for pothole prevention, as the member over here alluded to. During the campaign, people would complain to me all the time about the hundreds and hundreds of potholes across our State highways and our rural roads, because, on that side of the House, they failed to invest in infrastructure. In fact, we’re seeing over $82 million going into Hawke’s Bay’s potholes. So maintaining our roads is a top priority. Actually, that’s an increase of 51 percent, and it’s this type of investment that is going to make a huge difference, a focus on provincial New Zealand, stopping the centralisation in the bureaucracy and focusing on our regions.

Speaking of our regions, I’m going to make a reference to the cyclone rebuild and recovery funding that we have seen in these Estimates, because Hawke’s Bay is also getting an extra funding boost for cyclone recovery to ensure we can rebuild quickly and efficiently. Already, our Minister of Transport, Simeon Brown, has been to the region, and he’s been speaking with our regional leaders just to see how we can rebuild more efficiently and faster and make sure that we are investing in that crucial infrastructure. That includes the State highway network, including State Highway 2 and State Highway 5, and there will be an investment of $609.3 million over three years to complete the State highway recovery works in the areas that have been affected by the North Island weather events. This is significant for my region.

Also, there will be an investment of $330 million over two years to continue the response and recovery work on local roads, and it’s this funding that will ensure the vital transport links are repaired so people and freight can get to where they need to go quickly and safely. Our Government is absolutely committed to cyclone rebuild in the Hawke’s Bay region and ensuring that our region gets back on its feet, and it was absolutely heartening to see such a significant investment in Budget 2024, which is going to make a huge difference for the people of Hawke’s Bay and a lot of those people who were devastated in Cyclone Gabrielle.

This Budget is focused on getting more value out of the money we spend, returning to surplus, stopping the ballooning public debt that we’ve seen in the past six years, and restoring discipline to public spending. We’re putting money back into the front line and giving hard-working New Zealanders tax relief, and that’s getting New Zealand back on track.

Hon Dr DEBORAH RUSSELL (Labour): So many clichés in so little time—so little time—that the member didn’t even manage to address the bill that is under discussion. Now, the member is a new member, so I suppose it’s reasonable that she could be mistaken about the subject matter of this debate. But the subject matter of this debate is not—is not—the 2024 Budget; in fact, the subject matter of this debate is the imprest supply bill and this bill, the Supplementary Estimates, which are the Supplementary Estimates which amend the 2023 Budget—

DEPUTY SPEAKER: The previous member did refer to the Estimates a number of times.

Hon Dr DEBORAH RUSSELL: Indeed, she did, but she talked repeatedly about the Budget. However, if the member wants to open up the debate like that, well, I suppose we are going to welcome the opportunity to talk more about the Budget.

But I just want to retreat right back to this bill and some of the reasons behind it. First of all, any member who’s actually attended the Finance and Expenditure Committee meetings and read the report would know that the discussion there was very much on the extra money that has been appropriated, or not, in this bill, and there is a very dull, pro forma report that comes out. But the Minister of Finance—and the member would do well to listen to her Minister of Finance—said something very interesting in her speech. She said one of the reasons for this annual Supplementary Estimates bill is that “fiscal risks materialise”. Stuff happens—stuff happens between one Budget and the next. Stuff happens, which means that the Budget needs to be amended or changed. Sometimes it’s low-level stuff that just happens at the level of the department or a ministry. At other times, it is major and significant things that happen which then necessitate a change to the Budget.

In fact, the member, in amidst her speaking repeatedly about the Budget rather than the Supplementary Estimates, did spend quite a bit of time talking about the impact of Cyclone Gabrielle. I noticed she didn’t manage to talk about the Auckland Anniversary Weekend floods, which were just as important, but talked about the impact of Cyclone Gabrielle. Of course, that is one of those things that happens and that a Government simply must deal with. It simply must start spending the money and making the choices, because a disaster has happened or because something completely unexpected has happened, and, in these Supplementary Estimates, we see some of that going on.

So, to help the member out, I will direct her to page 28 of this bill, which is the one we’re debating, and it talks about some of the extra money that is allocated there. It’s a decrease of $257,000, actually, for Cyclone Gabrielle, for the National Land Transport Fund operating cost pressure funding—it’s on page 28. Now, that’s because when Cyclone Gabrielle swept through, a huge adjustment had to be made to the 2023 Budget. It was done as best we could, and so, subsequently, the money got changed around because later understandings developed. Why? Because, as the Minister of Finance said, fiscal risks materialise.

What this bill, the one that we should have been debating, is doing is talking about the changes that have been made between Budgets, and it does. This bill does contain, as my colleague Megan Woods said, some signals—some stuff that we know about that was changed because of the choices that this incoming Government has made—and these choices are quite instructive.

I want to direct the member’s attention to page 20 of this particular Appropriation (2023/24 Supplementary Estimates) Bill, and sitting in there is a return of money to central government of $122 million—it’s a lot of money—for the establishment of water services entities. So the incoming Government has made a choice about how it is going to deal with the serious issues around water supply in this country.

It’s interesting, sitting in the Finance and Expenditure Committee in the last few days. In the public hearings—the stuff that’s already public—council after council after council has come to that committee and said, “How are we going to pay? How is our rating base going to manage?” Councils—like Rangitikei Council; councils, like Clutha Council—have come and said, “We just don’t have the money or the rating base to manage this.”

Hon Peeni Henare: Far North.

Hon Dr DEBORAH RUSSELL: Now, the previous Government had come up with a solution to enable those councils to manage the real needs around water supply. Actually, my colleague Mr Henare has just mentioned the Far North District Council. They absolutely need assistance in order to get their water supplies up to standard, but off a low ratings base, they simply cannot pay for it. That Government over there, and it’s seen in this Supplementary Estimates bill, has told councils to go at it on their own—just go at it on their own—and some of the least wealthy areas of the country and some of the areas where there is no capacity to get further money out of the rating base have told the councils that they are on their own. That decision is recorded in this bill. It’s a shameful decision, and it’s one that council after council has rejected.

I want to direct the member’s attention now—because she needs to understand where this comes from—to page 52 of this bill. What it has in there is a return of $220 million to the centre, because there was going to be a Crown loan to support the transformation of Te Pūkenga and of our whole vocational education system in there, but that money is coming back. And it’s quite interesting because, even though that money has come back into the centre, sitting in the Budget this year, where, seeing as the Government has abandoned one plan, we might expect to see some plan in this year’s Budget—but sitting on page 90 of a summary of initiatives, where we’re looking at Te Pūkenga disestablishment and transition—a tad “contingency”—there’s not a single number in there. Not a single number there. What does this point to, between the Supplementary Estimates where the money is taken out because they’re not going to do that anymore, but no money is being provided for it in this document? There is no plan.

That Government does not have a plan. It does not have a plan for water services, other than charging the money back to councils. It does not have a plan for Te Pūkenga. It charged in to change things around because of its own ideological preferences and then couldn’t be bothered to allocate the money. It does not have a plan and does not have a sense of where it’s going. That is what this Supplementary Estimates bill records for us. That’s what we see coming through from it.

I also then want to turn to, again, another really interesting item sitting in this Supplementary Estimates bill, and I’m going to point the member to page 40 of this Supplementary Estimates bill. It’s some extra money that the Government has had to allocate to KiwiRail for the Project iReX wind-down costs—another area where the Government simply doesn’t have a plan. It has rejected the entirely sensible plan of the previous Government. The plan of the previous Government would have seen a secure freight connection between the North and South Islands that would have seen excellent ferry transport that would have promoted the use of rail to get our freight up and down the country, taking that pressure off our roads.

But that Government decided to just bin the contract. They decided they just didn’t want to do it. I don’t know why they just decided not to—and it’s going to cost us $300 million. That’s the money that’s been set aside in these Supplementary Estimates in order to cover off that Government’s ideological decision making where they’ve raced into decisions as a knee-jerk reaction and said they’re just not going to do anything that the former Government had done. So that is what is recorded in these Supplementary Estimates, and they are a shameful record for that Government.

Looking forward to next year, we can expect to see one more decision in some Supplementary Estimates. They ignored a promise they’d made on the campaign trail. They refused to fund the cancer drugs they’d promised to fund. They didn’t put it in the Budget, and so then, by the concerted action up and down the country, they were finally shamed into doing the thing they had promised to do all along. But they have not recorded it in their Budget—they have not recorded it in this Budget. They’ve written a cheque on the future, and I expect to see it in next year’s Budget, and right then we can think some more about their lack of planning, their lack of foresight, and their inability to follow through on their promises.

This is a Government that does not have a plan. It just races from one decision to another, and the record of that is right here. We will be voting against this bill.

NANCY LU (National): I stand before you to support the Appropriation (2023/24 Supplementary Estimates) Bill and Imprest Supply (First for 2024/25) Bill, a critical component of our Government’s financial framework. This bill is essential for ensuring the smooth operation of our nation’s finances as we transition from one fiscal year to the next.

A quick fact for those who have tuned in to us on TV and who are listening to us: the financial year for New Zealanders runs from 1 July to the following 30 June. During this period, the Government requires appropriations or authorisations from Parliament to carry out its functions effectively. I believe it is very important for the New Zealand public to understand how the Budget is set, especially before, during, and lapsing over the financial period, and, more importantly, what actually goes into this year’s Budget.

Now, the supply process, which is what this bill is part of, involves the appropriation of funds—the taxpayer’s hard-earned money—that are necessary for the Government to continue its operation in delivering for all New Zealanders. While some of the supply is established on a permanent, regular basis under permanent legislative authority, the majority needs to be authorised annually through the House supply procedures in any given financial year. So here we are. This is why we are here tonight debating in the House to deal with the residual supplies from the previous year, current supply issues, and preparatory supply issues for the forthcoming year.

Since the Budget was announced on 30 May, released on Budget day by the Minister of Finance, the Hon Nicola Willis, everyone up and down the country is looking at what our National-led coalition Government can deliver for all New Zealanders. The Budget statement, delivered by the Minister of Finance, outlined the principal components of our Budget. This year’s Budget is particularly noteworthy for several reasons. For the first time in 14 years, hard-working New Zealanders will get to keep more of their hard-earned money through the Government’s tax relief measures. This Budget is shifting resources from the back office of the Government into the front line, investing in healthcare, in schools, and in police.

Why is the Budget so strongly focused on shifting resources from our back office, from the bureaucracies, into front line, and why are we investing in law and order? Why are we investing in improving public services, particularly in education and healthcare? Well, let me remind every member in this House, and also to those who have tuned in, watching and listening to this debate of one very important date, 14 October 2023, the New Zealand general election. That was the date where more than half of New Zealanders voted for change and voted for this National-led coalition Government. It was the turnaround date for New Zealand.

Members on this side of the House campaigned on turning the ship around for New Zealand. We campaigned on bringing down the cost of living. We campaigned on restoring law and order, and we campaigned on improving public services. We campaigned to improve our education and to stop failing our children. We campaigned on improving our healthcare so Kiwis can access world-class healthcare and the medical care that we all deserve. But, just in case, if the members opposite had forgotten that night, it was painful, I know. It was 14 October when half of New Zealand voted them out and voted us in to clean up after their mess, to rescue the country from many fiscal cliffs, to put a handbrake on wasteful Government spending, and to finally bring some good sense and good decisions with taxpayers’ hard-earned money and actually get our country back on track.

So here we are: this Government’s first Budget announced on 30 May 2024. I take this opportunity to thank all the Ministers and Government officials involved, going line by line cutting down wasteful Government spending to find recurring savings and to reprioritise taxpayers’ hard-earned income to tax relief and to bring relief on cost of living pressures, to restore law and order, and to improve public services.

Now, the 2024 Budget aims to put New Zealanders’ money where it can make the biggest difference, delivering value for money while maintaining a fiscally responsible stance. If I can remind every member in this House, this Budget is the most fiscally responsible in seven years, with an operating allowance that is the lowest in real terms since the former finance Minister Steven Joyce’s Budget in 2017. This Budget is designed for everyday New Zealanders, those hard-working New Zealanders who are managing and doing their very best for their families and dealing with the daily grind. It aims to provide relief for the squeezed middle of New Zealand—the shift workers, the people who are working multiple jobs, people who have young children, people who are making sacrifices just to keep every day possible.

The right measure of success, in my opinion, for the Government is not how much we actually spent or how much PR we did or how many conferences we held, but actually whether we make a positive difference to New Zealanders and whether I can actually front up to my community, to my constituents, and tell them that we’ve done a really good job with their money. In my opinion, a good Government is also about bringing sense back to the revenue and expenses and bringing things back into balance. This is why the National-led Government has focused so much on managing and just bringing down our spending. Now, the operating allowance, as I alluded to earlier, has been the lowest in real terms since the last seven years. It’s set at $3.2 billion. Future Budgets from 2025 to 2027 will have even lower operating allowances per Budget.

A major component of this Budget, as I said a bit earlier, is tax relief, which is long overdue, because we haven’t had a personal income tax threshold change for 14 years. This is talking about reducing the burden for the individuals and the families who are working so hard. But on top of that, we’ve also updated the independent earner tax credit eligibility. We’ve also increased the in-work tax credit. We’ve also provided and introduced FamilyBoost. Families with young children—and I am one of them, and I can say there are so many families from my constituents who have come forward to us to say that this is finally some hope coming our way, because raising children in New Zealand is challenging. Raising children in New Zealand is challenging, but with FamilyBoost we are providing help—up to 25 percent of the early childhood education fees back to parents, back to caregivers, for them to decide on what they think is the best for their family, not for the Government to decide.

Apart from the tax relief, this Budget also invests heavily in public services. We are investing heavily into the health service in Budget 2024. We are also investing heavily in areas of education. We are investing heavily into areas of law and order. And can I just very briefly comment and say that Budget 2024 invests $8.15 billion extra operating capital funding in health services. It is providing $1.77 billion to Pharmac to ensure New Zealanders can have access to essential medicines. The Government is also investing $2.93 billion in schools and early childhood education. The Budget is also putting in $2.9 billion to restore law and order. The Budget is for everyone in New Zealand.

But, if I can, in my last remaining 50 seconds, I wanted to make a special mention of a family in Pakuranga—a family with two young children—who messaged me on 30 May, Budget day, with their screenshot. They went on to the tax calculator and have said that every fortnight they will be able to get $116.50. They are getting an annual saving of $3,029. They are stoked that they are finally able to send their children back to the extracurricular classes that the parents, unfortunately, had to cancel. They’re now even saying, “Maybe we can afford to take our kids to the zoo once a year.” So this is significant. I commend this bill to the House.

ASSISTANT SPEAKER (Teanau Tuiono): The next call is a split call between Labour and National. I call Arena Williams.

ARENA WILLIAMS (Labour—Manurewa): Tēnā koe, Mr Speaker. Te Aka Whai Ora is gone—the Māori Health Authority is gone—Māori education has been slashed, and Māori housing programmes are being cut in this bill and in this Government’s Budget, because this Government has delivered an austerity Budget for Māori that takes New Zealand backwards. It takes all New Zealanders backwards because of the way it impacts on some of our most vulnerable New Zealanders.

To have David Seymour come to this House today in this debate and ridicule the previous Government’s record on Māori housing—which stepped forward not only Māori homeownership but Māori conditions of living, of Māori in rental situations in sub-standard—

Glen Bennett: Embarrassing.

ARENA WILLIAMS: It is an embarrassment. It is an embarrassment when we have a Minister of the Crown coming to this House and saying, “What’s a Māori home?” A Māori home means something to those whānau who call that their kāinga; for whom that is not only the centre of their family but that is their connection with their land; that is a part of their identity. And Māori have no other home. We are the indigenous people of this country, and our homeownership aspirations are being crushed by this Government.

In this Appropriation (2024/25 Estimates) Bill, the Government has gone out of its way to cut the increasing Māori housing supply appropriation that the last Government introduced. It didn’t have to do that. It was penny-pinching—penny-pinching—$7 million from a fund which enabled Māori to realise some of those housing aspirations which have been held back and which the Minister David Seymour came to this House to rubbish, because he doesn’t believe in Māori homeownership.

But Labour does, because Labour knows that, actually, the history is more peppered than that Minister understands. In the 1930s, Māori homeownership was higher than any other group in New Zealand, but over successive decades—because of choices of colonial Governments and the kinds of economy that disenfranchised Māori in not only our urban centres but from their rural lands—Māori homeownership declined more steeply than any other group. And now Māori homeownership is less than 30 percent. It has declined in recent years at an even steeper rate than the decade previous.

It’s also quite alarming—and I think I’d like to offer the Minister some education on this—that 40 percent of Māori live in damp homes. That is double the number of other ethnicities reporting that they live in damp, cold homes. Māori are less likely to be able to heat their living spaces, to be able to afford to do so, and to be able to live in properly insulated properties too.

So what did the Labour Government do? It introduced a number of special Budget appropriations to actually tackle that inequality head-on. Things like He Kūkū Ki Te Kāinga, which is the increasing Māori housing supply appropriation, which this Government has removed, were among four initiatives like Ngāti Whātua Ōrākei’s kaumātua housing at Bastion Point. It was a small appropriation to allow that building to be completed, and they have cut that. They have taken it away from kaumātua and kuia who need that housing and who would have been able to contribute to the visions and aspirations of that iwi to return not only to their whenua and to that place in Auckland to reclaim that history but also to be around their grandchildren, their tamariki and mokopuna, who were growing up there. It is a real shame that that appropriation is something that these members are proud of cutting.

It is a real shame that they are cutting things like the support for the Papakura Marae, with its housing builds that enabled not only older people to live around the marae but also people who for generations have been locked out of the housing market through transitional housing. Not only was that fund being used for proper housing to be built there, it was also wraparound support to get people into homeownership and ready for homeownership.

Those are initiatives that Labour is proud of. Those are initiatives which that Minister, David Seymour, has rubbished in this House, and I challenge him to tell us why he doesn’t believe that Māori should own their own homes and should aspire to that, because he is part of a Government that has cut first-home buyers’ grants, which will continue to lock out first-home buyers from the market. He is not only happy to lock Māori first-home buyers out of the market, he’s happy to lock all first-home buyers out of the market and to advance a programme of work which incentivises large-scale investors to buy properties at the expense of those first-home buyers by reintroducing interest deductibility, which doesn’t increase housing supply at all—it simply encourages large investors to buy them up.

This is a Government with its priorities all wrong, but Labour will defend Māori homeownership next time.

Dr CARLOS CHEUNG (National—Mt Roskill): Budget 2024 is a Budget for the squeezed middle. For the first time in 14 years, hard-working Kiwis—like people in Mt Roskill—will get to keep more of what they earn through our Government tax relief. From 31 July this year, an average-income household will receive tax relief of up to $102 a fortnight, and eligible families will also receive a FamilyBoost childcare tax credit of up to $150 per fortnight. This will make a real difference to hard-working Kiwis, who have endured a prolonged cost of living crisis. Most importantly, these changes will be fully paid for by offsetting saving and revenue initiatives, meaning tax relief won’t require additional borrowing and won’t add to inflationary pressure.

I know my constituents are excited about the Budget and they want to know more, but today, as a member of the Health Committee, I would like to focus on how Budget 2024 is making a meaningful difference towards getting our health system back on track. Just now, we hear a lot of things from the opposite side of the House, talking about things going backward. They love to use data. Let’s talk about things going backwards and targets. Let’s talk about emergency department (ED) wait times. In 2017, 91 percent of the patients were being seen within six hours. What happened? Under the Labour Government, it dropped to only 76 percent. What does that mean? That means 90,000 more New Zealanders are waiting more than six hours at ED. Let’s talk about immunisation rates. The immunisation rate of children aged 24 months dropped from 92.4 percent in 2017, to 82.9 percent. This is what I call going backwards. Our healthcare system is facing a major workforce shortage. This is what I call going backwards.

As a part of Budget 2024, health is getting a significant funding boost of $16.69 billion, across three Budgets, as part of our plan to invest in our front-line services—such as emergency departments, primary care, medicine, and public health—to ensure New Zealanders can get the healthcare that they deserve. Let’s talk a little bit about health investment in Budget 2024 over the four years included. Well, listen: $3.44 billion for hospital and specialised service for Health New Zealand; $2.12 billion for primary, community, and public health through Health New Zealand; $1.77 billion for Pharmac to fix the shortfall left by the Labour Government. We will ensure that Kiwis can get access to the medicines they need. We talk about $31.2 million to extend free breast screening to an additional 60,000 women each year.

What we also target is the ongoing workforce issue in our healthcare system. Budget 2024 is also investing $22 million to train 24 more doctors each year—that’s enabled the University of Auckland and the University of Otago to increase their combined medical school first-year intake, which will see more doctors graduating and entering the health workforce. People in Mt Roskill are also concerned about the broken mental health system. Budget 2024 will invest $24 million in free mental health counselling services through Gumboot Friday, providing 160,000 hours of free counselling sessions for New Zealanders aged between five and 25. We are also allocating another $24.5 million for mental wellbeing support for primary and intermediate school students. This is how we target the issues.

Our Government, in Budget 2024, is committed to investing in our healthcare system because we are a Government that listens to people. We work for people, and we deliver for the people, especially for the hard-working people in New Zealand, especially the hard-working residents of Mt Roskill. I support this bill to the House.

REUBEN DAVIDSON (Labour—Christchurch East): Thank you, Mr Speaker. I stand to speak in strong opposition because there is nothing in this Budget for the people of Christchurch East. In fact, there’s less than nothing, because this Budget actually takes things away. That’s what we see in this bill and in this Budget, and I’m going to give you a local example of that.

If you come to Acheson Avenue in the heart of Shirley—it’s a beautiful street—there’s a set of shops that were built post-war, after the Second World War, and they were given to veterans to help them settle back into the community. They could start small independent businesses. They could build up a precinct and area for the people of Shirley to enjoy. Now, in recent years, things being what they are with moves to malls and supermarkets, those shops were mostly empty. But when Ka Ora, Ka Ako was established, this community saw an opportunity to invest. It was an opportunity to invest in their kids, and it was an opportunity to invest in themselves. I can’t think of anything better to invest in.

So they established Nourish Ōraka, a small, local, social enterprise. “What does that look like?”, I hear you ask. I’ll tell you it looks like. It looks like 10 jobs for locals. It looks like making 525 lunches a day for the students who go to Shirley Primary School and Te Oraka Shirley Intermediate School. It looks like after-school jobs for some of those school kids—finish school, pop in, do a couple of hours of dishes, be paid properly for it, and learn some skills. It looks like no kids staying home because their family can’t provide them lunch. It looks like no single-use packaging being used at all. It looks like 100 percent of the food scraps being recycled at a nearby chicken-rescue organisation. There’s something else that it achieves, something that isn’t a number: pride. This bill and this Budget cuts pride.

Now, I’ve been there on a typical day through the week, when it’s busy. You walk in through the door, you have no idea what’s going on inside, but it’s a bustling, busy kitchen. The radio’s on. Those 10 staff are making perfect lunches—perfect, uniform lunches; exactly what they know the local kids want to eat. The garage door is rolled up out the back. There’s a view out to the park. It makes it absolutely safe for people to spend time there. The van gets loaded up. The healthy food gets delivered for those kids to have for lunch. That’s community. This Budget cuts community to its very core. So when our community heard that this National-led Government was wanting to make a choice to cut spending on Ka Ora, Ka Ako—on school lunches, that was one of the places that they wanted to cut. That was one of the choices this Government was making.

Now, cutting school lunches doesn’t sound like a good way, to me, to address the cost of living, school attendance, or educational outcomes. But that is the choice—

Carl Bates: Fiscal cliff left by Labour; we funded it.

REUBEN DAVIDSON: —that this Government is making. I’ll remind that member that the point of a heckle is to try and make me look silly, not them.

So the community called on me to have a public meeting to hear from them about what taking this away would mean. So our education spokesperson, Jan Tinetti, came down and joined me at the MacFarlane Park Centre on Acheson Avenue, and we had a public meeting for the community of Christchurch East.

Hon Member: Well attended.

REUBEN DAVIDSON: It was busy. It was well attended. We had to put out extra chairs—three times, we had to put out extra chairs—and there was still standing room only. That front row of chairs was full of people that the members on the other side of this House should engage with more often. It was full of principals from local primary and intermediate and high schools. They told us that since they’d had the healthy school lunch programme, there were no queues for the sick bay after lunch and kids now eat together. For lots of kids, this is the only meal they may have that day. We heard about the very real difference that providers like Nourish Ōraka, who work with the local kids and who work with the community to design those menus and to provide those lunches, make. Some of them stood up and spoke to the strength of the school lunch programme and the fact that they were concerned about the Budget cutting that out of their school. They’d taken a petition around their school and had every student sign it.

One of the local schools is a school that has seen a 600 percent increase in NCEA achievement—600 percent. That’s been down to the work of Peggy Burrows, the principal, and the teaching staff at Haeata. Some of those students had heard that this Government wanted to cut their school lunch programme, and 68 of them wrote letters. I’m going to read three of them.

Hon Member: Oh, please don’t.

REUBEN DAVIDSON: The first letter: “If you take away the school lunches, we will be hungry and won’t be able to learn properly. Our school needs school lunches so we can get our energy for the rest of the day. The lunches help me to concentrate.” The fact that you don’t want to hear the letter is a point that I will get to, surely.

The second of 68 letters: “My name is Tavita, and I go to a Haeata community campus. I’m Samoan-born, and I live in New Zealand. I don’t want you to remove the lunches, because parents have to pay for school clothes, power bills, Wi-Fi, and books. Please do not remove the lunches, because parents might not afford to buy lunches, and if children starve, they can get tired and fail school.”

A third letter finishes by saying—

Carl Bates: Give me the letters. I’ll send them a correct reply.

REUBEN DAVIDSON: —“Our school lunches”—I’ll get to that, Mr Bates—“give us the strength and courage to do our learning properly. Foods digest in our body, which brings us happiness. We have food that makes us full of how good these foods are, and happiness makes us want to be a better person. Being a better person allows us to learn better and be smarter, which means we’ll get good grades. Our school may be the smartest school; you will never know.”

Now, those students, when I visited, knew that I worked in this building, and knew that the very same people—some of whom are sitting opposite me tonight—who are making the decisions in this Budget worked in this building too. They asked whether I would hand deliver those letters to the Prime Minister. I said, “I’ll do what I can.” So I took 68 letters, and I stood in the hallway outside the House one day before question time—

Hon Louise Upston: With a video camera.

REUBEN DAVIDSON: —to catch the Prime Minister on his way into the House—

Hon Louise Upston: And film him.

REUBEN DAVIDSON: —to be able to give him the letters. For the record, I did not have a video camera. Although—

Hon Louise Upston: You had someone filming.

REUBEN DAVIDSON: —with a background in television, I could have been. For the record, I did not have someone filming. Disappointingly, whilst 68 children and many others in that community had taken the time to write letters to the Prime Minister with their concerns about the content of the Budget and the risk to their school lunches, the Prime Minister refused to take the letters from me. I offered more than once. For the record, he did have two available hands that he could have taken them in.

More disappointingly, after I mailed them to his office and they were received, the letter I received in reply said, “The Prime Minister appreciates people taking the time to write to him, but due to the high volume of correspondence he receives, he is not able to reply to every message personally.”—so he has asked me to respond on his behalf—“Your letters are important to the Prime Minister. It tells him how passionate you are about the issue of trying to stop free school lunches in schools. Keep up the excellent work at school, and all the best with your studies.”

Hon Nicola Willis: Point of order. Mr Speaker, I came into the House, thinking that I was entering the House for the imprest supply debate. I seem to have stepped into an alternative universe in which we’re discussing the postal system in New Zealand.

Tangi Utikere: Speaking to the point of order. Thank you, Mr Speaker. I’ve listened diligently to my colleague Mr Davidson—

Hon Nicola Willis: Oh God, you poor thing!

Tangi Utikere: Well, Ms Willis—

ASSISTANT SPEAKER (Teanau Tuiono): A point of order will be taken in silence. Continue, Mr Tangi Utikere.

Tangi Utikere: Thank you, sir. I’ve listened diligently to my colleague Mr Davidson, and what he has done, from what I’ve heard, is actually reflect on the decisions that have been made that are relative to the Budget. While the member may have just indicated that she has only recently come down to the House, perhaps if she would actually understand—and she may wish to review the Hansard when she goes back to actually see that the context in which my colleague’s speech is currently being delivered is entirely within order.

ASSISTANT SPEAKER (Teanau Tuiono): Thank you, Mr Utikere. I thank you for the points of order. I do reflect that it has been wide ranging, in some cases, on both sides of the House today. But I would invite the member in his last seven seconds to wrap it up.

REUBEN DAVIDSON: Thank you, Mr Speaker. This is a Budget that takes things away from the people who need it most. It won’t do more with less; it will do less with less.

RYAN HAMILTON (National—Hamilton East): Thank you, Mr Speaker. It’s great to actually come back to be able to speak on the actual bill and talk about the things that we have been doing and are restoring. While the Opposition seems to take from the successful and give to the poor—that is the way of achieving equality or equity—we in the coalition are in the process or in the business of equality of opportunity. We believe in incentives, in education, in reward for achievement, and in keeping more of what you earn. We believe that staying on a benefit isn’t conducive to your long-term wellbeing and to setting up the next generation for success. That’s why we’re working on getting people into work so they can develop a sense of pride, be a role model, and fan the flame of mana within them.

There’s a few elephants in the room that I’d like to address, I guess, which provide context to the imprest supply allocations of the Budget, because those allocations in the Budget are there because of the context which we find ourselves in. One of those is—it’s like a myth buster. One of the Opposition loves to bring up tax cuts for the landlord—$2.9 billion tax cuts for the landlords. I just want to take a moment to analyse that and actually go: well, that tax wasn’t there until they came in, so really what we’re doing is restoring the status quo, like any other business structure around New Zealand that provides a taxable income. Then you have to ask yourself the question: did interest deductibility on rental incomes improve the housing situation across New Zealand?

Hon Tama Potaka: No.

RYAN HAMILTON: No. There were just more properties sitting empty because landlords were afraid to put tenants in them.

But it gets better, because I looked at a Stuff article from 26 February 2021, and there was analysis done. They questioned: “Do you know how many Kiwis had only one rental?” Did you know there was only 77.9 percent; nearly 80 percent of Kiwis only own one rental? So that will be mums and dads, aunties and uncles, related in many cases to the Opposition. Those are the wealthy landlords— and I quote—“While popular perception had it that all landlords owned multiple properties and reaped big capital gains as a result, the bond data suggested this was not true. Most of the landlords in the country are very much small-time operators, many of whom have the majority of their life savings in that property.”—mum and dad investors, which brings us back to the squeezed middle class. Now, actually, part of the working class has now incorporated some of that middle class because of fiscal drag. Hence the need for measured and meaningful tax reductions so they can keep more of the money they earn.

The Budget delivers on many key commitments. For the first time, as we’ve heard tonight, in 14 years—that’s a decade plus four years—hard-working New Zealanders will get to keep more of their own money through our Government’s tax relief. This Budget is for everyday people getting on with their lives, the mums and dads taking their kids to school and working hard. This Budget is for the people whose weekly budget expenses have now gone up by $300 or $400 a week because of mortgage increases. This is a Budget for the squeezed middle of New Zealand—the shift workers, the people working multiple jobs and making sacrifices for their kids. This should be Parliament’s focus every day, and we should be measuring a positive difference in the lives of New Zealanders, not just how much money we spend.

The Budget update expects core Crown tax revenue to be lower by around $18.5 billion, and yet we were able to deliver a significant Budget that will bring us back into surplus in four years’ time. After stripping out large one-off expenses and adjusting for the economic cycle, the Treasury estimates a structural operating deficit of around 1.5 percent of GDP this financial year. And, according to our great honourable Minister Nicola Willis, “structural deficit” is a technical term. To put it less formally, New Zealand has been borrowing to pay for the groceries. Yet, since 2010, inflation has pushed up wages in nominal terms, and, as a result, people pay more of their income in tax. The median full-time wage salary earner now earns $73,000 a year and is in one of the highest tax brackets. A minimum wage worker can face a marginal tax rate of 30 percent. Fortunately, we sorted that a couple of weeks ago, and, at the end of July, that will come into effect. We want people to keep more of the money they earn.

People’s individual and family circumstances differ widely, and if you haven’t yet availed yourself, may I encourage you to check out our tax calculator. Analysis from Treasury shows an estimated 727,000 households will benefit from at least $75 a fortnight. That’s about $150 a month—

Hon Peeni Henare: Missing $100.

RYAN HAMILTON: —$150 a month, and that would be enough to take your missus out on a hot date, I reckon. You take your partner out for a date—and may I recommend a couple of restaurants, Mr Speaker? If you’re in Hamilton East, you can go to Thyme Square Restaurant or Sage on Grey Street and keep the flame alight in that romantic love light. You might want to take your kids out tenpin bowling and get an ice cream at Duck Island. Or it’s an extra kilogram block of cheese, bread, milk, meat, and chicken, nourishing New Zealand - raised protein, sports uniforms, or a McChicken after netball with your grandparents who came and watched. We have heard that some people say that tax relief only benefits the well-off, but we know that’s simply not true.

Tax relief in this Budget puts $3.7 billion a year back into the pockets of New Zealanders. This tax relief is fully funded—

Scott Willis: And $3 billion to landlords.

RYAN HAMILTON: —fully funded. Did you not hear my first part on landlords? It’s probably your mum or your dad or your granddad.

I’m going to jump down to one of the other myth busters, because we’ve put a significant investment in law and order in this Budget. And again, why? Because of the context. I didn’t understand—I still struggle—why Labour said, “Let’s reduce the prison population by 30 percent.” I just couldn’t work it out. So, like all non-academics, I googled it. In the New Zealand Herald on 19 September 2023, former Minister Kelvin Davis was quoted: “When we became government at the end of 2017, our prisons were bursting at the seams … That was a trajectory the New Zealand public would never accept, so we set a goal to reduce the prison population.” They didn’t set a goal to reduce the impacts of crime or the causes, just to reduce the prison population.

Asked if today’s pivot, because remember then at the last minute, last year, the Labour Party reduced that—they removed that. Asked if today’s pivot was because of criticism linking the reduced prison population to increased crime, Hipkins replied, “Our overall goal here is to reduce offending in the first place.” But it’s a little bit too late. So our Government has committed to cracking down on crime and keeping communities safe so people can go about their lives in peace. In Budget 2024, we’re investing $2.9 billion in restoring law and order, including $497 million of reprioritisation, which was savings from the existing Budget.

This Budget delivers on the commitment made in the National - New Zealand First coalition agreement to add 500 additional front-line police officers. An investment of $226 million will fund their recruitment and retention and ensure they are properly equipped to do their job. A further $425 million will support front-line policing, including boosting police and purchasing vehicles. Our Government always backs the police. The Government’s commitment to restoring law and order means ensuring there are serious consequences for serious offenders. As previously announced, Budget 2024 will invest $1.9 billion in more front-line corrections officers, more support for offenders to turn away from crime, and more prison capacity, including an expansion of Waikeria Prison. The Budget also invests $69 million to address serious youth offending, including a military-style academy pilot and continuing the fast-track youth offending programme run by Oranga Tamariki and Police. This is exciting.

In conclusion, I will just summarise a few of our key Budget things. If I haven’t already mentioned, with your tax relief, you’re welcome to come to Thyme Square Restaurant or Sage on Grey Street, Hamilton East. In fact, an offer to members of the Opposition—in fact, anyone in this House, if you come before 31 July, I’ll throw in a free glass of wine. Compliments. They’re not going to vote for me. Tax relief for hard-working New Zealanders: our tax reforms aren’t just about numbers; they’re about putting more money into your pocket. Imagine that extra coffee or a few more groceries. Picture a nurse comforting a patient, a teacher inspiring young minds, or a police officer patrolling our streets. These are the heroes we’re backing. Hospitals, schools, and law enforcement agencies will receive targeted funding to enhance services where they matter most. This is tax relief for the squeezed middle.

How about our top-up to the multi-year capital allowance of $7 billion so we can invest in the infrastructure needed for future growth and resilience? I’m so proud to commend this bill to the House.

Hon PEENI HENARE (Labour): Thank you, Mr Speaker. Thank you for this opportunity to speak on this particular bill. And I want to acknowledge the member Ryan Hamilton for his kind offer for restaurants that one might find in Hamilton for people to visit. Well, I can tell that member that what he won’t find in Hamilton is a Super Rugby championship. That was won by the Auckland Blues, and we’ll just leave that one there.

But what I’d like to say about this particular bill is it does something that I like to say is “signed, sealed, and not delivered”. I want to acknowledge Dr Cheung, and why I want to acknowledge him is he did a very good job of not reading the National Party research group lines but he made an effort to quantify the investment in health. And while I commend that member for the statistics that he threw out into the House this evening, I want to just square off a couple of my own statistics with respect to health and what I perceive to be a lack of investment in this particular Budget on matters, in particular, of Māori health and rural health.

During the urgency that was had to take apart the Pae Ora legislation in the end of February of this year, the health Minister guaranteed this House that business per usual will continue after the Budget and into the next financial year for Māori health providers and rural health providers. That was a challenge that we put to him at the time. What we’ve seen in the Budget—and I acknowledge Mr Cheung and his statistics with respect to emergency wait rooms. While just over 70 percent of those in rural areas around the country will see their local Māori health provider and local health provider, they will not see a continuation on the funding that will support them to have outreach into those communities. I’m afraid we are going to need more money in those emergency departments because the health services that can stop families from ending up in the emergency department are not found in this Budget. And that is an absolute travesty.

That means that, for places like the Bay of Plenty, where Te Puna Ora o Mataatua have made it clear that this Budget has neglected to see the work that they do in order to stop families, both Maōri and Pākehā, ending up in the health system, where we don’t want them to be—where that is is in the emergency department. Let me be very clear for members on that side of the House: what many Maōri refer to as the emergency department, we call it the departure lounge because more often than not—and the statistics prove it, for Maōri who end up there—it’s already too late. That tells us then that the primary healthcare they need in their communities is not being delivered. And what this Budget has told those communities is there is no money for those initiatives that serve those communities well. It will continue to see the life expectancy of Maōri to be significantly less than those of non-Māori descent.

One of the other ones that Māori and non-Māori health providers are mentioning in their analysis of the Budget is when we look towards the diabetes numbers in this country. Yes, Māori and Pacific people are overrepresented in those particular statistics. An increasing number of our Indian community are finding a huge spike in those who are impacted and affected by type 2 diabetes. Service providers around this country who don’t have dialysis services in those particular regions have made it clear in their analysis of this Budget that they will not have the services to be able to provide the kind of support that these people so desperately need in the region.

What’s very clear to me is that this particular Budget and this particular bill and the details within it make a case for wrong decisions and make a case for a Government that had an opportunity to go one way but instead chose to go backwards, chose to take funding, and chose to take initiatives off the table and in the hope that they can fool the New Zealand public with a tax break. Well, the public aren’t that silly. When they get on to that calculator that’s been championed by the other side of the House, they’ll see that there is a pittance for them at the end of the week. But what they’ll also realise, too, is that many of the services that they relied upon have been stripped. Those services have been taken away, and now the cost for them to receive those services will go up, which means those tax breaks will mean bugger all, if anything at all. I do not commend this bill to the House.

A party vote was called for on the question, That the Appropriation (2023/24 Supplementary Estimates) Bill and the Imprest Supply (First for 2024/25) Bill be now read a second time.

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Bills read a second time.

DEPUTY SPEAKER: Those bills are set down for third reading immediately.

Bills

Appropriation (2023/24 Supplementary Estimates) Bill

Third Reading

Hon NICOLA WILLIS (Minister of Finance): I move, That the Appropriation (2023/24 Supplementary Estimates) Bill be now read a third time.

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

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

A party vote was called for on the question, That the Imprest Supply (First for 2024/25) Bill be now read a third time.

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Motion agreed to.

Bill read a third time.

Bills

Imprest Supply (First for 2024/25) Bill

Third Reading

Hon NICOLA WILLIS (Minister of Finance): I move, That the Imprest Supply (First for 2024/25) Bill be now read a third time.

Bill read a third time.

DEPUTY SPEAKER: I declare the House in committee for further consideration of the Accident Compensation (Interest on Instalment Plans) Amendment Bill.

Bills

Accident Compensation (Interest on Instalment Plans) Amendment Bill

In Committee

Debate resumed from 30 May.

Clause 6 Schedule 1AA amended (continued)

CHAIRPERSON (Teanau Tuiono): Members, the House is committee on the Accident Compensation (Interest on Instalment Plans) Amendment Bill. When we were last considering this bill, we were debating clause 6. This is the debate on the amendment to Schedule 1AA of the principal Act and the Schedule. The question is that clause 6 stand part.

RACHEL BOYACK (Labour—Nelson): Thank you, Mr Chair. It’s a real pleasure to continue the committee stage into this bill. The last time we were debating it—I think we’d spent a significant amount of time on that committee stage, and I was reading through the Hansard from the beginning of the debate into clause 6 and just noting some of the comments I had made there, and then what I have done as a result of those comments.

One of the questions I had for the Minister, which I think is a very fair question, is: whether he would consider an amendment to the bill so that the percentage increase on levies collected by instalments over a three-month and six-month period were permanently set at zero percent.

The reason I raise this—and I am very interested in a response from the Minister, because I think this is a fair question—the practice over many years has been that there are three types of instalment payments that can be used in order to add that interest payment to the instalments, which helps compensate ACC somewhat for the reduction in revenue that they get, essentially, by having an instalment plan in place.

What clause 17A in tabled amendment D talks about is, essentially, we’re putting this into statute, but what we’re doing is we’re setting it into regulation. So the Minister will have the ability through regulation to actually set these percentages of interest collected going forward. The reason we’re doing that—just to remind the committee—is because this has actually been a practice in place at ACC for a very long time and there has been concern around the legality of that. That is why we’re here, so I’m just reminding the committee of that.

In my contribution, the last time the House was in committee on this matter, I’d asked the Minister about whether he would put an amendment in to specifically make the three-month instalment period and the six-month instalment period that are outlined there in clause 17(a) and (b), inserted by the Schedule, permanently set at zero percent. Because what the bill does is it sets them at zero percent until regulations are made, and there is a risk that when regulations are made that the Minister and ACC may determine to actually increase that from zero percent, and I think keeping it permanently set at zero percent would be a pragmatic and fair thing to do.

So I have tabled an amendment in the Chamber tonight that would add new clause 17A to the Schedule. What that would do is it would permanently set the interest payment on that instalment of the levy at zero percent for three months and at zero percent for six months, and you would continue to keep—until regulations are set—the 2.73 percent for the 10-month instalment period.

I asked the Minister about this previously. I foreshadowed during that contribution that I would put an amendment in and I’m very keen to hear from the Minister around how he seeks to look at that. I do note that my colleague from the Green Party has put a couple of amendments in tonight and I intend to speak to those as well; I’m sure we will hear from him also. So I’m just noting to the Chair that I think there’s some usefulness in discussing those amendments.

There’s one that I think could work and one that possibly won’t, so I’m quite keen to take a contribution on those as well if we have time before the House rises at 10 o’clock, but I note that my colleague will probably want to speak to both of those amendments as well. So I’m very keen to hear from the Minister on whether he would look at supporting my amendment that I’ve tabled tonight.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. In terms of clause 6 of this particular bill, I also want to be given the opportunity to take a couple of calls on this, because I want to explore the different subclauses here.

The first one I want to explore is new clause 17 of Schedule 1AA, which our colleague Rachel Boyack has already mentioned as well. A couple of things on this: first of all, in terms of subclauses (a) and (b), when we are looking at the total amount of levy collected over the three-month and six-month periods—I just got myself a copy of the amendment for that as well. We will be in support of having it indicated—and I’ll also be interested to hear from the Minister. But the Greens will be in support of having the three-month and six-month options being permanently set at 0 percent. This will be something that, I think, will be really helpful, in terms of contributing and having that level of certainty around this particular aspect.

The key thing I want to kind of draw attention to is new clause 17(c) of Schedule 1AA, which is the setting of the 2.73 percent on the total of levy collected over the 10-month instalment period. Now, the reason I want to draw attention to this, the first part, is that this particular amount has been set, which is the current amount of 2.73 percent, according to the regulatory impact statement, clause 8. However, it is stated here that, in 2020, the fee for the 10-month plan reduced from 5.4 percent to 2.7 percent as a result of the COVID-19 pandemic. This is the amount that currently exists. I kind of wanted to get a sense from the Minister, since we’re putting this legislation through anyway, whether the 5.4 percent has ever been considered, since the 2.73 percent was almost an interim measure. This is one of the first questions I have for the Minister.

The second part around new clause 17 of Schedule 1AA that I want to get some clarification from the Minister on is that, as it stands, clause 6 of the bill makes this amendment and has this insertion of new Part 5 into Schedule 1AA of the primary Act. However, the amendments that follow on, in accordance with new section 239(1)(hb)—which is clauses 5(1) and (2) of the bill—say that any additional adjustments will be done as a result of making regulations. I kind of want to know from the Minister whether the making of the regulations will also be inserted as part of the primary legislation, as is indicated in what we have here, in terms of subclause 17. And also, when we are looking at regulations, when we are discussing regulations, I’m also conscious of whether we’re looking at the possibility of secondary legislation, and how that potentially works or interacts with the new Ministry of Regulations—whether there’s any discussions or conversations, or any need for some sort of collaboration or checking work that has to be done there.

So the two questions I have for the Minister on this: the first one is, for clause 6, inserting new clause 17(c) into Schedule 1AA, whether 5.4 percent has been considered instead of 2.73 percent due to the COVID interim measures. And the second question is: whether any future regulations that are made will be incorporated as part of the primary legislation or will they be in secondary legislation or a regulation, and, if so, how would that potentially work with the Ministry of Regulations? Thank you.

Hon MATT DOOCEY (Minister for ACC): Thank you very much, Mr Chair. It’s great to be back, debating this bill. In response to Rachel Boyack’s amendment—the handwritten amendment with probably some of the neatest handwriting, I must say, I have ever seen. But, no, I would not support her amendment, because it would remove the principle of fairness and would potentially create a perverse incentive.

The second amendment—would I support Dr Lawrence Xu-Nan’s amendment? His amendment hasn’t been handwritten, but typed, and if he is a true doctor, that’s probably because he hasn’t got very tidy handwriting, I would have thought! But I would not support his amendment because it would remove retrospectivity, which is the intent of the bill.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. This is actually a really great opportunity for me to speak on my amendment and also the rationale for my amendment, and this is to do with clause 18(2) of Schedule 1AA.

There are two parts to this amendment. The first one is around—so it states, “the instalment interest, and all actions of the Corporation”. So the first part of my amendment would replace “all actions” with “any action”. Now, the reason for that is I would be keen to hear from the Minister whether this could have been used to exploit a potential loophole when all actions done by the corporation in fixing the rate could encompass more than what is the intention of this particular legislation. So, to give an example, let’s say that in the process of the corporation fixing the rate of the instalment interest—when they are visiting a business to discuss these potential changes—they ran a red light and then they had a ticket, etc., would that be considered as an action of the corporation in fixing the rate—because it says “all actions”? So anything that can be, I guess, considered, or even encompassed in this, could be considered legal.

I would really like to hear from the Minister whether those kinds of scenarios have been suggested or teased out on what “all actions” could potentially encompass, potentially beyond the scope of what is intended in this legislation. So changing it from “all actions” to “any actions”, I understand, is not the perfect fix, but it also simply limits and narrows it down to a certain degree so that it may not be beyond the scope.

The second part of my amendment is the removal of “and declared to be and to have always been lawful”. Now, the reason I recommend this is in discussing or looking at this both in terms of clause 18(2) as well as clause 18(3), whereas—and if the Minister could enlighten us—subclause (3) already contains the retrospective nature of this bill, which is “to be treated as having been lawfully paid to, received by, and applied by the Corporation as if it were part of the levy.” So when I was looking through this legislation, having subclause (2), to include and declare the instalment interest and actions to have always been lawful, seems to be redundant—unless, again, if the Minister wouldn’t mind clarifying—in terms of when you are reading it in conjunction with subclause (3).

The only thing I could think of in this case is, legally, these two clauses perform different functions, in which case I will also be appreciative if the Minister would identify and highlight the difference of how subclause (2) and subclause (3) could be read separately and have separate meanings. So, without that level of clarification, my amendments propose to remove “and declared to be and to have always been lawful.” In this particular case, the reason I want to remove that is focusing on the word “always”. Again, without any potential analysis or modelling of the potential impact that this will have in future legal claims or legal challenges, as I mentioned in terms of “all actions” as well, what broader implications would there have been to say “always”?

Now, we already know that this particular thing first presented, as we saw in the regulatory impact statement, that the charging of interest starting in 2004 was not identified until a little while later. Although we are talking about the fact that there is this delay in identifying certain issues, I wanted to know whether the Act would also give ACC the interpretative allowance to potentially explore things that happened before 2004, with the fact that it says it’s “always” been lawful. So we potentially could be looking at up to 50 years’ worth of variations or changes or things that can be legally dubious. So that is one of the reasons why I made the second part of the amendment—it’s particularly around the word “always” and not knowing how to read subclause (2) and subclause (3) separately.

Hon MATT DOOCEY (Minister for ACC): Thank you very much, Mr Chair. I think, in my first contribution, I answered the question to the second part of Dr Lawrence Xu-Nan’s questioning. In response to the first part of his amendment, I can assure him that it is specific drafting that is standard practice for the choice of those words—but to reassure him that we are not introducing anything new here but just validating past and current practice.

RACHEL BOYACK (Labour—Nelson): Thank you, Mr Chair. I just wanted to take the opportunity to make a short contribution in the committee tonight just to respond to the amendment tabled by my colleague from the Green Party. I’m hopeful that he will consider allowing a vote on his amendment where the two parts are voted on separately. The Labour Party won’t be supporting the first change that he wants to make, which would be to replace “all actions” with “any action”. The reason we won’t be doing that—and we have talked about this a lot throughout all readings of this bill, actually—is that we do support the Government’s approach here, which is to validate the previous practices. We do agree with that.

My concern, and the Labour Party’s concern, is that changing the words “all actions” to “any action” would potentially open up a stronger case for a legal challenge, and so we do agree with the Minister and with the Government on that part. However, in the next part, the extra words at the end of that clause do appear to be somewhat redundant and unnecessary, and so we’d be quite happy to support that change to the clause. So I’m hopeful that the member will be comfortable with the committee voting on each of those separately so that we can vote in favour of one and against the other.

On that note, I think I’ve made the Labour Party’s position clear, and I thank my colleague from the Green Party for putting forward these amendments and the arguments in favour of them. Thank you.

CHAIRPERSON (Teanau Tuiono): The committee is suspended, and it will resume at 9 a.m. tomorrow.

Debate interrupted.

Sitting suspended from 9.59 p.m. to 9 a.m. (Wednesday)

TUESDAY, 25 JUNE 2024

(continued on Wednesday, 26 June 2024)

Bills

Accident Compensation (Interest on Instalment Plans) Amendment Bill

In Committee

Debate resumed.

Clause 6 Schedule 1AA amended (continued)

CHAIRPERSON (Greg O’Connor): Good morning, committee. We are resumed. When we finished last night, we were on the Accident Compensation (Interest on Instalment Plans) Amendment Bill.

CARL BATES (National—Whanganui): I move, That debate on this question now close.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. I think this is the third time that we are back talking about the ACC bill as part of the committee stage. So just to recap from last night, if I may, very briefly, so when we are looking at clause 6—now, clause 6 is the crux of the bill and one of the reasons that the Greens are not supporting this bill is because of the retrospective nature, particularly as seen in clause 18 in new Part 5 inserted into Schedule 1AA.

I know that previously the Minister for ACC has very kindly gone through some of the background and talked about the fact that this whole process in terms of the retrospectivity—and the reason that this is coming through as part of the legislation has been agreed upon by ACC and the Ministry for Business, Innovation and Employment but not necessarily had obviously the time to consult with businesses. I wanted to check with the Minister whether from a legality perspective the retrospectivity has been tested against the presumption against retrospectivity, as one of the legal presumptions. The reason I mention this is, again, like in terms of any form of presumption we’re looking at from a legal perspective, there need to be some sorts of checks and balances and some sort of accountability and some sort of scope in which case it’s not going to create a butterfly effect, so to speak, when we are introducing a particular bill into the House or that potentially has a follow-on effect in terms of both case law but also in terms of some of the other legal elements.

So I guess my question to the Minister is: from a legality perspective, has this been tested in the context of the presumption against retrospectivity, and has there been any work done in terms of checking through case law on the broader implications this will have on other potential bills in the future that will be introduced that potentially will introduce a retrospective element, or the historical context and precedence that was set as part of this retrospectivity? Yes, we have previously explored the operational and the business—and I also understand even, like, colleagues from across the House talking about the potential burden on ACC if the retrospectivity was not introduced and the kind of legal implication it may have for ACC. But, yes, we talked about the operation bit, but I wanted to ask from a legality perspective whether this is something that the Minister has considered or has been given advice on. So, yeah, that would be my question. Thank you.

Hon MATT DOOCEY (Minister for ACC): Thank you very much, Mr Chair. To respond to my colleague Dr Lawrence Xu-Nan, who’s leading the charge in this epic hourly debate of the ACC bill: as he knows, because it’s been traversed many times before, retrospectivity guidelines go through the Legislation Design and Advisory Committee guidelines, and this bill meets their threshold.

RACHEL BOYACK (Labour—Nelson): Thank you, Mr Chair. I do just want to come back to contributions made last night and the Minister for ACC’s response to my question about my Amendment Paper in particular. Can I just begin by saying I did appreciate his commentary about my handwriting. When you’re the daughter of a teacher, that’s what happens. I will acknowledge I did learn cursive handwriting, but obviously that hasn’t translated into the final handwriting style that I used. But I do appreciate the very kind words about my handwriting. Thank you for the compliment, Minister.

I want to come back to my Amendment Paper around clause 17 that’s in new Part 5 inserted into Schedule 1AA. The Minister’s response as to why he wouldn’t accept my amendment, which would permanently make the percentage of interest payable on a three-month instalment period zero percent, and on a six-month instalment period zero percent, was because it wouldn’t allow flexibility going into the future. I just have to put on record that that actually concerns me. This has been the practice for some time—that if you have an instalment over a period of three months or six months, it’s only zero percent. We know that one of the reasons this legislation has come to the House is because it has been the practice for a large number of years, and what the schedule seeks to do is allow the Minister to make regulations in the future that would change that.

That is of concern to us in the Labour Party—that this has been the practice for some time—and I guess what I would like to hear from the Minister actually isn’t that he’s looking for that flexibility, but that he is actually committed to retaining the zero percent interest payable for those three-month and six-month periods. The 2.73 percent is the amount that’s currently included for a 10-month instalment, and so we accept that that is the current rate. But, throughout this debate, we have asked the Minister and just put on record those elements of concern we should always have around the use of secondary legislation. And that is, essentially, what this part does. So I and the Labour Party would like to see some more certainty, even if he actually goes as far as to say into the Hansard today that it would not be his intent to change that zero percent. I think that would provide some assurance to small businesses, who are the ones who often use this, alongside sole traders.

What it does open up is the potential for that zero percent rate to be changed, and one of the benefits of us being able to use these tools is that people can access the ability to pay for their levies over a period of time at a cheaper rate than having to use other tools. What I wouldn’t want to see is people who are doing a short three-month or six-month instalment period having to then make the choice to go and use a different type of financing tool—so, potentially, going to a bank or another financing tool that might have interest applied to it—because, for such a small period of time, three months or six months actually, there’s an administrative burden and an administrative cost to doing that, in terms of having to take the time to go and make an appointment at a bank; all of those kinds of things. So there’s some unintended consequences if we are to lift that three-month instalment interest rate above zero percent, and in the six-month as well.

I appreciate that the Minister responded, but I just was concerned about the Minister’s response that it opened us up to that flexibility. I really would like to hear from the Minister that there’s no intent to change that zero percent rate, because I think, for people listening, small businesses listening in who access this tool, having that certainty is going to be very important for them. But, as I’ve said, I do accept the 10-month instalment period—the  2.73 percent is the current rate—so I’ve no objection to that being written into the Act in that nature. I would just appreciate that clarity from the Minister. Thank you.

Hon MATT DOOCEY (Minister for ACC): Thank you, Mr Chair. I understand the proposition of Rachel Boyack’s questioning, but I would just point out the advice I’ve received is that, in fact, up to 2021, under the last Government, the instalments for three and six months were 5 percent.

CAMILLA BELICH (Labour): Thank you, Mr Chair. It’s a pleasure to contribute to this committee stage. I didn’t have the opportunity last night, but I was questioning the Minister for ACC during the Budget week about the legal advice that he had received and I don’t understand—or I haven’t had it reported to me, and I have been following this debate—the reasons that he’s unable to share even a little bit of that advice with us. Obviously, being the client of the legal advice, it’s within his ambit to do that. But I wanted to just contribute to this debate in a couple of ways: firstly, by supporting my colleague Rachel Boyack’s Amendment Paper for the Schedule, which we are debating, and, secondly, to look at the amendments tabled by my colleague Dr Lawrence Xu-Nan. First, a question—procedurally, as I understand it, the two changes that he has suggested to the schedule in new Part 5 of Schedule 1AA have now been tabled separately. That’s a kind of question to ask for the procedure of the committee, whether that has in fact occurred and whether they will be voted on separately, because I understood that was Dr Xu-Nan’s intention in relation to those two particular changes. So if we could have that confirmed, that would be really helpful.

The second question I have is in relation to the deletion that he has suggested to page 3, lines 28 and 29. In new clause 18(2) of Schedule 1AA, he has suggested, and it’s something that we support, deleting “and declared to be and … have always been lawful”. Now, I have been following the debate, and I know the Minister has said he won’t be—as I understand—supporting that particular amendment. But what I wanted to follow up with the Minister is: would he support a change to that amendment to only delete “and to have always been” in new clause 18(2) of Schedule 1AA? So the sentence would then read: “and declared to be lawful”. I think that addresses some of the retrospectivity issues that have rightly been commented on by the committee so far. We know, and we accept, that one of the principles of good lawmaking is that retrospectivity should be avoided. That would make those payments lawful moving forward and would avoid that retrospectivity. So that is what I’m suggesting. If the Minister is mindful to accept that, I would be happy to table that as an additional amendment, edited slightly from what Mr Xu-Nan has put forward.

As I’ve said, we support that but understand that it’s unlikely to succeed if the Minister doesn’t support it. So would he support a smaller reduction to that, and, if not, can he give us, if not the exact legal advice he’s received, the legal advice to show that there is a realistic risk faced by the State—and we can be aware of those risks as parliamentarians—that is so great that it then outweighs the principle of this House not passing retrospective law? Essentially, that’s what the Minister is asking us to do here: accept that the risk to the State of possible litigation moving forward in relation to these interest payments is such a grave risk that it should allow us to pass a law that retrospectively disallows that type of action. I think that is an important point. I’m not saying that his decision in the end might not be the correct one, but I think the committee and I would appreciate some additional elucidation of the reasons for that, and if in fact that is a concern, or maybe it isn’t outweighed, whether he would agree to that slightly amended change that might be more agreeable to the Minister.

CHAIRPERSON (Greg O’Connor): Just before I call, yes there will be two—the two questions will be dealt with, so to reassure you on that.

GRANT McCALLUM (National—Northland): 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 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

A party vote was called for on the question, That clause 6 be agreed to.

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 15

Green Party of Aotearoa New Zealand 15.

Clause 6 agreed to.

CHAIRPERSON (Greg O’Connor): We come now to the Schedule. The question is that Rachel Boyack’s tabled amendment to the Schedule inserting new clause 17A to Schedule 1AA be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Schedule replacing “all actions” with “any actions” in new clause 18(2) of Schedule 1AA be agreed to.

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

Ayes 15

Green Party of Aotearoa New Zealand 15.

Noes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Dr Lawrence Xu-Nan’s tabled amendment to the Schedule deleting “and declared to be and to have always been lawful” from clause 18(2) of Schedule 1AA be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 the Schedule be agreed to.

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 15

Green Party of Aotearoa New Zealand 15.

Schedule agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Greg O’Connor): Madam Speaker, the committee has considered the Accident Compensation (Interest on Instalment Plans) Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: The bill is set down for third reading immediately.

Third Reading

Hon MATT DOOCEY (Minister for ACC): I move, That the Accident Compensation (Interest on Instalment Plans) Amendment Bill be now read a third time.

As I have mentioned, the amendment bill will make it clear that ACC has the legal authority to charge debit interest on payments of work account levies by instalments. Instalment plans are an important resource for businesses and self-employed levy payers that may otherwise be unable to pay their ACC levies on time without other more expensive forms of finance. Charging debt interest ensures that both ACC and the levy payers who pay their levies in lump sums are not disadvantaged by having the option for paying by instalments available. The amendment bill clarifies that charging this debit interest is lawful, ensuring that ACC can continue to charge debit interest in future. It also resolves an uncertainty over ACC’s past and current practice of charging debit interest and draws a line under it.

The amendment bill also provides a way for dividend interest on instalment plans to be updated in future. Any updates to the rates will only be made after public consultation on options and there will be no changes for levy payers when the amendment bill initially comes into force. The bill is preserving a reasonable and fair practice so it can continue. I commend this bill to the House.

ASSISTANT SPEAKER (Greg O’Connor): The question is that the motion be agreed to.

RACHEL BOYACK (Labour—Nelson): Thank you, Mr Speaker. It is a pleasure—we’ve finally made it to the third reading. I thank the Minister for ACC for his forbearance—that we have made it to the third reading of the Accident Compensation (Interest on Instalment Plans) Amendment Bill. Labour supports this bill, but throughout the process that we’ve undertaken in discussing this bill at various readings and through the committee stage, we have made some observations and comments around some concerns we do have around how this will roll-out in future, and I will touch on those shortly.

Can I begin though by acknowledging the taonga that ACC is. ACC has been in place for 50 years now. We are very proud, as the Labour Party, to be the party that introduced the world-leading ACC scheme into New Zealand, and we are very, very lucky to have it. It does require our ongoing protection; I note that this week we are likely to see the results of consultation over job losses at ACC, which, on this side of the House, does give us some deep concern. On this side of the House, we want to see ACC continue to be strengthened, to continue to be made fairer and more equitable so that more people are able to access ACC and receive the compensation, support, and rehabilitation that they deserve.

I will now come to the bill. What the bill does, as the Minister has explained, is it introduces a regulation-making power that allows ACC to charge debit interest on levies that are paid under instalment plans. Now, this particular practice has been in operation for a couple of decades. What has led us to this legislation was that between ACC and the Ministry of Business, Innovation and Employment, there were different points of view around the legality of that practice. We’ve gone into that in quite a bit of detail, looking at the Accident Compensation Act to specifically note that the way the law is currently drafted might not quite be tight enough and might expose the Crown to some legal risk. I want to acknowledge previous Ministers for ACC from the Labour Party Carmel Sepuloni and particularly Peeni Henare, who had begun some of this policy work, and it is good to see this now come through the House. Anything that can expose the Crown to some legal risk obviously does need to be addressed, and we accept that.

I would say, though, that as part of that legal risk being addressed, the legislation has had to be made retrospective. This is why in the committee of the whole House stage we didn’t support part of our friend from the Green Party’s suggested amendment, because one of the purposes of this legislation is to reduce that risk to the Crown. Unfortunately—and I do say unfortunately—that’s meant we’ve had to apply retrospective legislation. I think the House should always be very, very careful when they do choose to do that. I note that the advice from officials was that this piece of legislation had to come through urgency to, again, avoid legal risk. I guess there could have been an opportunity for a truncated select committee process and that would have given an opportunity to have had some more debate around some of these elements. I think that when members of the public look at what the Parliament is doing and making changes to law that apply for such a broad piece of time, I think they’re right to query that, to put on record that there’s a concern. So we in the Labour Party have certainly made our concerns known around that.

The other thing that has caused us some concerns and has led to a lot of the follow-on in the committee stage is about the use of secondary legislation. We are seeing under every Government—this isn’t a criticism of the Government; this is just an observation—more of a move towards secondary legislation. In the Parliament, obviously, we make good use of the Regulations Review Committee, but I think, actually, we all need to be mindful of the use of secondary legislation and the limitations that then places on the ability of the Parliament to actually make decisions that we have been elected to do on behalf of people. And that’s, again, not a criticism, just an observation, and I think something that, actually, most of us in the House are mindful of. So on that note, I do have some concerns around the regulation-making power that might then lead to a higher interest penalty paid by those people who need to access this particular tool.

I will just cover off again quickly why the tool is so useful. When people pay their ACC levies into the worker account, you get a bill and you need to pay it all in one go. We have a very large number of small to medium sized enterprises and sole traders in New Zealand. There’s a number of people running small businesses, a number of people operating on a day-to-day basis as a sole trader. Paying all of your levies in an upfront, lump sum - type payment can have a negative impact on cash flow. And we know, for those businesses, cash is king; having strong cash flow is one of the most critical things to those businesses being able to continue operating. So it is a very pragmatic approach for ACC to say, “Yes, you can pay your levies in an instalment.” And that’s a good thing to be able to do. It’s also not unreasonable for ACC to say, “There is a cost to us for doing that, because we have the opportunity cost of not receiving that income right at the beginning and there’s an administrative cost as well.” So I would hope most people in the House would say, “That’s fair; that’s a reasonable approach to take.”

The question becomes: what is the percentage set at? That is ultimately the question about what is fair. One of the observations I make is that as we see interest rates go up and down, that’s actually a very important consideration, because what you want to do with this particular tool that ACC uses is you want to ensure that the interest rate paid is less than what you would overwise access through another source of finance, such as through a bank. You also want to consider the opportunity cost, again, of potentially having to take the time, make an appointment with your bank manager, go and have the conversation, make a loan application, or whatever it might be—all of those things that take time for a small business owner. So all of those things need to be considered. ACC, to be fair, also has to consider the impact on everybody else who contributes into that worker account and pays the full amount on time—the taxpayer, everybody else who contributes into the ACC scheme. It’s absolutely fair and reasonable to consider that.

Looking back, ACC has applied a pragmatic approach in terms of the penalty rates that have been put in place. But my concern—and I’ve raised it in the final stage of the committee stage—is that there’s now going to be the flexibility for the Minister to increase what is currently being paid, and that happens through a regulation rather than coming through to the House. I note his comments that there’ll be consultation; I think that consultation is absolutely critical. I did ask questions about how that consultation would occur, and I didn’t get enough detail. Again, these are the kinds of things that would actually be explored in great detail if the bill had had the time to come to select committee, if select committee members had had the opportunity to actually ask these questions specifically of officials, if we’d had the opportunity to have a departmental report explaining how these things would work. All of these things are part of how the Parliament operates that are useful and we haven’t been able to do here. So we have explored a lot through the committee stage because of that decision by the Government not to send this to select committee.

I do want to put on record that what I want to see, and what Labour wants to see, is very robust and strong consultation with those who are affected, with those who undertake the use of these instalment plans. We also want to ensure that the rates that are set are fair—that they actually do incentivise people to use the ACC payment plan, rather than using a different source of finance to access the cash that is needed to pay the lump sum right when it is due. I don’t think those concerns that we’ve raised are unreasonable. I want to make sure it’s there on the Hansard that that’s Labour’s position. We understand that we do need to implement this legislation; one of the reasons we are supporting it is because we do have to limit any liability to the Crown, and Labour is very supportive of that. So thank you, Mr Speaker. On that note, Labour supports this bill and I commend the bill to the House.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Speaker. We are now at the third reading of the Accident Compensation (Interest on Instalment Plans) Amendment Bill. Thank you so much to everyone who contributed immensely during the committee stage so that we were able to clarify some elements of this bill.

I think, to start with, this bill looks at two components. The first component is giving the legal authority to ACC to be able to charge interest on instalments. That, in itself, is something that the Green Party is supportive of, and particularly in terms of when we are looking at the goal of ACC. However, the second part, around retrospective validation, which I’ll talk more about later, is an area that we have deep concerns on. Before that, I also want to mention that we are also incredibly grateful to the Minister for ACC, who has been able to be engaging and answer our questions during the committee stage, as well, as we’re going through this bill. Because of these two elements, I want to first raise the fact that one of my amendments to change the title to include both elements of this bill, which would then make it the “Accident Compensation (Interest on Instalment Plans and Retrospective Validation) Amendment Bill”, was not supported, which I think is a shame because it would clarify both elements of this bill enormously.

In terms of the first part, when we are talking about the process in which ACC is able to establish the interest plan—and part of this also comes down to clause 6, inserting new Part 5 in Schedule 1AA—one of the things that was also drawing our attention was to do with the existing instalment plan options. We talked about the fact that for three- and six-months’ stages, it is currently at zero percent interest, but for the 10-month stage, it is at 2.73 percent, which is the current practice by ACC. But, in terms of the process for setting new instalment plans, it’s something that we questioned the Minister on and tried to get additional clarification on. This is something that I kind of would like to highlight because one of the things we would draw attention to is, number one, the fact that ACC may or may not need the option to have to charge the interest. This is a flexibility that is given to ACC as indicated in clause 4 of the bill, and I think that flexibility is incredibly important to give to the corporation.

However, in clause 5, inserting new sections 329(1)(hb), 329(2)(2A), and 329(2)(2B), which talks about the process whereby consultation is needed, a four-week consultation is in fact needed by the corporation before a recommendation is made to the Minister. But in clause 5, it’s from the Minister’s perspective how the Minister takes up that recommendation and how the Minister implements that recommendation from the corporation, which generated a lot of discussion during the committee stage. Part of that is to do with the fact that it is not clear. I’m hoping that the Minister did clarify that the Minister must not—as opposed to just have to—put forward any changes to the making of the regulation or any changes to the instalment plan and instalment rate unless receiving that recommendation from ACC. I think this is incredibly crucial from the context that what we don’t want to see is a situation where, if the Minister is not taking on the ACC’s recommendation after they have conducted all this consultation with businesses etc., there is the possibility of the Minister operating ultra vires. This is something that was teased out through the committee stage. I was, again, really appreciative of the Minister being able to clarify and also kind of enlighten the House around some of these issues.

Moving on to the second part of this bill around retrospective validation, and this is the part that we do disagree with and which is, ultimately, the reason why the Greens will not be supporting this bill is because of this fact. So as the previous speaker, Rachel Boyack, mentioned, what we didn’t manage to see for this particular bill is that select committee stage where we’re able to hear from the public. Again, I appreciate the fact that this particular bill may need to be put through under urgency due to the fact that it will potentially open up to certain challenges. But, again, one of the things we drew attention to in the regulatory impact statement is the fact that this particular regulatory impact statement was something that was already available in April last year and it has taken until now, under urgency, to put this through. So, again, I would echo the previous speaker’s sentiment that even a truncated—you know, nothing has kind of happened up until now, so even if a truncated select committee process was put in place, it may have given us the reassurance needed to actually possibly support this bill if we were given the opportunity to hear from the public.

So, on that, again, the retrospective validation is something that both ACC and the Ministry of Innovation, Business and Employment agreed to, but as we heard from the Minister, it was not something that they had the opportunity to consult businesses on. In fact, there was very little data. There was data around how much of the levy would have been affected as part of this collection of the interest, but then there wasn’t enough information given on how many of them currently have to pay interest on that. It is presumed that about one third of the businesses are currently using that 10-month option. So this is one of the things that we found kind of concerning—the lack of data that was able to be put around something like this.

In terms of this, the other angle that we looked at is the fact that when we are looking at retrospectivity, this is something that must be weighed carefully. I think any legislation that does have a retrospective component to it ought to have that select committee process. I understand, for example, the potential mistakes or the legal ambiguity that something like this has created for the Crown and for the executive and for the agency. But as a legislature, our role is to hold that executive accountable, not simply sort of bailing them out when we have found a mistake was made. I think that it is incredibly concerning to us. One of our bottom lines around retrospectivity is to be able to have all of the information that we are able to get, and we weren’t able to see that.

One of the things we have also been unable to get clarification on is the breadth of that retrospectivity. One of the things to do with this was that we tabled an amendment on new section 18(2) of Schedule 1AA, inserted by clause 6, and how it says that all actions of the corporation in fixing the rate “are valid and declared to be and to have always been lawful.” There was some uncertainty, and something that we didn’t manage to get a clarification on is how much does that “all actions” encompass? Does it only encompass what we already know, or does it potentially also encompass elements that we don’t already know? So, again, this is something that we are finding incredibly concerning with that particular part of the bill.

Of course, as has been mentioned across the House, we see ACC as being a great thing and a great agency and something for us to have here in Aotearoa New Zealand, and there’s nothing that would make the Greens happier than seeing ACC one day transforming into something like the agency for comprehensive care. But when something like this happens, when we’re seeing something that they are doing that is already legally dubious and we have to use the tools available to the legislature to bail them out of a particular situation, when we’re seeing some of the cuts that are currently happening at ACC, when we’re seeing the issues around the dispute resolution process, we can’t continue to support ACC on this.

Dr PARMJEET PARMAR (ACT): Thank you, Mr Speaker. I’m taking this call to support the third reading of the Accident Compensation (Interest on Instalment Plans) Amendment Bill, and I’m taking this call on behalf of the ACT Party. As the name says, “Interest on Instalment Plans”, so that is what this bill is to fix. This is an issue about the interest on instalment plans that has been charged by ACC and this is something that has been happening for around 20 years. So it’s not something new—Government after Government didn’t notice this—but it has been noticed now, so it is important that we fix it.

What this legislation does is it validates the practice that ACC has been practising for a number of years—that is, charging debit interest on one of the instalment plans. We know that ACC is a system that we all like, and I know that it is the envy of a number of countries around the world. So ACC provides that support that is needed by those who get injured in an accident; this is regardless of fault, and this takes cares of those bills that people might incur because of the GP visits. This also takes care of compensation for people missing out on income from their work. We want to see that the reputation of our ACC scheme is maintained, and we also want to see that we are not exposing the Crown, or ACC, to any kind of legal risk, and that’s why this legislation is really important to be passed.

It’s important to note that what ACC does is it provides that option of paying a levy—of course, people can pay their levy on an annual basis, the whole amount—but then it gives the option of taking up the instalment plan, and then people can pay in three months, six months, or 10 months. What has been happening is that for the 10-month plan, ACC has been—in that payment that they received back from these people—charging debit interest. It is not very clear—it is not in the current legislation that they could do it, and that is what we are trying to fix through this legislation. So, basically, ACC will be allowed to make the decision of charging debit interest once this legislation goes through.

I have heard from members from the other side of the Chamber, especially the Green member Dr Lawrence Xu-Nan, about the retrospective nature of this legislation. I want to emphasise that retrospective nature in any legislation is not common, but in this legislation, it’s really important because this is something that has been happening for a number of years, and it is about protecting the reputation of our ACC scheme and not exposing the Crown to any kind of risk. It’s important that we fix this. It’s not going to benefit an individual; it’s about benefiting the whole scheme to make sure that the reputation of the scheme is intact. So the ACT Party is supporting this bill and we commend this bill to the House. Thank you.

JENNY MARCROFT (NZ First): Thank you, Mr Speaker, and a pleasure it is to stand on behalf of New Zealand First in support of the Accident Compensation (Interest on Instalment Plans) Amendment Bill. In New Zealand First, we support this bill because it ensures that ACC’s past practices of charging interest are legally validated, preventing any legal ambiguities in potential disputes—so removing that potential risk to the Crown and ACC. New Zealand First also believes that the bill will promote transparency and fairness in how interest rates are determined and applied.

Therefore, we believe that this bill actually aligns, also, with our principles as a party of fairness and transparency, providing necessary legal clarity and protecting the interests of both ACC and the levy payers as well, thereby ensuring that our compensation system, which is world renowned—and many of us have used it or our families have used the system. We’ve been reliant on it to support us through injury and into a healing pathway back to full health. So whatever we can do to ensure that our system remains robust, with that fairness and transparency as well, is going to ensure that we have a fair system for all New Zealanders. I commend this bill to the House.

FRANCISCO HERNANDEZ (Green): Thank you, Mr Speaker. I rise to oppose the Accident Compensation (Interest on Instalment Plans) Amendment Bill. I just want to acknowledge, first of all, that this bill isn’t the worst thing in the world. I think out of all the bills that the Government has proposed, this is probably one of the most benign ones and it’s something that the Greens would have come on board to support if it weren’t for the two aspects that we found quite problematic, which previous Green speakers have already spoken at length about. This bill is relatively benign in comparison to some of the other bills that the Government has done. For example, they’ve defunded the climate emergency, they’ve cut public servants, and they’ve taken away first-home grants. But this bill is actually, from a public service perspective, fairly good.

I acknowledge the past Green speakers Kahurangi Carter, Scott Willis, and Lawrence Xu-Nan, who’ve shared their personal anecdotes about ACC—Kahurangi and her family, Scott and his finger, and Lawrence, who’s done a great job speaking on this bill and holding the Government to account. Unfortunately, I’m a gamer, so I haven’t had a chance to have many accidents, but I have worked at ACC before, so that’s kind of the experience that I bring to this as a portfolio adviser.

So just two unique features of ACC—and this bill intends to safeguard aspects of it—one of them is that ACC has a no-fault system and the other is that ACC is self-funding. Now, this bill is intended to retroactively validate the collection of fines and the interest rates that were charged on them, which makes perfect sense, right? There’s actually a real commercial benefit to businesses being able to defer payments. So that’s a very sensible aspect of the bill and one that the Greens would probably have supported if it weren’t for the kind of processes and the urgency that surrounded this, and also the retrospective validation clause, which is not inherently problematic—but when you add to the cause of the urgency.

We do want to see the definition of ACC coverage progressively expand. We’ve heard, during the debates, friendly jostling between the Opposition benches, between comrades in Labour and the Greens, about who was responsible for expanding it to cover birthing injuries—I think it’s both of us—but we do want to see it go further and faster. We do want to see it transformed into the agency of comprehensive care.

In terms of the actual urgency process, it did skip the select committee process, which we do find problematic. We did ask questions throughout the whole process and there’s still a number of unanswered questions, which I’ll go through when I describe how the urgency process went. That was a very interesting process. I’m not sure whether it’s still actually 30 May or whether we’ve skipped and it’s now 26 June again.

In the clause 1 debate, my colleague Lawrence asked whether businesses would have confidence around retrospectivity. Minister for ACC, Matt Doocey, did address it but, in my view, he didn’t provide quite a fulsome answer. My colleague Scott Willis also brought up an excellent point about the Legislation Design and Advisory Committee. We know that there’s been no consultation around it, but we do wonder whether there’s been a chance to consult since then, because it’s been nearly a month since the bill went through the initial stages.

Around clause 2, my colleague Lawrence Xu-Nan asked about why the legislation was here when the ministry had known since last year—I believe 1 April was the date—and why it was being done under urgency when none of it is necessarily time relevant. I think the Minister did give quite a fulsome answer and comprehensively answer the questions.

Around clause 3, unfortunately, no Green MP managed to get calls on it. But, you know, I think it does speak to the point that I raised earlier that there are questions that haven’t been asked, and questions that haven’t been answered because they haven’t been asked around it. Because I was here for basically all of the committee of the whole House and I think Green MPs were very active in standing up to try and take calls, but not all of us were able to get calls unfortunately.

Around clause 4, my colleague Lawrence asked about new section 234(1A) and (1B). Again, the Minister did give quite fulsome answers on that. Around clause 5, I did manage to ask a question around new section 329(1)(hb)(ii): “the circumstances in which the payment of the whole or any part … may be remitted or waived:”, when I asked for a breakdown of the 30,000 that the regulatory impact statement had addressed. The Minister did address this question and I do thank the Minister for being so fulsome in answering these questions. Thank you.

ASSISTANT SPEAKER (Greg O’Connor): Just before I take the next call, you will note that I didn’t call the five-minute call for Te Pāti Māori. That five-minute call will now go to the end on the assumption that they may or may not be here by the end of this reading.

KATIE NIMON (National—Napier): Thank you, Mr Speaker. It’s a good opportunity to stand up and summarise, I think, the fact that the Minister for ACC has answered plentifully any concern raised from the opposite side. This is a very important administrative bill, to make sure that it goes through, and I’m very pleased, on that note, to be able to commend it to the House.

Dr TRACEY McLELLAN (Labour): Thank you, Mr Speaker, and thank you for the opportunity to say a few words about the Accident Compensation (Interest on Instalment Plans) Amendment Bill. It’s one of those bills that feels like it has been around for a while, because there’s been a stop-start process that has traversed a couple of late nights and various urgency arrangements, but it hasn’t really, and we haven’t had that long to consider the information, to ask questions, and to sort of ventilate and mull over some of the implications. As I said, it has gone through an urgency process, which has meant that this House hasn’t been afforded the opportunity to have a select committee process—the way in which we do things—and to get that departmental report and to have those questions that we may have liked to have lingered on answered in a little bit more of a robust way. But never mind; this is where we are.

I’d like to acknowledge what my colleague Rachel Boyack said earlier on today: we need to remind ourselves that ACC—the Accident Compensation Corporation—is a taonga. It is so incredibly important, and it is quite a unique and groundbreaking and innovative mechanism through which many people in this country have been able to have compensation, have been able to have support, and have been able to manage their rehabilitation when accidents occur. And, of course, it came via the very real desire to avoid a faults-based system, where we could rely upon that compensation when we needed it without having to go through such a litigious process, as we see happening in many other places in the world.

With that in mind, I recall on Monday—which was only two days ago, so one would hope I would—talking to a small-business owner in the Banks Peninsula electorate, in Woolston, specifically about ACC. I had reached out to Rachel Boyack, who, I know, is very passionate about ACC, to see if she had any advice about the specific concerns that this small-business owner was raising. She wasn’t attempting to disparage the system, in so far as a small-business owner who works closely within the system; she wanted to provide some feedback. We acknowledge that ACC is such a mammoth kind of beast, almost, that there’s always going to be amendments and there’s always going to be improvements and changes that we can make to ensure that we do the best by it and make sure that it’s in tip-top shape. So it was lovely to speak to her and to gather that feedback, which I will be duly passing on to my colleague Rachel Boyack, to feed into our bevy of information about what Labour will do differently in Government next time.

The specific aspects of this bill that required tinkering with, and required a change and an amendment, were a little bit more pressing and a little bit more serious, so to speak, because they had, essentially, shown that ACC had been acting in a way, arguably, in the past, that was not necessarily consistent with how it should have been. We note that certainly the Ministry of Business, Innovation and Employment (MBIE) and ACC had slightly differing views about whether ACC had been acting outside its legislative scope, and the advice from MBIE was to amend the Act, and here is where we find ourselves today, in order to provide that legislative clarity about the interest that has been charged when businesses—small businesses in particular—make the most of and take the opportunity to pay off those levies via instalment. So the broad purpose of the bill was, essentially, to introduce that regulation-making power so that they could do that in relation to that debit interest on levies, and they could also have prior behaviour retrospectively validated. The bill would introduce a regulation-making power that sets out the circumstances.

On the surface of it, when we look at it both in terms of the three instalment plans and the zero percent, zero percent, and 2.73 percent interest rates respectively that are applied to those three instalment plans, and also the retrospectivity, it doesn’t seem like it’s particularly contentious, in so far as the fact that we said, from the outset, it was something that we would support. We know that previous Ministers for ACC had identified that there was work required here, and so it shouldn’t be particularly onerous to get this across the line. But I do note that our colleagues in the Green Party took particular exception to the retrospectivity, which, I think, has been an issue that we have had somewhat of an opportunity to talk about through this process, but probably not as much as we should have.

I note my colleague Camilla Belich had raised some very good points about how this concept relates not just to this bill in particular, and whether the detrimental aspects or the erroneous aspects of what had been happening in the past—the consequences—truly do warrant setting a precedent for making and passing a piece of legislation that has that retrospective aspect to it. And, again, that would be something that I know I, for one, would have liked to have heard from some more people about and been able to ventilate a bit more and hear from some experts and kick around a bit, just so that as lawmakers, as is our obligation in this House, we could have all been fully, fully comfortable with the ramifications and the nuances of what this means, not only for this bill but for everything else that we do.

I also note that my colleague Rachel Boyack had put forward an amendment, which I think is worth talking a little bit more about, because the amendment—this one in particular—essentially said that it would have given the opportunity for the Minister for ACC to ensure that the three- and the six-month instalments that were relative to this instalment plan could have been set at zero percent permanently. She mentioned that there has, obviously, been custom and practice involved in that. But given there’s now going to be the mechanism in place for a regulatory process that means that could be changed in the future, I think it would have been a really good step forward in so far as assuring not just some continuity but some confidence, particularly from small-business owners, that that wasn’t something that was immediately going to change post the regulatory process.

She made that point, I think, very well, in so far as we want people to be able to make the most of the tools that we provide them. We don’t want them to have any kind of reason to be able to go outside that tool framework and go look for those advantages perhaps elsewhere when there’s uncertainty. The last thing we want our small businesses to do is to get themselves into situations that are not necessarily advantageous for them, are not necessarily what they should be doing in the best interests of their businesses, simply to avoid some interest on a long-serving process that had before that been at zero percent.

When the Minister was asked about this—and, again, if we had had the opportunity to have a select committee process, we probably could have teased it out a bit further—the Minister, who engaged very well in answering questions, which should be said, on this particular occasion didn’t really provide that much information, but he did mention the perverse incentives that could therefore exist. I don’t feel any more informed now that I’m standing here halfway through the third reading, in so far as what he actually meant by that. I would have liked to have had that as one of the half a dozen things I have circled on my piece of paper—to have been able to cross that off as something that I fully understood and was happy with.

I’d just like to finish off by acknowledging all the people that have taken part in this process. As many great philosophers have said over the years, not probably quite so well as Francisco Hernandez has just mentioned, this isn’t the worst bill in the world. Of all the bills that this Government has introduced, it is the most benign. And, on that very profound observation, I would like to reiterate that Labour does support this bill, and therefore we commend this bill to the House.

CARL BATES (National—Whanganui): Thank you, Madam Speaker. Business appreciates certainty; this bill provides certainty and clarity. I commend it to the House.

DEPUTY SPEAKER: This is a split call. Camilla Belich.

CAMILLA BELICH (Labour): Thank you, Madam Speaker. That was an incredibly short contribution from that last speaker, Carl Bates, and I—

Carl Bates: Short, sweet, and effective.

CAMILLA BELICH: Well, was it effective? I don’t know. I’m not sure if people looking over the Hansard in later years will have that same reflection, Mr Bates, but I am happy to elucidate, for the benefit of those future readers, in more detail about the Accident Compensation (Interest on Instalment Plans) Amendment Bill.

This is, as people have said, a relatively uncontroversial bill. The reason for that is there is general consensus that the procedures that ACC have been conducting in relation to interest appear to be reasonable and fair. However, that doesn’t mean that there aren’t important issues raised by the effect of this bill and the way that this bill is brought into law, which will be very soon because this bill comes into force the day after Royal assent. So there isn’t a long period of time before this is actually the law of the land.

Now, because of the change in Government, this is something that was looked at by the previous Labour Government and raised when—originally, it went through this procedure when we were under Budget urgency. It was picked up, I think, through an audit process in relation to questioning the authority for the charging of interest. So it’s regretful that it’s taken 20 years of this practice for that to be raised and put before the House. I think we can all agree that it’s something that should have been looked at earlier on—and I can’t recall exactly who was in Government 20 years ago, but that’s beside the point. Governments from both sides of the House have presided over this practice, and the whole House has an interest in making sure that there is clarity moving forward.

However, there are some concerns that were raised, which were briefly touched upon, I think, by the Minister for ACC in the committee stage. But because this bill does introduce retrospective legislation and does, effectively, cut off a possible legal remedy—and that is very openly discussed, not only in the regulatory impact statement but, in fact, in the explanatory note of the bill—there are concerns around the use of urgency for that process and the fact we didn’t have a select committee process. I want to ask the Government parties to reflect on whether this was an appropriate thing to put through urgency. They may have justified at the time through the urgency motion—and I can’t recall if this point was specifically made—that the reason for introducing this bill was, in fact, to circumvent any legal challenges by putting it through urgency and not having a select committee process, and so people who were charged interest weren’t alerted to the fact that they could perhaps sue ACC for the interest that they were wrongly charged. I’m not aware if that has occurred; I haven’t heard that that’s the case. But, obviously, because the urgency process wasn’t completed, we’re now in a situation where it is some weeks after the original urgency motion was put, and this hasn’t been concluded.

I think it’s for the whole House to reflect on whether, in those particular types of instances where the Government cannot be assured that urgency is particularly necessary for a bill or that it in fact would be passed, urgency should be afforded to this type of bill. If they do consider it is necessary, then why was it not put further up the Order Paper? I mean, I think these are genuine questions for the Government. It won’t affect the overall bipartisan—in terms of National and Labour—support for this bill and the Government parties’ support for this bill, but I think it is a fair thing to reflect on.

We did suggest some things to make the retrospectivity of this bill less severe. That was suggested in the committee of the whole House. It was removing some of those words that would have said that the practice was always lawful, which is a bit of a truism when you have parliamentary supremacy. If Parliament says something was always lawful, because of parliamentary supremacy, it is always lawful. Does that mean that it is a true fact, looking backwards? I question whether there could have been better wording in that part of the bill, and I did ask the Minister about that and he didn’t respond. So I’m disappointed about that.

I agree that ACC is a taonga. There has been bipartisan support for ACC moving forward, and I would hope—and I ask both parties in the House—that when there are issues around the function of such an important thing in ACC, it is important to try and have as bipartisan an approach as possible. So I will commend this bill to the House, but, I think, in the future, there are lessons to be learnt from this process.

MIKE BUTTERICK (National—Wairarapa): Thank you. This bill is pretty straightforward, really. It’s about common sense. It’s about practical amendments that provide clarity. Therefore, I commend it to the House.

Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Speaker. Look, it is a pleasure to take a call on the Accident Compensation (Interest on Instalment Plans) Amendment Bill, and I say that because the Accident Compensation Corporation, which has been in place of course for over 50 years now and was put in place by a previous Labour Government, is one that is unique to us, it’s world leading, it was revolutionary at the time and I think remains so. It, of course, provides accident insurance cover for accidental injuries to virtually everyone—New Zealand citizens, residents, and even temporary visitors—and I think that’s what makes it incredibly special.

I do want to acknowledge the fact that work on this technical bill began under previous Ministers as well, both the Hon Peeni Henare and the Hon Carmel Sepuloni, who were also intending to rebalance the Act and, well, did rebalance the Act to an extent by extending cover to parents giving birth and by also reviewing the Accredited Employers Programme. There was a new framework that came into play sometime back—from memory—that would be used to review Schedule 2 of the Accident Compensation Act 2001 to look at what other occupational injuries or diseases could be covered in the future as well. Those sorts of pieces of work were truly revolutionary in terms of extending ACC and what it could achieve. This bill that we’re here to debate in the House today is really just a technical fix, not quite that revolutionary, but important none the less.

Just a little bit of context as to why we’re here today: the cost of the cover of injuries that I mentioned previously—which is, of course, the primary benefit of ACC—is funded from five accounts. Now, three of those accounts—work, earners, and motor vehicle accounts—are funded solely through levies that are charged to employers, to earners, and to motorists. Most businesses, I understand, or at least a large number of them, do make their levy payment in one single payment on the annual deadline that is stipulated by legislation. But I also understand that there are many businesses, largely small businesses—and bearing in mind that about 97 percent of businesses in New Zealand are small to medium sized enterprise, there are some who then use the instalment plan that the ACC Act allows for as well. And therein lies a little bit of the issue and why we’re here today.

This bill, as I mentioned, is pretty technical. It will allow the Accident Compensation Corporation to charge debit interest when an employer or self-employed levy payer pays levies using the instalment plan, and there are a few different instalment plans that are allowed for; from memory there are three-month, six-month, and 10-monthly plans. It will also validate ACC’s past and continuing practice of charging debit interest in some cases where these levies are paid by instalment. And I will go into a little bit of that because it was quite interesting to see in the regulatory impact statement (RIS) that the Ministry of Business, Innovation and Employment (MBIE) and ACC had slightly differing views on the interpretation of the legislation, and so I will go into that a little bit.

What is the problem definition? What are we here to fix? Why are we here with the debate on this bill? It’s basically that there are strong policy reasons; so there is quite a strong rationale for ACC to be able to collect an appropriate charge, particularly on the longer instalment plans as well, just to make sure that there is equity between levy payers. If this wasn’t in place, from the reading of both the RIS and the bill, my understanding is that if the instalment plans weren’t an option, then it would lead to some issues, particularly with smaller businesses perhaps being forced to take on unsecured involuntary debt—whether it’s through alternative finance means, bank cards, overdrafts, and so on and so forth—which would then mean that they incur, typically, a higher rate of interest than they would have been charged if they had paid through the instalment plan with the debit interest component. So it is important that we are able, through the ACC Act, to allow for this as an option—for instalment plans as an option for businesses, particularly smaller businesses. So as a result of this, it’s more likely that businesses that are currently using that 10-month instalment plan are potentially better off financially than if they were not offered this instalment plan option and had to go down the pathway of a bank loan or an overdraft or things like that. So this is necessary.

Now, what’s the problem here? One of the issues, as I alluded to previously, was the fact that MBIE and ACC have had a slightly differing view on the interpretation of this legislation. There are two parts of the problem, as the regulatory impact statement lays out as well. So firstly, ensuring that ACC’s levy collection power is, I guess, fit for purpose, and then addressing the risk that potentially, and this is where the retrospectivity of this bill comes into play—ensuring that what ACC has been doing for approximately 20 years or so no longer incurs a legislative risk to the Government. So now the power for ACC to accept that payment—that levy payment, particularly—is provided for in the ACC Act as I mentioned, and I’ll just read the bit that is related to it. It says, ACC “may charge a reasonable fee to recover its costs of collecting any levy by instalments.”—that’s section 234(2) of the Act. The empowering provision provides that regulations may prescribe, and I quote, “the matters in respect of which fees or charges are payable under this Act, including any administration fee payable in respect of levies paid in instalments:”—that’s section 333 (1)(b)(i).

Apparently, when the two sections that I’ve just mentioned are read together, there is a discrepancy between the two agencies’ views—between MBIE and ACC. MBIE doesn’t consider that the “reasonable fee to recover its cost of collecting” and an “administration fee” provide the basis for ACC to be able to charge the debit interest payment. So therein lies the issue here. And I do take the point that there is a legislative risk. There was a rationale provided in the RIS for this bill to go through this House under urgency. I will, however, also point to the fact, again laid out in the RIS, that putting this bill through or passing this bill through all stages under urgency has meant that there’s a limited amount of time for formal advice to have been provided by the Legislation Design and Advisory Committee (LDAC). So there is an issue there. The time frames, they have said in the RIS, “short timeframes to support this bill being passed under urgency”, has meant that there was no possibility for formal advice to be provided. However, from the reading of it, MBIE has considered the LDAC guidelines as best as they can, and provided that this legislation is necessary, it is important, and this is the most appropriate way, according to them, to be able to achieve the policy objectives of this bill.

I will also make mention of new Part 5, inserted into Schedule 1AA by clause 6, and that is the fact that nothing really changes in terms of rates for business owners, for those using the instalment plans, as a result of this bill passing—which it will, given that both National and Labour are supporting it. So, currently, there is no amount of levy that’s collected on the three-month or the six-month instalment plans. The 2.73 percent is only collected on the 10-month instalment plan. That will not change as a result of this bill. I am really pleased to see that it is sort of baked into legislation that ACC must consult levy payers to ensure that the rates that are finally set through regulations are ones that are fair. That is important because while ACC does need to recover some of the costs or charge the debit interest fee for the reasons that I’ve outlined previously, it does need to be set at a rate that is fair—one that isn’t too high and one that isn’t too low. And the risks of both are laid out quite well in the regulatory impact statement as well.

So, while consultation could not be conducted because of the fact that this bill is passing through the House under urgency, through all stages, it is a good thing that consultation will need to occur before the rates are set to ensure that the rates that are finally set are fair. Thank you, Madam Speaker.

GRANT McCALLUM (National—Northland): Well, we are a Government that believes in delivering and fixing problems, unlike the previous Government, who procrastinated. I commend this bill to the House.

DEPUTY SPEAKER: I call Tangi Utikere—this is a contested split call from earlier call No. 6, and Tangi was the first person to stand up and call.

TANGI UTIKERE (Labour—Palmerston North): So observant, Madam Speaker—can I thank you and send a kia orana your way. It’s a pleasure to rise and speak in support of the Accident Compensation (Interest on Instalment Plans) Amendment Bill. Listening to colleagues all around the House as this bill has progressed through the Parliament and the suggestion that the way in which ACC conducts its business and its functionality needs to enjoy a “by all” or multipartisan level of support—it’s on that basis that we will be supporting it, but there are some caveats that I do want to just very briefly cover off this morning.

I think my colleague the Hon Priyanca Radhakrishnan has just summarised a few key points there that relate to the key differences between, essentially, the two main Government entities or organisations, ACC and the Ministry of Business, Innovation and Employment, and the point of difference that they’ve had in terms of interpreting what the current practice is—not just the current practice but the practice that seems to have been adopted over a period of more than 20 years. As my colleague has indicated, there is a legislative risk from that. It’s always really important, I think, for the House to spend some time seeking to address legislative risk where possible, but on this occasion it really needs to, I think, be weighed up whether, yes, there are time sensitivities in needing to progress this, but whether the use of the House’s time in urgency is a good one for that. Members and people listening and watching—albeit in the morning—will no doubt draw their own conclusions from that.

I do want to acknowledge the work that my colleague the Hon Peeni Henare has done on a lot of the groundwork in bringing this legislative change to where it is at the moment. The real question, I think, is around—and these words have been used in the House already—what is “fair and reasonable” when we’re talking about an instalment plan that’s been put in place for businesses, for small businesses, for entities, and where they engage in a contractual arrangement around interest rates that would be due on that. What this bill seeks to do is set anything less than six months at an interest rate of zero and then, as Dr Xu-Nan has said, that the 2.73 percent over the 10-month instalment period is what is, effectively, the current rate.

The fact that we are progressing this legislation through urgency means that it has not been subject to a select committee process, and I’m sure we would have heard from those submitters around what it would mean for them. We would have heard from small business entities. We would have heard, perhaps, from those who have had their own experiences. The deficiency in the process, of course, at the moment, is that we haven’t had that opportunity. So to my mind, what’s really important is when the Minister for ACC is exercising what will be their right under regulation to set what those interest rates for instalment plans will be, that they really do consider and actively go about consulting. I do encourage Ministers in the future to reflect on the fact that this is a piece of legislation that has moved through urgency, and I think that means that it provides a higher threshold for Ministers to ensure that when they are exercising their regulatory powers and functions, they consider the views of the community and others in reaching determinations before they do that.

I also think that there is a real need for a degree of incentivisation. My colleague Rachel Boyack touched on this. I absolutely think that is needed because the reality is this: when we look out as to what some of the options are for businesses and others who are finding some financial hardship, it’s very easy to see a lot of the communications that are out and about, and people get locked into particular arrangements where the interest rates are actually quite exorbitant and quite high. So if this is going to be an opportunity that’s offered by ACC that’s at a fair and reasonable rate that is, effectively, set by regulation after adequate and appropriate consultation has been met, I do think there is a real need and a responsibility on ACC to ensure that the communication with small businesses and entities is such so that they know that this is an absolute opportunity for them and that the rates that are set and are on offer as a result of instalment plans are fair and reasonable.

So, just in summary, I think when we approach matters that concern the Accident Compensation Corporation, it is important to ensure a wide range of support by the House, but that has to be supplemented and supported by good process. We haven’t had the opportunity to engage with the community, but I do hope that the Ministers in the future, in exercising these regulatory powers, consider to consult and do so actively. I commend this bill to the House.

A party vote was called for on the question, That the Accident Compensation (Interest on Instalment Plans) Amendment Bill be now read a third time.

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 15

Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Bill read a third time.

Bills

Corrections Amendment Bill

Second Reading

Hon TAMA POTAKA (Minister for Māori Development) on behalf of the Minister of Corrections: I present a legislative statement on the Corrections Amendment Bill.

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

Hon TAMA POTAKA: I move, That the Corrections Amendment Bill be now read a second time.

First, I would like to start by thanking the Justice Committee for its consideration of the Corrections Amendment Bill. The Justice Committee received 72—whitu tekau mā rua—submissions on the bill and heard 19—tekau mā iwa—oral submissions.

The bill is important as it modernises the Corrections Act 2004. It aims to improve rehabilitation, reintegration, and safety in prisons, our whare herehere. Corrections operates in a continuously changing environment and the prisoners Corrections manages are increasingly presenting complex issues. Many of these prisoners have histories of violence and antisocial behaviour. The violence and aggression in prisons poses an ongoing challenge for Corrections, including for front-line kaimahi or staff.

Kaimahi safety is one of my priorities, and this bill’s new intelligence powers will support not only kaimahi but prisoners and the public to be safer. The new intelligence provisions directly respond to the reality of the wero, the challenges that Corrections faces every day, and is a key part of this bill. These new provisions give Corrections new and clear powers to improve prison safety.

These provisions also include safeguards to ensure transparency and limits of those new powers. As an example, a tauira, Corrections’ recording of prisoner phone or video calls would cover all prisoners, but to protect prisoner rights to privacy, the focus of monitoring for intelligence purposes will be on prisoners who pose a serious risk of harm to prison safety and the public. In using these powers, Corrections will be looking for prisoners who seek to introduce contraband such as drugs, tarukino, into the prison and to identify prisoners who seek to physically harm other prisoners or members of the public.

The bill also helps to ensure the internal disciplinary process in prisons is effective alongside strengthening processes for the authorisation and the use of non-lethal weapons. These are, again, important tools for staff or kaimahi safety.

Rehabilitation is one of the Government’s priorities and is very important for this Kāwanatanga. The bill enables limited mixing of remand accused and convicted prisoners for non - offence-based programmes which will support the extension of rehabilitation to remand prisoners.

The bill also makes a series of other amendments that improve Corrections’ ability to operate prisons, whare herehere, safely and efficiently; strengthen kaimahi safety; and support prisoner wellbeing. The Justice Committee has strengthened the bill to ensure it provides Corrections with the necessary tools to continue to maintain the safety and security of prisons. Kei te mihi ki te Justice Committee.

Tom Rutherford: Hard-working.

Hon TAMA POTAKA: Hard-working. I want to be clear that Corrections will continue to do the mahi with hapū and iwi to deliver culturally responsive rehabilitation to improve outcomes for Māori notwithstanding the committee agreeing to the removal of Treaty of Waitangi provisions in the bill. Corrections remains committed to working closely, doing the mahi with Māori to continue strengthening its operations to address the over-representation of Māori in the Corrections system. It’s good to see the recent appointment of the Māori Deputy Chief Executive to his role.

For example, the Te Mana Wahine Project based at Christchurch Women’s Prison is designing a range of interventions with local iwi, hapū, tangata whenua, and Māori providers. One of the initiatives from the project is a 10-week group session guiding wāhine Māori to better understand their own identity, to identify their goals and aspirations. At Northland Region Corrections Facility, Ngāti Rangi, as mana whenua, have been integral in the ongoing design of rehabilitative practice at the whare herehere. This includes rongoā, tikanga, kapa haka support to build positive whānau relationships in the community.

With regard to other changes, the chief executive tumu kaimahi power to authorise the monitoring of visits will now be unable to be delegated to a prison staff member to recognise its potential to impinge on prisoners’ relationships. I know that there are concerns, raruraru and āwangawanga, about the impact this monitoring could have on family relationships. But this change is important, as Corrections knows that some prisoners use these unmonitored visits as an opportunity to have a kōrero about actions that could undermine the safety and good order of the prison.

The Justice Committee has also agreed that Corrections should be required to report annually on its use of intelligence powers. This is an important change that will boost transparency and accountability.

The komiti has also removed the ability for a prisoner to request a rehearing of a disciplinary charge before a visiting justice when a hearing has proceeded in their absence. This is an important change that will ensure there is a more timely and effective disciplinary process in our prisons. I acknowledge that this may have had some impacts on natural justice, which is why Corrections officers will now be required to provide evidence that the prisoner has refused to attend the hearing.

The Justice Committee has also made some changes to the process for prisoners segregated to address their risk of self-harm. This bill proposes a requirement for these prisoners to be visited daily by a health professional. While this already happens in practice, it’s important that the legislation sets this as a requirement. During these visits, staff will consider whether the decision to segregate these prisoners should be reviewed and whether their at-risk assessment should be reviewed.

The hard-working Justice Committee—very diligent—has replaced references to non-lethal weapons with less lethal weapons. This is in response to feedback from submitters and to recognise guidance released by the United Nations—that austere body—that all weapons used can potentially have fatal consequences.

The definition of “prisoner calls” has been updated to include video calls in addition to audio calls to better reflect the original policy intent.

The bill now provides for the expanded use of body imaging searches of prisoners to further prevent introduction of contraband such as tarukino, drugs, and cellphones from entering prisons. This will ensure the legislation provides flexibility to adapt future technologies and better supports kaimahi safety. The bill also now exempts communications between prisoners and advocates acting in their statutory role under the Health and Disability Commissioner Act from being monitored for intelligence purposes.

I also referred an Amendment Paper to the very professional committee, which they agreed be incorporated into the bill. Thank you to the chair of that committee. This paper was one of 100-day commitments. It emphasised the importance of rehabilitation for prisoners. The bill now creates a strong expectation for Corrections to provide remand convicted prisoners access to rehabilitative programmes such as special treatment units for sexual and violent offending. Kei te mihi ki ēnei mahi. [I acknowledge this work.] It also has stronger requirements for Corrections to provide remand prisoners with access to non - offence-based programmes.

The bill will help achieve my priorities and support Corrections to achieve its core purpose of improved prison and public safety, as well as managing sentences safely, securely, humanely, and effectively. These changes in the bill will help tautoko and support corrections officers in the important mahi that they carry out on a daily basis in prisons. These changes will also contribute to better outcomes for victims by enabling greater oversight of prisoner communications, support the hauora or wellbeing of prisoners, and ensure our prisons operate effectively and efficiently.

I want to conclude by again thanking all those who have contributed to the development of this bill, this pire. It is great to see this important mahi progressed to this stage and I look forward to us debating, having a taukumekume and a taupatupatu, on the bill in more detail during the committee of the whole House. I commend this bill to this Whare, this House. Kia ora tātou.

Dr TRACEY McLELLAN (Labour): Thank you, Madam Speaker, and thank you for the opportunity to say a few words on the Corrections Amendment Bill. I will be choosing my words a little bit differently from the words that the previous speaker, Tama Potaka, has chosen to provide—a very vanilla and a very understated and slightly inaccurate version of the events that have come before us as we get to this stage, which is the second reading of the Corrections Amendment Bill.

Can I just say, as a way of providing a little bit of background, that this bill once served a mighty purpose. This bill was introduced by the previous Labour Government around the middle of last year. And this bill, ordinarily, one would say, contains several measures that serve a mighty purpose to improve and to update the Corrections Amendment Act for the benefit of both the safety of prisoners, for staff, and for modernising some of the practices that happen in our corrections facilities. But what has happened and what has transpired through the process getting to this stage is the bill has radically changed, in so far as I can only describe it as having been gutted. It has had a very serious amendment made to it, which means that the bill is no longer recognisable in so far as its intent. It is no longer underpinned and grounded in anything that it needs to be able to do and to have the efficacy that is required, so it should come as no surprise to anybody in this House that whilst Labour introduced this bill, this is no longer a bill that we will be able to support.

If we take a couple of steps back, before we start to specify directly what’s so incredibly wrong with this bill now, as it stands, what it could have done was set out a series of measures—it was going to, as the previous speaker so blandly acknowledged, modernise the Act by introducing some new powers, enabling the Corrections department to monitor and collect and use and disclose prisoner communications and information sources for intelligence a little bit more modernly, a little bit more robustly, because times have moved on. It was also going to make changes to the disciplinary process, as has been described, in prisons to ensure that the process is more timely, to ensure that it incentivises the conduct of good behaviour, and it was going to enable some limited mixing of remand prisoners and convicted prisoners so that they could complete rehabilitation—I want to hold on to that one point for a little bit longer. We were also going to strengthen the processes for authorising the use of lethal weapons within our prison facilities.

But if we go back to the point above, this is all about rehabilitation, because this is what the Corrections department should be all about. And when we think of that third point—enabling the mixing of remand prisoners and convicted prisoners to complete rehabilitation programmes—there have been some adjustments in this bill. But the changes made at the Justice Committee were twofold, so let me explain. It enabled Corrections to provide access to offence-based rehabilitation programmes for remand convicted prisoners as well as remand accused prisoners, as introduced. And, look, the Minister of Corrections has made an absolute song and dance about that on many occasions, touting that as being some sort of massively innovative measure that he has introduced into this bill. The reality is, he’s just extended it slightly. We acknowledge that people in prisons are on remand for far too long, and, therefore, for many people, there’s been no opportunity to engage in any rehabilitative process. We can see there’s a need for that, hence the fact we introduced it.

But the second change that was made through the select committee process was that Cabinet directed that Te Tiriti o Waitangi provisions, the principles that were grounded in the Treaty, be removed from the bill—including the removal of the definition of “cultural activities”. There was a suite of clauses that were to be there that were to be there for the explicit purpose of guiding everything else that I’ve just spoken about. None of those measures are now grounded in the appropriate legislative foundation explicitly outlining and explicitly stating how we would give effect to the Treaty, because we need to for no other reason than we need to. And if we do need another reason, we only have to look at the fact that Māori are severely overrepresented in the prison system.

At some point, we have to do better. At some point, someone’s got to get up, make some changes, embed things in a legislative way where this Parliament actually says to a department, “Here are our expectations. We don’t want you to write up a strategy document; we’ve got that. We don’t want you to just report back once a year or every now and again that you’re on track, that you’ve got this operationalised in a way that will actually make a difference. We are setting out our expectations to say this is a legislative foundation and, by hell or high water, you bloody well better make the mark work.”

So I’m livid at the fact that this has been changed, and this is an absolute kick in the guts for all the people who have contributed to informing those principles. Iwi and Māori experts throughout the country had been involved in the development of these draft Treaty provisions, as rightly so. In the Cabinet paper, Mark Mitchell had the audacity of saying that Corrections had already operationalised the programmes. And, look, they may well have, but we can’t necessarily take the word of a department who at the moment are struggling to do the bare necessities correctly. They are struggling to provide the legal minimum requirements—for all sorts of reasons. It’s not from a lack of wanting to, but we’re now asking that same department to say, “Hey, we’ll leave it up to you about whether we actually ever start making any progress and redressing all of the things that are wrong with the imprisonment rates for Māori.”

It’s an absolute cop out, and I’m really disappointed that the Minister has done this and that we haven’t, so far, been able to hear from him. It’s an absolute cop out, because the coalition has explicitly shown that it would rather do a poor job of amending this bill, it would rather get it wrong and it would rather waste the opportunity of getting it right, than it would to be seen in participating in what is only an imaginary separatism agenda that they have created to form a base. I just think that that is shameful; it is a dog whistle. There is absolutely no reason to have this removed from this legislation apart from the fact that you want to go on the talking trail and after-dinner circuit and tell people that you’ve done it.

DEPUTY SPEAKER: Please don’t use the word “you”.

Dr TRACEY McLELLAN: Apologies, Madam Speaker. So that is, if we’re ticking off a list of priorities, then the Government have certainly managed to tick that one off, and I think it’s incredibly shameful.

Mark Mitchell also said, and he noted that officials considered, quite rightly so, that it would likely raise concerns. Removing these provisions would likely raise concerns given the significant overrepresentation of Māori in the corrections system. Well, he certainly put paid to that, didn’t he? Because he did so at the last minute. He ripped them out without any ability to go back and to consult, without any ability to reopen submissions as he had done a month prior when he wanted to extend the ability for remand accused people to have access to rehabilitation. And we were certainly able to ventilate that, to open that back up for submissions, to hear from experts, many of whom provided incredibly valuable information—and I’d like to take the opportunity to thank them. But when it comes to this, there was no such opportunity provided.

The cynic in me says, if this was part of the Government’s 100-day plan, then there was no reason why this removal of these principles shouldn’t have been well signalled, shouldn’t have been well accounted for, and shouldn’t have been included in the Amendment Paper that was taken that did afford the opportunity for some feedback. It feels a little rough that it wasn’t done that way, that it was simply done at the last minute, and there has been no means to be able to take any recourse. But here we are at the second reading and this is the only opportunity we have to ventilate those concerns—and I encourage my colleagues to also do the same.

As I said, it’s disappointing. The Corrections bill does need to be amended and it does need to be modernised. There are things within this amendment bill that are worthy and that are good, but they have all been overshadowed by this despicable move, and Labour does not commend this bill to the House.

DEPUTY SPEAKER: I omitted to say before the previous speaker that the question is that the motion be agreed to. So I will say now, the question is that the motion be agreed to, and call on Tamatha Paul, who was on her feet prior to me saying that. Thank you.

TAMATHA PAUL (Green—Wellington Central): Tēnā koe, Madam Speaker. The three things that I want to cover off and focus my attention on in regards to this bill today is, one, the process that has led us to the second reading of the Corrections Amendment Bill, and particularly focusing on the removal of Treaty provisions. The second point I want to focus on is why we need Treaty provisions in the first place, and the third point is why I think that Corrections should not feel confident or comfortable to remove these crucial provisions from within their Act.

Let’s talk about the process first. Here’s a bit of a time line for you. The bill came to us at the Justice Committee, and the purpose of the bill was, in my view, to make it easier to spy on prisoners and to monitor their communications with the outside world more closely. It outlined a process for the Minister to sign off on the use of non-lethal weapons so that we can physically harm people in prison into acting accordingly, but not so much that we kill them. Finally, it allows for prisons to mix up accused and convicted people within prisons, going completely against international conventions like the Mandela rules, which are in place to protect the rights of people in prisons, because that is the truth about human rights: you have them by virtue of being a human being, regardless of your actions.

We had a whole range of people come and talk to us, and organisations, and tell us about what they felt about these changes. Some of those submitters even praised the work that Corrections had been doing in honouring Te Tiriti o Waitangi. And that was the one opportunity that the public had to share their opinions and feedback on the bill. And then, on 2 May, we were advised that the Treaty provisions would be removed from the bill, and, even worse, nobody would get to have a say on such a major decision, because the feedback was already collected. And I guarantee you: if those people and those organisations knew what was being proposed by the Government, and the removal of those Treaty provisions, then they would have made very different submissions.

What’s worse is that we had advisers from the ministry come in and give evidence as to why they support the removal of Treaty provisions from Corrections. What concerns me the most is how deeply undemocratic it is that Corrections would recommend this on the basis that Cabinet told them to do it. We have an important democratic role on select committees to scrutinise the decisions of the Government on behalf of all New Zealanders. But how are we supposed to do that when the advice we receive is predicated on decisions made by Cabinet—not on evidence, not on the actual performance of the department, but on the opinions and views of Cabinet, as opposed to what we know to be true, which is this: not one person within Corrections can tell me that they are not failing Māori, and, in doing so, are not failing the whole country. Corrections have no leg to stand on when it comes to giving out advice on the Treaty.

But why do we need Treaty provisions in the first place? It’s no secret that Māori are overrepresented in the justice system, and I’m getting sick of hearing it and I’m getting sick of saying it. But I will repeat it for the record, because despite the fact that Māori make up just 17 percent of the population, we represent 52.8 percent of the total prison population. And for wahine Māori, that’s even worse—that’s even higher at 57 percent of the total female prison population. And just 30 years ago, that figure was 20 percent. In the span of my lifetime, the proportion of wahine Māori in prison has increased threefold, to the point where Māori women are the most imprisoned indigenous women in the world, and that’s compared to United States, Canada, and Australia.

It’s clear that Corrections and our Government have accepted this shameful reality, but have not accepted any actual responsibility for intentionally bringing us to this place. Why won’t they just be honest in saying they’d rather lock up young Māori and waste such great human potential because they’re too stingy to actually provide people with the stable home, a livable income, and actual opportunities to imagine a different life for themselves that exists outside of prison walls? What good is it for politicians and the leadership within Corrections and Justice to go on about how Māori are more heavily policed, more likely to be arrested, more likely to be convicted, more likely to get caught up in cycles of intergenerational imprisonment, if they’re not willing to do anything about it, or, more accurately, if they want to make the issue worse by acting as if the overrepresentation isn’t a consequence of colonisation?

Tracey Mckintosh and Tā Kim Workman in 2017 published extensive research about Māori and Pacific people in the justice system. Prisons were introduced in New Zealand not to punish the lawless Pākehā that were running around raping and pillaging villages; they were introduced as a tool to imprison the dispossessed, disenfranchised, and to torture Māori. Prisons are a tool of colonisation, and the fact that they are packed with brown people just tells you that they are a reminder that colonisation still happens today. And without Te Tiriti, there really is no reason for Corrections to reflect on their decisions or the consequences of their actions.

I want to acknowledge that there is transformational, life-changing work happening between people in prisons and kaupapa Māori providers, iwi, hapū, and other organisations who utilise whakapapa, reo Māori, mātauranga Māori to help people to heal people’s views of themselves and of the world around them and reflect on the harm that they’ve caused. But prisons shouldn’t be the first and only opportunity for people to engage with who they are and where they come from, and Corrections needs to do more than give us empty commitments to honour Te Tiriti; it needs to be enshrined in their governing legislation so that every person exercising powers under the Corrections Act is bound by this obligation.

The last point I want to make is that I genuinely don’t understand how Corrections can feel comfortable or confident in honouring their responsibilities under Te Tiriti, to the extent where they think they can do away with it altogether. Corrections are not even capable of meeting people’s basic human rights, let alone further commitments under Te Tiriti. And the Ombudsman summarises it perfectly in his Kia Whaitake report. He said, “After considering all the evidence, I consider the senior leadership of the Department is overly optimistic about the organisation’s performance. This has a direct impact on the ability of the Department to undertake a true exposition on the issues that need addressing.”

I think the most stark and accurate representation of the corrections system is that prisons are a storage unit, a people storage unit of containment and management. And here’s some of the realities for some people in prison. They’re left in isolation for 23 hours a day, and in segregation for over a year, in some cases. Proper visitation rights for families and prisoners have not resumed since the COVID-19 lockdowns. Minimum entitlement to one hour of exercise in the open air per day is not being met. There are sixteen hours between breakfast and dinner for some people in prison, and CCTV filming people going to the toilet and undressing. And that’s why 19 percent of people in prison have attempted suicide, because the experience of being in prison is so deeply degrading.

To finish, I’d like to seek leave to table a letter that I received from Stephen Robert Wilson, currently sitting in a prison in South Auckland. This document contains medical records showing that Mr Wilson was paralysed down the right side of his body and parts of the left side of his body while being transported to Ngāwhā Prison from Kaitāia court. He wrote to us to describe how he has to lie on his back and shower himself in prison, on the ground because the facilities aren’t accessible. He has been awaiting parole and rotting in prison because it is impossible to find suitable housing that meets his needs, because Mr Wilson is in a wheelchair.

DEPUTY SPEAKER: So leave is sought to table this document. Is there any objection? There is none. Thank you. Please carry on.

Document, by leave, laid on the Table of the House.

TAMATHA PAUL: Thank you. Every aspect of Mr Wilson’s mana has been degraded. His dignity is stripped away every time he lies on the cold concrete floor to wash himself. It’s clear through stories like Mr Wilson’s, and through reports, that Corrections fails to meet basic human rights, particularly those conventions around torture and minimum standards for people in prison. We have to accept that even humans who have created harm are still entitled to basic human rights. Corrections is failing to meet these basic human rights, so the fact that they think that they can meet their obligations under Te Tiriti when they’re already failing to do the basics is laughable, and this bill just reinforces the worst parts of Corrections. Thank you.

TODD STEPHENSON (ACT): Thank you, Madam Speaker. I rise to speak in support of the Corrections Amendment Bill. I think we’ve just heard, actually, from the Greens that we actually have a different perspective, maybe, on some criminal justice matters on these different sides of the House. What this bill is actually trying to do is modernise aspects of our corrections system. We on this side, on the Government side, accept that people do need to be locked up, they do need to be incarcerated to protect members of the community, and what this bill does is attempt to modernise some of the circumstances in which they are incarcerated and what can be done.

I also do want to say thanks to the members of the Justice Committee, from all of the parties. This was a bill, as I think has been outlined, that was started in the 53rd Parliament and came across to this Parliament. I do want to say that all members of the Justice Committee, regardless of what party they were from, actually did work diligently to make improvements to this bill, and that is reflected in the report that we made back to the House.

Again, I think the Minister of Corrections, in introducing the second reading, did talk about some of the more significant things that this does. I do think, with the Amendment Paper, being able to offer rehabilitation to remand accused and to remand convicted prisoners is important. Let’s get them on the track to some rehabilitation as soon as possible. Again, there are obviously other modernising provisions and, you know, language that was updated by the select committee.

I do note that this bill is some 46 pages long, and then there’s also the Amendment Paper. I have, obviously, heard from both speakers from the Labour Party and the Greens about their concerns around the removal of the Treaty provisions. Let me be clear: this Government, in its coalition agreements, does have a commitment to actually looking at how the Treaty is being operationalised across Government. That work is under way, and so putting in at this stage these provisions when that work is still ongoing is not appropriate.

I think the other thing we would say from ACT is we’re also looking forward to having a mature and grown-up conversation about what the Treaty means in modern New Zealand, and I do look forward to engaging with all New Zealanders and everyone in this House when we bring our Treaty principles bill forward so we can actually have some clarity about what the principles of the Treaty are, and we say that is the actual articles of the Treaty. So, again, I look forward to having that discussion—it seems like some of the members already want to have it, but we will do that in due course. So, again, I commend this bill to the House. Thank you.

JAMIE ARBUCKLE (NZ First): Thank you, Madam Speaker. I rise to voice New Zealand First’s support for the Corrections Amendment Bill and the Government’s intention to improve our corrections system.

The Justice Committee that I’m a member of has strengthened the bill to ensure that it provides Corrections with the necessary tools to continue to maintain the safety and security of our prisons. We received over 44 submissions and we heard from 19 of them and, as we’ve heard through the debate already today, we received a number of good intentions and the committee was able to make a number of changes. On that basis, and with this going through the House, I will commend this bill to the House. Thank you.

Hon Marama Davidson: Madam Speaker?

DEPUTY SPEAKER: The Hon Marama Davidson—and can I say it’s good to see you here, thank you.

Hon MARAMA DAVIDSON (Co-Leader—Green): I appreciate and will firstly acknowledge all of the love and aroha that I have received from across the House—is truly a beautiful thing. Thank you, Madam Speaker, for the opportunity to speak to this, the Corrections Amendment Bill. In actual fact, I will just pick up on some of the previous comments that I’ve just been hearing this morning and want to acknowledge the expertise of my colleague Tamatha Paul in this particular space.

Firstly, around Treaty principles, and I know that this legislation concentrates a lot on the changes and around the conversation of the role of Te Tiriti; the role of recognising the unique status of Māori as tangata whenua; mātauranga Māori leadership; kaupapa Māori practices methods, especially as they pertain to corrections work and their importance. We must not only not undermine that work but actually supercharge Tiriti, mana motuhake, the role of kaupapa Māori and Māori leadership in corrections legislation, practice, and provisions.

There was a comment mentioned earlier about this country having a mature conversation. My goodness, where has that member been? We have been having generations—generations—of conversations on marae, in community, in whānau. I’m really glad that we have got generations of experience of Māori, non-Māori, tangata Tiriti working together, living together, and actually improving our taiao, improving our social justice, improving our community relationships by having exactly that: a mature conversation, not one that whips into fear and racism; not one that whips and dials into ignorance. It’s actually one that upholds a vision for Aotearoa that builds us and brings us together in the very unique taonga that Te Tiriti is. So I’m just putting really clearly on record that in this current bill you have got the Treaty provisions around clauses 6, 7, 8, 17, 18, and 19, particularly that relate to access to mātauranga Māori as far as is practicable and that’s always sounding good and we need to ensure what that actually means in practice; so that’s good.

I also wanted to pick up—oh, jeez, that clock goes fast, doesn’t it?—in my particular contribution on the rehabilitation methods. I will draw on my experience as a former Minister for prevention of violence and the privilege that I had of working across Corrections and ensuring that Corrections itself was improving on the pathway to improving its own practice—to recognising, for example, having trauma-informed indicators of recognising the dynamics of when violence has been present in a person’s background; when they are using violence, when they have used violence, what are the correct trauma-informed and rehabilitative supports? The overwhelming—overwhelming—evidence of kaupapa Māori practices in a way that can actually apply to prisoners of all backgrounds, to rehabilitative efforts for people in prisons from all backgrounds, from all communities, that actually ensures full accountability—full accountability.

Now, listen, the thing about hohou te rongo [making peace between entities], the thing about true restoration and rehabilitative practice is it actually is about bringing fuller accountability and accountability that is beyond just prison bars, which often does not even begin to bring accountability—real accountability—to the people who have been caused harm, and that those rehabilitative efforts, especially the evidence kaupapa Māori - type practices that have been well, well praised by report after report after report, and if this Government is going to maintain a responsibility to ensure that they are being further supported rather than the ongoing funding cuts that we have continued to see through legislation after legislation in this House through this Government already. So I am again thankful for the opportunity to put on record the Greens—are we voting for this or against this?

Tamatha Paul: Strongly against.

Hon MARAMA DAVIDSON: Strongly against—strongly against—because of the points that I’ve just outlined, and Tamatha Paul tells me that it’s because it sucks. Strongly against this bill. So thank you, Madam Speaker.

ASSISTANT SPEAKER (Maureen Pugh): The honourable member who’s just resumed her seat, I extend my very best wishes to you as well.

JAMES MEAGER (National—Rangitata): Can I just acknowledge the Green Party co-leader Marama Davidson as well.

On behalf of the busy and effective Justice Committee, I’d like to just thank all the officials and the advisers for their work on this bill. We made a number of significant and substantive changes to the bill, which I think have strengthened protections not only for corrections officers but for prisoners in prisons as well. I’d like to thank the Opposition members of the Justice Committee, in particular Dr Webb and Dr McLellan, for the constructive engagement on those changes too.

Look, the one thing I wanted to highlight was that before this bill went through the House—or it goes through the House—prisoners on remand would not have been entitled to rehabilitation. After this bill passes that will no longer be the case; they will be entitled to rehabilitation. The only reason that happens is because of the intervention of the Hon Mark Mitchell. That is leadership and that is why I commend the bill to the House.

Hon WILLIE JACKSON (Labour): Oh well, what a disappointing and shameful speech from that member. This is another day, another attack on the Treaty by this Government, who continue to use Māori as a political punching bag. I’m disappointed with that member. I thought he would do a bit better than that, given that he’s the great brown hope, but clearly not the case.

Can I just start off—I wanted to acknowledge the passing of Keith Locke, if I could just for a second, because he was a really terrific advocate for kaupapa right across society and kaupapa Māori too. I worked with Keith in the freezing works in the mid-1980s and we came to Parliament together in 1999—about the same time Simeon Brown was born. I just want to acknowledge him and his whānau and all of his advocacy, particularly for kaupapa Māori. And I was just saying to my whanaunga Marama over here: well done, in terms of going to his tangi. Nō reira e te hoa, e kore mātou e wareware tō kaha ki te kōkiri i ngā kaupapa Māori. Nō reira e Keith, moe mai, moe mai, moe mai rā. [And so, my friend, we will never forget your strength in progressing Māori initiatives. And so, Keith, rest in peace.]

We are concerned about this bill. I have been listening to some of the kōrero and it’s a sad, sad day when Treaty provisions are removed from this type of legislation. I’m particularly disappointed with those Māori members over there, because I don’t understand what Treaty principles they’re scared of. I was having a glance through—I’ve seen them a million times, as I’m sure these members have, over there—and I was looking at the general principles and some of the principles are: “The main purpose of the Treaty was to ensure that both parties … would live together peacefully and develop New Zealand together in partnership.” Oh, Jesus, how frightening! Isn’t that frightening! Wouldn’t you just want to remove that from the legislation after hearing that, Madam Speaker? I mean: “The main purpose was to ensure both parties … would live together peacefully and develop New Zealand together in partnership.”

Now, “The Treaty does this by assuring Māori that their interests will be protected and confirming citizen equality.” Again, for those members, because I’m just not sure if they’ve looked at what they’ve kicked out of this legislation—“The Treaty signifies a partnership between Māori and the Crown, and requires the partners to act reasonably and with the utmost good faith. Partnership requires that each party have a voice in how the relationship is managed. This requires good faith and consultation with Māori groups on decisions affecting them all.” Oh, Jesus, that’s so frightening too, isn’t it? Isn’t that frightening, National? Oh, well, we’d better get that out of there. We better get that out of the legislation. Also, “The Crown has a duty to actively protect Māori in the use of their lands, fisheries, forests, and other treasured possessions, both tangible and intangible, such as language, culture and sacred places.” And “The Crown has a duty to remedy past breaches of the Treaty.”

I do not understand the fear of the Justice Committee. I do not understand why they found that this was so necessary to kick out of legislation. I’m sure Mr Meager might want to explain this to me later on. Is it because they’re upsetting their mates on the other side? I just cannot work out in my mind why the chair, why the Minister, Tama Potaka, could agree with this, because I was looking at Minister Potaka and I was thinking: is there one—one—Māori advocate, one Māori friend of his who would support this legislation? I don’t think there would be one.

I was thinking about Kim Workman—what a magnificent advocate he has been for our people, a magnificent advocate. Tracey McIntosh—you couldn’t get better with these sorts of people, all talking about how important the Treaty is. They all know Minister Potaka so well. My uncle, Moana Jackson, one of his heroes—I wonder what Uncle Moana would think now. One of his best friends, Che Wilson. They’re buddies, you know. I wonder if Che Wilson would support this. Jamie Tuuta—I mean, he’s sort of the leader of everything. The Minister would have appointed him to everything. I wonder what Jamie Tuuta would think about this. Julian Wilcox—I don’t think the Minister will have a friend soon because he wouldn’t have one friend, one Māori advocate, who would support this rotten legislation.

It is rotten legislation, even though they have said that they will keep supporting tikanga Māori and what not. But the Prime Minister said earlier this year, in front of Māori leadership, that he will honour the Treaty. That’s what he said. Yet this Government is removing the Treaty provisions and legislation left, right, and centre. They say one thing and they do another. They have said they will not support the Treaty principles bill past a second reading, but then they do this type of nonsense. How can Māori have any faith in a Government that double talks—double talks. The Minister for Māori Development over there—yes, yes, we all like him. You know, can’t help liking him. However, he is part of the strategy. Stand up, Tama. Stand up against your mates in National. That’s what your Māori mates are saying. They’re sick of this removal of legislation. Now there’s an attack on the Waitangi Tribunal. So the Treaty is not being honoured and we’re stripping Treaty obligations out of Corrections.

This isn’t social policy. It’s petty point scoring for worse outcomes. It’s in coordination with what’s happening with section 7AA out of Oranga Tamariki. I have to say that I just don’t understand where this National Party is coming from, given the history, a proud history, and work from people like Bill English, who I caught up with over the weekend, and Anne Tolley. These are people who have—well, you need to have a talk to him, because you and the kid have no idea of National Party history. You know, you had a National Party who worked in tandem with Māori, Mr Meager. You worked in tandem with the Māori Party, inserted section 7AA, but now you’re removing it from legislation.

The Government assures the iwi social services community that they want to keep their services but just don’t want to be obligated to them. So how long will the assurance last? That’s the key. This legislation is offensive to Māori. Mr Meager doesn’t understand that. This is what people are saying. You are removing the Treaty obligations for the incarceration of indigenous people when Māori are so grotesquely overrepresented in our prisons. And you have the audacity, Mr Meager, to call that justice—you, the chair of the Justice Committee.

ASSISTANT SPEAKER (Maureen Pugh): The Speaker is not the chair of the Justice Committee.

Hon WILLIE JACKSON: My apologies, Madam Speaker—my apologies. We all seem to go down that track every now and then, in terms of—.

ASSISTANT SPEAKER (Maureen Pugh): I’ll get you back on track.

Hon WILLIE JACKSON: My apologies, Madam Speaker. But the point today is these Treaty obligations need to be enshrined in legislation.

James Meager: Why?

Hon WILLIE JACKSON: You see, whilst I’ve heard—well, well, just listen, listen. We’re trying to explain it to you that it’s all right to say, “Well, yes, we can still do the Māori thing, we can do the mana wāhine thing, we can do all that.”, but if there’s no commitment, if it’s not entrenched, then anybody can come along and just change things. That’s why Kelvin Davis did such a wonderful job in entrenching this in legislation. That’s why he was an exceptional corrections Minister. No, he didn’t get everything right. No one gets everything right. But we had a move in terms of rehabilitation and getting tikanga Māori entrenched into the system. So I’m proud of the work that Kelvin Davis did.

I’m proud of the work that the previous Labour Government has done in terms of making New Zealanders aware of their Treaty obligations. This is not about forcing the Treaty down people’s throats; this is about us working in partnership, working in tandem. The other side, sadly, led by fools like Mr Meager over there and—

ASSISTANT SPEAKER (Maureen Pugh): Excuse me.

Hon WILLIE JACKSON: Was that going a bit far?

ASSISTANT SPEAKER (Maureen Pugh): That is unparliamentary.

Hon WILLIE JACKSON: Unparliamentary; I apologise for that. I know that he can take it well. But the reality is this is about bringing society along and, seriously, we need Mr Meager, we need Mr Potaka over there, we need Mr MacLeod over there, too. Also, we need these Māori to be aware of what their people are saying, which is: entrench the Treaty, support tikanga Māori, support kaupapa Māori, and show some courage instead of being gutless Māoris. Kia ora.

CAMERON BREWER (National—Upper Harbour): Thank you, Madam Speaker. It gives me great pleasure to rise in support of the second reading of the Corrections Amendment Bill, which, of course, amends the 2004 Act, improving rehabilitation, reintegration, and safety outcomes for people in prisons, as well as enabling best practice operations for the Department of Corrections. As our hard-working and very able Justice Committee chair, James Meager, reminded us, the bill incorporates Minister Mark Mitchell’s Amendment Paper to deliver rehabilitation for rehab prisoners. This Government and this bill backs our around 10,000 corrections staff, who work every day to protect the public and ensure that offenders receive the help they need to turn their lives around. I commend the bill.

ASSISTANT SPEAKER (Maureen Pugh): We’ve got a split call. The first call is from the Labour Party—Tangi Utikere.

TANGI UTIKERE (Labour—Palmerston North): Tēnā koe, Madam Speaker. Thank you. Look, I rise and speak in opposition to the Corrections Amendment Bill this morning. It’s been made quite clear by previous speakers on this side of the House that when this bill was introduced, there was an intention that many components within the bill were to be supported, and, of course, the safety for staff and all personnel in prisons throughout Aotearoa New Zealand is always of paramount consideration. But the removal of provisions that relate to Te Tiriti o Waitangi is nothing short of foul. It is nothing short of foul, and alongside the definition of “cultural activities” and, basically, a complete removal of that is going to be not just disproportionate but it will lead to significantly worse outcomes in prisons, particularly by not meeting the needs of those who are there. This bill, I think, had the potential to do many great things, actually. But the reality is that it is, basically, undermined by the removal of that specific provision that relates to Te Tiriti, and so it is on that basis that we will not be supportive of it.

You know, prisons are very interesting places, and many members in this House who have had opportunities to visit or to be involved will reflect on that for themselves. This bill, I note, reflects and impacts directly on the work that visiting justices do, and I do want to spend a bit of time on that because some folk who are listening may not know what visiting justices do. Well, there are around about 20 of them in New Zealand, and prior to coming to this place, I was one of them for five years, as a visiting justice undertaking discipline hearings in prisons around Aotearoa New Zealand. Usually, it’d be two weeks, actually; often on a Friday.

The make-up is about 50 percent lawyers and 50 percent judicial justices of the peace, and what they do is they go into prisons every single week. They hear matters that relate to allegations of charges against internal discipline, and there is a range of particular penalties that might be imposed by a visiting justice. There is also a hearing adjudicator, and this bill seeks the functions and the powers that a hearing adjudicator would have. The powers that a hearing adjudicator has are at a lower threshold than those of a visiting justice, but visiting justices can impose self-confinement time or a loss of privileges for, in some instances, up to 90 days, or three months, and they can impose a monetary penalty and the like.

So the implication on those who are in prisons, whether they be prisoners or whether they be staff members, is still quite significant, and there are some changes in here that actually, in isolation, might not be that bad. They’re pretty straightforward, actually. They relate to, for example, including an audio link or a visual link rather than a specific audiovisual link—those sorts of things. But the reality is that the changes that are underpinned by the removal of Te Tiriti provisions mean that the operations and the way in which these powers would be exercised by visiting justices and also by hearing adjudicators is somewhat curtailed.

For example, the suggestion that the Justice Committee has made by majority is to remove the ability for a prisoner to request a rehearing before a visiting justice when a hearing had proceeded in their absence. Now, I’ve conducted many hearings in the absence of prisoners in prisons, but it would always be open to some form of response from a prisoner—for example, maybe there was an administrative error, or maybe there was a miscommunication. Why should any person who is charged with any potential misconduct be subject to having their rights, basically, curtailed on the basis of having some evidence from a corrections staff member to say that they were otherwise indisposed or they’d refused?

I’ve had many hearings, actually, where charges have been dismissed because of the nature of some of the information or the processes that were involved in prisons, and I know that my colleague the Hon Willie Jackson has said that, well, we can all do things better. But, basically, throwing out a provision that empowers a significant majority of the people who are in New Zealand’s prisons is not the right way to go, and that is exactly what this bill does. It seeks to curtail the provision that would have significant implications in a positive way to make real differences for everyone in prisons, not just for prisoners but for staff and the nature of the way that they go about their daily duties—and they do that so admirably—and also the community network that works alongside them, as well. So, on that basis, there is no other option but to oppose this particular bill.

GREG FLEMING (National—Maungakiekie): Ka taunaki au i te pire nei. [I support this bill.]

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you. Yes, a very brief contribution. Short—not to the point.

Hon Dr Deborah Russell: Such a lack of respect for the House.

Hon Dr DUNCAN WEBB: It really is disrespectful. What’s happened to this bill is actually indicative of the difference between this side of the House and our approach to corrections and the justice system and that side of the House, because it was, I believe, an ex-National MP who said that prisons are a moral and fiscal failure. And I would absolutely recommend to every MP to go and visit a prison, as you’re entitled to do under the Corrections Act, and to fully exercise that right, because it’s not a right to be shown around a prison; it’s a right to go yourself and choose what to see. So go and choose what to see in a prison. Go to the most confronting parts of those prisons—the high security wards, the cells where they’re being double-bunked. Go and see what those prisoners have for lunch, because it’s grim.

One of the real challenges is that prisons, as they’re currently framed, are dehumanising. They disassociate people from their family and from where they come from, and that’s a challenge. We’ve seen in recent days and weeks, as we’ve examined the Estimates and talked to officials in the Justice Committee, how much our prisons struggle. And this bill is adding to it. We’ve seen the corrections officials and Minister admit that they can’t meet their minimum obligations—minimum legal obligations—in respect of prisoners.

The last Government introduced a bill which struck a balance between the unfortunate necessities that accompany incarceration—the need to have information, the need to monitor communications, the need to exercise physical restraint and so on—but, at the same time, on this side of the House, we are committed to a corrections system that does what it says. That is building a corrections system over time which sees people better when they leave than when they went in. And we acknowledge that right now that doesn’t exist. It’s only in a few instances that we can achieve that. But we were making progress. And Hōkai Rangi—the Te Ara Poutama strategy; the corrections strategy—outlined that. It outlined the commitments to achieve a corrections framework that gave mana to the inmates and worked particularly in reducing the recidivism rates of Māori by providing tools to them to be better people when they leave than when they went in.

I’ve heard today, and I won’t repeat, the statistics of the significant overrepresentation of Māori in our corrections system. The Treaty of Waitangi clause in this bill was part of that. It was recognising that since the Treaty was signed, the Crown and the Government have failed. And one of the symptoms of that failure is the overrepresentation of Māori in the corrections system. And we don’t buy in to the narrative that treating everyone the same is addressing that failure, because the wrongs weren’t treating everyone the same, so putting them right isn’t going to be achieved by treating everyone the same.

It’s not like it was particularly onerous to simply recognise that there are cultural differences and an obligation to lift people up where historically they’ve been trodden down. And the suggestion by the Minister and the Government that “Don’t worry, they’ll do it anyway.” just doesn’t hold water, because the conduct and behaviour from the chief executive to the prison officers to the people who are in the kitchens is directed by the Minister and the Government. And this Minister and this Government is making it very clear that they don’t care about Māori overrepresentation in the justice system.

Hon David Seymour: Oh my God!

Hon Member: Rubbish.

Hon Dr DUNCAN WEBB: Well, some people can moan, but then they can also point out that a hundred million dollars has been taken out of the Corrections budget. So $3.5 million of that is out of the high impact programme—the very programme that was designed to identify people and programmes whose lives could be transformed by modest changes. And you can have statements like, “We’re just saving $43 million by changing back-office expenditure.” But you know what that back-office expenditure is? It’s exactly the kinds of things that would make the Department of Corrections’ conduct not only compliant with Treaty obligations, which is kind of lofty and intellectual, but, at the end of the day, recognising each inmate individually and returning them to the community in a better space than they were and more equipped to be effective citizens than they were.

That Government is building prisons. Building prisons is to justice what building cemeteries is to health—it’s a sign of giving up. On this side of the House, we won’t give up. We will use all of the tools. Yes, there’s some good things here. The idea that remand prisoners should have access to programmes which aren’t offence-based but can address some of the issues which they face, which might be addiction issues or they might be education issues—yes, that’s good. But the idea that access to cultural programme is wrong—because that’s been deleted from the legislation as well. The idea that the corrections system should be an appropriate cultural fit—I mean, what is so alarming and frightening with that? In the way it’s framed in the proposed legislation, it’s not even Māori-specific. Certainly, Māori have a particular claim to have the services delivered in a way which is appropriate to their cultural background and to be culturally connected, where appropriate, with their whānau and with their iwis. And cultural programmes which do that have been shown to be more effective.

Now, these trials and programmes are still out there, but in the face of this kind of ministerial leadership, in the face of these kinds of budget cuts, it’s extremely difficult to hear, on the other side of the House, them say, “Don’t worry. Corrections is still committed to adhering to the Treaty of Waitangi.”, because it just lies fallow in their mouths. So I go back to my original challenge, which is to go to the prisons. Go and don’t just visit but look. Because when you look there and ask yourself, “What is the purpose of our corrections system?”, the purpose at the moment, from the other side, is simply to incarcerate, not to improve. So I hope that on that side of the House, they’ll change their approach, change their philosophy, and start improving people’s lives, rather than just hiding them away.

PAULO GARCIA (National—New Lynn): The Corrections Amendment Bill enables the Corrections Act 2004 to deal better with the challenges that Corrections faces today. It incentivises good behaviour, it strengthens processes, and it enables best-practice operations in prisons, particularly in efficiency and safety. I commend this bill to the House.

Hon Members: Madam Speaker!

ASSISTANT SPEAKER (Maureen Pugh): I believe Carl Bates was on his feet. Just to be clear, this is the balance of the Māori Party split call that wasn’t taken.

Hon Dr DEBORAH RUSSELL (Labour): Madam Speaker, he called for the call before the other speaker had even sat down.

CARL BATES (National—Whanganui): Point of order, Madam Speaker. She didn’t say “Point of order”.

ASSISTANT SPEAKER (Maureen Pugh): No point of order required. The precedent that has been set—and I did see Carl Bates get to his feet first.

Hon Dr DEBORAH RUSSELL (Labour): Point of order, Madam Speaker. Can I just clarify something? Is it acceptable, then, to stand up and call before the previous speaker has sat down?

ASSISTANT SPEAKER (Maureen Pugh): This is the person I have called and who will continue.

Hon Dr DEBORAH RUSSELL: My point of order was a different matter. I’m asking for some guidance from the Speaker. Is it acceptable to stand and make a call—

ASSISTANT SPEAKER (Maureen Pugh): What’s the point of order?

Hon Dr DEBORAH RUSSELL: The point of order is that I’m asking for your guidance and a ruling on this. Is it acceptable to stand and seek a call before the previous speaker has finished their call?

ASSISTANT SPEAKER (Maureen Pugh): Seeking guidance is not a point of order.

Hon Dr DEBORAH RUSSELL: Well, in that case, the point of order is, straight forwardly, that the person who is now going to speak had stood and sought a call before the previous speaker had completed his call.

ASSISTANT SPEAKER (Maureen Pugh): And I have called that person—Carl Bates.

Hon David Seymour: Speaking to the point of order—

ASSISTANT SPEAKER (Maureen Pugh): This is a bit of a nonsense. I have made the call, and the member is—

Hon David Seymour: I was just trying to help.

ASSISTANT SPEAKER (Maureen Pugh): Thank you. We are taking the call.

TANGI UTIKERE (Chief Whip—Labour): Point of order.

ASSISTANT SPEAKER (Maureen Pugh): Is this a different matter?

TANGI UTIKERE: Yes, it is. Thank you, Madam Speaker. I wish to seek some understanding about—this is a new point of order—at what point a member’s call is terminated.

ASSISTANT SPEAKER (Maureen Pugh): I will take advice and come back to the House.

CARL BATES (National—Whanganui): Thank you, Madam Speaker. This bill will improve the rehabilitation, integration, and safety outcomes in our prisons. It provides Corrections with the necessary tools to maintain and ensure safety and security in our prisons. It provides remand prisoners with access to rehabilitation. I commend the work of the chair and the Justice Committee, and I commend this bill to the House.

ASSISTANT SPEAKER (Maureen Pugh): The question is, That the amendments recommended by the Justice Committee by majority be agreed to.

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

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Amendments agreed to.

A party vote was called for on the question, That the Corrections Amendment Bill be now read a second time.

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Bill read a second time.

Bills

Education and Training Amendment Bill

First Reading

Hon DAVID SEYMOUR (Associate Minister of Education (Partnership Schools)): I present a legislative statement on the Education and Training Amendment Bill.

ASSISTANT SPEAKER (Maureen Pugh): That legislative statement is published under the authority of the House and can be found on the parliamentary website.

Hon DAVID SEYMOUR: I move, That the Education and Training Amendment Bill be now read a first time. I nominate the Education and Workforce Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 5 September 2024 and that the committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, on a Friday in a week in which there has been a sitting of the House, and outside the Wellington area, despite Standing Orders 193, 195, and 196.

This is a very important day for education policy in New Zealand. This Education and Training Amendment Bill focuses on three areas of policy. The first is introducing a legal framework for charter schools / kura hourua here in New Zealand. The second is to remove laws that would have put specific network planning requirements on early childhood education centres. That bureaucracy will be gone because it made no sense. And, finally, this legislation will allow the Secretary of Education to make specific rules around attendance, addressing the crisis in attendance that is bedevilling not only New Zealand’s schools but our future as we currently conceive ourselves as a modern, developed country with a highly educated population who went to school.

I work through each of these matters in this speech before saying I look forward to the select committee, and I thank in advance Katie Nimon, the Education and Workforce Committee chair, for the work that I know the committee will do, hearing from New Zealanders, improving the legislation if and where necessary, and reporting back so that this policy progress can continue.

First and foremost, the framework for charter schools / kura hourua will put in place the rules for who will be responsible for the administration of charter schools, and that is by and large the authorisation board, a board of experts from different backgrounds with knowledge of communities up and down New Zealand, with knowledge of education, and with knowledge of law and business, so that we can have entities from across the political spectrum, from up and down the country, from different ethnic backgrounds, able to come forward and run schools in a way that suits the aspirations of those communities and those students.

That authorisation board which is put in place is absolutely key, and the authorisation boards will be, under this law, responsible for negotiating and striking contracts with the sponsors who run the schools. Those contracts will be quite different from the approach that has been taken to New Zealand education under successive Governments. For far too long we have overly stipulated how each dollar of funding is used for this or that. We’ve forced schools to negotiate with the Ministry of Education local office—often for trivial things, to wait long periods of time—who have stopped them from being able to expand when even there was clear demand from the parents and the students in the community for more of the education they were offering. We’re going to stop that level of stipulation and micromanagement. In this contract we’re going to say, “You get the money that is owed to the students of this country.” Their share of the education funding will be paid to the school in cash in full. That’s quite a big concession.

But there’s another change that we’re going to make in return for that freedom and flexibility to start a school or to convert a State school. We’re going to say, “Actually, we’re going to contract you for outcomes.” Because the amazing thing that happens in the current State system is that a school can keep getting funded even when the students aren’t attending and when they’re not achieving. It’s an incredible thing that this has been allowed to go on for so long, and charter schools will be the opposite.

I say to my colleagues from Te Pāti Māori that in many respects this is tino rangatiratanga in action. This is allowing communities to take control of their destiny so long as they live up to the mana of achieving and engaging the rangatahi and the students in their rohe, in their community. And the Labour Party—they don’t know which way to go on this because they kind of like the idea of tino rangatiratanga, but they also like the middle class unions that back them and pay their fees, and they’re not quite sure about that.

Camilla Belich: Teachers—we like teachers.

Hon DAVID SEYMOUR: Camilla Belich says, “Oh, it’s about teachers.” It’s not about teachers. You see, here’s what this is about for teachers. The Opposition is saying that teachers are opposed to this. Actually, this is a liberation of the education profession. You see, charter schools will allow a group of teachers to run a school their way, and so long as they have the mana to achieve the results of engaging the students, having them show up and learning, we’re going to stop interfering with them.

Camilla Belich should take note, because I talk to teachers and Post Primary Teachers Association members too, and New Zealand Educational Institute members and all her union backers, and do you know what they say quietly? I say, “What if you had 10 years where you knew that the Ministry of Education and successive changes in Governments weren’t going to mess with you and put new conditions on how you teach and what you teach all the time?” And they say, “What? For 10 years?” They say that would be amazing. Well, you know what? With a 10-year contract, these schools will actually be firewalled away, achieve the results, keep the children safe, keep the children learning, keep the children engaged, and you’ll have the professional autonomy to do education your way.

Hon Jan Tinetti: Rubbish—rubbish!

Hon DAVID SEYMOUR: That’s a pretty popular idea with the teaching profession, and Jan Tinetti ought to get with the programme and listen to a few of the teachers that are saying that. She might be surprised at how many are saying it.

This legislation also allows State schools to convert to charter status. It’s not just new applicants, brand new schools; it’s also—and she might be surprised how many State schools are showing an interest in this—to actually take on charter status and do that deal: attendance and achievement, and here’s your money and here’s your autonomy and here’s your mana and your dignity as a profession, as an educator, to do it your way, so long as you’re getting the results. That conversion process is also set out in the legislation.

All together: charter schools are back, school autonomy is back, tino rangatiratanga in education is back, and self-determination for the children and the educators and the future of this country is back with this legislation. And the Labour Party? They’re not back; they’re backward. That’s the big problem for the Labour Party on this issue. They’re not back and they won’t be back for a long time, but they’re certainly backward.

I would be remiss if I didn’t mention a few more aspects of this legislation. It also removes the network planning provisions for early childhood education centres. This legislation was just completely nuts, because it is the Labour Party “we know best” ideology that the Ministry of Education can decide whether or not a person should be able to invest their own money in serving students, young people, and a community that wants them to be there. And how do we know the community wants them to be there? Because they send their children to the centre. If they don’t, it either won’t start or it will go broke. I know it’s a new concept for some people on the other side, but this is how the New Zealand economy works.

Instead of the Ministry of Education micromanaging where you can open an early childhood education (ECE) centre and whether or not you can expand and how many children you can have at your ECE centre, we’re actually going to leave the decision up to the people that risk their own money to start them and the parents who truly know what is best for their children, who decide to send them there because they’re happy, because they’re safe, and because they’re learning. Those are the people who should have the power, and these are the people who will have the power. And, all together, it means people spend less time on the bureaucracy of justifying their existence and more time on the empowerment about being able to do it their way.

Finally, we are going to give powers to the Secretary of Education to make changes to the way that attendance records are required to be reported. Another amazing thing is that for far too long, as a country, we really never got to grips with who is attending school each day. So we don’t know what the patterns are. We don’t know why they weren’t there. We’ve got regulations that are almost 100 years old if you go back to the legislation they’re initially enabled under, and so we’re going to require that data. With that, I commend this bill to the House.

Hon JAN TINETTI (Labour): It’s been a long time in this House that I’ve heard such a confusing rant by a Minister. In fact, six times—six times—the Minister mentioned the Labour Party; obviously enamoured with us on this side and the wonderful legislation that we had put in place, obviously can’t wait to be over on this side again and, obviously, with terrible legislation like this that won’t be that far away.

Hon David Seymour: She said my speech was confusing!

Hon JAN TINETTI: I say that this was confusing because, on one hand, you’ve got the Minister talking about flexibility and on the other hand you’ve got him talking about tightening up in areas such as attendance; a totally confusing piece of legislation, totally contradictory to itself. I would have to say to the Minister: please go and learn what tino rangatiratanga actually means, because he obviously has no idea. I know that my colleague is going to talk about that in greater depth and greater detail later on.

Charter schools represent, more than anything, an absolutely concerted effort to deregulate the public education system. They have few restrictions in place on pedagogy, curriculum, class size, discipline, and other details in their operation. We have the most devolved education system in the world. How on earth do we think that having that absolutely devolved system like that is going to improve the education system for young people who have been marginalised within the system?

Charter schools represent a slow drip towards privatisation within our schooling system. Let’s go back a little way to see where charter schools came out of. They were born out of the States by a gentleman by the name of Albert Shanker, who was what is called the founding father of charter schools. He withdrew his endorsement of charter schools in 1993 and became a vociferous critic against them; totally—totally—absolutely appalled with the direction in which they were moving in. He watched the charter schools movement evolve as he saw new businesses jump into the education industry. In the States, charter schools have been started by social service agencies, universities, teachers, parents, philanthropists, hedge fund managers, for-profit firms, corporations, charter management organisations, and community groups. Now, we might hear people say on the other side, “Well, that’s not New Zealand”, but hang on a moment, go and have a look at the early childhood education (ECE) sector because that is very much New Zealand and those groups are very much represented right throughout the early childhood education system.

Again, we might hear the other side say, “Oh, but hang on a moment, that wouldn’t happen within the schooling system in New Zealand.” I would then cite a white paper that was written by one of the groups who was interested in opening a charter school, which said, “For widespread success there needs to be the ability for sponsors to get a return on capital, which has made the ECE model so successful in New Zealand.” So we’re talking about a slow drip towards privatisation that will quickly become an absolutely leaking drip.

When we look at the research that sits around whether charter schools have been successful or not, the Minister often quotes the Center for Research on Education Outcomes study. Last week in our Estimates hearings, we talked about the reliability of that study and we were able to put that one to bed completely. The Minister has been completely selective in his research. There is research that has come out of Stanford University—the Minister might actually note that Stanford University is a big university—that shows that 80 percent of charter schools in the study performed either the same or worse than the local public schools: 80 percent. Why on earth are we looking at introducing something to this country that has an absolutely backward impact on the number of young people in this country?

This is a sad day for education. This is an absolutely atrocious day. The other side should hang their heads in shame for what they are doing to the young people of this country. This is an absolute attack on quality public education. I do look forward to showing that throughout the select committee process and I do look forward to those members hanging their heads when they see the evidence of how bad charter schools are for young people in this country.

ASSISTANT SPEAKER (Maureen Pugh): Members, I need to insert that the question is that the motion be agreed to.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Speaker. This bill has three parts to it. You’ve got the first part, the first bit, which is around charter schools. You’ve got the second part, around the removal of the network’s approval. And you’ve got the third part regarding the ability for the Secretary to collect data on attendance.

This is a chimera of a bill, and, like the story of the kind of Chimera and Bellerophon, this is not a beast that slays. Let’s start with the charter school bit. The previous speaker, the Hon Jan Tinetti, has already mentioned, in terms of the lack of evidence internationally—we have seen that unequivocally and unbiasedly, if that’s a word, charter schools as a model work. This is something that we have mentioned before, both in terms of the data from the US and also when we are looking at economisation in the UK. This is something that ruins education systems and this is something that ruins the future of a nation, the future of Aotearoa, in this case.

I think, to start with, let’s just draw attention to the regulatory impact statement. As you go into the regulatory impact statement, it is riddled with, “Here are the risks, these are the uncertainties, these are the limitations. Due to the lack of time that we have given, we have not been able to consult with X, Y, and Z.” So this is not a serious solution to the issues that we are currently facing. Yes, we admit that there are certain elements of our education system that need to be tightened up. There are certain things and there are certain parts of our education system, yes, that have let some students and some schools down.

However, the funding that we are looking at here, $153 million on charter schools—imagine, proportionally, what that funding would do to the public sector in order to uplift all—all—of tamariki, all of rangatahi, all of our students across the country, when we are looking at educational systems. So this is not a serious solution. It is simply a vanity project, something to make people look pretty when they’re looking at themselves in the mirror in the morning. We cannot gamble $153 million on uncertainty, so this is something that the Green Party is unequivocally opposed to, because of the fact there is simply no evidence that suggests it works. It is not the magical bullet that we see elsewhere that is going to magically fix the education system and some of the issues and harshness that we see our students and teachers and our schools go through currently.

Now, the second head of this chimera is around the network approval process. This is what I mean. Charter schools—we’re looking at this privatisation, it’s about community-based, in fact, you know, we’re also allowing people from overseas to also invest in our education system with unclarity around financial scrutiny. But the second part of this, in terms of network approval, that was put in place for a reason, because of the way that the early childhood education (ECE) sectors have been managed. Without it, and without that level of financial sustainability, the Ministry of Education is able to do—without the kind of work that is expected when we are going through the scrutiny process for setting up an ECE centre, what we’ll see is that we’re going to be putting more young people, more tamariki at risk. And not just the students in those ECE centres but also the teachers. This is serious, especially when we hear the Minister of Education talking about consistency, talking about what we need to do, talking about structured literacy, talking about the reduction in our numeracy and literacy—that starts at the ECE level. And without any form of scrutiny, we are seeing that at risk.

The last point I want to mention, the third head of the chimera, is around attendance. And while, yes, it’s a good idea to collect attendance and, yes, an attendance action plan is good, but data for the sake of collecting data is not worthwhile. What are we going to actually do with it? With that, the Green Party does oppose this bill.

KATIE NIMON (National—Napier): It’s a pleasure to speak on the bill, the Education and Training Amendment Bill. I will just remind all those watching that it is not just about charter schools. There are important administrative regulatory changes also on early childhood centres to enable rules and also daily reporting of attendance. So with that very important point, we need to tighten up regulation, offer more choice to parents, and I commend this bill to the House.

ANDY FOSTER (NZ First): Madam Speaker, thank you. I want to start by just congratulating the honourable Minister for this bill. This is about, again, this coalition Government keeping our promises. Charter schools, to me, are about recognising, as the Hon Duncan Webb said in the last debate, that one size does not fit all. I think there is a very logical set of criteria there, a logical set of expectations on charter schools, and I think they will make a significant improvement to our education system.

When I listened to what the Opposition was talking about, it’s as though our education system is working brilliantly at the moment. The reality is that we know it is not—we know it is not. We have a terrible attendance rate at the moment, and you cannot teach children who are not at school. Therefore I’m particularly pleased also to see the enablement of the Secretary for Education to collect really good data so that we know exactly where our students are and we can get them back to school, get them back to learning, because that’s what we need to do for their future and for the future of this country. I commend this bill to the House.

CAMILLA BELICH (Labour): Thank you, Madam Speaker. I wish I could say it was a pleasure to take a call on this bill, but it’s absolutely not a pleasure. It feels more of a duty to draw this House’s attention to this absolutely blatant attack on public education which is going through this House at the moment.

In New Zealand, we have a public education system. Yes, it’s not perfect; but, yes, there is a lot of work that goes into making sure it’s good. This bill will just take money away from the public educators that are currently doing the best job that they possibly can educate—

Andy Foster: It doesn’t.

CAMILLA BELICH: Yes, it will, and I want to draw the House’s attention in the short time I have in this first reading to some great contradictions that this Government currently has in relation to charter schools. Recently, in scrutiny week, the Minister that brought this bill to the House, the Hon David Seymour, said, and I quote, “I’m never comfortable with any level of Government spending that could be reduced.” Well, I’ll tell the Minister: there is a huge amount of money that is about to be going into charter schools with absolutely no justification and it is a waste. It will take money away from the public education system and it will mean that there is less ability to ensure that a good public education is occurring for our students.

It is completely contradictory to the measures that this Government say they’re proud of, that the current education Minister, Erica Stanford, is implementing. Rules about cell phone use, rules about time spent on literacy, rules about time spent on maths—none of these will apply to charter schools. So if those are good for children in New Zealand, why are they not good enough for children that end up going to charter schools? It’s an absolute disgrace.

Now, you may say, “Oh, actually, it’s not going to be a waste of money.” Well, I’ll draw the House’s attention to two statistics which show that charter schools end up costing New Zealanders more, in contradiction to what this Government says is its absolute priority in reducing spending. The average annual operational cost per student of all charter schools is over $18,000, almost triple the $6,000 for public schools of the same period. The National-ACT charter schools from 2014 to 2018 cost up to $48,421 per student and needed more than six times the average amount of money spent on children in State schools. Why are we not putting this money where it should go: into our State education? Why are we not backing our local schools and our local teachers? I don’t have the answer for that.

I don’t understand why we need charter schools. We currently have private schools, we have integrated schools, we have home schooling. There is choice available for parents. Why do we need to establish a totally separate—totally separate—type of school that gets public money but has absolutely no accountability for our curriculum; it has no accountability in relation to an hour of reading, writing, and maths? They can look at their cell phones for all we know. All of these things that this Government stands against. It makes absolutely no sense. It’s a huge contradiction; a huge waste of money.

As workplace relations and safety spokesperson from the Labour Party, I feel it’s also my duty to raise some very serious concerns that we have around the way that these will be incorporated. The Minister can establish a charter school. He can also tell a State school that it can become a charter school. Now, what are the consultation requirements around this? Does this have to be with the permission of the State school? I can’t see that in the legislation. That is an outstanding question that I think should be of absolute concern to every New Zealander watching this debate.

The Minister, David Seymour—who is opposed ideologically to the State—as a libertarian head of a libertarian party is able to go around and make all of the public schools into charter schools. I’m not clear that there has to be adequate consultation with the community to ensure that that happens.

What happens to the teachers? As workplace health and safety spokesperson, I have a duty to ask what happens to them. Well, their contracts—that they worked so hard for—go into the bin. This is a Minister who is opposed to unions. He has spoken in his first reading speech absolutely disrespectfully to the mandate that unions have to represent their members. He has spoken and represented their views incorrectly in this House to say that they are secretly in support of charter schools. Well, I tell you—I challenge anyone in this House to look at the New Zealand Educational Institute website, the Post Primary Teachers’ Association website, and see their absolute opposition to charter schools.

Hon Member: Oh, unions? Unions!

CAMILLA BELICH: Unions represent the teachers in this country—they are opposed to charter schools. So I challenge any member in this House—[Interruption] I challenge any member of this House to go and read those.

In relation to their working conditions, they have an absolute mandate to have an interest in this area, because what is going to happen to their terms and conditions? Their collective agreement goes into the bin. They are all under individual conditions. It means that anything that they have bargained for in terms of the way that they like to work in a particular school, all the work that their union has done to make sure that their terms and conditions reflect what they need as teachers—gone.

GRANT McCALLUM (National—Northland): Unlike the people on the other side of the House, we trust the professionals out there to do their job, and this bill will give them the opportunity and the freedom to get on and do it, right? But, ultimately, this is about the children who desperately need a great education, and charter schools will certainly help with that. I commend this bill to the House.

SHANAN HALBERT (Labour): Thank you, Mr Speaker. Whāia te iti kahurangi; ki te tūohu koe, me he maunga teitei. [Pursue excellence; if you should bow, let it be to a lofty mountain.]

We have a right, in this country, to an equitable, free, public education. In this House, we all stand for the best achievement of our rangatahi in this country, the best outcomes, and the best opportunities to live a good life with their whānau.

Charter schools are an experiment. They are ideological, and they are being put forward in this country without the evidence, without the expertise that our good public education system currently has. The question here is: how do we fund it? How do we fund success? If we have issues with attendance, then fund it. If we need to raise achievement, then fund it adequately.

This Government, their track record in just six months—it’s contradictory to the idea that David Seymour puts forward as the Associate Minister of Education. This week, we’ve seen them put forward punitive youth justice policies that will harm our rangatahi in this country and will put them in youth justice facilities and prisons. They’ve put forward boot camps as the best idea that they can possibly pull out to put young people on the right pathway. They’ve removed cellphones. They’ve enforced one hour of reading, maths, and arithmetic in schools. They’re removing the sexuality guidelines that were put in place to keep young people safe in their schools, and they’ve cut funding to school lunches in a cost of living crisis. We cannot trust this Government on a charter school experiment.

The Minister, in his speech, talked about tino rangatiratanga. In his view, this is his example of what tino rangatiratanga achieves. Tino rangatiratanga doesn’t come from the USA. It doesn’t come from the USA. It comes intrinsically from a Māori world view. It starts with our whānau. It starts with our reo. It’s the emancipation of our people, our families, and our communities to be able to self-determine their education system for themselves, to have sovereignty and decision making over their lives, to have the independence and the autonomy—that is tino rangatiratanga from Aotearoa.

I acknowledge the work of all of our public schools, but I also today want to acknowledge kura kaupapa Māori—people that have transformed our education system in the closest example that we have in this country to tino rangatiratanga. But I come back to the question around funding. If we want to raise achievement, particularly for Māori, in this sense, then kura kaupapa Māori is also our best example. But if we want to raise achievement for everyone in our public school system, then fund it in the same way that this Government is funding charter schools.

The National and ACT experiment with charter schools that ran from 2014 to 2018 cost up to $48,000 per student annually. That’s more than six times the average funding spent on students in State care. I talked about how if we want to improve attendance outcomes in this country, then fund them. If we want to raise achievement of our rangatahi, then fund it. But there is inequitable investment in each of our rangatahi in what is being proposed in this House today, and that is why I say that charter schools are not a quality way forward, because they’re inequitable purely by the funding investment per student in this country, and it is not acceptable that this child gets a different investment than that child.

My final point here today is that this is an experiment. It’s not tino rangatiratanga, and we must come back to—

ASSISTANT SPEAKER (Greg O’Connor): The member’s time has expired.

MIKE BUTTERICK (National—Wairarapa): Thank you, Mr Speaker. The three objectives in the Education and Training Amendment Bill are, ultimately, driven by this coalition Government’s commitment to drive improvement in our children’s education and achievement, to help set them up with the skills they’ll need out in the real world, to help them with the skills they’ll need to have a chance to be successful. Anything that helps contribute to those objectives, such as this bill, should be supported as a priority by everyone in this House. I commend it.

ARENA WILLIAMS (Labour—Manurewa): The Government’s priorities here could not be more wrong. Today they are using the House’s urgency to pass through a bill which is deeply ideologically driven. It is not evidence based and its budgetary impact and the reasons why we are here having urgency related to the Budget documents in the first place are all out of kilter. The evidence shows here, as my colleagues have said, that this will cost New Zealanders more. It does not result in efficient spending in our education system, and I’ll come back to that later.

I wanted to talk a little bit about why we have a public education system in the first place, and what my colleague Camila Belich has raised here as being an attack on that public education system. Because on this side of the House we believe in an education system which everyone has access to, which we consider to be, you know, a privilege that all New Zealanders can go to their public school down the road in their local neighbourhood and get the same kind of education everywhere. That education needs to be of a high quality. And we all agree in this House that there are things that we need to improve, but that is the thing that we should all be debating: how we improve people’s access to their local education and take pride in their local schools and back their local teachers. Not this chimera of a bill which basically puts the politics of the ACT Party ahead of all of the evidence that we know works and that backs our local teachers to do the best they can.

Public education can be something that we’re really proud of in New Zealand. We’re really lucky in this country to have basically everyone being able to go to their local school. It’s something that not only brings out the best in our young people in New Zealand, but also is really important for those neighbourhoods. Local schools can be this cornerstone in our local neighbourhoods, in our cities, in our rural towns, which enable people to meet each other, to have a connection to one another, and for young people to be able to engage in a touch point for the public system.

Hon David Seymour: This is a fantasy—defending the indefensible.

ARENA WILLIAMS: And I hear the member David Seymour criticising that goal, but that is actually what we have in New Zealand. It’s a decade’s worth of a public education system which people are proud of and which we need to back more strongly.

The transformative power of education is something that we can all be proud of in this country. My dad’s story: he grew up on the shores of the Ōhiwa Harbour only speaking te reo Māori, and his parents weren’t in the picture. He grew up with his grandparents who didn’t have any kind of contact with the European world but were able to send their grandchild to the public school, and it was something they were really proud of. He went through primary school. He started when he was nine and he got to go to high school because Peter Fraser’s Government put school buses on the roads to let rural Maōri kids go to school. That kind of interaction with the State was this family’s first interaction. It was a really positive one because it transformed his life; the ability and the skills to read, to write, to be a part of that community then let him go on to teachers’ college to become a teacher and then a journalist.

It’s that transformative power of education that we want for every New Zealander. Only by investing in our public education system through things like buses to get kids to school, things that enable parents to be able to send their kids to school with no barriers like school lunches and an end to school donations, that’s the kind of priority we should be making, because it’s only through those measures that we allow everyone to have the same kind of access that my dad did. And when I talk about a social elevator, it is truly something, it is the only thing, really, that we have baked into our system which allows people, no matter what they are born into, no matter what conditions they grow up in, to get ahead in life. We need that public education system so that we are a thriving society which also is fair for people and allows people to get ahead.

When we introduce something like charter schools into the system, which is directly competing for the same funding that our public education system desperately needs, that is taking away from the kids that otherwise rely on it. That is taking away from Maōri kids, that is taking away from those kids who would otherwise not be able to get ahead. We should see this for what it is, which is an ideology focused on giving those who already have more of a leg up in an education system because they can pay for it. We should be focusing on funding our public schools well. We should be focusing on removing the barriers to success in education, like making sure kids are fed. But this Government’s priorities are backwards. They are not only taking away those things like free school lunches, which we know principals and schools are telling us improve educational outcomes, but it is further entrenching those inequities that exist in the system. That is why we should vote against this bill.

CARL BATES (National—Whanganui): Improving educational achievement in this country is critical. I’m particularly interested, as a member on the Education and Workforce Committee, in when we get into the early childhood education and the removing of red tape, particularly around the network approval requirements introduced by the last Government. I’m looking forward to getting into the work and getting this bill passed through the House. I commend this bill to the House.

A party vote was called for on the question, That the Education and Training Amendment Bill be now read a first time.

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Bill read a first time.

Education and Training Amendment Bill be considered by the E

Motion agreed to.

ASSISTANT SPEAKER (Greg O’Connor): The question is, That theducation and Workforce Committee.

Bill referred to the Education and Workforce Committee.

Instruction to Education and Workforce Committee

Hon DAVID SEYMOUR (Associate Minister of Education (Partnership Schools)): I move, That the Education and Training Amendment Bill be reported to the House by 5 September 2024 and that the committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, on a Friday in a week in which there has been a sitting of the House, and outside the Wellington area, despite Standing Orders 193, 195, and 196.

This legislation brings into effect policies that have actually been introduced in New Zealand before. It is certainly true that there are some modifications and improvements that will mean that charter schools, as we propose them today, will be even better than the pilot of charters that was run in New Zealand from around 2012 to 2017. However, that does not mean that there is an extensive need to consult on something that we effectively ran a five-year pilot of—very successfully, I might add—in New Zealand.

The network provisions are simply removing something that has had no positive effect, is openly criticised by the sector, and will return to the status quo ante that all parties appear to have been happy with for a long period of time.

Finally, the power of the Secretary to require attendance rules be made in schools is simply enabling the Secretary to make a rule—not any particular rule—and one would hope that allowing the Ministry of Education to make rules about children having to attend school and schools having to report that they’ve attended would be relatively uncontroversial across most parties in the House.

Hon JAN TINETTI (Labour): Thank you, Mr Speaker. I’m somewhat perturbed to hear the Minister, the Hon David Seymour, minimising in this debate the importance of an education bill and saying that this is stuff that all sides would be really interested in and that would mean we would shorten the process because of it.

It would be very rare that an education bill would have a shortened select committee, because it is education—we are talking about our kids; we are talking about our present and our future. It is really surprising to me that the Minister would take this sort of line of thought around the fact that because we’ve had a failed experiment of charter schools in the past, it means we’re not going to consult with any great detail on them. I would have thought, because it was a failed experiment, we should have had more consultation happen.

The Minister has sort of minimised the last two parts of the bill as well, and I want to talk about those first, as the reason why we do need to have a very good and robust select committee, including the timing of it. It really concerns me that we would shorten that time. And then I would like to come back to the charter schools and the failed experiment that we’ve had, and why that consultation needs to be longer.

ASSISTANT SPEAKER (Greg O’Connor): I do warn the member that this is quite a tight debate.

Hon JAN TINETTI: I do know that, Mr Speaker, and thank you for reminding me of that. I am well aware of that. I’m talking about why the time frame needs to be a normal time frame. So please, Mr Speaker, I’m well aware, but you’re very welcome to keep reminding me of that, as well.

With that early childhood change, the Minister said that most people would be happy about that and so there wouldn’t be any need to have that conversation. That is not the feedback that I have had from the early childhood sector, and therefore there will be a lot of people who will be very interested in the network management provisions. They understand the implications of that for the early childhood sector, particularly in those low socioeconomic areas. I know there is a large number of them who want to take the time to submit on this particular part of this bill and that they see this as their opportunity to have their thoughts and their wishes being said and heard across this House. The only time they will have is during the select committee process, so to shorten that time is a real concern.

I’d also say, for them, they would be really concerned, having heard the previous debate, that the Minister did spend a lot of time speaking about charter schools and probably thinks that people will not be submitting so much on the early childhood side of this, whereas, in fact, there are a lot of people out there who are very concerned that the early childhood provision part of this bill is kind of being rammed in with charter schools, and they see that they’ve become the poor relation to the schooling sector. They want to make their voices heard in this particular process, so to shorten that time is absolutely insulting to those people from that particular sector. I’m really urging the Minister to rethink for those particular people, for whom he has the oversight as Associate Minister, with his early childhood hat on.

There is also the attendance, but I’m not really going to spend much time talking about that. I think there will be people who will submit on that.

Hon David Seymour: I can imagine the member wouldn’t want to talk about attendance!

Hon JAN TINETTI: I am absolutely quite happy to talk about attendance, Mr Seymour, but this is not the time to talk about this. As the Speaker has said, this is the time to be talking about the length of time we’re spending at select committee. So let’s have a conversation about that at another stage. And let’s have a conversation about the invitation that you gave to me at select committee, which, I notice, hasn’t been forthcoming since select committee last week. But I do look forward to getting that invitation anytime soon to my office, and then we can meet up to talk about attendance further.

Let’s put that aside now and go back to talk about charter schools and why it is really important to have the correct time spent on this at our select committee. The Minister talked about why he thinks we need a shorter time, around the fact that he’d already piloted the charter school model back between 2014 and—whatever the time was; five years he had of that failed experiment. And it was a failed experiment. So, therefore, there are a number of people who have said they want to be able to speak on this, to present on it, to be able to speak on it. But not only that, what the Minister has failed to say in his speech right up front, about this particular part of the debate, is that this is not the same. He is actually putting a very new part and a very big change into our education system. He is talking about current public schools having the opportunity to become charter schools.

Now, that is one of the biggest changes to hit our education sector. Why would we shorten the debate? That is going to take choice away from our kids—and I will say why in a moment. Why would we shorten that debate to make that specific change in our education sector? Why I say that it takes choice away from our kids is that if a school that has an enrolment zone that is a current State school chooses to become a charter school, what choice do those young people have to go anywhere else, when all of those schools around them have an enrolment zone? The Minister has taken the choice away—

Hon Member: What’s this got to do with the report-back date?

Hon JAN TINETTI: And thank you, Mr Speaker; that’s exactly why we cannot have a shortened debate on this. Our education system is far, far, far too important to narrow this down to about eight weeks of consultation. In that time, we’re not talking about eight weeks of consultation; we’re talking of only a few weeks—or even a few days, really—where written submissions come in, and then we have to hear the many oral submissions that come in.

I was on the select committee in 2018 when we talked about the repealing of the charter schools legislation. I know how many people submitted to that. We’re talking in the thousands, of people who submitted to that. To shorten a select committee process right now is not OK in the education sector. It is putting our young people’s education at risk by taking away the true debate. But the Minister is over there, saying that that is not right. That is exactly what is right. I remember the last time the Minister submitted to the select committee on charter schools and he urged the committee to listen to what he said, and he urged the committee to pay due diligence and really think about it. He is not giving people that same due diligence by shortening this period. He is taking that away from people, and that is not OK. He has stood up before in this House about how we should have a strong democratic process, and he is now the one who is saying we will shorten it because we have run this system in the past. We have not run this system as it stands at the moment, we have not run it the way that he has set out in his bill, and we have not run it with those schools that are currently State schools becoming charter schools.

One of the final points that I would like to make is that consultation with Māori is really important in this particular instance, and I fear that shortening this process will take away from that consultation. Māori are very much who the Minister has identified, or one of the key demographics that the Minister has identified, and we have strong ways of doing our consultation and working with our consultation with Māori. I fear that the voices of Māori who don’t align particularly to iwi groups will be marginalised, but I also fear that the voices of those in iwi groups will be marginalised in this particular process. Whether they come in support or whether they come against the charter schools, their voices will be marginalised in a much shorter process. I am really, really concerned that an area that we do really well, and we get told about overseas that we do really well, with our Māori-medium education, will not have the opportunity in such a short time frame to be able to give that consultation.

My final point is that there are a lot of young people with learning support needs who have contacted me about this bill. They are concerned about the lottery of the roles that could occur and do occur overseas with charter schools. They want to have the time. They want to have a full and strong process throughout the select committee to consider this bill. The Minister has taken that democratic right away.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Speaker. I, too, echo the previous speaker, the Hon Jan Tinetti’s sentiment that the shortened time frame for the select committee on such an important bill which has future implications is something that should be quite concerning for all people. When we are looking at select committee timing, we are looking at usually six months to collect the information, to do the due diligence of consultation. So we should, theoretically, not be looking at reporting back to the House on 5 September but pushing it out to December, which I understand may come with challenges on some of the Associate Minister’s own goals in terms of when certain elements of this bill should be set up.

I would just like to speak on the rationale on why having a full select committee process and a full duration of the select committee process is really vital for this particular bill. First of all, we mentioned already that this amendment bill comes in three different and seemingly unrelated parts. In the first part we talked about it in terms of the attendance element of it. You know, there will be people who would like to consult and who would like to feed into this bill, who may need some time to fully flesh out and understand the implications, but also what additional work there would be when the Secretary for Education is given the authority to collect some of this attendance data. I think this particular element might be the smallest element of the three that we are looking at, but still, there will be people who would like to provide some feedback on this, and that may require time to generate some of the data. Now, the previous speaker, the Hon Jan Tinetti, has already talked about this in terms of the network approval element. When we get attendance, this is tied into the Associate Minister of Education’s announcement of the attendance action plan, which is for schools, particularly for public and for State schools.

The second part, when we’re looking at network approval, looks at the completely different elements of our educational system, which is around early childhood education. Again, when we’re looking at something like this, the network approval process has only been in place for a month and we have already read in the regulatory impact statement about the limited time. Consistently, over and over again, when we’re looking at the regulatory impact statement, we see the limited time that the ministry and adviser had to consult and put something together. As a result, it is absolutely crucial that we will be given sufficient time to consult on the network element, particularly in terms of the network approval when we’re looking at what the impact would be on community-based early childhood education (ECE) providers and what the impact will be on private for-profit ECE providers. What will be the impact it has in relation to the FamilyBoost that the Government has announced that gives compensation or rebate to parents? With a lot of these we are looking at multiple elements and multiple stakeholders that potentially would like to feed into this particular element of the network approval. Hence the absolutely vital element of having that full select committee process and not just simply having the report back on 5 September.

When we’re looking at having the report back on 5 September, I also just want to sort of lay out what some of that could potentially look like as well. It looks like there will be a submission process for possibly the July period, and then there will be hearings, etc., during the August period so that we are able to report back. So, in fact, when we’re looking at the process itself of a select committee, it actually doesn’t give sufficient time for people to provide that feedback and for the select committee itself to be able to hear from the relevant and broad-ranging stakeholders that is required for something like education. The impact of education is a slow burn in Aotearoa. If we don’t do something well, if we’re not being meticulous about it, it will have a long-term impact. So, again, this is why it is so important. The Government has already mentioned that they like the democratic process. They want to have a decentralised process, but at the same time, we’re seeing that it’s not giving sufficient time for the public to fully express their democratic right, as is the right of people of Aotearoa to be able to feed into something like this.

The third element of the bill is around charter schools, and this is probably the most crucial and the most time-consuming element of this particular bill. When we are looking at the impact it will have, first of all, if we are just looking at the conversion element that the Associate Minister has announced—this is State schools converting to charter schools, which also, again, does not engage with or is apart from what he says over here in the bill. It is apart from State-integrated schools, distance schools, kura kaupapa Māori, specialist schools, and designated character schools. So when we’re only looking at consultation from public schools, we’re looking at feedback from agencies, we’re looking at feedback from schools, and within that school we’re looking at feedback from teachers, we’re looking at feedback from support staff, we’re looking at feedback from students, and we’re looking at how schools are going to have sufficient time to consult with their communities, with their local communities. This is something that the Associate Minister has himself mentioned: this consulting is about allowing communities to have their voice back and have their level of autonomy, and consulting with the boards of the schools.

That is just from the school component, which may take up a lot of time; you also have the community element. The Hon Jan Tinetti has already mentioned the kind of consultation that will be required with whānau, hapū, and iwi from a Māori perspective. This is something we must acknowledge: that the current education system has let our Māori rangatahi and students down in many regards. So it is really important that we have the time to be able to engage with them, and for these hapū and iwi to be able to engage and have the wānanga, have that kōrero themselves, to be able to sensitively tease out exactly what they would like to feed in as part of this process.

Another element of this, looking more at engaging with communities, is our rural communities, not just simply our regional communities but our rural communities, who also feel that they are being let down by the system. So it’s really important that they get given sufficient time to be able to have their say as well.

Grant McCallum: I just did!

Dr LAWRENCE XU-NAN: Of course, finally, the last part of this puzzle—and you know, as you can see that other members who are also incredibly passionate about rural communities may also encourage their communities to make submissions. They would also then know how long it takes for rural communities to pull something together.

The last component of this is how the students are able to pull something together. We’re looking at not just students but also student collectives. The student voice is incredibly important when we’re looking at anything that is related to education. For far too long our system has negated or has neglected the voice of the students. So, in this case, how are we going to consult with the relevant students, in conjunction with their parents, in conjunction with their teachers, and in conjunction with their schools? This is going to be really, really important. And when we are looking at all of these, obviously we are also looking at how we are able to do these sorts of consultations potentially with students or potentially with families whose English may not be their first language. How are we going to be able to consult with those families and with those communities in a really sensitive and articulate and measured way, so that they know exactly what it means for their children and for their families? This is something that would affect every person in Aotearoa because every person in Aotearoa goes through the education system.

We absolutely need to have that level of scrutiny and that level of insight from across the board, from all aspects, from all facets of our community of Aotearoa when we’re looking at this particular bill. So I would highly, highly encourage and endorse the delay of this reporting to the six-month select committee stage.

Arena Williams: Point of order, Mr Speaker.

ASSISTANT SPEAKER (Greg O’Connor): Before I call the next call, just now we’ve had two quite full speeches on this and provided a lot of context. From henceforth, I’ll be looking for some very narrow arguments around the timing. So I am calling Arena Williams.

ARENA WILLIAMS (Assistant Whip—Labour): For a call or for a point of order?

ASSISTANT SPEAKER (Greg O’Connor): Sorry—calling Arena Williams.

ARENA WILLIAMS: OK. Briefly on—

ASSISTANT SPEAKER (Greg O’Connor): Oh, sorry. Was that a point of order?

ARENA WILLIAMS: I would like a call, though, Mr Speaker.

ASSISTANT SPEAKER (Greg O’Connor): Oh, you’re seeking the call?

ARENA WILLIAMS: I am seeking the call.

Katie Nimon: Point of order, Mr Speaker. The member called a point of order.

ASSISTANT SPEAKER (Greg O’Connor): OK, so the member is—point of order.

ARENA WILLIAMS: Mr Speaker, I acknowledge your guidance there and that was something that I was listening for. I just want to be helpful to the House and bring your attention to Speaker’s ruling 115/3. I’d invite you to consider the Minister’s speech—that’s on page 115, Mr Speaker—where he provided the House with some further context, as you say.

The reason why members on this side of the House have been debating that context is because the Minister didn’t actually provide a reason for his use of urgency. So in Speaker’s ruling 115/3, it’s about the Speaker not accepting a closure motion when a Minister has not provided a reason for the need for use of urgency. In that case, we are still interested in hearing from the Minister and we have a Minister here in the House who might be able to provide a reason, but we haven’t heard that yet. So that is why Opposition members have spoken quite widely to the context, because we’re still waiting for the Minister’s use of urgency reasoning.

ASSISTANT SPEAKER (Greg O’Connor): Yes, that’s why I’ve allowed the debate to actually be wider than I may have otherwise. But at this stage, we also move to the repetition stage, so I just indicate now that I’ll give the member a call—indicating, too, that we’re looking for new material.

ARENA WILLIAMS (Labour—Manurewa): Mr Speaker, thank you for the opportunity to speak to this motion. The reason I am speaking is because I want to urge the Associate Minister of Education to consider a later report-back date. That’s for two reasons: one is the ability of the Education and Workforce Committee to use its financial scrutiny functions for this bill, and the second is for its consultative functions, and some assistance for the Minister, in what will be a contentious piece of this legislation. Given that it is a closer report back, one of the risks open here that the Government will be weighing out is its consultation responsibilities with Māori groups, and so I’ll speak to that in the second half of this contribution.

Firstly, to those financial scrutiny functions, it’s really important for the Education and Workforce Committee to actually have a longer extension date than would be normal, because this is pretty unique in what this legislation would empower. You’ve got a use of a public asset here, which has been public before and open to the scrutiny of something like the Office of the Auditor-General and subject to those provisions which apply to the use of public funds, then moving into a system where it would not be subject to that level of scrutiny. So what’s going to be really important here is for the Education and Workforce Committee to be able to not only hear from members of the public but also hear well-prepared work from the Public Service on what those new financial oversight arrangements should be, because this is the use of public funds moving to private benefit. It is almost unique in the sense that only this select committee is going to perform those functions which makes sure those governance arrangements are appropriate for what had been, sort of, a public asset in public ownership.

The questions that the select committee will need to consider—and it will need a proper briefing from the Office of the Auditor-General on this—are whether those financial oversight provisions, which have been performed by the Public Service in the past, should be performed by some other independent entity or should be performed in a way which is then publicly available, and, if so, what checks and balances there are on that. They will also need to consider who the appropriate auditor is for a situation like this, because we’ve already seen that the use of public funds by charter schools has been widely debated. That was one of the things we heard from the Minister. When the Minister provided his commentary on this motion, which he had introduced just moments ago, he said that the pilot had been successful. But you’ve also heard from the Hon Jan Tinetti that the average annual operating cost per student across all charter schools was over $18,000, which was almost triple the average of the $6,600 for public schools over the same—she was quoting, there, the researcher Dr Shannon Walsh. So what we see here is a select committee which will be presented with, basically, alternate facts about what the financial implications of this are and how that money has been spent in the past compared to now.

The reason why I bring up the pilot and what the Minister said about that is, actually, the pilot presents the select committee with more financial information than it had in the past. It needs to scrutinise that information. That’s the reason why we do pilots in the education and the health system: so that we have robust financial information in the first place, which we can then make good governance decisions about. When the Minister brings up the fact that he has a pilot here and that he alleges that it is successful, that select committee’s job is then to go away and make sure, for that Minister, that he is correct about that. We need, in this House, to come back to the next reading of this bill in a way that we can be sure that, actually, the financial arrangements do have the right level of oversight and are, as the Minister said, being done in a way which has been successful in the past. That’s really worthy of the House’s time because this is quite a unique situation where we have public assets going into what will then be used for private benefit.

We also have heard the New Zealand Educational Institute Te Riu Roa say that the cost is up to $48,000, for $121 per student annually, which is more than six times the average funding for students in State schools. So the reason I bring that up is, actually, I would propose to the Minister that what would be useful here is to not only instruct the select committee to spend more time but to seek that further analysis by not only the Office of the Auditor-General but also by Treasury, who are the only kind of policy shop that we have to be able to make these kinds of decisions, so we’re not using alternative facts.

I then turn to the issue of consultation. The motion has been made to the Education and Workforce Committee—that is useful—but under the new Standing Orders provisions, following the review in 2020, there are also provisions for that committee to work with other committees on particular parts of legislation and particular topics of inquiry. It would be really useful—and I urge the Minister to consider this—to ask for the Education and Workforce Committee to also work with the Māori Affairs Committee to consider this particular piece of consultation and to drill into the details here. If the Māori Affairs Committee is able to then consider what the Crown’s duty of active protection is in working with Māori in the education sector, then that would be a useful thing to be able to report back to the House.

The duty also owed is one of consultation. As I said before, this bill opens up some new risk for the Government—it’s a new legal risk. If consultation isn’t properly conducted with Māori interest groups, there is a risk here that it will create ongoing litigation, ongoing lack of trust, between those people and the Crown. It’s something that all members of this House should be interested in because, as parliamentarians, we really are stewards of the Crown’s relationship there, which is created by those principles of the Treaty and by obligations under the Treaty. So it would be useful for that Minister to consider the role of the Māori Affairs Committee here, to consider the role that that bipartisan, cross-partisan committee can play in our Parliament to open up space for what is, essentially, playing out the duty of good faith owed by the Crown here to Māori who want to participate in it.

Those are the two points I have. I look forward to hearing from another Minister of the House about the reason why there is urgency required, and another one of my colleagues then can speak to that point.

Hon WILLOW-JEAN PRIME (Labour): Thank you, Mr Speaker. As Labour’s associate spokesperson for education, in particular for Māori, I want to add my contribution to the argument, why we need to have a longer select committee process to allow for proper and actual consultation to take place with Māori. Now, I know the issue has been raised by previous members—

Grant McCallum: Repetition.

Hon WILLOW-JEAN PRIME: It’s not repetition because I want to take the House to the departmental disclosure statement which says—yup, it’s on page 12—“Due to time constraints, the Ministry of Education has not been able to undertake formal consultation with the public on any … proposals in the Bill.” There has been absolutely no consultation on any of the proposals in this bill.

I want to talk to the regulatory impact statement. Let me take you to page 29 of that, where it talks about the Tiriti o Waitangi analysis. At paragraph 109, it says “As a partner to Te Tiriti, the Crown has a duty to actively promote and protect Tiriti rights [and interests] and to develop education settings in a way that supports Māori-Crown relationships.” This duty is recognised in section 4(1)(d) of the Act, which records one of the education system’s purposes as being to establish and regulate an education system that honours Te Tirit o Waitangi and supports Māori-Crown relationships. Te Tiriti analysis supports the Crown to uphold our obligations to Māori by actively considering how a charter school model might impact Māori.

I am arguing that we need to have an extended time frame because, as was argued in the Waitangi Tribunal for the repeal of section 7AA of the Oranga Tamariki Act, Māori have said that it is not partnership and it is not consultation to invite Māori to participate in a select committee process. That is not the standard for consultation.

ASSISTANT SPEAKER (Greg O’Connor): Well, bearing in mind, Ms Prime, that broadening out about the actual fact of consultation versus the time for consultation are two different arguments.

Hon WILLOW-JEAN PRIME: Yep, so I’m making the point that that is not even the appropriate place for it, but we have an acknowledgment in this departmental disclosure statement that none has taken place whatsoever. So all we have is the select committee process, and I argue that is not upholding the Treaty responsibilities and obligations of the Crown when it comes to Māori.

Now, if that is the only place where this can actually take place, is the time frame adequate and sufficient for that to be meaningful? I don’t think it is, and I am arguing that the time frame is too short to allow for there to be any meaningful consultation and work with Māori on what is proposed in this legislation. And I implore the members on the other side of the House to go and speak to their Minister about their concerns, about their failure to uphold Te Tiriti o Waitangi. I’m sure that Minister in particular will be so interested in Te Tiriti o Waitangi.

If I can guide the members and tell them to look at pages 29 and 30 of the regulatory impact statement and the further table of analysis, which points out what all of those issues are, when you look at the number of considerations that the advice has, I do not believe that the time that has been allowed is sufficient to address all of the things that they have identified need to take place in consultation, need to be answered on how to improve these proposals for how to deliver for Māori in our education system. Thank you.

GRANT McCALLUM (National—Northland): 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 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

A party vote was called for on the question, That the Education and Training Amendment Bill be reported to the House by 5 September 2024 and that the committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, on a Friday in a week in which there has been a sitting of the House, and outside the Wellington area, despite Standing Orders 193, 195, and 196.

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Bills

Sentencing (Reinstating Three Strikes) Amendment Bill

First Reading

Hon NICOLE McKEE (Associate Minister of Justice): I present a legislative statement on the Sentencing (Reinstating Three Strikes) Amendment Bill.

ASSISTANT SPEAKER (Greg O’Connor): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon NICOLE McKEE: I move, That the Sentencing (Reinstating Three Strikes) Amendment Bill be now read a first time. I nominate the Justice Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 1 November 2024.

I present a legislative statement on the Sentencing (Reinstating Three Strikes) Amendment Bill and I move that the Sentencing (Reinstating Three Strikes) Amendment Bill now be read for that first time, and I had already nominated the Justice Committee—and I will just reinforce that with them. This bill gives effect to the Government’s coalition and manifesto commitment to bring back the three-strikes sentencing law as a key priority in our work to restore law and order. Reinstating the three-strikes law sends a clear message to offenders that there will be grave consequences for serious repeat offending. It recognises the harm to victims and communities that results from violent crime and makes clear that this will not be tolerated. Keeping offenders off the streets will contribute to this Government’s commitment to ensuring there are 20,000 fewer victims of violent crime by 2029.

The main features of this bill mean that we will reinstate a three-stage sentencing regime, with increasingly tougher penalties at each stage. It will have the same overall structure and essential features as the previous regime. In general, offenders will be warned of the consequences of reoffending at their first strike, and they will be denied parole at their second strike. For a third strike, offenders will have to serve the maximum penalty without parole.

There will also be some changes to make the three-strikes regime more workable. For example, the new regime will only apply to sentences of over 24 months’ imprisonment. This will ensure that the toughest sentences are reserved for the most serious offending. There will be limited judicial discretion at each stage, to guard against manifestly unjust sentences. The offence of strangulation or suffocation will also be brought into the regime to ensure consistency with other violent and sexual crimes that have a seven-year maximum penalty.

We are ensuring the new three-strikes regime is not retrospective. Strikes from the previous regime will not be carried across into this new regime. This is important because we are making changes to what was in place before.

There are changes to the way strike penalties will operate. The bill provides escalating consequences for offenders who continue to commit serious offences despite the warnings. To outline in more detail what will happen at each stage of the regime: for all offences, at a first strike, the offender will be warned about the consequences of receiving another qualifying sentence, and offenders will, again, receive a warning at each stage. For offences other than murder: at a second strike, the offender will be required to serve their sentence without parole, unless this is deemed to be manifestly unjust. At a third strike, the offender will receive the maximum penalty for that offence—unless it’s manifestly unjust—which must be served without parole, unless, again, it’s manifestly unjust.

Under the previous regime, it became clear that life imprisonment without parole would virtually never be imposed for murder offences, as such a punitive sentence, because it would be manifestly unjust. To ensure that there is an escalating penalty for such offending, we are introducing minimum periods of imprisonment for murder, as follows: at a second strike, the offender will receive a minimum non-parole period of 17 years; at a third strike, a minimum non-parole period of 20 years. These minimum periods will apply in each case, unless it would be manifestly unjust. For both murder and non-murder offences, there is a limited reduction in the sentence available for a guilty plea. This is to help reduce court delays and avoid victims having to go through unnecessary trials.

We are giving guidance to the judges. The bill includes guidance for judges to help in determining whether a sentence or order would be manifestly unjust. This will ensure that the exception is applied in a way that does not undermine the regime. The bill also requires that even where the manifestly unjust exception does apply, the court must still regard the offending as worthy of a very stern response, and the bill provides that the courts should not shorten sentences to prevent offenders from qualifying for the regime, or compensate those who do qualify for the loss of their parole eligibility.

There are also some other minor and technical clarifications that we’re making. The bill makes a number of these clarifications to technical and procedural matters to improve the efficiency and also the workability of the legislation. For example, it clarifies which post-conviction orders the court can make. Under the Criminal Procedure (Mentally Impaired Persons) Act 2003, it makes the process for giving warnings to offenders much clearer. After the bill passes, we are providing a six-month period before the new three-strikes regime comes into force, to allow time for everyone to prepare training for those changes.

Additional amendments to the Parole Act are also included. We are including these because there are some changes to the Parole Act 2002 that need to be addressed. These are needed to address some errors that were made back when the previous three-strikes regime was repealed in 2022. The Act unintentionally repealed several Parole Act provisions relating to sentences imposed for murder of life imprisonment without parole. This bill restores those provisions with retrospective effect so that there can be no doubt that this technical error will have no practical consequence. I would like to reassure the public that this bill makes clear that no one subject to a sentence of life imprisonment without parole will be able to claim parole eligibility. I’m also advised that no one serving this sentence is currently eligible for parole because of the error that had been made. These changes will apply straight away, after the bill receives Royal assent.

We are committed to reinstating the three-strikes regime so that there are appropriate consequences for repeat offending. With this bill, we intend to ensure there are tougher consequences for serious repeat offenders, while avoiding those unjust outcomes. This bill, I believe, strikes the right balance, and I commend this bill to the House.

ASSISTANT SPEAKER (Greg O’Connor): Members, the time has come for me to leave the Chair. The House will be suspended until 2 p.m.

Debate interrupted.

Sitting suspended from 1.03 p.m. to 2 p.m.

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

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

SPEAKER: I present the report of the Parliamentary Commissioner for the Environment entitled A review of freshwater models used to support the regulation and management of water in New Zealand.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. Hon MARAMA DAVIDSON (Co-Leader—Green) to the Prime Minister: Does he stand by his Government’s statements and actions?

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes, and especially our action to rewrite the Sentencing Act to ensure that criminals face serious sentences for serious offending. We’re making a raft of changes to prioritise victims over offenders: capping discounts, new aggravating factors for retail crime, and a new requirement that victims’ interests must be taken into account when sentencing. After years of lawlessness, this Government is putting its foot down and saying “Enough.” We said we would restore law and order, and today’s announcement is part of that.

Hon Marama Davidson: Does he stand by the statement of the Minister responsible for RMA Reform, “We’re open to constructive changes on the fast-track regime to ameliorate some of the concerns that people have”, and, if so, what changes will he make to address the concerns of over 20,000 people who marched on 8 June because they believe this bill is a threat to Aotearoa’s environment and democracy?

Rt Hon CHRISTOPHER LUXON: Yes, I agree with the Minister who has quite generously said that he would go through the select committee process and if there’s sensible changes, he would be happy to make them.

Hon Marama Davidson: What constructive changes will he make to address the concerns of Ngāi Tahu that the infrastructure deficit should be corrected, but “it should not be used as an excuse to subvert Treaty settlements or environmental safeguards. … We cannot sacrifice the long-term sustainability of our natural resources for short-term economic gains.”?

Rt Hon CHRISTOPHER LUXON: The Minister, as I said before—I don’t know how to express it any other way—if there’s any sensible or constructive changes, he’s very happy to take that on board.

Hon Marama Davidson: What constructive changes will he make to address the concerns of the Ombudsman that unless the “beefing up of executive power … [is] matched by oversight and accountability, … I think democracy itself is the loser.”?

Rt Hon CHRISTOPHER LUXON: Again, I don’t know how to explain it to the member, but it is before the committee, and as a result we are going through a process, and if there’s sensible changes to be made, they will be made. But what I’d just say is that we are determined to get things built in this country. And we are not apologising for fast-track legislation, because we need modern, reliable infrastructure. We need to double the amount of renewable energy in this country so we can deliver on our climate change goals. And I’d just encourage the Green Party, if you believe in climate change, you’d support our fast-track provisions. [Interruption]

Hon Marama Davidson: What—

SPEAKER: Just wait—OK.

Hon Marama Davidson: What constructive changes will he make to address the concerns of the Lake Horowhenua Trust, who say that the bill “places excessive powers in the hands of Ministers and unjustifiably removes public participation”, given Christopher Luxon’s description of centralisation as “a robbery of power and control from local communities”?

Rt Hon CHRISTOPHER LUXON: Again, the bill is before the select committee. Sensible changes will be considered. But we are going to build things in this country. We need to get things done. We need to speed up our resource consenting; we need to be able to open up more financing and funding tools; and we need to be able to build things for New Zealanders so they get the economic, social, and environmental benefits.

Hon Marama Davidson: Can he outline how the Cabinet Manual policies for managing real or perceived conflicts, which he mentioned in this House on 28 May, have been engaged in relation to the fast-track bill?

Rt Hon CHRISTOPHER LUXON: All Ministers are aware of the Cabinet Manual and conflicts are managed.

Rt Hon Winston Peters: Can I ask the Prime Minister, will he heed the Green Party’s response to the Hon David Parker’s insightful legislation, setting 17 precedents for fast track; or is it a case that when that happened, from the Greens there wasn’t a mutter, not a murmur, not a syllable, not a sound?

Rt Hon CHRISTOPHER LUXON: Well, I’d just say we have taken a very good piece of legislation from David Parker. We have expanded and built upon it. We are determined to make sure we get things built and we do encourage the Green Party to support the legislation.

Ricardo Menéndez March: Point of order. Mr Speaker, surely that question should have been stopped. The Prime Minister is absolutely not responsible for the Green Party’s position on something David Parker said or has done.

SPEAKER: No, but he’s responsible for his own views. And if the member likes to check the Hansard, he’ll find that’s what was asked for. Question No. 2—

Hon Rachel Brooking: Supplementary?

SPEAKER: —in the name of Ryan Hamilton. Oh, sorry. My apologies, Mr Hamilton, we are still going.

Hon Rachel Brooking: To the Prime Minister, does he know that the purpose section of the COVID legislation that he just referred to is significantly different to the purpose of his fast-track legislation, which does not mention the environment or sustainable management?

Rt Hon CHRISTOPHER LUXON: I’ll just say, when we see a good idea, we try and build upon it and improve it, and that’s exactly what we’re doing.

Steve Abel: Point of order. I think that was a very specific and useful question as to whether the Prime Minister knows if the purpose section is different. He didn’t actually directly answer that.

Rt Hon CHRISTOPHER LUXON: I agree they are different pieces of legislation, but the principle of actually fast-tracking so we can get things done and built is a good idea. And we’ve taken that as an idea. We’re building upon it so we get a one-stop fast-track solution in place so we can get things done, including doubling renewable energy.

SPEAKER: The House appreciates the Prime Minister’s eagerness to answer questions, but just wait till you’re called would be helpful.

Question No. 2—Finance

2. RYAN HAMILTON (National—Hamilton East) to the Minister of Finance: What was the final operating allowance in Budget 2024?

Hon NICOLA WILLIS (Minister of Finance): Well, the operating allowance is the amount of new operating funding allocated to new policy initiatives in each Budget—

Hon Willow-Jean Prime: And 2025.

Hon NICOLA WILLIS: —it’s good to see Willow-Jean Prime is so interested in this—calculated on average per year across the forecast period. I said in the Budget Policy Statement in March that the final operating allowance for Budget 2024 would be less than $3.5 billion, which was the allowance set by the previous Government. The final allowance in this year’s Budget is, in fact, $3.2 billion.

Ryan Hamilton: What does the operating allowance include?

Hon NICOLA WILLIS: Allowances are a net concept. They include savings initiatives as well as new spending and revenue increases as well as tax relief. So Budget 2024 contains $9.1 billion of spending and tax relief on average per year across the forecast period, and that includes significant investments in health, in education, in law and order. But it also contains $5.9 billion worth of savings and revenue raising initiatives. So to help members with the maths: $9.1 billion of spending minus $5.9 billion of savings equals $3.2 billion, which is how we could fit all the Budget 2024 initiatives, including those investments in key public services, into a $3.2 billion operating allowance.

SPEAKER: Good. Brevity is a good idea.

Ryan Hamilton: How does the $3.2 billion operating allowance in Budget 2024 compare to allowances in previous Budgets?

Hon NICOLA WILLIS: Well, the operating allowance in Budget 2024 is the lowest allowance in nominal terms since Budget 2018. So, taking into account inflation, which is quite important given rampant inflation in previous years, this is the lowest allowance since Steven Joyce’s Budget in 2017. So to give members something to compare with: the final operating allowances for the last two Labour Budgets were $5.9 billion in 2022 and $4.8 billion in 2023. This is a very fiscally responsible Budget.

Ryan Hamilton: What operating allowances has the Government set for future Budgets?

Hon NICOLA WILLIS: The Government has set the operating allowances for Budgets 2025, 2026, and 2027 at $2.4 billion per Budget. They are considerably lower than the allowances presented in the half-year update, which was set by the previous Government. Managing within future allowances of $2.4 billion will be very challenging. Savings and reprioritisation will be a feature of future Budgets, just as they were in Budget 2024 and just as New Zealanders expect from us. They will be a business-as-usual activity for this Government.

Question No. 3—Prime Minister

3. 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 the context that they were given.

Rt Hon Chris Hipkins: What support is the Government providing to local authorities in Gisborne and the Hawke’s Bay, following today’s extreme weather events?

Rt Hon CHRISTOPHER LUXON: Look, I want to thank the member for his question. Minister Mitchell is actually down in the region. I’ve spoken to both mayors in Gisborne and also Wairoa, and immediately we’ve made available $100,000 to each of the mayoral relief funds. Obviously, the Minister will have an assessment on the ground today, and we stand by to do more.

Rt Hon Chris Hipkins: Will the Government be taking into account the recommendations made by Sir Jerry Mataparae in his report into the last North Island weather events last year in the way that it responds to the situation unfolding on the East Coast at the moment?

Rt Hon CHRISTOPHER LUXON: Yes. There have been two reports around our response to emergency events, and it’s important that both of those reports are digested, taken on board, and put into standard operating procedure.

Rt Hon Chris Hipkins: Has the Government increased the capability and capacity in civil defence emergency management across New Zealand, as recommended in the report, and, if not, when does the Government expect to make decisions on that?

Rt Hon CHRISTOPHER LUXON: I can’t give the member a specific answer. I’m happy to give more detail around that. What I can say is that we have put $1 billion extra into the Budget this year to support the communities after the events of last year.

Rt Hon Chris Hipkins: Have the policy settings criteria and process for the funding that’s distributed in response to the costs associated with crises like this been updated, as the report recommended?

Rt Hon CHRISTOPHER LUXON: Well, what I can say is that we have $7.5 billion of unallocated multi-year capital allowance that’s been put to one side—or it is there, and it’s available to be used in infrastructure in the region on an as-needed basis.

Rt Hon Chris Hipkins: Will the Government be making allowance in its support package for the region for those homes and businesses who are still recovering from Cyclone Gabrielle—which was less than 18 months ago—recognising that for many of those homes and businesses, they haven’t yet completed that recovery process?

Rt Hon CHRISTOPHER LUXON: Yeah, I can say to the member that each week, I have been asking for a scorecard on all of the areas that have been affected by the North Island weather events to see what progress is being made around category 3 property assessments: people moving from category 2 to category 3, or back out of that. We’d need to see the assessment from the Minister, and we stand by, ready to help.

Question No. 4—Justice

4. Dr PARMJEET PARMAR (ACT) to the Associate Minister of Justice: How will the Sentencing (Reinstating Three Strikes) Amendment Bill ensure consequences for repeat serious violent and sexual offenders while delivering justice for victims?

Hon NICOLE McKEE (Associate Minister of Justice): Yesterday, the Sentencing (Reinstating Three Strikes) Amendment Bill was introduced to Parliament and earlier today I delivered the bill’s first reading speech. I’ve heard from many people that repeat serious sexual and violent offenders avoided the consequences of their actions under the old three-strikes regime. This Government is determined to hold offenders accountable for their actions. The sentencing principles included in the new three-strikes regime will require the judiciary to impose stricter sentences for repeat offenders and guides the judiciary to not take the implications of a strike into account when determining the length of a sentence. Under this Government, offenders will face the consequences of their actions and victims will receive the justice that they deserve.

Dr Parmjeet Parmar: What consequences will offenders face under the new and improved three-strikes regime?

Hon NICOLE McKEE: The Sentencing (Reinstating Three Strikes) Amendment Bill will ensure that offenders who do the crime will do the time. Upon receiving a sentence for a first strike, offenders will be warned of the consequences of further strikes. Second-strike offenders will be denied parole at their second strike, and offenders who receive their third strike will receive the maximum penalty for their sentence without parole. After six long years of a soft on crime approach, the victims of repeat violent and sexual offenders deserve justice, and this Government is going to make sure that they get it.

Dr Parmjeet Parmar: How will the Sentencing (Reinstating Three Strikes) Amendment Bill ensure that offenders convicted for murder receive appropriate sentences?

Hon NICOLE McKEE: The bill ensures that individuals convicted of a murder on their second strike receive a sentence of life imprisonment with a minimum period of imprisonment of at least 17 years. If the offender pleads guilty, they will receive a minimum sentence of 15 years to incentivise the timely delivery of justice and expedite court proceedings. For offenders convicted of murder on their third strike, the bill mandates a sentence of life imprisonment with a minimum period of imprisonment of 20 years. If they plead guilty, they will serve at least 18 years. Serious offenders deserve serious punishment. This Government will not be turning a blind eye.

Hon Dr Duncan Webb: Is this three-strikes initiative value for money, given that it will cost up to $10 million per year and the advice is that there will be no impact on community safety, the number of victims, trust in the justice system, or reduced recidivism, and her own officials said in respect of the last three-strikes regime that there was no consistent pattern to changing crime?

Hon NICOLE McKEE: Will this be value for money at a price of a maximum of $10 million at a 10-year period when we start locking up those very serious repeat violent offenders? To the victims in our community, absolutely it’s value for money. For the people that are trying to run businesses and have retail crime on them, absolutely it’s going to be just for them. It’s not that we can put a monetary price on it; it’s that we put a value on victims in our communities, their safety, and their security.

Hon David Seymour: Has she considered the opposite approach of setting a target to reduce the prison population, saving money, letting the criminals out, and seeing victimisation rates go up 30 percent?

Hon NICOLE McKEE: The last six years with the target of reducing the prison population has not been—

SPEAKER: Tell you what—hang on. Start answering again without the reference to the past six years. The question was, had the member considered it? That doesn’t need a history lesson. Answer the question as it’s asked.

Hon NICOLE McKEE: We want to make sure that for our victims of crime, those that are in the community, they see penalties, sentences, and very serious violent offenders being locked up and taken out of their communities so they are not re-victimising victims over and over again, and I think the value of that is a just one.

Dr Parmjeet Parmar: Will offenders receive discounted sentences to compensate for any loss of parole, as occurred under the previous three-strikes regime?

Hon NICOLE McKEE: Certainly not. The new bill clearly states that courts should not reduce sentences to avoid giving an offender a strike or to compensate for loss of parole eligibility if they do get a strike. This Government will not be wrapping repeat serious violent and sexual offenders in cotton wool. If they are willing to repeatedly make victims of innocent New Zealanders, then they will do the time in prison for it under this Government.

Question No. 5—Regional Development

5. ANDY FOSTER (NZ First) to the Minister for Regional Development: What announcements has he made about investing in regional economic growth?

Hon SHANE JONES (Minister for Regional Development): Recently, I attended an event near the Hauraki Gulf. Sadly, I was greeting by a small group of protesters, who I soon dismissed as speckled eco-squawkers. After that, the leader of the New Zealand First Party—the Deputy Prime Minister—and I announced the Kōpū Marine Precinct, which is going to expand and improve investment in the servicing of marine craft and broader maritime industries. An 80-metre wharf is the main feature, along with a floating pontoon. Aquaculture is a priority for this part of New Zealand, and that is why we are looking forward to the timely passing of the fast-track aquaculture consents bill.

Andy Foster: Why is the Kōpū Marine Precinct critical for driving economic growth in the Coromandel region?

Hon SHANE JONES: Economic growth in a number of our regions has faltered over the last three years. Our circumstances in regional New Zealand, in many respects, are dire, not only because of inflationary pressure but because of large degrees of red tape, regulatory dead-weight effects. For those reasons, we are continuing to support not only aquaculture—

Chlöe Swarbrick: A long way to say, “New Zealand First”.

Hon SHANE JONES: Enough from the psychedelic crowd over there. Not only will the Regional Infrastructure Fund improve opportunities in regional New Zealand, which will be announced in the very near future in July; it will also ensure that infrastructure, where appropriate, is modernised and renewed for the inevitable growth of the mining sector.

Andy Foster: Can the Minister tell us why infrastructure is so important for regional New Zealand?

Hon SHANE JONES: That question requires a very judicious reply; I shall give my best shot at that.

SPEAKER: Does that mean brief?

Hon SHANE JONES: Within the audience, within the community groups that gathered with us, were the leaders of the Ngāti Maru tribe, including the elder Harry Mikaere, who has assumed the mantle of an earlier group of rangatira, not the least of which was Mr Shu Tukukino. They said this: without infrastructure, without clear direction, without a robust quality of regional leadership that goes over the top of the catastrophising, demonising effects of climate alarmists, we will never have growth in regional New Zealand.

Andy Foster: What other announcements is he planning on investment in regional infrastructure?

Hon SHANE JONES: It should be evident to those who have paid great attention to the recent Budget decisions: up to $100 million has been made available to various flood resilience projects. That will be rolled out. It is a response to the list of projects served up by the regional council leadership of New Zealand. They are wending their way through the approvals process, because we want to make sure that such announcements get the balance right between what the Crown can pay for exclusively and what costs can be shared with regional communities. We understand that this is a classic, practical response to the concerns associated with volatile weather, which is why climate adaptations time has well and truly arrived, and I will deliver it with appropriate professionalism.

Question No. 6—Finance

6. Hon Dr MEGAN WOODS (Labour—Wigram) to the Minister of Finance: Does she stand by her statement that her Budget will have “less verbiage, fewer pretty pictures, and a lot more substance”; if not, why not?

Hon NICOLA WILLIS (Minister of Finance): Yes. When I said that, I was particularly thinking of this document called Wellbeing Budget 2023, which has a pretty picture on the front, a forward from the Prime Minister, a forward from the Minister of Finance, a highlights page, a chapter on spending—called “investments”—a chapter on wellbeing outlook and approach, all interspersed by multiple pretty pictures. I can assure members that none of this verbiage or pretty pictures are in Budget 2024.

Hon Dr Megan Woods: Does her Budget contain less verbiage because she cannot explain how the additional $12 billion in borrowing is not for her tax cuts?

Hon NICOLA WILLIS: No.

Hon Dr Megan Woods: How does her Budget contain “a lot more substance” when her own chief economist could not point to any specific evidence that her Budget improves productivity?

Hon NICOLA WILLIS: The substance in our Budget that I would highlight for that member is the more than 240 savings initiatives, summarised in the summary of initiatives, wiping out low-value spending from the previous lot so that New Zealanders can keep more of their own money and we can make investments in things like schools, hospitals, and cancer drugs.

Hon Dr Megan Woods: Is one of the “fewer pretty pictures” international credit rating agency Fitch being unimpressed with New Zealand’s worse than expected economic and Budget performance?

Hon NICOLA WILLIS: One of the pretty pictures that isn’t there is this cracker from 2019—remember that one? That was the one with the couple who left New Zealand soon after being featured on the front page of her Budget.

Hon Dr Megan Woods: Is one of the “fewer pretty pictures” our climate outlook, as the New Zealand Institute of Economic Research today said there has been a clear prioritisation of tax relief at the cost of climate outcomes?

Hon NICOLA WILLIS: The point of my statement has clearly completely escaped that member, which is this: we actually had six years of a Government that stamped “wellbeing” on every document that they could, who used hundreds and thousands of words to describe how pure and good their intentions were, but failed to deliver, and that is the point. That is what New Zealanders will judge this Government on. It’s what they judged your Government on, and it’s why you got voted out.

Hon Dr Duncan Webb: Point of order. I think my point of order’s clear—that whilst it was a political exchange, there was no place for a lecture on the previous Government’s achievements.

SPEAKER: With all due respect, when a question contains a word like “excessive verbiage”, what would you expect?

Hon Dr Duncan Webb: Point of order.

SPEAKER: No, I’m sorry; I’m saying your point does not stand. It’s a reasonable exchange that is going on.

Hon Dr Duncan Webb: Those were not the Opposition’s words; they were the Government’s words.

SPEAKER: That’s right, but they were in the Opposition’s question today. Supplementary question, the Hon Dr Megan Woods—and we’ll have quiet while the question is asked.

Hon Dr Megan Woods: Is one of her “fewer pretty pictures” the fact that her operating allowance for next year is $2.4 billion but cost pressures will be at least $2.5 billion, which can only mean even deeper cuts to the public services are still to come?

Hon NICOLA WILLIS: But wait there’s more. We have the pictures of New Zealand from above—that didn’t make any difference to New Zealand’s inflation rate or productivity. We’ve got the picture apparently Grant Robertson spent his time taking—that didn’t make any difference to waiting lists in the hospitals. We’ve got this pretty picture of a beautiful lake in New Zealand, and that didn’t lift educational achievement. Our Government is focused on results.

Hon Dr Megan Woods: Point of order, Mr Speaker. Mr Speaker, although my supplementary did contain a quote from my primary, which was a direct quote from the Minister, I asked a very clear question about the operating allowances for next Budget. While the Minister showed us some interesting images from Budgets gone by, she did not address the issue of the operating allowance for next year’s Budget.

SPEAKER: I can’t agree with that, because the question was about the $100 million gap between the allowance and the projected expense pressures. The member pointed that out in her question. The answer came that pretty pictures don’t make a difference when it comes to Government expenditure.

Rt Hon Winston Peters: Could I ask the Minister of Finance as to whether or not those pretty pictures contained one of the Marsden Point refinery, which Megan Woods requested be closed down, much to the shock of the ownership of Marsden Point, not known until now?

Hon NICOLA WILLIS: No.

Hon Chris Bishop: Supplementary question.

SPEAKER: Sorry?

Hon Chris Bishop: Supplementary question.

SPEAKER: No, we’ve got to hear the answer.

Hon Chris Bishop: She did.

SPEAKER: Oh, did she? Well, there was so much noise, I couldn’t hear it. Please answer again.

Hon NICOLA WILLIS: No.

SPEAKER: Ah, good. OK. That’s clear. The Rt Hon Winston Peters—oh, sorry; the Hon Chris Bishop.

Hon Chris Bishop: You’re not right on that, either!

SPEAKER: Well, you know, you want to watch that mirror-image stuff.

Hon Chris Bishop: Was one of the pretty pictures referenced by the Hon Megan Woods in her original question a picture of the fantastical Auckland light rail project of which the previous Government published many?

Hon NICOLA WILLIS: No, but I have it on good authority that that was from the same file which had the picture of Wellington light rail that was also contained in the same file—

SPEAKER: That’s OK

Hon NICOLA WILLIS: —which had the picture of the Waitematā crossing—

SPEAKER: All good. Thank you.

Hon NICOLA WILLIS: —and other such fantasy projects.

SPEAKER: Very good.

Question No. 7—Justice

7. DAN BIDOIS (National—Northcote) to the Minister of Justice: What recent announcements has the Government made about law and order?

Hon PAUL GOLDSMITH (Minister of Justice): Today I’ve announced a suite of sentencing reforms as part of the Government’s commitment to restoring law and order and real consequences for crime. We are capping sentence discounts at 40 percent, limiting concurrent sentencing, preventing repeat discounts for youth and remorse, and creating a sliding scale of guilty plea discounts. We’re acknowledging the vulnerability of sole-charge workers like dairy owners by making it an aggravating factor in sentencing, and reforming the overall principles of the Sentencing Act to provide confidence to victims that their needs will be taken into account. Victims are the priority.

Dan Bidois: How will these changes affect sentencing?

Hon PAUL GOLDSMITH: In recent years, we’ve seen the courts imposing fewer and shorter prison sentences despite the increasing seriousness of cases coming before the courts. A recent sample of sentences showed 18 percent of cases received a total discount greater than 40 percent; some as high as 69 percent. Large discounts tell victims that we are more concerned about the offenders than ensuring that they see justice. The suite of changes we’ve announced today will prevent discounts by capping discounts at 40 percent to ensure that the punishment fits the crime.

Dan Bidois: Why do we need to do this?

Hon PAUL GOLDSMITH: Well, everyone needs to know that there are real consequences for crime. In recent years those consequences have diminished. For example, we’ve seen the imprisonment rate for robbery offences with a maximum penalty of 14 years decrease from 74 percent to 58 percent. We campaigned on restoring real consequences for crime, and that is what we’re going to.

Dan Bidois: How will this announcement align with the coalition’s priorities for law and order?

Hon PAUL GOLDSMITH: Well, this is a Government that is prioritising reducing the number of serious victims of crime and also reducing the number of serious repeat youth offenders. Part of that fits into a process of giving the police the extra powers they need to deal with gangs, having 500 extra police, restoring three strikes, and having the young serious offender category included, that Minister Chhour announced last week. Overall the goal is to restore law and order.

Question No. 8—Prime Minister

8. Hon MARAMA DAVIDSON (Co-Leader—Green) 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 given.

Hon Marama Davidson: Is he concerned that amending the Residential Tenancies Act to allow no-cause evictions will increase housing insecurity and lead to more whānau being unable to put down roots in their communities?

Rt Hon CHRISTOPHER LUXON: We want to increase the supply of rental properties so we put downward pressure on rents. Part of that has been restoring interest deductibility, making sure we are backing off the brightline test, and, importantly, getting the balance right between tenants and landlords.

Hon Marama Davidson: Is he aware of the findings of the Growing Up in New Zealand study that found a quarter of children who had experienced involuntary moves went on to experience homelessness, and, if so, why is this Government changing the law so that landlords can kick out tenants without any reason at all?

Rt Hon CHRISTOPHER LUXON: Well, our Government wants to make sure that vulnerable people get a chance to get a house. That’s why we are expanding supply of houses being built, rental houses, and also social housing. We’re very committed to solving and fixing the housing crisis the previous administration left behind.

Hon Marama Davidson: Is he aware that the same study found 7 percent of young people in the cohort—that’s one or two kids in each classroom—has experienced homelessness by age 12, and, if so, why isn’t he concerned that his decision to cut funding for homelessness prevention will exacerbate this?

Rt Hon CHRISTOPHER LUXON: What’s important is that we rebuild this economy so that we can actually make people wealthier and more prosperous. That’s what we’re working incredibly hard to do. We want to lower the cost of living. That means actually getting on top of Government spending, lowering inflation, lowering interest rates, growing the economy, and keeping people in work.

Hon Marama Davidson: What does he say to Māhera Maihi, who runs a charitable trust providing transitional housing for youth, who said in relation to these Budget cuts, “What is there for those young people? They’ve taken away $20 million intended for them and they’ve put it back into mainstream. That’s not fair, that’s not equitable and that doesn’t solve the problem.”?

Rt Hon CHRISTOPHER LUXON: We announced that there would be 1,500 extra social housing places for community housing providers. We are determined to get our economy working again so that people can actually do well when they work hard.

Hon Shane Jones: Off the couch—off the couch.

Chlöe Swarbrick: They don’t have a couch—that’s the point.

SPEAKER: Question—

Hon Marama Davidson: Go see Māhera, Shane.

SPEAKER: That’s enough—it’s quite enough.

Question No. 9—State Owned Enterprises

9. TANGI UTIKERE (Labour—Palmerston North) to the Minister for State Owned Enterprises: Does he stand by his answers to oral question No. 10 yesterday that the KiwiRail iReX contract with Hyundai has been “repudiated and ongoing discussions are continuing around the exit cost of that”; if so, was that repudiation a unilateral decision by KiwiRail or agreed by all parties?

Hon PAUL GOLDSMITH (Minister for State Owned Enterprises): Yes, I stand by my answer in full, which included the quote, “The ferries will not be coming because we are not going to spend $3 billion on an overall project.” In response to the second part of the member’s question, repudiation of a contract occurs when one party to a contract is unwilling or unable to fulfil its obligation to another.

Tangi Utikere: Is KiwiRail currently undertaking a disputes resolution or arbitration process with Hyundai regarding their ship building contract?

Hon PAUL GOLDSMITH: Yes, there are ongoing conversations, and it’s not in the interests of the company or the Government to outline the details of that. But, yes, there are ongoing discussions.

Tangi Utikere: Is there a cap on KiwiRail’s exposure in this dispute; if not, what is the exposure of KiwiRail?

Hon PAUL GOLDSMITH: Well, I’m not going to go into the details of that, but I can remind the member that the Government, when it came in, had a choice between two bad outcomes. One outcome was to risk paying for breaking the contract—for KiwiRail breaking the contract. The other risk was going ahead with a project that had got to $3 billion and rising. And so neither of those were very good options, but we had to go with one and we didn’t want to spend $3 billion.

Rt Hon Winston Peters: In the interest of transparency, could the Minister advise as to which Government was in power when the iReX contract was signed, and is it also the case that of the contract, when it comes to the ferries, they only totalled less than 25 percent of the contract and the rest was for infrastructure that Labour had signed up to?

Hon PAUL GOLDSMITH: Well, I can advise the House that the Labour Government was in power, and that the initial estimate of the cost of the project for two ferries was $700 million, and it has crested $3 billion and was continuing to rise. And the primary driver of that cost was not the cost of the ferries; it was the cost of the fact that the ferries were bigger than the current ferries and rail-enabled, and it required an enormous amount of very expensive work at the ports at both ends. And that’s what we’re trying to avoid.

Tangi Utikere: Was Cabinet advised prior to announcing the cancellation of the contract with Hyundai that there is no exit provision for KiwiRail in the contract?

Hon PAUL GOLDSMITH: I’m not going to go into the details of ongoing discussions, but Cabinet had a simple decision as to whether it was going to continue to fund the project to the tune of, all over, $3 billion, and we declined to make that decision.

Rt Hon Winston Peters: Could I ask the Minister as to whether or not he’s aware or not that his predecessor never saw the contract that he signed up to being raised now in terms of the provision of an exit clause?

Hon PAUL GOLDSMITH: Well, I can’t tell the House what the previous Minister did or didn’t see. But what I can tell—

SPEAKER: Hold on. Hold on. I doubt that you’d be in a position, Minister, to say whether or not another Minister had seen something.

Rt Hon Winston Peters: Yeah, but he could.

SPEAKER: Well, that might be the case, but he can’t. So maybe ask the question again.

Rt Hon Winston Peters: Can I ask the Minister as to whether or not he has been informed by Mr Hipkins as to that iReX contract, as to whether Mr Hipkins and his party over there saw the contract in the first place and (b) looked at the opt-out clause being in it or not?

Hon PAUL GOLDSMITH: No, I haven’t been informed of such by Mr Hipkins, but I am shocked that they allowed a project like this to get to the extent that it might be costing $3 billion or excess.

Tangi Utikere: Has Cabinet been advised that costs for exiting the contract could exceed $200 million?

Hon PAUL GOLDSMITH: Well, again, those discussions are ongoing, but Cabinet has been advised there may well be costs in exiting the contract. And, like I say, Cabinet was forced to choose between two bad outcomes: exiting a contract or continuing on with a ridiculously expensive project, and we had to make a decision and we did make a decision.

Tangi Utikere: What advice, if any, has the Government received regarding the reputational risk to New Zealand and KiwiRail of exiting the contract, particularly if the Government had been warned that due to reputational damage of breaking the contract, it may not be able to procure new ships for decades and it could also impact other Government ship procurements?

Hon PAUL GOLDSMITH: Well, the advice is it’s never desirable to be breaking contracts, but it’s also not desirable to spend $3 billion on two ferries. And so we have to be careful with the way that we spend our money. This is why this is a Government that’s inherited a Budget which is in a state of disrepair that we’re trying to put back together again by making some sensible decisions about spending.

Question No. 10—Social Development and Employment

10. KATIE NIMON (National—Napier) to the Minister for Social Development and Employment: What recent changes, if any, has the Government made to contribute to the target to have 50,000 fewer people on the jobseeker benefit by 2030?

Hon LOUISE UPSTON (Minister for Social Development and Employment): On Monday, I announced the launch of the Ministry of Social Development’s (MSD) new work check-in seminars that job seekers who don’t have case managers will need to attend after six months of receiving their benefit, to assess how their job search is going. The point of these seminars is to provide greater support to a larger number of job seekers by ensuring they have more regular contact with MSD. This initiative builds on the new Kōrero Mahi - Let’s Talk Work seminars that job seekers now attend within two weeks of their benefit starting, to plan their next steps for finding work.

Katie Nimon: How many job seekers are in regular contact with MSD now?

Hon LOUISE UPSTON: About 190,000 people currently receive the jobseeker support benefit, but only 53,000 have employment case managers assigned to them at any given time. The other 137,000 can go months without talking to MSD about their job search, with some not having to check back in until they reapply for their benefit after 12 months. Increasing the amount of contact these job seekers have with MSD is important to ensure they are taking the right steps to find work and are receiving the right support.

Katie Nimon: What kind of support will these work check-ins provide to job seekers?

Hon LOUISE UPSTON: If a job seeker is ready to work, they could be helped to apply for a job straight away. If they need retraining or upskilling, they could be referred to a programme that can help, like getting a driver’s licence. MSD will also make sure their job profiles and CVs are up to date, offer interview tips, and talk through what other support they may need to find work.

Katie Nimon: Why is it important for job seekers to have regular contact with MSD?

Hon LOUISE UPSTON: The longer someone spends on welfare the harder it is for them to get back into the workforce, so it’s important they stay active in their search for employment. Our Government is concerned about long-term benefit dependency and the number of people who have spent more than a year on jobseeker support, which grew by about 40,000 over the last six years. That’s why we’re making our welfare system much more proactive about checking in on job seekers, to help them get back on their feet quickly.

Question No. 11—Workplace Relations and Safety

11. CAMILLA BELICH (Labour) to the Minister for Workplace Relations and Safety: Will she take steps to progress work on addressing modern slavery and exploitation in New Zealand’s supply chain; if so, when?

Hon BROOKE VAN VELDEN (Minister for Workplace Relations and Safety): The Government has not made any decisions on progressing work to address modern slavery and exploitation. Modern slavery is a concerning issue that should be appropriately punished where it has occurred. However, I would also stress that regulations are not required for businesses to review their supply chains and ensure that they are free from modern slavery. I’d also like to point out the many measures that are already in place to combat modern slavery practices under this Government. Dealing in slaves is a criminal offence. Trafficking in persons is a criminal offence. Exploitation of unlawful employees and temporary workers is a criminal offence. Coerced marriage or civil union is a criminal offence. Employment law, including breaches such as failing to retain employment records, denying leave, and underpayment of wages are offences, and the Ministry of Business, Innovation and Employment (MBIE) has published a series of ethical and sustainable work practice resources to help businesses apply ethical and sustainable work practices both within their organisations and across business networks.

Camilla Belich: Do the New Zealand - UK free-trade agreement and the New Zealand - EU free-trade agreement require New Zealand to have specific measures addressing modern slavery in our supply chain?

Hon BROOKE VAN VELDEN: We have agreements with both the EU and the UK about modern slavery; however, in my view, the Government’s current practices meet these obligations.

Camilla Belich: Given that answer and that the New Zealand - EU agreement has specific provisions for modern slavery in article 19.12 and the New Zealand - UK free-trade agreement has a specific provision in relation to modern slavery in article 23.9, why has MBIE admitted it is doing no such work to implement such measures?

Hon BROOKE VAN VELDEN: I’ll just refer to a few of my previous comments. There are a range of criminal offences and offences under New Zealand law that address modern slavery already in place under this Government. Under the UK and EU free-trade agreements, yes, there are requirements about labour laws. It is in my view that our current guidelines and laws meet these obligations. However, I’d also like to suggest that under the previous Government, there was no legislation and there was no work getting anywhere near what that member is suggesting.

Camilla Belich: Is MBIE correct, then, when they said that they ended work on modern slavery that was initiated under the previous Government due to the Minister’s priorities, and, if so, why is modern slavery not a priority for her?

Hon BROOKE VAN VELDEN: I haven’t asked MBIE to stop work.

Camilla Belich: So is MBIE incorrect when they stated to the Education and Workforce Committee that they were not working on modern slavery due to a decision made by her—that was incorrect?

Hon BROOKE VAN VELDEN: I’d like to suggest that the advice I received on MBIE’s labour market session last week said, “work paused at the election”, and that’s a question, really, for the member of that member’s party about why the work paused at the election. Since the election, I’ve asked MBIE to focus on my priorities, which it is doing.

Camilla Belich: Does she agree with Christopher Luxon, who said, “There’s something I feel very passionate about: is modern slavery for example. It’s something that I’ve been really passionate about for a long time. That’s something that I think we could do a better job … [on] and have modern slavery legislation and make sure that we’re holding … ourselves to a standard. There are those things that I feel passionate about.”, and if so, why is modern slavery not a priority for this Government?

Hon BROOKE VAN VELDEN: I stand by the statement made by our Prime Minister, which he also said a few months ago, that at the moment it’s not a priority for us. What is a priority for me is focusing on the issues that really, really matter to New Zealand businesses. If businesses aren’t able to even uphold basic labour market standards such as making sure people have their correct entitlements for holidays pay, we have some serious issues. That Government did not finalise work on holidays pay, and that is one area that is my top priority. We have hundreds if not thousands of Kiwis that are being underpaid their correct entitlements. That is what that member should be focused on—rights for workers here in New Zealand, and that they actually get their correct entitlements paid for by business.

Question No. 12—Building and Construction

12. TIM COSTLEY (National—Ōtaki) to the Minister for Building and Construction: What announcements has the Government made about making it easier to build granny flats?

Hon CHRIS PENK (Minister for Building and Construction): Thank you, Mr Speaker. The coalition Government is making it easier to build granny flats and other small structures up to 60 square metres without the need for resource or building consent. We want less red tape and more knitting wool. This announcement is part of the agreement between the National and New Zealand First coalition and fits within the Government’s wider package of work to streamline the building consent system and address the housing crisis.

Tim Costley: Why are these changes needed?

Hon CHRIS PENK: Over a quarter of the households that do not own their own home spend 40 percent or more of their income on housing. High housing costs have a disproportionately high impact on Māori, Pacific, and people with disabilities, as well as seniors—including, of course, grannies. This Government is focused on making it easier to build so we can drive down building costs as part of our pledge to rebuild the economy.

Tim Costley: Are these granny flats only for grannies?

Hon CHRIS PENK: Good question. Anyone can live in a granny flat, including youth—think student flats; think those who are youth-adjacent, for example, workers on a farm or other rural setting; and those who are simply young at heart, including even yourself, Mr Speaker.

SPEAKER: That’s enough of that question.

Tim Costley: What are the next steps for granny flats?

Hon CHRIS PENK: Because we want to make sure that we get the detail of the changes right, we have published a discussion document with submissions open until 12 August for the public to have their say. They can do that online or by emailing grannyflats@mbie.govt.nz. Since Messrs Peters and Bishop announced the policy, already 1,000 Kiwis have provided feedback on this policy—overwhelmingly positive.

Bills

Sentencing (Reinstating Three Strikes) Amendment Bill

First Reading

Debate resumed.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora, Mr Speaker. Well, this bill is about choices and values, and this Government chooses window dressing over substance. It chooses rhetoric over outcomes.

We know that three strikes doesn’t work. We absolutely agree that we want to see a reduction in offending and a reduction in the number of victims, and we want to see reoffending reduced as well. But this reheated policy flies in the face of all of the evidence. The Minister’s own officials have said that there is no consistent pattern to changing crime from three-strikes regimes. The officials have made it absolutely clear that this proposal will do no good whatsoever—in fact, quite the reverse. Not only that but every other jurisdiction in the world, more or less, where these regimes have been introduced have been rolling them back, have been watering them down, or have been getting rid of them entirely. This regime will have no impact on reoffending, will not keep communities safer, will cost $10 million a year, and will see around 90 people in prison who wouldn’t otherwise have been in prison.

Well, look, the fact of the matter is that we do think that, where there is serious offending, there should be a serious sentence. In fact, we think a rule that says that a judge “must impose the maximum penalty prescribed for the offence [where] the offending is within the most serious cases for which the penalty is prescribed, unless there are circumstances [which make it] inappropriate;”—we think that would be a good rule. It sounds a bit like this legislation, except it’s not; it’s actually section 8(c) of the Sentencing Act. So the fact of the matter is sitting there right now in the Sentencing Act is a provision which says a judge must give the most serious sentence to the most serious offending. This bill is simply taking New Zealand backwards. It will have an absolutely disproportionate effect on Māori as well. We know that, under the last regime, of the people who were subject to a third strike, 81 percent of them were Māori. Let’s be clear. The Minister has been clear here that this is intentionally disproportionate sentencing. The punishment, by definition, doesn’t need to fit the crime. That is extraordinary. The idea that we are in a modern, First World country where the legislation itself says even if the sentence is disproportionate, that is not an extraordinary circumstance.

It’s true that this bill is not as terrible as the former legislation. It does things like raise the bar to make it a two-year imprisonment sentence as the triggering offence. And then we have a perverse section in there as well, a section that says to a judge, “Sentence as if you didn’t know that was the case. Ignore that.” Well, the way the justice system works is that people take into account all of those factors when they come to litigate a case. The prosecutor themselves will know what the consequences of a strike sentence will be. The prosecutor has a very significant role to play in what sentence is sought. It’s often the prosecutor who undertakes plea negotiations and makes submissions on sentence indications. So those kinds of statements or provisions in the legislation which say “Don’t take that into account when sentencing” are largely meaningless.

Not only is this a vile piece of legislation in the sense that it’s intentionally imposing disproportionate sentences; it’s entirely unworkable. The provisions setting out how judges should impose sentences simply won’t work. They take no real account of how the justice and sentencing system works, and they will have no impact on the safety of communities or the number of victims. Kia ora.

TAMATHA PAUL (Green—Wellington Central): Tēnā koe, Mr Speaker. Well, welcome to an era of mass incarceration, which has been brought in by Minister McKee and their misguided, unimaginative approach to dealing with the very real harm that is happening in our communities.

Let’s be straight up about what we’ve got in front of us. We’ve got a concept of three strikes that we have imported from the United States, of all countries—the country with the most incarcerated people in the world. That is the country that our Government has chosen as an exemplar for our justice system. And where did they get that idea from? They got it from a game of baseball—a game of baseball—where it’s three strikes and you’re out. But this is not a game, and if the Government actually put some effort into basing their law and order policies on evidence, rather than a game where there are winners and losers, maybe our communities would get the safety and the peaceful way of life that they deserve.

But we’re playing games—we’re playing games with people’s lives, and it’s not just the people that we’re sentencing that suffer; it’s their entire families and often their communities too, because children of people in prison are nine times more likely to go to prison. And now, thanks to the new young serious offenders category, they can go into prison even earlier! That’s the approach of this Government to law and order. It’s a game of how many prisons can we build and how many beds can we fill with poor, disabled, brown people before the public rejects this failed logic. Locking people up and punishing people does not lead to the safe communities that the public deserves.

At the rate we’re heading, we are going to need a new prison every few years. The billion dollars—

Simon Court: Don’t worry; we’re building them.

TAMATHA PAUL: And it’s shameful. It’s unimaginative. It’s a waste of money when the Government could be putting that money into housing, into education, into job opportunities, into livable benefits, into the public health system—but, no, let’s build more mega-prisons! That is the sum ambition of this Government. They’ve scrapped prison population reduction targets, they’ve removed Treaty provisions from the corrections bill, and they have made it easier to lock up children, with the young serious offender category, because that is their ambition and they think they can just lock people up and that’s going to solve the issue. Well, it won’t, because it’s a failure, just like three strikes was a failure.

The concept of continuing to repeat failed experiments is the definition of insanity. Three strikes was a failed experiment. It’s a policy that has, according to advisers, limited evidence that it reduces serious crime. Officials weren’t even able to identify any quantifiable benefits for this bill. And that’s because there is none. There are no benefits from reintroducing three strikes. The evidence also shows that judicial discretion is better than mandatory sentences, because it allows for the circumstances of each person to be taken into account. And that matters when you look at who’s actually in prison: more than 90 percent of people in prison have a lifetime diagnosable mental health or substance abuse issue; more than 75 percent of people in prison have been victims of violence. I know the Government loves to talk about victims of violence. How about that—that a majority of people in prisons are victims themselves? It’s a false dichotomy to make it out like there’s a difference. They are victims too. Around 71 percent of people in prison have significant literacy issues, and one in three people who were in State residential care between 1950 and 1999 ends up serving a prison sentence.

Prisons should never be the only answer, yet they have become the only answer because that is the sum ambition of this Government and of the Minister. They choose to ignore the strong evidence about the failure of three strikes. They continue to restore failed policies. Until they wake up and realise it doesn’t work, we will get no better outcomes in this country.

TIM COSTLEY (National—Ōtaki): Thank you, Mr Speaker. It snuck in there at the end, didn’t it? The people getting locked up are the victims—that’s what we heard—they’re the victims; they’re the ones we should be worried about. It’s mean; it’s mean to put serious offenders behind bars. Well, actually, I don’t support that. I don’t believe that, and that’s why we’re here; that’s why we’re passing this legislation.

I hear the call that says this isn’t the only way to deal with it, and that’s why we have a social investment approach in this Government, targeting those resources early where they can make a difference, but where there is serious offending and where there are victims that are seriously impacted by this, there has to be consequence, and this bill does that. It brings backs consequence.

There is still the out provision for where it’s manifestly unjust, unless of course it’s murder. It has to go to the senior courts for that third strike but there has to be guidance that ensures there will be serious consequences for serious offenders in the right circumstance. That’s what this bill does; it just needs to be read. I commend this bill to the House.

Hon CASEY COSTELLO (Associate Minister of Police): I am floored that we just heard a diatribe about using imagination. This is not about imagining; this is about fact. This is about looking in the eyes of victims and saying, “We hear you and we will make you safe.” This is not about rhetoric and clever phrases; this is about practical actions to make our communities safer and ensure that serious offenders know there will be consequences. We will not continue down the path of taking mercy against an offender who has inflicted harm. This is not a programme that’s in isolation; this is a wraparound social response. But, at one end of the spectrum, there has to be an ability to make sure they will not create further victims. We will ensure that happens. We will ensure that they know there is a consequence. I fully commend this bill to the House.

HANA-RAWHITI MAIPI-CLARKE (Te Pāti Māori—Hauraki-Waikato): Tēnā rā koe e te Pīka, otirā tēnā rā tātou e te Whare. E tū ana ahau ki te waha i ngā kōrero mā Te Pāti Māori i te rangi nei, ā, e kaha whakahē ana i tēnei o ngā pire kua tae mai ki rō Pāremata i tēnei rangi.

[Thank you, Mr Speaker, indeed greetings to us all in the House. I stand to give voice to the statements of the Māori Party today, and we strongly oppose this bill that has arrived in Parliament today.]

Te Pāti Māori is deeply concerned about this Government’s decision to reinstate the three-strikes regime. Our principal concern is this legislation will only worsen an inherently biased and racist criminal justice system. These issues have been well articulated and documented by the great minds, like Dr Moana Jackson in The Maori and the Criminal Justice System: A New Perspective—He Whaipaanga Hou, and more recently by movements and organisations like JustSpeak. Further still, in its own advice to Cabinet and through its regulatory impact statement, the Ministry of Justice explained that “Reinstating a three strikes regime will exacerbate the over-representation of populations which are already disproportionately represented in the justice system. While there are options to modify the regime which would minimise the overall impact on Māori, Māori would continue to be disproportionately represented in the relative terms, perhaps even more so than under a broader regime.”

Public commentary, including by Criminal Bar Association vice-president Annabel Creswell, also raised doubts about the legislation: “Criminal justice policy has to be based on evidence, and there’s no evidence that three strikes either reduces crime or assists the rehabilitation,”. Evidence briefs from the Ministry of Justice explained that there’s no evidence of three-strikes policy reducing crime or having a serious effect on crimes at all.

What we do know about three-strikes legislation is that during the time it was in place here in Aotearoa, Māori and Pasifika received over 50 percent of the strikes, and 63 percent of those with a second strike were Māori. Three strikes in its short term had unjustly perpetrated racism and caught Māori with no evidence of reducing crime.

Our grave concern is that this legislation will result in unjust sentences which will only deliver mass imprisonment to Māori and Pasifika people nationwide, and that this House is setting into place a regime held up by a lack of evidence and by racial bias that should shock all peoples who called this place their home. Te Pāti Māori insists on intelligent policy and rehabilitation; rather, this legislation strengthens the race-based system of colonisation that continues to deliver race-based outcomes. The evidence shows that tangata whenua are more likely to be treated unjustly at one or all of these stages in the criminal justice process. The extent of the racial bias within the criminal justice system means that we must do everything we can to stop the pipeline to prison.

Finally, advice put to the Ministers also notes that regarding the three-strikes legislation, claims before the Waitangi Tribunal are possible, including the live and existing Waitangi Tribunal claim Te Rau o te Tika: the Justice System Kaupapa Inquiry, Wai 3060. Article 3 of Te Tiriti o Waitangi means that until outstanding justice inequities between Māori and non-Māori are resolved meaningfully, no justice system in Aotearoa will ever be just, in Te Tiriti o Waitangi.

We encourage tangata whenua and tangata Tiriti allies everywhere to utilise every tool, pathway, and process available to advance the transformation of the criminal justice system here in Aotearoa.

Nō reira koinei aku koha ki tēnei o ngā pire. E kaha whakahē ana Te Pāti Māori i tēnei pire. [And so that is my contribution to this bill. The Māori Party strongly opposes this bill.] We oppose this bill. Tēnā rā koe e te Pīka.

JAMES MEAGER (National—Rangitata): If New Zealanders weren’t already on notice that this is a Government committed to restoring law and order in this country, well, they are now. Along with this excellent piece of legislation, the Government, today, also announced strengthening of our sentencing laws. On the weekend, the Prime Minister, along with the Minister for Children, Karen Chhour, announced new serious youth offender categories. And, of course, there are new cops hitting the beat as we speak.

As chair of the busy and effective Justice Committee, we look forward to considering our 16th bill for this Parliament. We will look forward to the robust and strong exchanges amongst committee members. I commend the bill to the House.

Hon GINNY ANDERSEN (Labour): Thank you, Mr Speaker. Thank you for that lengthy and detailed contribution from the Government! So this is an interesting bill. One thing that strikes me is that I often wonder why this Government keeps implementing legislation that has absolutely no evidence to back it. I mean, it’s a sensible question. You can see that we might not see eye to eye on a lot of heartfelt issues, but you would think if you’re going to do some decent analysis, check some facts and figures, to actually go through and look at history as to what works and what doesn’t work. Why is it that, particularly in the space of law and order, this Government continues to implement policy and decisions that have zero evidence to back them up? It’s a legitimate question, and I think the answer is that they don’t really care about the outcome. They want something that looks good, that ticks the box of getting a vote, that keeps people happy here and now and makes it sound OK, but they have zero vested interest in the long-term benefits to New Zealand. That’s what really bothers me.

This legislation first came to New Zealand way back in 2010. It was a coalition agreement between ACT and National when Rodney Hide was a member of the ACT Party. At that point in time, I was working within New Zealand Police, and what happened at that point was that we were tasked to try and figure out how to implement this new system across three different computer systems in the justice sector. There was no consideration the first time this came in as to how it would be implemented. There was someone—namely me—who sat and had to watch three databases for when we got a striker. And when we got a striker who was eligible, we had to call up the courtroom and tell the person who was prosecuting in the courtroom that they had to call out to the judge and notify them that there was a strike. If that didn’t happen, that person got away without a strike. We had to draw straws on a weekly basis over who fronted up and told Judith Collins how many strikes had got away that week and how many strikes had got away that month.

This goes to my point that there was no interest in how this was actually going to be implemented and monitored. There was no investment in the system of how it was actually going to work because all that was wanted to be achieved—the only thing that was to be achieved—was that it looked good. It looked good and it ticked the box, and it is no different now. This is something that we saw during scrutiny week which was very interesting. In scrutiny week, Nicole McKee, as the Associate Minister of Justice, fronted up to the Justice Committee at scrutiny week, and Nicole McKee openly stated that the first time three strikes was introduced, it didn’t work. We had ACT on record in scrutiny week, stating that the first bill didn’t work, because she had received advice from the Ministry of Justice that demonstrated the first time—

Hon Nicole McKee: So why are you talking about it? We’re on to the second version now. Time to move on, Ginny.

Hon GINNY ANDERSEN: We’ve got it on record, Nicole; it’s there—you said it had problems and it didn’t work properly at all. So the reason why they had to peddle it back was because the advice came through from the Ministry of Justice officials that it had zero deterrent effect on criminal offending. It had no impact on reducing the number of victims and it had no impact on actually making a meaningful difference in our justice system. That’s what the advice is.

The bill we have now is a reheated version. It’s actually slightly less worse than the first one they fronted up in 2010. But it goes to the point that there’s no new ideas in the bucket. They’re just reheating old, failed stuff that still doesn’t work, and rebranding it in some kind of sad attempt to look tough and look cool. I’m afraid that it just doesn’t work. It’s sad to see this implemented once again. I am pleased to see that they’ve made some changes, including the manifestly unjust provision, which will go some way to mitigating the damage that this will do. It shows no faith in our judiciary, it shows no faith in our justice system, and it will have zero impact on reducing victims, even though those members opposite will continue to sing its praises and say it will fix everything. Only time will tell. As we’ve seen in the past bill, this will do nothing to reduce victims. It’s a waste of time. It’s a waste of money.

CAMERON BREWER (National—Upper Harbour): Thank you, Mr Speaker. What a great day for law and order in this country. What a great day for Upper Harbour. Look, I stand in support—full support—of the Sentencing (Reinstating Three Strikes) Amendment Bill. This Government is delivering on our commitment to introduce the revised three-strikes law as one of our key law and order priorities, after that lot repealed it in 2022. And did that help? No, no. What’s happened since 2022? It’s only got worse. This bill will help protect victims and communities by keeping violent criminals off the streets and by delivering justice for the victims of serious violent and sexual offending. I commend this bill.

Dr TRACEY McLELLAN (Labour): Thank you, Mr Speaker. Thank you for the chance to make a contribution, as one does, to the Sentencing (Reinstating Three Strikes) Amendment Bill. I’m surprised by the previous contribution daring to bring up the concept of law and order on the North Shore, when it was only a couple of days ago—didn’t we learn?—that the harbour cops are being moved to the CBD to bolster the police presence there. But good on you for standing up for your communities!

As has been previously said, and we don’t need to go over it in too much detail, this bill simply isn’t needed. It’s not needed, because the law already says, as my colleague the Hon Dr Duncan Webb said earlier, a judge must impose the maximum penalty prescribed for the offence if the offending is within the most serious of cases for which the penalty is prescribed, obviously unless circumstances relating to the offender make that inappropriate. That is part of the Sentencing Act. So this rhetoric that somehow this Government, who is very light on evidence and very big on big noting and rhetoric, is somehow reinventing and rewriting the Sentencing Act is just nonsense. This is simply another means by which to introduce something that, essentially, does nothing. But, in this case, not only does it not do what it says on the tin, it actually does harm. It’s reintroducing a reheated policy that has already failed.

I note, as my colleague the Hon Ginny Andersen has just said now, that we acknowledge the fact that the first three-strike bill was terrible, as was the Act. This is less rubbish, but it’s not much less rubbish. Therefore, it kind of feels like it’s a little bit of a waste of our time. We know that there is absolutely no evidence that three strikes reduces reoffending, and that should be the Government’s goal. If the Government’s going to talk a big talk about being tough on crime, the only way you can be tough on crime is to reduce crime. Doing things that don’t reduce crime is a waste of our time. It doesn’t reduce reoffending. There’s plenty of evidence to suggest that it actually makes rehabilitation worse. It certainly doesn’t act as a deterrent. So if the goal in the long run is to not make things better, this is a step in the right direction.

As has already previously been also discussed, it removes judicial discretion, which I think is a slippery slope and that is not something that we should be doing. Also, when I suggested that it does harm, we know that it does disproportionately impact on Māori, on people with cognitive diversity or people with cognitive impairments; they absolutely bear the brunt of these knee-jerk reactions so that the Government can appear tough on crime. Ultimately, it’s just part of that ideology—the Government always claims it doesn’t have any, which is a misnomer in itself—that punishment leads to change. That doesn’t happen. The regulatory impact statement and several other sources have explicitly stated through cost-benefit analyses and various other evidence-based methodologies that we haven’t been able to see any significant quantifiable benefit in this policy.

Importantly, the provision stating—this is the part that I find quite interesting—that the courts must not take into account the additional consequences of the three-strikes regime when determining the sentence, therefore, makes it unenforceable and meaningless. What I mean by that is that lawyers and judges can’t unknow what they know. If they know there’s going to be a loss of parole eligibility at strike two, it’s going to change the way that they act. They will have that in their mind when considering sentences, and judges will as well. Judges will also know the impact of imposing a 24-month sentence as opposed to imposing a 23-month sentence. So, ultimately, it’s going to change those thresholds and it’s going to mean there’s some perverse sort of outcomes as people skirt their way around this—not to mention the fact that the New Zealand Bill of Rights Act obviously prohibits severely disproportionate sentences, and we know that this has the ability to do so.

So, at the end of the day, it’s a big price to pay, considering all the extra people in prison and all the extra costs that that incurs for the National Government to talk about the fact that they’re tough on crime. It has zero impact on crime. It has zero impact on reducing victims of crime. It’s a cheap and nasty way of the Government trying to send a message out there for people who don’t know any better.

PAULO GARCIA (National—New Lynn): Restoring three strikes is about restoring law and order. We on the Government benches make no apologies for taking action to crack down on crime, hold serious offenders to account, and make our towns and cities safer. I commend this bill to the House.

A party vote was called for on the question, That the Sentencing (Reinstating Three Strikes) Amendment Bill be now read a first time.

Ayes 68

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

Noes 52

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 3.

Motion agreed to.

Bill read a first time.

The result corrected after originally being announced as Ayes 68, Noes 55.

Sentencing (Reinstating Three Strikes) Amendment Bill be considered by the Justice Committee.

A party vote was called for on the question, That the Sentencing (Reinstating Three Strikes) Amendment Bill be reported to the House by 1 November 2024.

Ayes 68

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

Noes 52

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 3.

Motion agreed to.

SPEAKER: The question is, That the

Motion agreed to.

Bill referred to the Justice Committee.

Instruction to Justice Committee

Hon NICOLE McKEE (Associate Minister of Justice): I move, That the Sentencing (Reinstating Three Strikes) Amendment Bill be reported to the House by 1 November 2024.

The result corrected after originally being announced as Ayes 68, Noes 55.

Bills

Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill

First Reading

Hon SIMON WATTS (Minister of Climate Change): I present a legislative statement on the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill.

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

Hon SIMON WATTS: I move, That the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill be now read a first time. I nominate the Primary Production Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 1 November 2024.

This bill will amend the Climate Change Response Act 2022 to keep agriculture out of the emissions trading scheme (ETS). It will pave the way for us to develop a fair and sustainable pricing system for agriculture that reduces emissions without sending that production offshore for farmers who are less efficient than they are here in New Zealand. This bill supports the Government coalition agreements and the National Party’s manifesto. It delivers on action number 12 of the quarter two action plan to finalise policy to keep agriculture out of the emissions trading scheme. But not only that, it actually supports farmers.

Agriculture is the backbone of the New Zealand economy. It contributes 81 percent of goods exported and New Zealand - grown produce feeds over 40 million people worldwide. This Government is committed to supporting our farmers and the sector to reduce its emissions in a way that does not put farmers out of business and shifts production offshore. Currently, under the Climate Change Response Act, agricultural processes will begin to pay for emissions associated with the fertiliser and livestock that they process from 1 January 2025. Animal farmers will begin reporting their on-farm emissions from 1 January 2026, and paying for those emissions from 1 January 2027.

Modelling commissioned by officials suggests that requiring agricultural processes to pay for their emissions under the emissions trading scheme would have a negative impact on both farm production and farm revenue, particularly for the sheep and beef sector. In our current fiscal environment, we cannot let agricultural production be sent offshore. Additionally, if agricultural processes are required to pay for on-farm emissions, that may mean that they pass these costs directly on to farmers, regardless of whether the farmers’ emissions efficiency rates are what they are. This means that there will be no incentive for farmers to reduce emissions and there will be no financial recognition for their individual effort.

The obligations on animal farmers that start from 2026 would add additional problems. These obligations could require up to 100,000 animal farmers registered, reporting, and paying for their emissions in the ETS. This would be overly burdensome for small farmers and would significantly increase the number of participants in that scheme, which could disrupt the operation of the scheme. This is why this bill is necessary.

In short, without it, the current system will present significant administrative, implementation, and compliance costs to our domestic agriculture sector. This Government is taking the steps necessary to support the development of the right tools and technology for farmers to reduce their emissions. We will invest $400 million over the next four years to accelerate the commercialisation of tools and technology to reduce on-farm emissions with on-farm measurement systems in place by 2025. This Government has commissioned a methane science and target review to consider the methane science and targets for consistency with no additional warming. These are only some of the actions that this Government is taking. More will be set out in the second emissions reduction plan, which we will begin consultation on soon.

In my maiden speech I spoke about how challenging times will require us to work together in the interests of all New Zealanders, and that is what this coalition Government is doing. Minister McClay and I recently announced that the Government has disestablished the He Waka Eke Noa - Primary Sector Climate Action Partnership. Instead, we are setting up a pastural sector group to work directly with the sector in a way that’s fit for purpose. The Government has committed to doubling the value of exports in the next 10 years to help rebuild our economy. We cannot allow production to move offshore to less carbon-efficient farmers. And that’s why this is important work that we work with the sector, not against it, to ensure consumers’ expectations of sustainability are met while maintaining profitability in the sector.

As I outlined earlier, this bill is an initial step in this Government’s plan to support farmers to reduce their emissions. The Government has signalled our commitment to introduce a fair and sustainable pricing system for on-farm emissions by 2030, and keeping agriculture out of the ETS is a key part of that commitment. I look forward to working with the sector, iwi Māori, and the public as we implement this plan and deliver on our climate change commitment. I am proud to commend this bill to the House.

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

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Mr Speaker. I wouldn’t say it is my pleasure to take a call on this bill. Labour will not be supporting this legislation because this is a piece of legislation that is making a poor choice and it is a piece of legislation that is taking New Zealand backwards. If ever there was a can in New Zealand politics in the late 20th and early 21st centuries that has been continuously kicked down the road, it is that of agricultural emissions and where it fits in our emissions trading schemes (ETS), and, indeed, our emissions pricing schemes. This is something that it is time that we as a country had a clear plan for.

Unfortunately, what we’re seeing in this bill that has been brought to the House by the Government is clear evidence that there is no plan. The only plan is to further kick that can down the road and to delay the inevitable, which, for many decades, has been tumbling along. When we see the objectives of this bill are twofold—to keep agriculture out of the ETS by repealing all New Zealand’s emission training schemes obligations for agricultural activities from the Climate Change Response Act of 2002; and also ensuring that agricultural emissions are not subject to surrender obligations under the New Zealand ETS, and all the languages about removal and prevention—once again, we are seeing not a glimmer of what the vision of this Government might be, what the plan might be, and where they may be going.

Farm-related emissions—biogenic emissions—make up 49 percent of New Zealand’s greenhouse gas emissions. Of those, methane makes up the majority of those. It is agreed across this House, and there is multipartisan support, that we need to reach net zero by 2050. That is an area that we have agreement on, but what we have to have is this Government start to front up and tell us how they plan to do this. They don’t plan to do it in the same way that we as a Government plan to do it, and that was by having a plan, that was by actually cutting emissions. The Minister of Climate Change continually telling us “Wait till you say see emissions reduction plan 2.” is not good enough. We need to have transparency around what those plans are and we need to be debating them across this House.

When the zero carbon Act was passed in 2019, it was a watershed moment for New Zealand. It was a moment when we could come together, put politics aside, and agree on a direction of travel as a country in this House. We are a better country for having done that. But it is disappointing that we’re not seeing us grasp the most difficult of nettles by having a plan. It is vital that we have a plan to reduce our agricultural emissions, to meet our various obligations, not at least of all our agreed target to be net zero by 2050, to meet our nationally determined contribution under the Paris Agreement and various other international obligations. But I would also point to the economic necessity for New Zealand to meet these obligations. I would like to acknowledge the work and the huge amount of work that was done in our Government by my colleague the Hon Damien O’Connor—not only as the Minister of Agriculture but as a man who went and negotiated successful trade deals in both the EU and the UK, and understood that market access into these most lucrative of markets was actually contingent on us having some ambition in climate action—that includes agriculture.

If we want to continue to sell our high value agricultural products into certain markets, us being an international laggard is simply not going to cut it. We have within those trade agreements clauses that speak to the necessity for both parties of those agreements to fulfil their international climate obligations, and time and time and time again we are seeing from this Government a walking back of what action is being taken to fulfil those obligations. In this case, in this piece of legislation that we’re debating here today, that is around agricultural emissions. We’re seeing it in transport, we’re seeing it in industrial and process heat, we’re seeing it in every part of the New Zealand economy—a walking back of the actions that we were taking to get us there.

What we have is a Government, in doing this, that is putting New Zealanders’ future at risk—not only our ability to get our agricultural products into high value markets and to fulfil our trade obligations but the jobs of the future as well. Thank you.

CHLÖE SWARBRICK (Co-Leader—Green): E te Māngai, tēnā koe. Tēnā koutou e te Whare. It’ll come as no surprise that the Greens will be opposing the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill today, so I’d like to walk through some of the rationale for it.

Firstly, I just wanted to acknowledge my forebears, particularly in the Green Party, the likes of whom the Hon Dr Megan Woods did, particularly the Hon James Shaw for the work that he has done, because, funnily enough, with the new path that this Government has decided to embark on, with yet another working group, they may indeed find that He Waka Eke Noa was “He Waka Eke Nowhere”. Once again, we are seeing the can kicked down the road when it comes to climate action.

This Government also tells us that they want to see pricing on agricultural emissions by 2030. Let’s just unpack why agricultural emissions should be priced in the first place, because I think that’s kind of a foundational argument, which has kind of been avoided thus far in the debate. Agriculture is currently the only sector within our economy that does not carry with it a price, in terms of the emissions trading scheme. It is the only sector which currently is excluded from the emissions trading scheme. Its inclusion is a debate that we have been having in this place, in Parliament and across politics in this country, for approximately 20-odd years, and we have not yet found any meaningful conclusion where farmers across the board, or rather the peak bodies that represent them, will say, “Hey, guess what? We actually want to be priced.” As it turns out, that would happen to be the role of Government, to make those necessary, bold decisions to say that we are going to treat industries across our economy equitably.

Let’s talk about that equity. Well, as has been pointed out by the Minister of Climate Change, particularly speaking about export numbers, we should provide a little bit more context here. Agriculture is responsible for 5 percent of the GDP in this country—5 percent of GDP in this country. Those aren’t my figures; those figures are from Infometrics.

Mike Butterick: 82 percent of export income.

CHLÖE SWARBRICK: And, to those speakers presently heckling me, or rather those members in the National Party presently heckling me, 5 percent of our GDP is responsible for more than half of our emissions profile.

Mike Butterick: Different gas.

CHLÖE SWARBRICK: Yet, it is the only sector that’s currently not priced for those emissions within our emissions trading scheme. What that means, to that National member presently heckling, is that every other part of the economy that this Government professes to care so much about carries the burden for the sector presently not priced.

Interestingly, as was canvassed at scrutiny week with the climate Minister, and, actually, the Minister of Finance as well, this Government is also saying that they are still committed to what is currently baked into the legislation, for a 10 percent reduction in methane emissions by 2030. Yet, we have no idea of the pathway to get there, because they’re kicking the can down the road on this pricing issue. More so than that, something which is very deserving of interrogation, is the fact that this bill also takes us back to the future on reporting requirements for processors’ emissions. This is a really, really important point, because, actually, it wasn’t until 2020 that there was publicity given to processor-level emissions, but it was actually in 2011 when processors were required to report that information to Government bodies. The Government, in this bill, with the swipe of a pen, is taking away those reporting requirements.

The only conclusion that we can come to as a result of that is that they just don’t want to know, so, therefore, they don’t have to deal with the issue. This is really something that I’d like to hear from the Hon Todd McClay about. Why, the Hon Todd McClay, is your Government removing requirements for reporting on emissions, because you have committed in your coalition agreements to making decisions based on data and evidence? Further, the climate Minister was crowing about the fact that there is a new working group when it comes to the idea of no additional warming. Here, I would implore all members to look at the evidence and the data that is already there amply. The Climate Change Commission released three draft pieces of advice at the beginning of this year, two of which referred explicitly—and they haven’t done this before—to the agreement between the National Party and the ACT Party, and said that if we were to pursue that no-additional-warming framing that they are putting out there, we would see a far higher burden on every other household and sector of the economy in this country. But, more so than that, to purse such a policy position would obscure the bigger question of whether we should pull our weight and reach our targets internationally.

Now, those targets are often spoken about as though they’re some kind of abstract numbers on a page, but those targets are actually the scientific reality, the scientific fundamentals, for life on Earth as we know it—actually, for food-growing capacity, which this Government says they care about. It also is the case that those nationally determined contributions under the Paris Agreement put us on the hook, by 2030, for anywhere between $3.6 billion and $24 billion, and the difference is whether we get our act together and do something domestically. The Greens oppose this legislation.

Hon ANDREW HOGGARD (Associate Minister of Agriculture): Thank you, Mr Speaker. It’s a great joy to be here today giving benefit to this bill and ensuring that it passes. This bill, the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, this ag emissions trading scheme (ETS) backstop, has been hanging like the sword of Damocles over the farming sector for the last six years. One of the best things, or perhaps the only good thing, that came out of the whole He Waka Eke Noa process was the Government report in October 2022 which laid out the costs of He Waka Eke Noa, but it also laid out the costs of agriculture going into the ETS.

Chlöe Swarbrick: How much does your group cost, Andrew? We don’t know.

Hon ANDREW HOGGARD: Well, let me give you some numbers on what this will cost rural New Zealand. No, I’ll give you the cost from the figures.

Chlöe Swarbrick: No, but give us the costs on your working group.

Hon ANDREW HOGGARD: No, no, no, calm it.

SPEAKER: I’d ask two things: one is, I don’t need to know the numbers, nor does an interjector in your speech.

Hon ANDREW HOGGARD: OK. Milk production will be down by 8 percent under the ETS; lamb by 19 percent; beef, 44 percent; wool, 18 percent; venison, 37 percent. We introduced the ag into the ETS. Those are the reductions you will see. Based off the latest situation for primary industries, what does that equal? From the dairy industry, $2.4 billion; from the lamb, $600 million; beef, $2.1 billion; wool, $68 million; venison, $81 million. All up, that’s around $5.3 billion gone from regional New Zealand.

When you think about the economic multipliers—somewhere between 1.8 to 2.7—that’s going to feel like $10 to $15 billion to regional New Zealand. We heard before, “Oh, this will take New Zealand backwards. Implementing this will take New Zealand backwards.” These are costs rural New Zealand, regional New Zealand, and New Zealand cannot afford. You know, we’ve heard about “What about the market access?” Well, no offence, but we didn’t get a hell of a lot of market access for dairy or beef in the EU trade deal. So, I’m sorry, but I don’t see how that’s relevant to this situation. And we’re the best in the world. We have the lowest footprint. If they’re going to say, “Oh, you can’t export your food here, because of your emissions.”, well, our emissions are lower than theirs.

We’ve heard about this whole thing around, “Oh, the Climate Change Commission says it’s going to cost some people more.” Well, the problem there is because we have a very silly nationally determined contribution that was put in place by the previous Government. It didn’t take into account split gas. So, internationally, we have a non - split gas approach. Nationally, we have a split-gas approach. We’re charging ourselves too much, and that’s why they came out with that report. But I think it’s important we’ve just got to go back to the whole point: methane is a short-lived gas. No additional warming makes sense. That is what the basis of the Paris accord is—limit warming to an additional 1.5 to 2 degrees. We are aiming to ensure that New Zealand agriculture doesn’t add anything to that. That is a sensible and smart goal to work for, not reducing agriculture by $5 billion and making New Zealand poorer. These are sensible, smart decisions that New Zealand needs to take into account. So I commend this bill to the House, and well done.

JAMIE ARBUCKLE (NZ First): Thank you, Mr Speaker. I rise on behalf of New Zealand First to speak on the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill. What I’d like to say first is that we have world-class farmers that are probably the most efficient farmers in the world. They’re also facing some unique challenges and those unique challenges at the moment are affecting the agricultural sector. This bill here actually provides some support to them.

New Zealand First supports this bill because it aligns with the party’s principle of safeguarding the interest of farmers and ensuring that climate policies are pragmatic and effective. By removing the agricultural obligations from the New Zealand emissions trading scheme, the bill removes unnecessary compliance costs and administrative burdens on farmers. It recognises the impracticality of a one-size-fits-all approach to emission pricing and supports the split-gas approach that is more suitable to the New Zealand agricultural context. New Zealand First believes that this bill is a step towards achieving a balanced and a fair climate policy that supports both environmental sustainability and the agricultural economy. I commend this bill to the House.

HANA-RAWHITI MAIPI-CLARKE (Te Pāti Māori—Hauraki-Waikato): Tēnā rā koe e te Pīka, otirā tēnā rā tātau e te Whare. E tū ana ahau ki te waha i ngā kōrero mā Te Pāti Māori i te rangi nei, ā, e kaha whakahē ana i tēnei o ngā pire e takahi ana i tō mātou nei taiao, ō mātou nei pepeha, ki tōku iwi ake, ki tōku rohe ake o Hauraki/Waikato, ki te awa o ōku tūpuna, arā ko Waikato. Ka tiki ake au i tētehi o ngā tongikura a Kīngi Tāwhiao i a ia e noho ana ki te riu o Waikato: “wai hōpuapua ka mimiti noa, nei ko Waiarona; he manawa whenua e kore e mimiti.”

[Thank you, Mr Speaker, indeed greetings to us all in the House. I stand to give voice to the statements of the Māori Party today, and we strongly oppose this bill that abuses our environment, our expressions of identity, to my very own iwi, my very own electorate of Hauraki/Waikato, to the river of my ancestors—i.e., the Waikato. I recall the proverbial saying of King Tāwhiao while he was in residence in the Waikato basin: “ponds of water will diminish, like Waiarona; a deep water spring will never diminish.”]

Just as the waters of the Waikato spring deep from beneath the earth, Waikato people, like the river we take our name from, we will never go dry.

Te Pāti Māori is deeply concerned about the changes to climate change legislation that is not mokopuna focused. What this bill does: this bill amends the Climate Change Response Act 2002 to remove pakihi ahuwhenua—agriculture—from the New Zealand Emissions Trading Scheme.

This bill does away with He Waka Eke Noa, a partnership effort between Government, iwi, and the primary sector to address climate change in pakihi ahuwhenua. Te Pāti Māori is concerned that the words “iwi” and “Maōri do not appear once in this new legislation.

Why Te Pāti Maōri opposes this bill: we oppose this bill in the name of mana motuhake. These changes are being proposed without consultation or input from te iwi Maōri, whereas He Waka Eke Noa was at least particularly developed in consultation with Maōri. We are not included at all in the pastoral sector group that will replace He Waka Eke Noa or Māori whakaaro.

We oppose this bill in the name of mana ōrite. Māori have been locked out of the conversation around climate change in agriculture. Māori farmers who want to transition into sustainable farming will not be supported to do so.

We oppose this bill in the name of mana mokopuna. This bill was a part of a suite of policies that will allocate climate change and ensure our biggest polluters are let off the hook. The polluters should pay; instead, it will be our mokopuna.

Hei whakakapi ake i ngā kōrero a Te Pāti Māori i tēnei rangi: ko te toto o te tangata he kai; ko te oranga o te tangata he whenua: While food provides for the blood in our veins, our health is drawn from the land. Nō reira koinā aku koha ki tēnei o ngā pire; e kaha whakahē ana Te Pāti Māori.

[To conclude the statements of the Māori Party today: while food provides for the blood in our veins, our health is drawn from the land. And so these are my contributions to this bill; the Māori Party strongly opposes it.]

Hon TODD McCLAY (Minister of Agriculture): Thank you, Mr Speaker. We, of course, are supporting this legislation. It’s extremely important so we can lay the foundations and groundwork to actually find an enduring solution to agricultural emissions reduction. Because, sadly, after six years of the last Government, that wasn’t achieved; the only thing that was achieved was “Do what we say or else we’re going to tax you, and for some of you farmers, we will tax you out of existence.” Now, if we were the worst carbon-emitting food producers in the world, that would be an argument with merit. However, we’re not. We’re some of the best—if not the best—most efficient food producers with the lowest carbon footprint.

And all that happens if you put a tax upon agriculture—which is what the last Government legislated for by putting agriculture into the emissions trading scheme (ETS) next year; of course, it’s not in at the moment, it comes into effect on 1 January without this change—is that jobs and production goes overseas. What that means is that in the European Union and the United Kingdom and America, where their farmers produce food with a greater carbon footprint and more emissions than New Zealand farmers have, they will produce the food, the climate will be worse off, New Zealand will be poorer if farmers go out of business, and we won’t do that.

But we are absolutely committed to meeting New Zealand’s international obligations when it comes to reducing emissions. The members opposite are right: the agriculture rural sector must play its part. But it must play its part in a way that doesn’t put them out of business and merely makes New Zealand feel like it’s done the right thing but sends those jobs and production overseas. Speakers from the Opposition have said, “Well, what’s the Government’s plan?” It’s really clear: we campaigned on it, we were elected, and we are putting it through. Number one, we will commit to having an independent review of the science and targets of methane against additional warming this year so we can set the target of what agriculture has to do.

You see, the last Government said by 2050 agriculture must reduce its methane emissions by between 24 and 47 percent. That’s not a business plan, that’s not a target; it’s a hope that they can sort it out later on. How about we come up with exactly what agriculture needs to do and then work with them, not tax them, but work with them to achieve that?

Number two, we said next year we’ll stand up a system for on-farm measurement of methane. So the Labour Government previously said “From 1 January we will tax you, but we haven’t even set up the system to know how much methane you are producing to measure so we can work out what the tax would be. So we’ll just chuck you into the ETS.” Well, we won’t do that; we’ll deliver on it next year. We’ve said a pricing system set up by 2030, and a pricing system, a price of tax is used for one of two things: it’s used so that you will change behaviour. The problem is, with what the Labour Government did, the behaviour they want to change is there’s no farming as a consequence because they’re not the tools, and their systems are not there to allow farmers to reduce emissions without reducing production—i.e., closing down farms—then that tax is actually just putting people out of business.

What we’re also doing is saying we’re going to invest much, much more in the research and development. And if you go and talk to our scientists in New Zealand, they are developing the solutions that New Zealand farmers and the world’s farmers will use to reduce emissions, reduce methane, produce the same amount or less—i.e., becoming much more efficient. And we announced $400 million and will continue with a lot more focus on that.

The final thing I guess I want to say is, yes, we have disbanded He Waka Eke Noa—because it was dead; there was no partnership. The farming sector worked tirelessly over many years to come up with solutions, and the previous Government, in part with Labour, but, largely, the Green Party that come to this Parliament and lecture everybody and said, “Well, we don’t accept that, we’ve got a better idea.”—and, therefore, it’s that point that they drove a great big diesel tractor through the middle of the so-called partnership and destroyed it. And so, yes, it’s gone, because it doesn’t exist anymore. In part, though, in its replacement, we’ve established a pasture sector group with just those that represent methane—i.e., pasture farmers, to find enduring solutions. Number one, they’re committed to reducing emissions; number two, they’re committed to doing it without reducing production; and, number three, the Opposition is right—we are going to work with them to achieve that because it is important for New Zealand and also it’s important for our economy.

At the Fieldays a week or so ago, the Labour Party turned up and said, “We are creating the red band group. And what we’re going to do is going to work with farmers, we’re going to cooperate with farmers, and we’re going to listen to you because we care about you, farmers.”—the Labour Party in Opposition. And the first thing they’ve done, they left their Red Bands that were shining at the door and they walked in here and said they are voting against this because farmers are bad people and they want to tax them. And I can say to members of the Labour Party, you shouldn’t have spent your own money on those Red Bands because you wasted that money. If you actually support agriculture, you would be supporting this in first reading so the committee can have a full discussion and debate against it, but, oh no, you want to tax them out of existence.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Speaker—a lot to respond to from that last speech. But I want to acknowledge the role of my parents in my thinking about both the rural economy and the environment. Because I have a mother who grew up in many rural areas throughout both islands—sorry to Stewart Island; both the main islands—and tells me all the time, “Rachel, make sure you’re not being mean to farmers.” That is one side of my growing up.

The other side, I have my father who is a historian, and a rural historian, who gets very excited about different types of grass that have grown over many years in this country and the type of sheep that feed on that grass and where we export to on refrigerated boats. So I am not from a rural upbringing at all, but I do come from this place. And, of course, most people in the House will know that I care very deeply about the environment and the very privileged position to be Labour’s environmental spokesperson.

Also, I care very deeply about our climate. Because, of course, if we have all of the terrible things that we know can happen with climate change, if we do not reduce our emissions, we know that we get more of the storm events, but we also know there comes sea-level rise, there comes changes to our climate of where different crops and the like can grow as well—so it’s extraordinarily important. It’s also extraordinarily important for our biodiversity. If we have a climate that changes too drastically, then our native indigenous species will go extinct, and that is not something that I want to happen.

So, in that context, why is that relevant to talking about this bill removing the backstop for agricultural emissions? It’s very clear. This bill amends the Climate Change Response Act, and that Climate Change Response Act happened before I was a member of this House, and parties agreed that we need to reduce our climate emissions. Not only do we have to adapt but we also have to decrease emissions. That is decarbonisation, and those emissions are across gases. So we say “decarbonisation” but we are not just talking about carbon; we are also talking about methane and nitrous oxide and some fluorides and other gases as well.

So we’ve all agreed that that has to happen. There’s a difference in opinion of how half of those emissions, being agricultural emissions, are reduced. We know that the last Government worked very hard—and I’m sitting next to the Hon Damien O’Connor, who worked very hard with the rural sector to try and work out a way through so that we can reduce those agricultural emissions. What happened is that there was a backstop in the Act, so that if that hard work and progress did not result in an agreement for a change, then there was a backstop so that the emissions were in the emissions trading scheme (ETS).

Now, what this bill does, of course, is remove that backstop. And we’ve heard from the members opposite that they have a plan. They have a plan to revise methane science. That is not a plan. They have a plan that maybe they’re going to have a pricing system by 2030. And, if that is the case—that there is going to be work towards a pricing system—then what is the problem with including a backstop in this ETS? They could amend the backstop, they could change the date, but that’s not here.

And this is all in the context of the $3 billion of cuts to climate emission reducing projects. This is in the context of the CERF being gone, the Climate Emergency Reduction Fund. This is in the context of the Spatial Planning Act being repealed and the Natural and Built Environments Act being repealed—all pieces of legislation that try to do much better planning to reduce those emissions. But that’s not happening, and agricultural emissions are not being reduced either. This is a shameful thing to be happening. This Government has no plan and I condemn this bill.

Hon SCOTT SIMPSON (National—Coromandel): Thank you very much, Mr Speaker. As chair of the Environment Committee, I’m looking forward to having a full select committee process around this piece of legislation. As the previous member, the Hon Rachel Brooking, has just said, there are differing views. But on this side of the House, we trust our farmers. We take our commitments to climate change both domestically and internationally very seriously. I’m looking forward to hearing what submitters have to say in the select committee and I commend the bill to the House.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Speaker. This is a bill which takes New Zealand backwards, back to a time when we had no leadership on the Government meeting its obligations internationally to climate change and no pride in the role that New Zealand plays on the international stage of leadership as a small island nation in the Pacific and doing our bit for our Pacific neighbours to stop the effects of climate change, which are affecting us and our closest partners.

This is a disappointing and embarrassing piece of legislation, which takes us back to a time when it was not the role of Ministers of Cabinet to lead our agricultural sector to do the best they can possibly do, where it was not the role of Ministers of Cabinet to get out and have those conversations with our great farmers to do better and to plan for the future and to act in a way where their responsibility and the responsibility that they take to care for the environment, which we are so proud of, is well rewarded. No, they’ve gone for the lowest common denominator here. They’ve gone for a solution, in this bill, which represents stepping back into the worst players in the market getting rewarded and those who have done their best, those who we are most proud of in our agricultural sector, are being punished.

I say it takes leadership, because I have watched the Hon Damien O’Connor do exactly that—get out and have those hard conversations with the sector and earn their respect for that, and have a partnership that actually was getting us somewhere where great agricultural sector players were doing really well out of working closely with Government and making those arrangements happen, because they know that in 10 years from now and 20 years from now and 30 years from now, our agricultural sector depends on us honouring those commitments that New Zealand has internationally to our climate change goals and being the greenest, best performing sector that we can possibly be.

I’ve seen Ministers on this side of the House making hard decisions about the way that the Government prioritises our impact on climate change. I’ve seen things like the Climate Emergency Reduction Fund that the Hon Rachel Brooking talked about being used to make targeted investments in those sectors to help them improve their performance in emissions and make sure that we are planning for the future, because it does have to be Government alongside industry in this. We all want Government to be partnering with those people in the industry making decisions about our total emissions profile, and we know we can’t do that as Government alone. That’s the kind of leadership I’m talking about, and that’s not what we are seeing here in this bill.

So what is this bill? Well, it’s a clear indication to anyone watching today that the Government has no plan to address the impacts of agricultural emissions on climate. On one hand, they want us to believe that they will use the emissions trading scheme, which is a great scheme, to improve our emissions, but, on the other hand, they won’t do anything to help the agricultural sector become a part of that. So we have this tool now which is a dead duck in the water, because, really, it doesn’t apply to some sectors and it doesn’t apply to the sectors it needs to most.

We have a tool here which was world-leading. The emissions trading scheme is something we can all be proud of and is something which has been borrowed by a number of other jurisdictions and used to great effect overseas. But there’s always been this outstanding question of how agricultural emissions are going to be included in that or included in another market mechanism similar to that. We have now taken this away in this bill. There is no further forward momentum for those leaders in the sector to be able to draw on and bring people with them. Instead, we go back to a system where those people who do not see it as their obligation to care for the environment and do not see it as their obligation to do their part for the rest of the sector are the winners here. And that is bad decision making by this Government.

The Government are leaving farmers in the dark when they desperately need something clear about the road ahead. We need a proper policy which outlines where we are going with this and that allows us a cross-partisan way of having this conversation. They are doing everything they can to delay taking action on climate change with this kind of move, and it’s the wrong side of the debate to be on, because when we look back at this, we will see this legislation for what it is, which is hurting New Zealand’s reputation on the world stage, which is hurting New Zealand’s agricultural sector, which is hurting our exports, and which is hurting those farmers who are doing a great job now. I’m disappointed about this bill, I’m sad to see it progressing in the House, and I do not commend it.

MIKE BUTTERICK (National—Wairarapa): Thank you, Mr Speaker. This bill is great news to New Zealand farmers, to the 360,000 New Zealanders that are employed in the sector, to the 70,000 businesses that are associated with it. New Zealand farmers are already the most carbon-efficient producers per unit of product in the world. Why would you penalise them by putting them in the emissions trading scheme when there’s no viable mitigations? That’s what the other side of the House would have had happen—reduce production here, resulting in that same production being driven overseas. Net result: increased global emissions and a poorer New Zealand. Our commitment is to keep our farmers farming, keep them doing what they do best, which is growing food, providing jobs, earning over 80 percent of our export income. That’s how we pay our bills. Our commitment is to also work with the sector, to provide the tools that are viable, to allow them to reduce their emissions while allowing them to keep the lights on. We back our farmers—we always have and we always will. I commend this bill to the House.

A party vote was called for on the question, That the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill be now read a first time.

Ayes 68

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

Noes 52

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 3.

Motion agreed to.

Bill read a first time.

The result corrected after originally being announced as Ayes 68, Noes 55.

the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill be considered by the Primary Production Committee.

Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill be reported to the House by 1November2024.

A party vote was called for on the question, That the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill be now read a first time.

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 18

Green Party of Aotearoa New Zealand 15; Te Pāti Māori 3.

Motion agreed to.

SPEAKER: The question is, That

Motion agreed to.

Bill referred to the Primary Production Committee.

Instruction to Primary Production Committee

Hon SIMON WATTS (Minister of Climate Change): I move, That the   

Motion agreed to.

Bills

Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill

First Reading

Hon TODD McCLAY (Minister of Forestry): I present a legislative statement on the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill.

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

Hon TODD McCLAY: I move, That the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill be now read a first time.

It’s my privilege to bring this bill to the House. This bill supports the Government’s goal of getting New Zealand back on track through removing unwanted regulatory burden and making it easier for people to just get on with running their businesses.

The Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill will ensure that the sector is not bogged down with unnecessary red tape. Forestry, including wood processing, is the country’s fourth largest exporter. Over the past few years, forestry has been hit by a perfect storm of falling sales to China, extreme weather, a collapse in carbon prices, and a weak economy and further regulatory burden. Passing these amendments into law as fast as possible has been an early policy priority for the forestry portfolio. A mandatory registration system for log traders and forestry advisers adds unnecessary compliance costs on to forest operators, has no purpose, and delivers no meaningful improvement in outcomes. Progressing this bill is one part of a wider forestry work programme that will restore confidence and certainty to forestry, support further investment, and contribute towards rebuilding the economy and getting it working for all New Zealanders.

The bill that originally brought in the registration system in 2020 has not achieved its intended outcome. These changes were brought in at a time when there was a perceived need to ensure greater professionalism and give more transparency to support equitable trading of logs, however, requiring a mandatory registration system is no longer needed and has only added cost to the sector.

The New Zealand Institute of Forestry operates a voluntary system of registration for individuals providing forestry services. This voluntary system enables a professional industry standard without the need for regulation, and I consider this to be a good pathway for forestry advisers to be registered. The bill acknowledges the extensive work of the industry to create best practice guides and to update practices where knowledge evolves.

There are some key parts to the bill that I want to draw the House’s attention to: firstly, the removal of the mandatory registration system or reporting requirements that have been put on our forestry sector. This removal of the system and associated fees and levies means the sector will be able to keep more of their hard-earned money, driving growth into forestry and wood processing.

I’m also proposing, through the bill, to refund all fees and levies that were paid by log traders and forestry advisers to the Ministry for Primary Industries to become registered. Registered log traders and forestry advisers gain nothing from the system, and I want to signal that this Government values the work they do and that we trust them to continue driving investment in growth in the forestry and wood processing sector.

As for the legal harvest assurance scheme, this has full Government support. This system will provide market assurance and signals to the world that New Zealand supports setting international standards for timber legality. This legislation aligns with our ambitions of doubling export value in the forestry sector over the next decade. The legal harvest legislation was passed just a year ago but will only commence once it has been enabled through secondary legislation, given that it relies on the definition of a log trader located in the part of the Act proposed to be repealed. I have made a technical change in the bill before us to ensure that the requirement to register for legal harvest is retained.

It’s essential that the development of the legal harvest assurance scheme is fit for purpose and does not add unnecessary compliance costs to forestry businesses. To ensure this, and that the system meets market access requirement, full engagement with the sector and trading partners is needed. I’m therefore proposing in the bill that the commencement date for the legal harvest assurance system be amended to August 2027.

Whilst the system is being implemented, I’ll ensure that the export of wood products to markets is supported through existing interim solutions, and I anticipate that these solutions will remain acceptable to the markets they have been negotiated with throughout this time. Amending this commencement date also does not prevent the system from being brought into effect sooner by Order in Council.

This is only a small bill in the context of the House, and I’ve touched on the key components. However, for the forestry sector, this bill will be important for bringing back autonomy to those providing essential services for the forestry sector, as well as having important cost savings for forest businesses. As I’ve said, this is only the beginning of a wider forestry work programme that will boost sector confidence and continue to grow investment in the forestry and wood processing sector.

Can I thank my colleagues in the coalition Government from New Zealand First and ACT for their support, and also the Labour Party for working with us to ensure that we’re able to bring this into place as quickly as possible, so that more people don’t need to register on 1 July this year. I commend this bill to the House.

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

Hon PEENI HENARE (Labour): Thank you, Mr Speaker. Can I also endorse the words of the Minister, the Hon Todd McClay, when we think about the forestry sector and the impact it’s taken and absorbed over a number of years, certainly in my time in Parliament, and my mind right now casts to the East Coast and the Hawke’s Bay, and the East Coast, knowing full well of the long forestry history, the long forestry growth that happens on the East Coast and the impact that this devastating weather event will have on them. I do want to support the words of the Minister and say that, in order for the forestry sector to continue to thrive into the future, this particular bill is important.

It is important that, as we look towards the support of the sector moving forward, we make sure that the right levers are in place to ensure the forestry sector will continue to grow. It is a big part of our economy. It is a big part of making sure, in small places and rural places around the country, places like where I’m from in Te Tai Tokerau, where forestry does play a large part, that, one, we can continue to support the endeavours of those who are in forestry, and, two, we can also look towards incentivising those who want to get into forestry, by removing some of the burdens and some of the bureaucracy that might come with the forestry sector and is inhibiting those who wish to get into forestry. We also must make sure that there are a number of protections in place, and I want to acknowledge the Minister for reaching out over the past one or two months—four to eight weeks—to discuss this particular matter. It would be remiss of me if we didn’t go and contact the local forestry councils, those who are key stakeholders in the sector, to make sure that this is exactly how we can support them to make sure that the forestry sector thrives.

It’s important to remember that this particular bill was put in place, initially led by the Hon Shane Jones, when the Labour coalition Government came to power in 2017. He did a lot of work with the sector to make sure that, as more forests were coming online to be harvested and those logs ultimately exported, we could make sure there were safeguards in place to ensure that cowboys didn’t take advantage of those who didn’t have the skill level or didn’t have the experience to be able to trade their logs offshore. There was a number of so-called cowboys in the industry at the time, which is why the Hon Shane Jones brought this particular bill to the House. The Minister after the Hon Shane Jones, the Hon Stuart Nash, ushered this bill through, and, ultimately, it landed with me as the last forestry Minister in the Labour Government of the last term.

During that entire time, we continued to work with the sector to ask whether or not the changes that were implemented under the Hon Shane Jones met what they were intended for, and despite the good intentions—and why I want to be very clear here, though—that onus was put back on the sector to come to us about what might work for them. That was the predecessor to this bill. That’s what we’re repealing here today, because, after a number of years with that particular regime in place, as the Minister has already described, it didn’t meet its intention. So, with the support from the Minister and the sector, we want to, on this side of the House, as part of the Labour Party, make sure that we can continue to support the forestry sector into the future.

However, I will be very clear and put on the record here today that we still look towards continuing a strong forestry sector, one that will continue to respect the growers, respect the harvesters, respect the workers, and respect those that process wood locally. What we can’t keep having is thousands and thousands of logs just sitting at the ports here in Wellington, Tauranga, and Auckland. What we had endeavoured to do was to make sure we could process locally, and that was part of the solution to support those who were harvesting their forests who didn’t want to send their logs offshore—that we could process those locally, providing local economies local jobs, making sure that we could stop having logs traveling up and down the country on the roads and they could be processed locally and even manufactured and sold locally.

So we want to make sure that we put on the record that Labour still believes in that: making sure that we can process our logs locally and that we’re not exporting all of the logs that are grown here in Aotearoa New Zealand. Why? Because we believe it supports our economies, we believe it supports rural towns up and down this country, and we want to make sure that forestry continues to thrive into the future. We’ll make sure we put that on the record through the length of this debate. We support this bill.

HŪHANA LYNDON (Green): Tēnā koe, Madam Speaker. Tēnā koutou e te Whare. Well, I’m hearing a serious flip-flop—a flip-flop of the coalition Government and of my Labour colleagues—because this repeal right here undermines the good work of my Matua Shane Jones and the work of the officials of Te Uru Rākau. Almost four years since this legislation was put in place, we now have a coalition Government that undermines the good work of Matua Shane, who knew that there were cowboys, who knew that we had vulnerable landowners—those forest owners who were being taken advantage of by advisers who didn’t adhere to a registration. That’s why the register was set up. Moumou ngā mahi o Matua Shane—moumou ngā mahi o Matua Shane. And while Minister McClay laughs, it’s really disappointing, because it would be good to know what evaluation took place in the repeal of this legislation.

We attended the meeting as forest owners, we attended the meeting as stakeholders and those in industry, and, as I sat in the consultation in Kerikeri, it was a good, robust discussion between the advisers, us as forest owners, and the administrators, coming together to agree that “Actually, yes, we do need a register. We do need regulation.”. It was only four years ago that Matua Shane stood in this House to shepherd in this legislation that provided informed and transparent means for us, as the land owners and the foresters, to be able to engage with professionals who were impartial in order to give us good advice, because at that time, as my whanaunga colleague Peeni Henare has shared, there were cowboys in the sector, and we were vulnerable.

In July 2020, in the third reading, Matua Shane Jones stood in the House and he said that not all log-mongers historically have been rascals, but far too many have enjoyed, to the detriment of the good name of our industry, a laissez-faire approach to the way with which they had engaged with us. So this Government is anti-transparency and anti-regulation, because our Matua Shane—the Minister—brought this legislation through the Whare in order to support us so that we could access good, solid advice at the time. Now, the regulation is straightforward. It’s only four years in place. I can’t see an evaluation, apart from some opinions where there have been no further hui. I can’t see any hui with Māori land owners on this. Has the Minister engaged with te iwi Māori? Regulation was required for the industry to ensure that we were being given the quality advice that we needed, and Matua Shane shared in 2020 that real estate agents have a register, so why can’t the forestry advisers have a register? That’s what Matua Shane shared in this Whare. Give it a chance—give it a chance.

Now that we’ve got this flip-flop going back on the work of Matua Shane, we’re going to lose the opportunity in the sector and in the industry to continue that mahi tahi to ensure that we are getting the quality advice that we needed, because, to be fair, we have had some whānau who have been used to the detriment through the poor advice that they garnered before these regulations came into place. That was the benefit. As a landowner, when you’re seeking to harvest or you’re wanting to plan your forest, you can check that the adviser coming to your table is registered. At the time when this was a voluntary scheme, only 10 to 12 percent of forestry advisers were registered—10 to 12 percent—because when it was voluntary, nobody cared. They didn’t adhere to standards, and, in fact, there was so much work done in that space to bring the sector on board, the submission process was not rushed. We had meetings, we had webinar, we had a Māori land owners’ wananga, and a full committee sat and heard submissions.

This is going to be a rushed process. As I can see, we have the coalition Government and my Labour colleagues going to usher this through quickly, and yet we won’t even get a select committee process so that we can hear from the sector and we can hear from the forest owners. It would be good to hear from the voice of our people, but we’re getting this pushed through under urgency. I think that’s part of the moumou for Matua Shane, and the moumou of coming from Tai Tokerau and only spending last night with forest owners who shared, “Well, why are they doing this?”, and I said, “I don’t know.”

DEPUTY SPEAKER: The member’s time has expired. Please just finish the sentence, as then we can move on.

HŪHANA LYNDON: Kia ora. The Green Party oppose this legislation and will pursue a full process. Kia ora.

Dr PARMJEET PARMAR (ACT): Thank you, Madam Speaker. I’m taking this call on behalf of the ACT Party, and we are supporting the first reading of the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill.

I was listening to the previous contributor, Hūhana Lyndon, and I can see that the member is saying that something was done at one point and it was considered that that was the right thing to do so now we cannot change our position. That is not right. We have to assess things on an ongoing basis. At any point, if you realise that something is not working, we must change that, and that is what this bill about. Yes, the original bill, which this bill is repealing, was passed in 2020, and some of the regulations commenced in August 2022, but we know that over-burdening businesses with regulations doesn’t work, and the forestry sector is no different from other businesses.

As we know, the forestry sector brings huge revenue for us. It’s the fourth-largest export sector for us, and this Government wants to increase our export revenue—we actually want to double it by 2030. So we can double that only by supporting businesses. We want to see that businesses are able to do the things that they are supposed to do rather than just ticking some boxes and complying with unnecessary requirements. That is what this bill does. It gets rid of some of the compliances that we have enforced on the forestry sector and also forestry advisers. We want them to be able to do the work and produce the revenue for New Zealand and to support the lifestyle that we enjoy here.

What this bill does is it gets rid of the requirement of the register. That is, under the previous legislation, a registration system was set up where registered people were required to provide information, including their personal information. This bill will actually revoke all that requirement once it has gone through Parliament. That information that has been collected will be archived and will be secured from further use, which is important to note. Also, the levies and fees that the Ministry for Primary Industries (MPI) has been collecting will be refunded. Once the bill commences, if anything is due at that date, that will be waived by MPI. These are some of the changes that are really important to support the forestry sector.

On this side, we really want to get rid of all the red tape and unnecessary burden on businesses. We even have the new Minister for Regulation, the Hon David Seymour. So the ACT Party is really keen to get rid of unnecessary regulations and unnecessary burdens that the previous Government has imposed on businesses. We want to see that businesses are able to thrive, businesses are able to support the economy, and that is what the ACT Party wants to do. That’s why the ACT Party supports this bill and commends this bill to the House. Thank you, Madam Speaker.

JENNY MARCROFT (NZ First): Thank you, Madam Speaker. It’s a pleasure to speak this afternoon, and, particularly, it is a pleasure to hear from Hūhana Lyndon, my whanaunga from across the House, from Ngātiwai, for those words that were unexpected to hear of support of matua Shane—unexpected but delightfully received. It would just be a wonderful thing if you could also share that support on the fast-track bill.

In terms of the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill, I commend it to the House.

DEPUTY SPEAKER: It’s important to remember, for members, to stand and call, otherwise we might miss something.

HANA-RAWHITI MAIPI-CLARKE (Te Pāti Māori—Hauraki-Waikato): Ngā mihi e te Pīka, he nui ngā pire i te rangi nei.

E tū ana ahau ki te waha i ngā kōrero mā Te Pāti Māori i te rangi nei, ā, e kaha whakahē ana i tēnei o ngā pire kua tae mai i rō Pāremata i te rangi nei.

[Thank you, Madam Speaker, there are many bills today.

I stand to give voice to the statements of the Māori Party today, and we strongly oppose this bill that has arrived in the House today.]

The Forestry (Log Traders and Forestry Advisers Repeal) Amendment Bill provides for the disestablishment of the registration system and all associated requirements for log traders and forestry advisers and the Ministry for Primary Industries (MPI) to refund any fees or levies paid to MPI under the scheme and waive any fees or levies that are due to not be paid on time.

Alignment with Te Pāti Māori tikanga: we oppose this bill to our mana motuhake. According to the departmental disclosure statement, Māori were not consulted and there is no information available on the impacts of this repeal on Māori. When it comes to our whenua, Māori should always be partners in the decision-making process. We oppose this bill due to our mana ōrite. The registration system was put in place to allow equity of access to timber for both domestic processors and exporters. Its repeal will be inequitable for timber processors in Aotearoa. We oppose this bill for mana mokopuna. This bill will remove the requirement for forestry advisers, log traders, and exporters to work to nationally agreed practice standards. Less standards means less protections for our whenua and our tangata whenua.

The regulations that are being removed will be detrimental to oranga tāngata and oranga whenua. Māori should at least be consulted on all matters relating to our whenua.

Koinā taku takoha ki tēnei o ngā pire. Tēnā rā tātou e te Whare. [This is my contribution to this bill. I acknowledge all of us in the House.]

TIM COSTLEY (National—Ōtaki): This is a great bill, isn’t it? I love this, and I do want to acknowledge the support across the House from my colleague on the Foreign Affairs, Defence and Trade Committee, as we should, because you know, forestry is our fourth largest exporter in New Zealand. We have to be supporting them to power them up to get the best competitive advantage that we can. This bill is about getting rid of red tape for our forestry sector. Whatever the intentions may have been a few years ago when it first came in, ultimately, the end result was more red tape for forestry.

We are a Government, as this Parliament should be, that listens, that learns, and that can improve and ultimately will get rid of the red tape to get New Zealanders ahead. It’s about restoring autonomy to those that provide essential services to our forestry. It is signalling, I think, the wider intent of this Government to support our forestry sector, to grow investment in forestry, in fact, to grow our economy, and, for good measure, to get New Zealand back on track. I commend it to the House.

Hon DAMIEN O’CONNOR (Labour): A couple of questions I have: firstly, where’s Matua Shane? Where’s Shane?

DEPUTY SPEAKER: It’s not appropriate to refer—

Hon DAMIEN O’CONNOR: No, no, sorry—he’s in the House, but I hope he’s on the speaking list, because, actually, I was an enthusiastic supporter of this piece of legislation when it was brought in. A ute and a laptop was literally all you needed to trade logs. We had small forests owners, we had small investors, and we had small processors who were getting ripped off by people who would come and make an offer, people didn’t have good advice, and Matua Shane rightfully knew that we had to bring in a registration system so that people who were advising people new to the sector had some kind of credibility.

In fact, for the fourth-largest export sector in our country, it is absolutely essential that we have credible systems in place. So we are going to support this. But the question is, can we get guarantees from the Government that they will ensure that logs that are harvested come from areas free of disease? Because if that disease is identified offshore by any of our markets—say, India, for example—the risks are that those logs and our log trade will be shut down overnight.

The second thing is that we are now seeing increasing obligations around deforestation. There are countries around the world that simply cut down their forests, do not replant, and there’s growing concern about biodiversity, about carbon sequestration, all the rest of it. So there’s an obligation to ensure that the sustainably managed and harvested forests that produce the vast majority of radiata in our country, just what we’re talking about here, are actually replanted and run in a sustainable manner. If we can’t prove that and we don’t know that the logs that are going on the ship or they’re going to a processing system have come from a sustainably harvested forest, then we too could be shut out of international markets. Then there’s the one of ensuring confidence for those who invest in or own small forests that they can be protected against road traders, someone with a ute and a laptop, because that’s what we’ll be going back to now.

One of the primary drivers for the Hon Shane Jones—I guess, the obligation to place on these traders some credibility, some systems that offered some certification—was to ensure that the processing sector in our country, if they were signed up to a contract for supply, indeed had that supply delivered. These are companies—small, some of them are larger—that are employing New Zealanders up and down our country to produce the high-quality timber that we all rely on for our housing market. The Government says it wants to build more houses; it will need more timber.

When the log price goes up—and, at the moment, it’s low; the export log prices. So there’s lots of timber available for local processing. When the log price goes back up, which we hope it does, then the ability for those sawmills to compete for logs gets constrained and the traders will simply shift the logs to the highest place. If there’s no comeback on them, if there’s no registration, no certification, no proof of integrity or credibility, then the risk is that those rogue traders, as they did in the past, will just shift the logs to the highest market and leave our local sawmills at risk. So the question to the Government in passing this—and the costs are actually relative to this being the fourth-biggest export sector in our country.

The cost for individual traders was not that great. These are people dealing with millions of dollars, coming and going in terms of logs and supply. The money that the Government has decided it will hand back—like it is to landlords, it is now handing it back to some log traders—probably won’t be that great, but it will leave a gap in terms of Ministry for Primary Industries’ ability to provide oversight in this crucial area. This is a really important area out of our economy. It’s a growing one. People are looking to invest in the forestry sector. The Government needs to give them an assurance, those small forest owners, that they will be protected, given that the passage of this legislation will remove one of the obligations around registration that provided that protection.

TOM RUTHERFORD (National—Bay of Plenty): Thank you very much, Madam Speaker, and I stand in support of the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill, and I commend it to the House.

ARENA WILLIAMS (Labour—Manurewa): Madam Speaker, thank you for the opportunity to take a call on this bill. This is a bill which Labour supports, but it’s moving through the House’s urgency now through all stages so it’s really important for parliamentarians around this House to be able to appreciate the decisions that are being made here and also for the Minister to take full responsibility for those concerns, which my colleague the Hon Damien O’Connor has raised. Because this is an incredibly important sector for New Zealand.

We want our foresters to do well. I came to this House from a role in a large corporate group which owns the Woodhill Forest, and that forest was an important strategic asset not only for that group and its intergenerational commitments to those people who are shareholders in it, but also to the wider Auckland region. The economic impact of that forest, the way that it is used—it also has a big tourism element in the forest—is all really important as part of the economic engine room of that region. So we want these businesses to absolutely thrive and it’s important that they aren’t burdened with unnecessary regulations.

However, when we have a piece of legislation like this going through all stages, we need to know from the Minister that he’s got the right kind of safeguards, the right kind of checks in place to make sure that those businesses that will be now operating without the oversight of something like the Ministry for Primary Industries (MPI) are fully equipped to take into account those considerations that the Hon Damien O’Connor has raised.

I think it’s going to be really useful for us in the committee stage to hear from the Minister on his intentions around the conduct of those businesses and to make sure, particularly around those questions of rogue trading, that we’re not going to see that in our market. Although I think it is really important to acknowledge here that the sector has changed since that legislation was brought in, and so we have some comfort there around the kind of operators that we’re seeing in New Zealand forests.

I also want to make sure that the House knows of Labour’s intention here to always be scrutinising the forestry industry in relation to those interests of Māori forest owners. We know that forestry is a big part of the $40 billion Māori economy. Māori are very over-invested in forestry and so anything that would damage the performance of that sector and the ability of that sector to return gains to the shareholders who are actually iwi members—many of whom have benefited from settlements which involved Crown forest which has been returned to their iwi—that is of utmost importance to the Labour Party and is something we will watch closely.

We know that the Māori forestry sector is also poised to do incredibly well in the next two decades, and so we want to make sure that this House is enabling legislation which gives a real framework for that. We want to see a forestry sector that changes; that delivers good jobs, highly skilled jobs, in our regions and in places like North Auckland for the Woodhill Forest. We need to make sure that—

Hon Member: Safe jobs.

ARENA WILLIAMS: —exactly: safe jobs that have the right kind of checks and safeguards around them and the right kind of oversight from something like MPI and from a health and safety perspective where everyone in the sector is empowered to sort of unlock the economic potential of that asset.

Māori as investors in that—whether it’s through the post-settlement governance entities that have received Crown forestry assets through the settlements, or whether it’s through their own investments in rural forests like, say, the Mangatu Blocks that have had, since the 1930s, a policy of buying back forestry land out of private hands to restore their tino rangatiratanga over the realm of kaitiakitanga. In both of those scenarios, we want to make sure that they are not only able to realise the economic gains out of their forestry but also to realise the gains for future generations of owning the whenua, of having a relationship with it, and tying up into commercial agreements which are not advantageous to those iwi is something we would be concerned about. Because iwi members need to be able to not only realise the commercial gains that forestry allows for but also the access to their land, the access to their hunting rights, access to their wāhi tapu [sacred sites] which are often in these forestry areas.

So working with good foresters who also know those obligations and who are interested in their obligations in New Zealand—when, of course, Madam Speaker, you will know that many foresters are overseas-based, many of them are US operating here in the New Zealand market. We need to make sure that our provisions in here that we decide on are the kind of empowering legislation that Māori need to realise the benefits of their forestry asset. With that, and with no notes, I commend this bill to the House.

Hon SCOTT SIMPSON (National—Coromandel): With no notes, I commend this bill to the House.

Bill read a first time.

The result corrected after originally being announced as Ayes 102, Noes 21.

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

Second Reading

Hon TODD McCLAY (Minister of Forestry): I move, That the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill be now read a second time.

I would like to again acknowledge the forestry sector and the amount of change they’ve experienced over the past six years. There have been, you know, different messages that have come from Government in the form of the emissions trading scheme reviews, and the piling on of additional rules and regulations have affected them. It’s made the investment environment very uncertain for foresters.

Forestry has a very long investment time frame. From planting to harvest, it can take over 30 years for individuals and businesses to capitalise on their investment. I want to send a clear signal that it is worth investing in forestry, and the Government supports afforestation to boost exports, grow, and to help meet our emissions reduction and adaptation objectives.

The problem we’ve had in New Zealand in recent years is that when we have a problem, even a perceived problem, we’ve often attempted to fix it through more rules or regulations. This is probably a case that is no different than that. Through the repeal of the bill, and the passing of other bills since the Government took office, we’re sending a very clear signal to the wider Government agencies and the general public that, actually, what we want is fewer rules but better ones, and to work with the private sector, where they’re able to achieve what Government tries to sometimes—they are often better placed to do so.

The introduction of a regulation system was not the only part of these regulations. On top of the regulation system, additional regulations came into force on 1 July 2024, which add yet more obligations on registered forestry advisors to record their activities and submit annual reports of those activities to the Government. Additionally, on the same date, a new levy year will commence and another annual levy will be required to be paid by the registrants. I don’t see that any value has been created as a result of the log traders or forest advisers, through the system, and, therefore, these levies are not justified, nor is there a fee that they should be paid in registration.

Given the new regulations would add further compliance costs on to the sector in July, we’re seeking to repeal this legislation as quickly as possible so that the sector avoids this duplication, additional cost, and, of course, more compliance. We are repealing this legislation as effectively and efficiently as possible to avoid these initial costs on the sector but also on the Crown.

This legislation has been supported by a very large majority in the House and by all of the coalition partners, including the Hon Shane Jones, who I’ve worked very, very closely with to ensure that we get the balance right, to be in the protection but not over-regulated and burdening.

I just wanted to point out, in the previous debate, the member from the Green Party asked what engagement we’ve had from Māori, as I think the member of the Māori Party did. I’d just like to read, and can perhaps table if necessary, a letter and email that we received from Ngā Pou a Tāne, the National Māori Forestry Association, that said, “Tēnā koe, Minita McClay. A short note from Ngā Pou a Tāne in thanks for making the practical decision to repeal this unnecessary legislation. We’re pleased our voice and that of the industry has prevailed. Long may this continue.” That was from the chair of that organisation. So there has been ongoing engagement and discussion, and this is something that is widely supported by the forestry sector. I commend it to the House.

DEPUTY SPEAKER: So, just can I clarify, the Minister was saying that he would table that document if requested?

Hon TODD McCLAY: Well, I said what I’ve said: if necessary.

DEPUTY SPEAKER: OK, so if requested—you’re not asking to table it?

Hon TODD McCLAY: No.

DEPUTY SPEAKER: OK. Thank you.

HŪHANA LYNDON (Green): Point of order. Could I seek for the letter to be tabled?

DEPUTY SPEAKER: Yeah, you can make a point of order and you can request that the Minister tables that.

HŪHANA LYNDON: I did.

DEPUTY SPEAKER: Yeah. You need to seek leave for—just a moment, I’ll just get the words right. I’ve just clarified that—I can’t seek leave for someone else to do something; the Minister will have to do that voluntarily. Thank you.

HŪHANA LYNDON: Thank you.

Hon TODD McCLAY (Minister of Forestry): Point of order, Madam Speaker. I will just tidy it up so there’s not information that shouldn’t be in the public domain, in as far as contact details, and then I’ll table it.

DEPUTY SPEAKER: OK. Thank you.

Hon PEENI HENARE (Labour): Thank you, Madam Speaker. Before we all join hands and pat each other on the back about support breaking out across the House, I sat here and listened to a number of the speeches, and I thought it interesting when, over the last six years, the ACT Party took a very clear stance—pro farmer—to say no more farmland will be put into forestry. And I remember my matua Shane Jones saying, “More forestry is good.” And so I wonder if later on in the debate, as we progress this bill through the House, we might get a far more honest view—or a far more open view, I apologise, Madam Chair—and a far more transparent view on whether or not—

DEPUTY SPEAKER: Good choice of words.

Hon PEENI HENARE: —the relations between the coalition partners certainly indicate the words, or support the words, that were uttered by the Minister.

We will be supporting this bill. There are a number of things in the bill that the Minister spoke to that, of course, we’ll continue to look for safeguards on, and he mentioned the date August 2027. And I take his point that it is a long period of time when we look to the forestry sector for those that do the planning, those that do the planting, the growing, and, of course, the harvesting.

Of course, we’re putting a lot of trust into the sector to ensure that those safeguards will continue to be there for those that are small operators in the system, but also those who might wish to come into the system. And I think that’s an important thing to support the sector to make sure that they’ve got that system right. What we did find—and I speak as a former forestry Minister here—was that there was a lot of frustration with the burden that was placed on those particular forest owners, forest growers, and wood harvesters with respect to some of the legislation that was put in place to make sure that we have those safeguards. But I want to be very clear that those safeguards, with respect to international trade, looked to do a number of things. One of them was to protect indigenous species so that for those who might be selling indigenous species offshore illegally, we can keep a track of these things. We can make sure that through clear registration, knowing who’s who in the field, knowing who is brokering these deals as we export logs from New Zealand offshore, that they weren’t breaking the rules with respect to indigenous species, which are a very lucrative market right across the world in indigenous species.

In fact, I know of a number of traders from the Far North who have entered into swamp kauri or harvesting swamp kauri and have made a heck of a lot of money as they’ve exported that particular timber offshore. What we don’t want to see, though, is people going out and trying to raid paddocks or raid areas or raid land that they might think have those indigenous species like swamp kauri and look towards profiting offshore. That’s why it was important that we have checks and balances. We’re not simply saying, “Yes, we tried something, and it didn’t work in its entirety.”; we’re saying, “Yes, this is why we did it.” And it was to do a number of things, like I’ve already mentioned, about protecting indigenous species.

One of the other things, too, that what we tried to do with the legislation that this bill is repealing was to make sure that—we’ve heard the term “cowboys” in the sector here—there was a code of ethics in the way that they were operating in the field. Now, not only did we want to see that with respect to the trade and trade brokers that might be involved in the forestry sector; we want to continue to see a strong code of ethics across the entire forestry sector. The Labour Party most certainly have always been very staunch about workers’ rights, certainly staunch about the way that we can continue to protect workers in the field of forestry. We know that in forestry workers, the death rate is just far too high. In fact, I think it’s the highest in working professions in this country. So we were trying to do far more than just specifically what this bill is repealing.

It was about trying to set a good tone across the entire sector so that we have it from growth to harvest to export. And every single part of that machinery needs to be cognisant that these rules were in place for a reason. But I take the Minister and his word in our discussions that we had, and in the discussions that I too had with the wood councils, a number of them across the country who do have Māori representation on those wood councils. Recently, we were in Gisborne at the Te Tairāwhiti Wood Council Awards, where a number of traders, a number of growers and harvesters, had the opportunity to speak to my colleagues, and the following day, I caught up with them where they expressed an opportunity to do things better. And what we’re doing here is repealing a bill, repealing a piece of legislation, with the hope that they will get it right moving forward.

The Minister has offered some safeguards. We will continue to look towards supporting and making sure that those safeguards are adhered to. We acknowledge the time that it takes in order to make sure that these filter out across the sector. So, from my perspective, I think the Minister has the timing about right with respect to August 2027, which is the amendment that he’s made to his bill. And it’s the support of that sector that I think is going to make it even stronger for the future. Why I say that is because, as my colleague had already mentioned, at the moment, log prices are stable and low. As they rise, the market changes. And we want to make sure that everyone has an opportunity here to still be able to trade in what will be and has proven in the past to be a very lucrative export for our country.

And, in order to do that, what we don’t want to see is simply large owners taking over a small player in the field—in particular in places on Māori land, and it’s already been made clear by members across the House that Māori land under the stewardship of the stewardship of the former forestry Minister, the Hon Shane Jones, who went around to look towards land that was—I can’t remember the word exactly, but it was land that couldn’t be used for much more. And they were used to plant and to grow trees in order to create carbon sinks as well as make sure that there was opportunity for Māori land owners, trust-land owners to be involved in forestry exports into the future. And they look for those safeguards, which is why we put in place the legislation that we did.

The bill now is going to repeal that. The Minister has made clear some of the safeguards—and we’ve already expressed that, through the committee of the whole House, that will continue to seek those assurances to make sure that, as we go through the debate on the bill, we can come to a consensus certainly for the support that we offer as the Labour Party to this particular bill and make sure that it can be the best base for the forestry sector to grow.

In conclusion, I want to just continue to reiterate, though, that the Labour Party has always stood for manufacturing and processing wood locally. Well, I want to make that point clear. We want to, yes, support exporters—of course. We want to make sure that the regime is in place to support exporters, but, as my colleague had already mentioned, when we look to build in this country, when we want to build ourselves out of a housing crisis, when we want to build more schools, it just makes more sense to have the timber locally. I always found it odd, and most members in the House will come across members in the community who will say, “I find it odd we export our logs and then we purchase back processed timber.” I’m not the only one who says that in the House. I’m sure members have experienced their constituents or the sector saying the same thing. So I want to make it very clear: we, in our time as Government, invested in that particular sector, and those are more of the opportunities that will look towards this Government in hoping that they’re true to their word in order to support the forestry sector moving forward.

So, on this side of the House, the Labour Party will be supporting this bill, but we will continue to look towards the safeguards that the Minister outlined in the first reading of this bill.

HŪHANA LYNDON (Green): Tēnā koe, Madam Speaker. Tēnā koutou e te Whare. Now, I’m reflecting on the purpose of this legislation that is to be repealed. It was to ensure that logs grown in New Zealand and bought and sold were handled in a way that was transparent and professional. So since 6 August 2023, it’s been an offence to operate as a log trader or provide forestry advice without being registered.

Now, if I can share some personal experience around the benefit as a small forest owner and administer on behalf of our shareholders, this scheme has been very beneficial for us, because we had the opportunity to engage with registered professionals to advise us on how to manage our forests, and then who to engage to finally execute the thinning that we need on our whenua. Now, we may not be big players, we may not be members of Ngā Pou a Tāne, but our voice matters and we are worried, because, certainly, we have seen others who have spent far too much in gaining advice and then seeking services which actually didn’t work out for them anyhow.

In Tai Tokerau last night and yesterday, I had the opportunity to sit with forest owners and other hui and talk to them about, “Hey, have you engaged with any forest advisers lately? Or where are you at with your thinning programme?” They said, “Yep, it’s good because we know tūturu that the person that we’re engaging has the right credentials and experience to engage to support our trust.” And we aren’t big players—no, no—but we are important in terms of the building blocks of the economy of New Zealand. And, as Māori landowners, our voice does matter.

In terms of the original intention of this legislation, it was to strengthen integrity; it was to provide continuous, predictable, and long-term supply of timber; and then to provide, of course, as I’ve spoken to, transparency and professionalism. But also it helps us to have confidence with those that we engage. And I was thinking about the consultation meeting that I did engage with when the Minister was making the rounds in establishing this legislation, and it was robust, because we had whenua Māori, we had members of our wood council, we had advisers, and we had some whanaunga who were in the sector. And some of our whanaunga in the sector raised concerns around registration and compliance and “This is just another added burden”. But, actually, in engaging with them recently, the professional learning and development that the advisers are required to engage with to keep up their registration has meant that we had confidence in the advisers, whether it be for log trading or whether it be for forestry advice in general meant that we knew tūturu that these people had the credentials and experience that we needed.

Now, in the process of consultation that Minister Jones at the time undertook with Te Uru Rākau, the wānanga, the webinars, the online hui, and also the face-to-face like I participated in saw submissions come back because we had a full process. This is really fast what’s happening here. But in that process we had the select committee, and the submitters came back and supported the need for continuous professional development for our advisers. In fact, 87 percent said that the records from this continuous professional development should be held centrally, and 93 percent thought that they needed to be lodged and held so that we could check the credentials of our advisers.

So I mihi to the submitters who supported the need for somewhere central—a bank—so we could check the credentials of these people, because there’s nothing worse than engaging a cowboy—nothing worse than engaging a cowboy—that turns up with their laptop on their truck, and then next minute it’s costing you more and more in the pocket. And when it comes to your annual general meeting (AGM), when you need to stand before your people, you’re held to account. I have seen many AGMs where we have been burnt as trustees who are inexperienced in the market, and we’re just doing our best to make a good decision for the use of our whenua, but we had confidence because of this legislation. So, yes, I do support my matua—Matua Shane—for this. And I do thank him for persevering in this space.

If we recall the need for this legislation, and thinking about the speeches we had that took place in the House by Eugenie Sage, she stood up and she shared that there’s a social licence that the industry really needs to gain back that trust within our communities. And we don’t have to think too far back to our whānau in Te Tai Rāwhiti, and then also for myself in the back blocks Ngāti Hine when our logs fall into the waterways or clog up our roads when they fall over and we have to figure out a plan because, actually, our planting plan wasn’t great. So, critical to this is good advice.

Now, I appreciate that the Minister’s going to share the letter he’s received from Ngā Pou a Tāne—great; kia ora. As a stakeholder, that’s great to see that you engaged with someone, because in the official records there was “No consultation has been undertaken on the policies within this bill.” So the more we learn around the consultation undertaken by the Minister and his officials for this legislation, the more we will learn in terms of what the product is that will be produced, because if we have to rely on the sector and we have to trust that they will come up with something, we know they didn’t before. There was only 10 to 12 of those forest advisers, those loggers, that registered—10 to 12 percent. So, Matua, Tama, Wairua Tapu—we’re going to have to trust that they’re going to come up with something. Kia ora tātou.

We know that forestry is a massive player within our economy. We know that our people benefit from the work and also there is always risk within this space. And I’ve spoken to my own experience in land administration and having to face the wrath of our people at an AGM. But ultimately what I understood back in the day four years ago when the sales pitch came into our kāinga was that this was about retaining the value back in our communities so that we could build our own homes from wood produced in our kāinga to support our local processors. I say this because that’s what I clearly heard on the day, and that’s what I saw from our local processors standing up and saying “Āe, tautoko, āe.” They were there. And I appreciated the way that the industry and us as landowners came together. That was the vision that Matua Shane presented: keeping the value in our communities and building up our own industry. He said the short-term issue is how we manage slowing down the volume of logs getting harvested in Northland and we need to protect the jobs of our local people.

Now, with this I keep thinking about building more homes, so I do welcome the discussion around what is the plan beyond here. Through this process, can the Minister present what is the vision, because from a whenua Māori perspective, we might be small players, but if we can keep our logs in Tai Tokerau or in Te Tai Rāwhiti, and then we can put them through local processing and build local homes for our people because we know we have a shortage of homes in our kāinga, then that would be a win. So I welcome the wānanga that we might have today, but continue to raise concerns around the exclusion of the people of New Zealand and the exclusion of our voice, whether we be large or small forest owners, whether we be just a subbie. Sometimes you’re only small harvesters, the loggers, or even I think of some of our matua who are around who try their best, and they put in tono all the time for jobbies for our people, and they got registered so that they could have a chance with our landowners to be able to demonstrate that they could harvest or they could thin.

So my tono to our Minister is to present the vision. What is the plan? Because the people of New Zealand deserve that, forest owners deserve that, whether we’re big or small. And for those that have made the effort to become registered and who have complied with the need for continuous professional development, I think they need to be celebrated. And by celebrating them, they’re important to the sector. And if they’ve been through the rigour of registration, let’s maintain that movement of getting the rest of everyone on board. So what is the solution? What is the plan? Because we can’t see it right now. Kia ora tātou.

LAURA TRASK (ACT): Thank you. I stand in support of the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill, acknowledging the Hon Peeni Henare’s comments about forestry and ACT’s position on turning productive land into forest. Unfortunately, I’m unable to comment on my colleague’s positions on that, but maybe throughout this process you will get your answers.

Look, the ACT Party’s all about cutting red tape and making it easier to do business in New Zealand. So I think that this bill strikes a good balance between eco-activity and providing employment, and I think it’s a really sensible bill and I commend this bill to the House. Thank you.

Hon MARK PATTERSON (Minister for Rural Communities): Thank you, Madam Speaker. I find myself in a rather invidious position of getting up to support a bill that I was part of a party that helped bring into being. So that is politics for you. But I recall back in those, maybe, 2018-19 years when this piece of legislation came into being—it was, as the previous Green speaker alluded to, a sense of tidying up the industry, taking out some cowboys. But, also, there was concern and continues to be concern about the massive opportunity costs of seeing raw logs go out from the ports without the value being captured by further processing onshore. It was thought that some of these mechanisms could help to make sure that at least the local processors got a shot at some of that supply.

I guess the long and the short of it is that it’s a solution that didn’t necessarily deal with the problem. That seems to be the outcome of this. I think, sometimes in politics, you’ve got to be able to accept that you don’t always get it right, and if you haven’t got it right and you can try another way, then that’s what you should do. So we’ve taken on some wisdom from the Minister here—Minister McClay—who does not support this. We’ve been prepared to go with him on this and accept his worldview, I guess, in terms of cutting the red tape, getting out of the way, and letting industry take care of itself a bit. So we’ll see how that goes. But, I think, sometimes in politics, there’s some things you’re not going to die in a ditch for, and New Zealand First is not going to die in a ditch for this bill. It’s a bill that hasn’t probably reached its potential in terms of outcomes that we would have liked when we brought it in. So we will accept that. We will support the bill and we’ll commend it through to this next stage. Thank you.

HANA-RAWHITI MAIPI-CLARKE (Te Pāti Māori—Hauraki-Waikato): Ngā mihi ki a koe, otirā tēnā rā tātau e te Whare.

E tū ana ahau hei taima tuarua i roto i tēnei Whare hei kōrero ki tēnei o ngā pire e kaha tāmi ana i ngā āhuatanga, i ngā uri o te wao nui a Tāne. E kaha tautokotia ana e au ngā kōrero a taku tuakana nei, a Hūhana, otirā i Te Pāti Kākāriki me ō rātou wheakoranga nui i roto i tēnei o ngā rōpū, i roto i tēnei o ngā mahi e hono ana ki tō rātou ake nei iwi o Ngāpuhi, i roto i ēnei wheakoranga i roto i ngā take ahuwhenua, i ngā take e hono ana ki ngā rākau, ngā uri o Tāne Mahuta.

E tāruaruatia ana e au ēnei kōrero nā runga anō i te mea kāore anō kia panoni ōku whakaaro, ngā whakaaro o Te Pāti Māori. E kaha whakahē ana mātou i tēnei pire nā runga anō i te mea e tūhono ana tēnei pire ki tō mātou mana motuhake.

E rongo kōrero ana i te Minita kua whakawhiti kōrero ia i te taha i te rōpū o Ngā Pou a Tāne. E mihi ana ki tērā. E tatari ana mātou mō te reta kia whakawhārikihia ki runga i te tēpu rā. E tatari ana mātou mō tēnā.

Heoi anō, ehake i te mea ko tētehi rōpū anahe. E kaha rangona ana e mātou ko wai ngā rōpū, ko wai ngā iwi, ko wai ngā tāngata kua kōrerotia e tēnei Kāwana, e tēnei Minita ki ngā tāngata whenua, ngā tāngata Māori ki roto i tēnei o ngā wāhi o ngā take e tūhono ana ki a Tāne Mahuta.

E kaha whakahē ana mātou i tēnei pire e hono ana ki te mana ōrite, nā runga anō i te mea ka whai mana ngā exporters, ngā domestic processors, ngā tāngata e whai mana ana i roto i te ao o te timber.

Waihoki e kaha whakahē ana mātou i tēnei o ngā pire e hono ana ki tō mātou mana mokopuna nā runga anō i te mea ko tēnei o ngā pire e tāmi ana, e takahi ana i te nuku o te whenua, i tō mātou nei pepeha, i te oranga whenua. Nā runga anō i tēnā, e whakahē ana mātou, Te Pāti Māori.

E kaha tautokotia ana e mātou ngā wheakoranga o Hūhana Lyndon i tēnei o ngā wāhi. Nō reira koinā aku takoha ki tēnei o ngā pire.

[Thank you, and, indeed, greetings to all of us in the House.

I stand for a second time in this House to speak to this bill that strongly oppresses the circumstances and the descendants of the great forest of Tāne. I strongly support the comments of my senior here, Hūhana, indeed the Green Party and their many experiences within this one of the organisations, within this particular activity that is connected to our own iwi of Ngāpuhi, within these experiences in horticultural issues, and the issues related to forestry, the descendants of Tāne Mahuta.

I am repeating these statements because my opinions have not changed, the opinions of the Māori Party. We strongly oppose this bill because this bill is connected to our self-determination.

We hear statements from the Minister that he has communicated with the organisation of Ngā Pou a Tāne. We commend that. We are waiting for the letter to be tabled here. We are waiting for that.

However, it is not as if there is only one organisation. We are hearing a lot about who are the organisations, who are the iwi, who are the people that have been engaged by this Government, and by this Minister with the people of the land, the Māori people within this area of the issues that are related to Tāne Mahuta.

We strongly oppose this bill that is connected to equality, because authority is afforded to the exporters, the domestic processors, and people with power within the timber sector.

Furthermore, we strongly oppose this bill as it relates to the authority of our grandchildren because this bill oppresses and mistreats the breadth of the land, our expressions of identity, and the health of the land. And due to that, we, the Māori Party, strongly oppose it.

We strongly support the experiences of Hūhana Lyndon in this space. And so these are my contributions to this bill.]

Dr LAWRENCE XU-NAN (Green): Kia ora, thank you so much, Madam Speaker. When we’re looking at this particular bill, there are multiple parts to this. So there are two major elements we’re looking at. The first of them is the repeal of the log traders and forest advisers, and the second part is to do with the legal harvesting assurance.

Before we talk about some of these, I just want to kind of give the broader picture that when we’re looking at something like forestry, we’re looking at an ecosystem, at multiple perspectives, and, in the context of this House, multiple portfolios that come into play. We have also already heard from our forestry spokesperson, Hūhana Lyndon, but also in this context we are going to be looking for engagement from the agriculture perspective, from the environment perspective, and, in this context, from me in a trade perspective when we are looking at the bigger picture of forestry.

The first thing that we were looking at—the intention that was introduced a few years ago around the log traders and forestry advisers is around the standardisation and the transparency that it will provide. We have already heard from my colleague Hūhana Lyndon that when we are looking at this, it is to provide small entities and small groups with the best opportunity to benefit from something like this; having that availability and the genuine personal stories that we have heard, that ability to hear and having that access and the confidence to the forestry advisers, and this is something that this particular bill will be removing. So that level of transparency is absolutely crucial.

The second thing I want to raise—and this is something that I’m sure we’ll tease out again in the committee stage in lieu of a select committee—is around this idea, as we heard before, of thinning and harvesting. This is where the environmental component comes in really handy, and it’s incredibly crucial because we have seen the danger and the harm both to our environment but also to people and to livelihoods when things are not harvested and when timber is not thinned correctly. Our heart goes out and we acknowledge every single person today who is currently suffering in the East Coast, and we also acknowledge the work that our colleagues in this House are currently doing within their respective electorates that are affected as a result of the state of emergency in the East Coast. For some of those, forestry is so important and the way that we harvest is so important for those regions, to ensure that healthy environment, that people across the board, that ecosystem we’re looking at isn’t going to be ruined.

This is, again, something that’s going to be really, really important, and to tie it into my portfolio around trade, and also in this particular case the Hon Todd McClay’s other hat, other than forestry, is looking at how this system, when we are looking at the transparency and the protection and everything that this particular bill that we are repealing has in terms of our current trade agreements and particularly some of our most recent trade agreements with the EU and UK—granted, these are not areas that, potentially, we are exporting some of those woods and we’re looking at other forms of exports, but within those agreements there are specific requirements for environmental standards, specific requirements to environmental and labour protection. This is something that is also going to be really crucial, and I am really looking forward to the opportunity to get some clarification from the Minister during the committee stage of how, without something like this, do we ensure that the same level of protection is in place and the same level of equity for our small forestry operators will continue to be in place?

So this is something that I am looking forward to continuing discussing during the committee stage, but, unfortunately, at this stage, with the lack of information, we cannot support this bill.

TOM RUTHERFORD (National—Bay of Plenty): Thank you very much, Madam Speaker. I stand in support of the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill. I was reading through some of the debate notes in preparation for this speech, and one of the things I came across was some comments actually made by the relevant Minister, the Hon Todd McClay—and I quote—“The current system fails to deliver outcomes and places unnecessary costs on forest businesses. The repeal will be delivered at speed, with changes coming into effect before 1 July.” Therefore, I’d like to get out of the way and get it all enforced. I commend it to the House.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora, Madam Speaker. What an unusual treat it is to have a speech on this bill, because I was the lucky chair of the Environment Committee when the original Forests (Log Traders and Forestry Advisers) Amendment Bill was passed. I particularly enjoyed Mr Patterson’s speech tonight because it was New Zealand First who pressed with utmost urgency that this was a critical piece of legislation to ensure that we had a robust domestic industry. And it’s interesting, because my own background is in professional regulation and this regime landed on the select committee table with a fully fledged complaints and dispute resolution framework at incredible pace, and with urgency because of the importance of it. We worked through all kinds of details of standards committees and what kind of code of conduct there would be and how we deal with commercial disputes.

To be fair, at the time, this was very much a New Zealand First initiative. In fact, it was of critical importance to them. It was a “do or die” situation. And here we have it. They’ve flip-flopped. Someone in their coalition said, “We don’t like that.” And Shane Jones said, “Well, you know, maybe, you know”—Mr Patterson said we tried it; it was a bad idea. Let’s be clear, it’s not even properly enforced yet. It hasn’t actually been fully implemented. So we don’t know whether it was going to be a good idea or not. But, even at the time, certainly it was there because New Zealand First desperately wanted it. There was a sense from New Zealand First that some log traders would not be doing the decent thing with domestic growers and providers of foresters, so there was this framework put into place.

We do support this bill, because we do have concerns that you can’t go around and, just because you don’t like the way some people are behaving or you’d like to see a different approach—and one of the questions here was the mix between logs that were being exported and logs that were being made available for domestic milling. And, look, the last thing we want is to be importing milled timber from overseas. But, at the same time, we don’t want to be creating an entirely kind of false regime where local mills have some kind of preferential treatment, and people who are buying logs for export are doing it on an other than commercial basis. And that’s, kind of through the back door, essentially what this this regime was at least targeted at. So it, in effect, had an element of trying to interfere in the market in a way in which some would say was anti-competitive. So, in so far as it’s not landed well, that’s not entirely surprising.

Log traders—the name pretty much says it all. I’ve heard a number of people who didn’t know about this, but talk about a guy with a ute, or a person with a ute and a laptop. But that’s what log traders do. They purchase logs and they broker them and they then supply them to third parties—a perfectly legitimate role. And, as in any business, there’s going to be some rogues and scallywags out there, but there’s a whole system of commercial law for that. I think we’ve got to be cautious about imposing onerous systems and kind of fully fledged regulatory systems like we do on lawyers, for example, where you’ve simply got two commercial parties with bargaining positions.

I think the trigger for a kind of conduct system, which is what this was and is at the moment, but won’t be for long—a conduct system really is only appropriate where you’ve got some kind of vulnerability or significant imbalance of power. A kind of historic origins of those were doctors, lawyers, and those traditional professions, if you like, who had a kind of special position and knowledge, and, therefore, in respect of their clients, they had to have these special conduct rules. Over time, it’s been expanded into kind of the consumer area. So we see the banking code of conduct. We see the Credit Contracts and Consumer Finance Act regime and the financial market conduct regime, all of which are good because of the imbalance of knowledge and power between, essentially, a seller and a buyer.

Log traders don’t quite fit into that. This is not a consumer contract. It’s not some kind of fiduciary relationship. So, in fact, it was heavy-handed and that was always the concern. It is with somewhat of a wry smile when being pressed heavily by New Zealand First as to the critical importance and the fact that our local log industry depended for its life on this. So I think Mr Shane Jones is now hiding in the ditch he was about to die in before. So, you know, there you go. But it is good that we can look at this. You know, the ACT Party has got this bee in its bonnet about regulation, as if, on this side of the House, we just love regulation. Well, it’s not the case. We want appropriate regulation in appropriate places. And, certainly, in the forestry industry, there is some appropriate regulation needed. I’m sure my colleague our spokesperson for workplace safety will have something to say about that. But in terms of regulating the relationship between buyers and sellers of logs, it seemed a very odd place to do that.

So, yes, we want responsible capitalism, but we actually want capitalism that works. And we agree that where there is an unnecessary fetter on people making agreements and engaging in effective business, then we want to get rid of them. I would say come over and have a yarn, because we’re very interested in this. As our position on this bill shows, we’re really interested in having a fruitful discussion, but we think the kind of regulation bonfire approach is just a little unsophisticated and doesn’t really serve us well. So, in respect of this piece of legislation, we think that the code of conduct framework was unnecessary. Of course, the additional fees and levies, that does have to be borne somewhere, whether it’s in the traders’ profits or the price of the timber that ultimately gets milled, and we don’t want to see that.

The commercial disputes resolution framework—you know, there was something in that. I’m actually a real advocate of keeping disputes out of the courts as far as we can, and providing people with a forum and a framework which is non-court - based is a good thing. But you don’t actually need to do that by imposition in commercial situations. You can generally provide a framework and let people pick it up if they choose to do so. So, once again, that’s a really good example of how you can provide the tools but not necessarily go down the road of compulsion. A lot of these disputes can be solved by mediation or by arbitration, which was, essentially, the framework that was set out in this log traders framework here. But the fact of the matter is that a non-litigious approach is by far and away better.

But, at the end of the day, what we’re all interested in is a robust, thriving, and competitive forestry industry and one which has both a good export aspect to it. We do want to see our timber go overseas. Ideally, it would be milled before it goes over—but we know that’s not always the case—but also a robust domestic industry. We don’t think we need regulation to achieve that. We think that the industry’s actually in good health. It’s going to have its ups and downs—industries, and primary industries in particular, always do.

So, once again, good on you, Matua Jones. You come to this House one day, say something is absolutely important, and the next day slink away with your tail between your legs saying, “Well, maybe it wasn’t that important after all. Maybe it was all just a bit of a mistake.” Kia ora, Madam Speaker.

STUART SMITH (National—Kaikōura): Thank you, Madam Speaker. It is a great pleasure to speak on the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill. I think there’s widespread agreement across the House that this Act is unnecessary. I do have to take a little bit of issue with the previous speaker, the Hon Dr Duncan Webb. I think it’s a big person who is someone who can accept that they put something in that is not actually fit for purpose, with new information, and I think it’s really big of them to come forward and take it on the chin and move on. With that, I commend the bill to the House.

CAMILLA BELICH (Labour): Thank you, Madam Speaker. It’s a pleasure to be able to make a contribution to this Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill. I have to say it was a bill that I wasn’t that involved with. I wasn’t in the Parliament when my colleague Duncan Webb was involved on the select committee, so I had to look into the history of this bill.

To start with, I was thinking, well, this actually looks quite good, the fact that we have some constraints on one of our most dangerous work areas, which is forestry. But then when I looked at the content of the bill, I realised, obviously, that’s not the purpose of this bill. It was very much to do with regulating the sale and the trade of logs, which is not the biggest issue in my mind for regulation. And I thought a bit more widely about this and looked at the existing framework in relation to some of the health and safety provisions that we have in forestry. And the reason that this comes to mind in forestry is, as Peeni Henare indicated before, forestry is our most dangerous profession by quite some magnitude. So if you look at the number of people who are injured and the number of fatalities that occur, these are much, much greater in relation to forestry than they are in almost any other industry.

There is in the explanatory note an explanation of why this bill has been brought to the House. It’s to do with the National Party’s position in relation to the election. Fair enough. You win the election; you get to implement the policies that you campaign on. And I know that this was an important thing that the National Party has had a long history opposing. I didn’t agree with the focus, though, on lack of regulation. So that’s why it was really important to me, when I read this bill and we were considering our support for this bill, to go through the types of regulations which were actually included in this particular bill and just to assure myself that they aren’t ones that could be associated with having a safer regime for forest.

I am interested to hear and participate in the committee stage where we’ll have the opportunity to question the Minister more on the regulatory framework and just to tease out a little bit what was meant in the original legislation that this repeals, which actually talks about professionalising forestry. And, you know, I have a degree of sympathy with the idea that because it is such a hugely dangerous trade and a necessary one—obviously, we do need logs to be able to build, and it’s important for our trade. There’s lots of important things associated with forestry, and my contribution is not at all meant to cast any doubt on a lot of people within that sector who do want to have a robust regime in place, but the original bill did say that they wanted to kind of look at making sure they got rid of cowboys. And that’s something that I would agree with. So that was something that I was concerned about.

But when I actually looked at this particular bill, there’s obviously the repeal of the traders and forestry advisers. I have listened to the points that have been raised in the House, and it appears that the objectives that were meant to be achieved by that particular part of the bill, perhaps haven’t served the purpose or they’re not as necessary from the proponents in support of this bill. So I can accept that. And I did note that, also, there is still an aspect of this legislative change which will go ahead in terms of the Forests (Legal Harvest Assurance) Amendment Act. And so this bill, as I understand it, takes the commencement date out to, I think, 1 August 2027. So there is a component still, and I’m sure the Minister will be able to go through this in subsequent readings and also on the committee stage, that is still maintained.

But, overall, I agree with my colleagues that we should support the repeal of this legislation, but also to note the concerning rate of injury and workplace deaths that occur in the forestry industry and not to accept wholeheartedly some of the language in this bill around the need for lack of regulation, because I think regulations that keep people safe, regulations that save lives, and regulations that mean that people come home at night to their families are really important. For all too many forestry families, that hasn’t happened. So this particular bill doesn’t go very far at all towards that objective, but I would encourage the House and the Minister to make sure that they are aware of those issues and work towards them.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Speaker. Happy to rise and take a call in the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill. I think the case has been traversed quite well—the Minister put forward and outlined the clear reasons we need this. Ultimately, one of the biggest frustrations I hear from my constituents in the Waikato is the over-regulation; the burdensome red tape and compliance that just makes it hard to get stuff done.

On this side of the House, we are focused on unlocking New Zealand’s potential, on driving that economic growth, rebuilding the economy, and getting the country back on track. So I absolutely support this bill and look forward to the progressions of the next few stages this evening. Thank you.

Hon GINNY ANDERSEN (Labour): Thank you very much, Madam Speaker. Thank you for allowing me to take a call on the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill, part of a suite of different measures that have been designed to reduce regulation. The changes that were brought in, led by Shane Jones in this space, are being wound back. I think it’s important to note that while we are supporting the bill, it is really important that the safeguards that have been undertaken to industry to make sure that those forestry exporters and forestry growers—that those safeguards are in place. That is the main caveat that we are placing upon the support of this bill today.

As it has already been noted, not only is forestry a significant part of our export market—fourth-largest, I believe—but it’s also an area where there has been a large number of workplace casualties and also fatalities. It has been a hugely unregulated place where workers are operating in incredibly dangerous situations. It is important to note that the way we do our business in New Zealand directly reflects upon our international reputation and our ability to continue and grow our trade market. So if we are serious about growing trade, if we are serious about growing our economy, we need to look after our workers.

I would just like to acknowledge the work of Helen Kelly in this space. She worked for a long time and fought for many families who had lost loved ones. She fought WorkSafe hard and long for poor-quality investigation where workers had been killed and did not come home, because of poor-quality safety practices right here in New Zealand—young men operating with dangerous instruments, and felling trees in areas that were just plain unsafe. So, with pulling back regulation, we need to be cautious that we don’t kill and hurt the very people that we are expecting to drive our economy further. That word of warning comes with taking away any form of regulation. We need to be doing that in a measured sense.

One of the things that’s always struck me living in the Wellington area is how many logs sit on our ports when you drive past. It always strikes me that we should be doing a little bit more of that processing here in New Zealand. We support local processing of those trees that we fell. It would be far better for our own economy to have value-add to be making more of those products here in New Zealand that we’re able to export at a higher price. There’s some really smart stuff going on in that sector in terms of composites and how we can do that in the building sector. I think this is an area that we could continue to work upon. Instead, we do send a lot of it offshore and then we bring it back in as finished goods from other countries. I think there’s some opportunities there for us to make more out of the produce that we grow right here in New Zealand.

I think it’s important to note, in terms of this winding back regulation, that we always take a good look at our supply chains—where are they starting off and where are they finishing and what are the industries involved along that process of supply chains? Regulation can be really effective at lining up our industries so that we get maximum bang for buck. Sometimes, just cutting staff and saying “Red tape sucks and we’re going to get rid of it.” loses sight of some of the bigger scope of how we plan and, for a small country, make the most of our resources, make the most of our skills, and grow our GDP as much as we possibly can. So I really hope that there’s further work going on with this Government to understand the bigger picture of our forestry sector and how we make the most of the opportunities that we have right here.

I’d like to also note that this bill defers the commencement date so we see it makes those amendments to the bill that was enacted in 2023. It’s to ensure that there are no regulatory gaps and that full engagement is effected with people and trading partners, that that can be delivered. It’s important to keep that in place. It also ensures that the secondary legislation for the legal harvest system is developed and implemented in a way that appropriately manages risk and does not add unnecessary compliance costs. That’s an important balance to strike—between making sure we manage risk but also managing compliance. It’s important to listen to the sector, and we believe, in Labour, that we want to work with our local sector and understand their concerns, to not only make sure their job is easier but also that they balance those risks that have been outlaid.

This is a bill that New Zealand First pushed forward and I see that they’re still OK with it now as it’s wound back and to reduce some of that regulation. Overall, I think it is an interesting time and I look forward to seeing not only how the Government but also the Ministry for Primary Industries (MPI) sees how we make sure this operates well. The bill specifically provides for MPI to refund any of those levies or any of those fees under the system and also to waive those levies or fees that are due but not yet paid as part of when this was meant to commence. It also stipulates here that all unresolved complaints and reviews will be extinguished and commercial disputes discontinued. Those consequential amendments made will make sure that when it commences, the Act does not include any of the provisions that relate to that primary piece of legislation.

For a sector that means a lot to New Zealand’s economy, for a sector that does a lot of good for New Zealand, a big part of our export market, but also a lot of workers out there, I really hope that this Government gets it right and I really hope that they strike that balance appropriately between reducing regulation but managing risk.

MIKE BUTTERICK (National—Wairarapa): Thank you, Madam Speaker. Another great bill that removes red tape—unnecessary red tape—and removes costs for the forestry sector, which, like the rest of the primary sector, are doing it pretty tough at the moment. I’m sure they’ll appreciate a reduction in cost. The old adage “If it ain’t broke, don’t fix it.” certainly applies. The cost of the red tape is now a solution that has turned out to be a solution looking for a problem that didn’t actually eventuate. So, red tape—unnecessary red tape—bye, bye. I commend the bill to the House.

A party vote was called for on the question, That the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill be now read a second time.

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 14

Green Party of Aotearoa New Zealand 14.

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 Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill.

In Committee

Part 1 Amendments to Forests Act 1949

CHAIRPERSON (Maureen Pugh): Members, the House is in committee on the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill. We come first to the debate on Part 1. This is the debate on clauses 3 to 8, “Amendments to Forests Act 1949”, and the Schedule.

STUART SMITH (National—Kaikōura): Point of order. I seek leave for all provisions to be taken as one question.

CHAIRPERSON (Maureen Pugh): Leave is sought for that purpose. Is there any objection? There is objection. The question is that Part 1 stand part.

Hon PEENI HENARE (Labour): Thank you, Madam Chair. As we look towards Part 1, it might be really good just to elaborate for the members across the Chamber what are the parts that are being repealed here is, which is the code of ethics. A code of ethics is really important, and if you look at the short list of the code of ethics that is there, one will see “professional responsibility”, “responsibility to clients”, “professional work standards by registered forestry adviser” and “maintaining professional competency”. I think these are all things we’d all look towards in the sector, especially in a sector such as forestry, which is important to our people.

The Minister, the Hon Todd McClay, in the first and second readings of the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill, talked about some of the safeguards. I think, when we think about the code of ethics and what is happening here with its repeal, there are going to be some assurances sought not just from the Minister—because I appreciate the Minister is the Minister of the sector. But the sector itself will need to make sure that they do act ethically and that they do engage the sector broadly and don’t take it upon themselves alone, in some of the organised bodies, to make the decisions on behalf of others, who might not get to be fully represented there.

The question I have for the Minister, with respect to Part 1, about those safeguards, which he did refer to in his speech—things that will give this side of the House assurance that those codes of ethics, in particular with trade, can be upheld; or a code of ethics can be upheld, given that we are repealing in this particular bill. I wonder—and I’m going to take just a small licence here—if that might also extend to some of the other matters that were raised through the speeches by my colleagues in the first and second reading of the bill, about making sure that there is a good code of ethics right across the sector. I think, if we’re going to do it, we want to make sure that we can have it right for exporters. We want to give confidence to the whole sector, as the international markets look toward New Zealand for the exporting of timber.

That’s my first question for the Minister, and I appreciate he’s got the advisers there and he’s writing some notes. So I’m going to shift to my second question, and that is with respect to the forestry practice standards. Work safety is paramount for our party. We want to know that forestry practice standards with respect to trade will continue—same thing: to look towards the safeguards for the sector, so the forestry practice standards—the practical application of what would be a code of ethics. So those sort of go hand in hand, and I’ll leave those as my first two opening salvos for the Minister as we go through this bill.

CAMILLA BELICH (Labour): Thank you, Madam Chair. I just wanted to take the opportunity to ask the Minister some questions about this piece of legislation. I guess, really, how he is going to ensure that there is a kind of respectable, cowboy-free log trade in relation to specifically Part 1, which amends the Forests Act 1949?

Obviously, a lot has changed in New Zealand since 1949, but this piece of legislation remains on our statute book. I just did a quick google, and I think Sid Holland was the Prime Minister in 1949, and I imagine that the forestry trade was also possibly flourishing at that time, but with not the same level of workplace regulations or rules to keep people safe as we had then. So this particular part—and I appreciate there are other parts that amend different pieces of legislation, but this is a Forests Act 1949. And so, if the Minister could just, kind of, let us know how we can be assured, with the repeal of this legislation, of a continued professional practice in relation to forestry and trade in logs.

I also want to emphasise a question by my colleague Peeni Henare, which was also touched on by my colleague Ginny Andersen as well. Professionalism does entail, even though this is not the purpose of this bill, a level of care for the community that the forestry is being undertaken on, the land, the environmental concerns, the workers’ safety. The original Act that this amendment to the Forests Act repeals was allegedly going to increase professionalism and get rid of cowboys, so how are we assured with the repeal of this code of ethics in this part—specifically, in clause 4—that that will occur? That’s all.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. We’re looking at Part 1. I would like to take a couple of calls on this, but the first one is actually to do with clause 4, and again, later on, it is my understanding that the Schedule is also part of Part 1, which we’re going to be discussing—so please correct me if I’m wrong.

When we’re looking at clause 4 of this, there are a couple of concerns that I would like to raise in terms of the repeal of some of the definitions. I think we’ve already heard about this in terms of the definition when it comes to the code of ethics, but also some of these—you know, I understand, considering we’re repealing it, I say to the Minister, because I can see we’re repealing the log traders and the forestry advisers bit, so I understand the removal of some of these. Again, I want to express some concerns around the repeal of, specifically, the code of ethics and the forestry practice standards, and maybe just see if we can get some reassurance from the Minister that the removal of these means that we’ll still be able to continue to maintain the same level of quality that has come with the introduction of the log traders and forestry advisers legislation.

I think that in this particular case, as we’ve heard in the first and second readings—and I was really appreciative of the Minister talking in terms of the tabled amendments, in terms of some of the consultation that has been undertaken. I think that one of the things we’ve stressed in the first and second readings, because we haven’t been able to hear from small forestry operators—other than the speakers in this House—during those readings, is that it would be really good to know that what we are looking at doing in this will be to maintain that same level of equity.

I understand, when the Minister and other people are talking about that, that we want forestry to be an area that flourishes and thrives, but there is this latent concern that when we are removing some of the definitions as part of this repeal, we are seeing a further imbalance and not that level of diversification of the forestry operators that we could be seeing here in Aotearoa. Again, this is something we’ve heard before. These are locally owned, locally producing operators, and it would be a huge shame that by removing some of these definitions, what we would be starting to see is more centralisation and more conglomeration when it comes to the forestry industry.

I would like to draw attention in this case to the supplementary analysis report, at paragraph 23, and also paragraph 26, where it says, “The main beneficiaries of repealing the RTFA regime will be the forest practitioners, the logging companies, and trade entities, including wood processers and log exporters.” Although this particular point is something we might come back to because it might affect other parts of this legislation, I would like to draw attention to that in the context of the definition. The other part is that in paragraph 26, it says, “The main cost of repealing the RTFA regime would likely fall on small-forest owners.”, and, again, that is really concerning. So I ask if the Minister wouldn’t mind clarifying whether the repeal of any of these definitions would have unintended consequences as a result.

The second part is more looking at clause 4(2), in terms of the definition of “registered”. In this particular clause, it is to repeal paragraph (c) of that definition. I would also be curious—and this is a very minor point—in terms of the drafting over here, where I see inconsistency of the drafting, because it is my understanding that the paragraph (c) here is to do with the register of the log traders and forestry advisers. The main bulk of the questions I am looking at, to the Minister, is if the Minister could just provide some reassurance to the committee and to us that we’re not going to be seeing inequity as a result of the repeal of the definitions and that we are still going to be seeing the maintenance of the same standard.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair. My question for the Minister of Forestry is probably relatively short. I see that under Part 1, clause 10 of New Part 3 inserted into Schedule 1AA of the Forests Act 1949 says that in respect of commercial disputes, parties to a dispute don’t have to continue to comply with the dispute resolution procedure. It seems a little odd. It may be—and the Minister, no doubt, can take advice on this—that there are no disputes because it’s new, so in fact it’s just a kind of belt and braces approach. But if parties have entered into a dispute resolution procedure on a set of rules that both parties know and have been imposed, it seems very unusual, just as a basic principle, but also having an element of retrospectivity—that something has started and in fact you’re now retrospectively changing it because you’ve got into a set of rules.

It is a very short question, but it’s kind of a natural justice question about when you enter into a dispute resolution arrangement, and then you legislate to change the rights that have crystallised. That’s a concern to me because the rights of the parties to have a particular process seem to have kind of fallen into place and those rights now exist—because it does say “parties to an existing dispute do not need to comply”. Now, the fact is the rules about the dispute resolution process will have benefits and burdens, and one party will like them and the other party won’t like them. So I’m very interested to hear from the Minister whether there are any disputes, and, if so, has he taken advice on that retrospectivity point—if there is. If there’s none, then I don’t think we even need the clause and it’s not an issue.

FRANCISCO HERNANDEZ (Green): Thank you, Madam Chair. Thank you for giving me my first call on this bill. I just had a few questions that I wanted to ask around it, but I wanted to preface it a little bit with some context. Forestry, as we all know, is an over $6 billion industry, and I had a look at what the actual costs of the registration were. So I had a look and the cost for the application was $510.60, with the annual levy set at $320 and the renewal being set at $444. There’s been an assertion that the rationale for this bill is that there have been undue costs and undue regulatory burden on business, but that fee doesn’t seem to be set all that high to me.

Considering that we’ve seen what the catastrophic impacts of under-regulation are, with the impacts of forestry slash in the aftermath of the extreme weather events in Cyclone Gabrielle and the sad stuff that happened in the North Island, it would seem to me that the forestry sector—and, you know, considering that some of the contributions that the Labour members have made are rightly pointing out that we do need to make sure that the forestry sector is safe, particularly for workers, particularly for owners, and particularly for communities that are around forestry, it doesn’t strike me that there’s under-regulation at the moment.

I guess my first question to the Minister is: what evidence, I guess, have you had in terms of over-regulation? I appreciate that this bill isn’t going to go through a select committee process, so we sadly will miss out on the chance to hear from submitters, but, yeah, I would really be interested in what evidence there has been on over-regulation. Particularly since I think there’s been an assertion that voluntary regulation and some sort of code of practice will kind of fill the gap that the withdrawal of regulation can have, but the supplementary analysis paper says that before the regulation was introduced there were 90 registered members under the voluntary scheme and that after the regulation was introduced there were 527 members. So it just strikes me that if less than one in five of the forestry advisers and of the forestry owners were members of the voluntary kind of regime that existed, won’t it just go back to that same old kind of cowboy country of under-regulation, as my colleague Hūhana Lyndon rightly pointed out?

It’s particularly important as well, I think, because I’m coming at this from a climate angle as well as the kind of regulation angle. Forestry will play an important role in meeting our kind of domestic targets and also potentially our international targets, so I would also be interested in hearing from the Minister whether there has been any analysis done on the impact of repealing regulations on the extent of forestry coverage. I think it’s kind of like the basics of supply and demand. I think members on the Government benches have asserted that if we withdraw regulation, it will lead to the forestry sector expanding, so what is the extent of that expansion that will happen and what can we expect from that?

This leads on to my final question, that obviously there’s an interaction between the forestry sector and the New Zealand emissions trading scheme. We’ve seen, in the past, carbon market auctions fail because they have failed to meet the reserve price, so is there a concern that—and this is the logic that I’m following—if the Government benches have asserted that withdrawing regulation will lead to a growth in the forestry sector, and a growth in the forestry sector means that there’ll be an expansion of potential providers of emissions returns and carbon units (NZUs) in their carbon market scheme, does that mean that there’ll be a flood of NZUs in the scheme? What will that do to the reserve price, and not only the reserve price but the overall price in the secondary markets in the emissions trading scheme?

We do need a carbon price that actually incentivises companies to avoid making pollution, and we’ve heard assertions from the Government benches that they’re relying on market-based mechanisms. So if you’re actually flooding the markets with forestry credits, what does that do to the incentives to actually reduce pollution? So I’m really curious to hear the Minister after the dinner break, perhaps.

Hon TODD McCLAY (Minister of Forestry): Whilst there’s a very short amount of time, I thought I’d address some of these comments, and, of course, we’re back after the dinner break. Firstly, to most colleagues, the legislation is very, very narrow. So, in as far as the emissions trading scheme is concerned or environmental standards or what people can do in forest health and safety, it’s outside the scope of this legislation, and it is governed with many other parts of legislation, and that doesn’t change. In fact, I think we’ll see over the next three years in this House us having conversations about how we strengthen requirements on the environment, in the way we plant trees, and certainly health and safety, but doing so in such a way that doesn’t add additional burden.

In as far as the retrospective nature of saying any dispute would be dismissed, there aren’t any disputes we’re aware of at the moment. But, more broadly, when we say, “Do we need this regulation?” Well, the member’s right that the cost is about $500 per year, but that’s the cost to run the system of registration on the part of the Government, it’s not the cost to those who have entered into it or the obligation, the cost that they have on a daily basis to collect information, report, and do other things. That’s just the cost that we take off them to run the system. We’re giving that money back because we won’t have a system, but actually that’s not the cost to the sector. The actual cost is the things that the legislation imposed upon them and requires them to do.

I would say the New Zealand Institute of Forestry wasn’t in the space that they are today when the legislation first went through. They have a regulatory system they set up themselves. They are being very, very responsible. It is growing. Indeed, there are examples that I’ve been made aware of where they go and help people where there has been a dispute between a trader or somebody that has been registered or not registered, even though they may not be a member, and they’ve gone to work that out with them because actually they and many other parts of the sector have stepped up and are showing greater responsibility for themselves, and actually we’ve got to find ways to work with them.

With that in mind, I can stop here and can go into greater detail, but again, in many of the areas that members have raised questions, they fall outside of the scope of the legislation of what we’re changing. They are important, and therefore the requirements that are in place from the forestry sector to meet those obligations don’t alter at all as a result of the repeal of this legislation.

CHAIRPERSON (Maureen Pugh): Members, the time has come to suspend for the dinner break. We will resume again at 7 p.m.

Sitting suspended from 6.03 p.m. to 7 p.m.

CHAIRPERSON (Barbara Kuriger): Members, when we rose for the dinner break, the House was in committee and is in committee on the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill, and we were on the debate on Part 1. I will take some calls but I was watching before the dinner break and I do want to make it very clear that it’s a very narrow bill and there’s been a number of calls that have gone quite wide of the bill so I expect people to—

Hon Dr Duncan Webb: Point of order, Madam Chair. I think it’s appropriate, given that observation, to note that we are doing all stages under urgency and there’s not many opportunities to have a wide-ranging debate on a bill or an examination that would be akin to a select committee examination, except for this committee. So I would ask—

CHAIRPERSON (Barbara Kuriger): I accept that, Dr Webb. All I’m saying is that we can have a wide-ranging debate on this bill. Some of the things I heard were actually not part of the bill.

Hon Dr Duncan Webb: Fair point. Thank you, Madam Chair.

CHAIRPERSON (Barbara Kuriger): Thank you.

ARENA WILLIAMS (Labour—Manurewa): Madam Chair, thank you for the opportunity to give what is my first call on this debate. As a former professional with experience in a large commercial group that owned a forest, the Woodhill Forest, I’m really interested in how the professional-practice expectations of those practising in the forestry sector work. So my first line of questions for the Minister are around whether he has considered some transitional provisions which would allow some of the good work that most people in this House would agree was useful at the time it was introduced to continue.

I want to come to Part 1 of the bill. It’s clause 4 under (1)(e). The Minister is proposing to repeal the requirement for a forestry register, and the questions I have for him are about whether he has considered some transitionary or savings provisions in relation to that repeal, or whether he is open to considering whether that particular piece needs to be repealed at all.

CHAIRPERSON (Barbara Kuriger): Sorry to interrupt that member’s speech, but I understand there’s a member in the Chamber who may be on the phone, and I’d ask them to put that down, and I will allow the member a little extra time.

ARENA WILLIAMS: Thank you, Madam Chair. So my question about the forestry register here is that this bill was introduced at a time when there was widespread concern from forestry owners about bad practice, rogue trading, in the industry. We believe, and the Minister obviously believes that those conditions have changed, but there was some good work there around registering practitioners in this area. My questions are about whether some of that good work can be saved. So the registration element is a system that assures anyone dealing with registered log traders and forestry advisors that they’re getting expert and impartial advice from people with the right knowledge and experience. That’s why it was set up at the time, because of this widespread concern that there were just a small number of operators that weren’t doing that and were offering terms of trade that, if they had been formally contracted, they would have been unconscionable and unreasonable at the time.

The registered log traders and forestry advisors would have then passed a background check, including a criminal conviction check. That will be done away with under these new provisions, and we accept that the Minister has had some advice on this and that he doesn’t believe that that is now necessary. The good work that has been obtained by that is having a register of people who have gone through those checks and who may be held to a high standard, and that is useful for the market to have access to that information. It is useful for small forestry owners in particular, and Māori forestry owners and Māori forestry blocks who have a governance structure which is unusual, where they have a number of lay people sitting on their governance structure, to have access to that information.

So the first question to the Minister is: has he considered making that information available in an ongoing way, given that work has been done and given that it wouldn’t require any change to the legislation necessarily to provide for that information to still be available and maintained going forward? The second question is: if forestry advisors and log traders chose to be registered in this way—which, you know, there are many professional bodies which provide this function—but given the Ministry for Primary Industries (MPI) is already set up to be able to provide a function like that and there is no professional body doing it at the moment, would it be appropriate for MPI to continue to provide that function and to continue to be able to provide some assurance around those people who are practising to a high standard?

My other question for the Minister is: once registered, those log traders and forestry advisors had ongoing obligations that they met. Now, I know that my colleague the Hon Peeni Henare has asked some questions around, say, that code of ethics, but there are other obligations there that they would be held to, and I want to understand whether the Minister is interested in a further amendment for some transitional provisions which would save those ongoing obligations then applying to people who chose to be on such a register, which would need a legislative change.

I also want to ask the Minister about the complaints process that this register allowed for. It created, essentially, a regime where a complaints process was set up to deal with complaints about registered log traders and forestry advisers, and anyone could make a complaint about unsatisfactory conduct or misconduct of one of those registered forestry advisors. The useful thing that that did is it created one place where small forestry owners could take complaints about the advice that they had received or about conditions and a commercial arrangement that later turned out to be unfair, and I want to hear from the Minister how complaints will be resolved under his proposed changes.

MARK CAMERON (ACT): Thank you, Madam Chair. Maybe the Minister just has to counterfactual to the previous member’s remarks. You could elucidate or illuminate or all of the above for the members of this committee, what the counterfactual looks like in the absence of a registration system, given that there are local bylaws, as you would be cognisant of, sir, I am sure, that a polluter pays, and if there are issues in and around slash or bad practice, those that are affording those poor practices in a regional community would otherwise be caught by council bylaws. Do you have thoughts on that, sir?

Hon PEENI HENARE (Labour): Thank you, Madam Chair. To Part 1, clause 6, “Section 13 amended (Protection of forestry officers)”—it repeals section 13(2). My question here is: throughout the progress of this bill, we talked about trust and empowerment of the sector. This one, if I recall correctly, gives the Minister the ability to delegate powers outside of what would be a forest officer, if you will, or a forestry authority.

I wondered, in this very brief question—it’s about whether or not the Minister had considered maintaining or retaining that power in order to be able to perhaps delegate that authority to a forestry body, another group that might look towards, as the Minister put it, future regulations that will put in place a system that will allow the export of forestry logs offshore to be in a system that is led, designed by the sector itself.

So just a very brief question to the Minister—just to repeat myself—whether or not the Minister considered whether or not he would retain that authority to be able to delegate that to somebody who isn’t a forestry officer or a forestry authority, perhaps to a sector or to a body of a forestry sector in order for them to be able to possess those powers and whether or not the Minister considered keeping it.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. Firstly, I just want to kind of pick up what our colleague mentioned before in terms of polluter pays. I’m mainly kind of interested to hear from the Minister regarding the interaction when we’re looking at something like slash and polluter pays and the interaction that will have with the bill that was recently passed in the House around the waste minimisation levy, and how that potentially—

CHAIRPERSON (Barbara Kuriger): Sorry to the member, but we’re not discussing the Waste Minimisation Bill. I want to keep this very close to the regulations that are involved with this piece of legislation, and it is also not the emissions trading scheme bill, either.

Dr LAWRENCE XU-NAN: Thank you, Madam Chair. If I may, there are two questions regarding the relationship with Part 1 and also Schedule 1 with the primary legislation that I would like some clarification from the Minister on. So if I could ask sort of that relationship, but two separate questions. If the Minister wouldn’t mind responding, that would be greatly appreciated.

The first question is around, you know, we did talk about the repeal of the definition, but when we are looking at the primary legislation in the Forests Act 1949, under both the code of ethics as well as forestry practice standards, it talks about the definition in relation to another section within the primary legislation. So for the code of ethics, it talks about the relationship that that particular clause has with section 63ZZM and for the forestry practice standard, the relationship with that and also the definition in section 63ZZL. So the first clarification I want from the Minister is whether the repeal of the definition is just the definition or the subsequent clauses have also been repealed as a result. That’s my first question, if the Minister wouldn’t mind responding.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Madam Chair. I look forward to the Minister, the Hon Todd McClay, engaging with my questions about the forestry register, but I have some further follow-up questions about the register, if you’ll indulge me. This legislation, as I understand it—and this is a simple question for the Minister—doesn’t repeal that definition of a forestry adviser, but it does take away some of the regulations around their involvement. So my first question to him: is it his intention that forestry advisers will still be a regulated term and will still be a protected term?

My second question is: is it his view that in situations where a small forestry owner, or even a medium-sized forestry owner, is seeking advice on their commercial arrangements—because the comparison here, just to explain myself, is that forestry advisers are people who, under the Act, are acting on behalf of another person in relation to the sale or purchase of timber or other forest produce. That person who was once regulated under these provisions—there would have been recourse if their advice was negligent or there was misconduct around their actions. Does he think that for small forestry owners and medium-sized forestry owners who are seeking that kind of advice, for that advice to be protected they will otherwise need to, essentially, get their advice from lawyers?

I ask this question because that is the capacity I was involved in, in forestry ownership, as the general counsel of that group. As the general counsel, I was providing advice not only on the arrangements between the commercial forester and the commercial group holdings company, but also on things like the stumpage and the arrangements to use the roads in a commercial forest, because all of those things are complex commercial arrangements. Foresters, essentially, build roads in a forest to last only the lifecycle of when they will be harvesting. So I want to understand from the Minister whether he is really further pushing costs on to small forestry owners and medium-sized forestry owners, who need that level of protection about the advice and to be able to rely on it in future.

My further question, and this is a different line of inquiry, is specifically in relation to Crown forests that have been returned to iwi. Those are a patchwork of arrangements that, basically, change hands from the Crown to iwi over sometimes 20-, sometimes 30-, sometimes 50-year cycles, where, essentially, you have blocks within the forest that are being harvested at different times, and when one block is harvested, it will go from Crown ownership to iwi ownership. My question there is that, say, in the Kaingaroa Forest at the moment, you’ll have a puzzle where some of the forests are owned by iwi and some are owned by the Crown. In those kinds of scenarios, you have pretty complex and heavy-duty commercial arrangements between one American forester, who is backed by iwi, and the Crown forestry entity, which will be backed by another commercial forester.

So I want to understand, in those scenarios, whether the Minister is opening up further risk to the Crown in those pretty complex commercial arrangements which are also backed by Treaty settlements, where, if an iwi is getting advice which is now not protected, they will come back to the Crown where they have forestry advisers who have acted negligently and where their economic outcomes do not support their aspirations for that forest.

Hon TODD McCLAY (Minister of Forestry): Madam Chair, thank you, and I’ll try to go through some of these fairly succinctly and I’ll try to stick to the order. The first round of questions, around transitional provisions: no, haven’t looked at that. The reason for that is when things are repealed, they are not there anymore. So we’re not transitioning to something else; we’re, I suppose, going back to what was there before because the need for the register and the implications of that are now not necessary, firstly. Secondly, we’re seeing the cost is greater than any benefit that would have been there.

The member mentioned that there had been widespread concern initially. That wasn’t the case: we go back and look at the original legislation when it went through and the submissions and so on. There was some concern, but I wouldn’t suggest it was widespread at all. What we’ve seen subsequently since the Government announced the repeal of this is almost uniformly across the forestry sector—not just those who are consultants or registered consultants, but across the forestry sector—it’s been accepted because they have said very, very clearly that it hasn’t worked; it hasn’t achieved the things that it looked to four years ago that were needed; and there are a number of other things that have happened as the sector has matured over that period of time that mean the cost to the sector, not the cost of the regulation to the sector, is greater than the benefit they saw.

The member also mentioned where somebody has formally contracted, but, actually, you can have formal contractual obligations without a formal contract. With every other part of business and contract law in New Zealand, people are held to account and to a standard and they have to meet that. So that doesn’t change at all—

Hon Dr Duncan Webb: Sounds like you’ve been buying ferries.

Hon TODD McCLAY: Well, that doesn’t change at all in this as far as forestry is concerned. There are still obligations there. I come back to what I said before the dinner break when I talked a bit about the New Zealand Institute of Forestry.

Indeed, I think one of the questions was, “Would we look to keep the register even though there may not be obligation upon that so people could see who had been registered?” Well, indeed we wouldn’t do that, but for anybody who is looking to work with somebody and give them advice in the forestry sector, the New Zealand Institute of Forestry has set up the equivalent of their own industry standards. They are robust—in some cases, I believe, probably more robust than what is held in this legislation—and they take their obligations very strongly. For a growing number of people involved in forestry, large and small, they look towards whether there is registration of that organisation and make decisions based upon that.

I suppose in most things that we do in New Zealand when you want to get advice, you know—I’m not suggesting “the buyer beware”, but certainly given the investment that people make in forestry is a very long period of time from a small forestry lot to a large one, they are wise and almost without exception look at the quality of the advice and look to reputation. As far as New Zealand Institute of Forestry and their registration standards are concerned around advisers and traders, they have been asked more often about their members than the system has been. We are not repealing so that there is a vacuum. In fact, the sector itself across the board is taking a greater ownership of the provision of service and accountability than was the case before the legislation came in—even though the legislation is there—and I think that’s a very, very good thing.

Then, finally, to my colleague from ACT: well, the answer to that question also is, though, there is a counterfactual. But, indeed, outside of the very narrow scope of this, as I said before the dinner break, anything to do with environmental standards, the National environmental standard for commercial forestry and so on, remain—doesn’t alter it; doesn’t change it. This legislation doesn’t make people who own land or own trees or plant trees do anything that they are not meant to anyway—have a legal requirement to—with a range of other pieces of legislation.

I know it hasn’t been raised now, but by way just of example, members were right before the dinner break: we need to continue to consider how we ensure people who work in forests are safe. This legislation doesn’t make them safer, doesn’t make them less safe—it has nothing to do with that. Indeed, it’s a separate piece of legislation work that we need to focus on.

The final point, I think, for my colleague from the Green Party—and he’s talking about definitions and so on. Well, indeed, the definitions of “registered forestry” or of a “trader” remain not in as far as Part 1 is concerned, but because we need them for Part 2—which we’re going to have an opportunity to discuss shortly, Madam Chair; we’ll have an opportunity to discuss shortly—so that when it comes to the legal harvest assurance, which we have obligations internationally, we use that to be able to prove that elsewhere. So that’s the only reason they remain.

In your question about the primary legislation a long time ago, it doesn’t have any impact upon that—they remain for other reasons. Because there is no provision within this bill once it’s repealed, we don’t have to deal with what was in the primary legislation. But we are keeping those only so we don’t have to go back and create something else for what is remaining in Part 2.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair. I appreciate that this repeal bill has been prepared in haste and there’s no regulatory impact statement, but just looking at the supplementary analysis report, it does raise some good issues.

As the Minister just said, there were concerns which led to the original legislation, and we’re now removing the fix. Some of those things which were enhanced by the original framework which we’re now repealing, they’re at risk. So my question is given the repeal bill, what executive steps, essentially, are being taken to look after making sure that we can have confidence or participants can have confidence in the market—the log trading market. It’s on page 6 of the supplementary analysis report, where it talks about the need for—and one of the fixes was there were lax professional standards in some parts of the industry, so a code of conduct was imposed.

Now, we’re doing away with a compulsory code of conduct. It strikes me that the Minister now has an opportunity, and his department and agencies, to promote and to give support to the industry in their voluntary code of conduct. Similarly, in terms of things like one of the challenges was poor contracting terms and behaviour, and the code of conduct and the contractual dispute resolution framework enhanced that by giving a kind of a fallback vision. So I’m wondering what supports he is putting in place in place of a legislative framework.

I notice that the overall assessment in the supplementary analysis report says reverting to the status quo would mean not having mandatory registration, obviously, and has limitations for improving professional standards, transparency, and grower confidence. So the questions—a substantial one for the industry. In terms of those four things, what steps is the Minister taking to fill the gap created by this legislation?

Hon TODD McCLAY (Minister of Forestry): Well, I think there’s probably a philosophical difference as to the way that we approach these things across the House, although I do recognise the members in the Labour Party are supportive of the bill. The philosophical difference, probably, is from the point of view of a belief that the Government doesn’t have to legislate or regulate everything. A sector has to take responsibility for itself.

In this case, we are seeing that the forestry sector has not only started to do that, are and looking to enforce it. Again, before the dinner break I gave the example of the New Zealand Institute of Forestry, where there has been a dispute or an issue between a forestry consultant who is registered or otherwise, not their member, to go and assist with that dispute, including the landowner or tree owner that brought the concern. So that’s the sector showing responsibility where they actually don’t have to, I suppose, as not a member of theirs to do so. I applaud them for that and encourage them to do very, very much more. There is a kind of factual of saying the industry is taking responsibility for itself.

Where it doesn’t, then, of course, there often can be a need for legislation or regulation. In the case of this regulation and legislation, the cost upon the sector is greater upon the benefit that they are getting for it. So it’s costing more than the benefit that’s been driven, particularly because they’re taking a lot of the obligation on for themselves. Ultimately, that might or might not have been the case four years ago, but it is today, and that’s the reason for the repeal.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Madam Chair, and thank you to the Minister for his fulsome answer to that question. I think the Hon Dr Duncan Webb has some further points that are not clarified in the Minister’s answer, because the question is about the New Zealand Institute of Forestry’s ability to assist the industry with that and whether—to my previous point about that, that work has already been done by Ministry for Primary Industries. There is benefit to not only the sector but also to the participants in the forestry industry to passing on, I guess, that information and the learning that has already been done and exists. So, I guess, what we’re asking is whether the Minister would consider making available that work that has already been done to assist the sector with what they propose to do—yeah.

The other question that I have for the Minister is around those Crown forests. I want to understand whether in the Crown forestry licences there is this further risk opened up to the Crown who is the licensor, in the scenario where some land on a certain forestry block is owned by the Crown, some is licenced to a forestry provider, and then to an iwi that has received that in the settlement. I think the Minister did give a brief answer to my question where he explained that contracts are contracts in this area, but the issue that I’m going to is the settlement provisions, which are primary legislation that this House passes, where the Crown sets out its obligations in relation to a forest. So there’s not only a contractual obligation here for the Crown, both in a lease arrangement and an owner’s arrangement with another forester, but there’s also the relationship between the Crown and iwi in those scenarios.

The question here is: is there sufficient protection for iwi in the advice that they get on the commercial arrangements, which need to play out in these forests, when we know that there are ongoing commercial disputes in those forests right now between the Crown and iwi who have been settled?

Hon TODD McCLAY (Minister of Forestry): In respect of that, if I think about the Central North Island (CNI) as an example, which is probably one of the largest settlements when it came to Crown forest licences, the relationship, in as far as the settlement and handing back and how those forest licences are treated, was done by statute, not by this. So statute set out very, very clearly rights and obligations, including the case of the number of rotations that people have the right of authority to licence.

Then, ultimately, if we see the way that has evolved over a period of time—because, from memory, there would be no Crown forest licence that has formed part of a Treaty settlement since this legislation came in. I could be wrong, but I imagine that’s not the case—that, in effect, what happened before and happens afterwards hasn’t changed as a result of this legislation being repealed. Ultimately, I think that before this legislation was put in place, there was a very short period of time it was there before it entered into force, and we’ve got to realise that it’s not that long since the obligation to register came about.

The CNI forests—that settlement—has shown how the sector responsibly can develop a very successful commercial relationship. There was a change of land ownership. The trees remained the same. There was a contract, and whatever was in legislation has evolved further between landowners and those who had a right of renewal for another rotation of trees. Actually, it becomes a commercial relationship that we didn’t imagine was likely to be the case, nor those who benefited from the settlement of the land going back.

So, in answer to the question, it doesn’t open the Crown to any liability that is obvious in as far as a landowner, or tree owner that has received trees back, makes a commercial decision as to who to get advice from in the future. If the Crown had an obligation as a result of the settlement, then that doesn’t change irrespective of what this legislation says.

CHAIRPERSON (Barbara Kuriger): I’m going to call Lan Pham, but I’m looking for new questions now. I think the Minister’s been very comprehensive in the answers that he’s given to Part 1. Thank you.

LAN PHAM (Green): Thank you, Madam Chair. I wanted to pick up specifically on clause 7; this is the aspect of the bill that repeals the log trading forestry adviser regulatory regime. The system assures that anyone dealing with these log traders and forestry advisers—it assures people that they’re actually getting that impartial and expert advice from people with the right knowledge and experience, and this sounds like what was a really positive part of this previous bill which has now been repealed.

I’m really keen to hear from the Minister what will replace this or be the interim measure? I’m noting that you’re saying that the sector is going to be taking, you know, much greater ownership of what this looks like, but I’m really interested as to what are the actual steps that they’re going through and the process that they’re going through to actually establish what that is. I’m noting that there were also some really key things, like about the forestry advisers actually passing a background check, including a criminal conviction check, and even evidence of their qualifications and experience—which seems extremely vital when you are someone out there in the public who is wanting to turn to the forestry industry, to contract or anything, and you want to make sure that they’re credible, they have that impartial advice, and they actually know what they’re doing.

I also want to pick up on the advice to Cabinet which came in the 2022 decision when they actually bought this in because they specifically identified—and I want to quote them—“Without specific regulation, there’s a risk that the practice of log traders and forestry advisers will allow poor performance to go unchecked.” So I’m really interested to know, Minister, in your conversations with the sector, are they taking this really seriously? What are the implications of this poor performance, from their perspective, and what are the checks and balances that they’re wanting to introduce to actually ensure that core performance is picked up within what you’re proposing that the sector’s going to undertake now?

I also wanted to know not only from, I guess, the operational perspective how they’re going to do that, but does it also include environmental poor performance and checks and balances around that—

CHAIRPERSON (Barbara Kuriger): It’s not in the scope.

LAN PHAM: —or the health and safety aspects?

CHAIRPERSON (Barbara Kuriger): Environmental is not part of the scope of the bill. It’s regulated—

LAN PHAM: Well, I’m asking about the sector and how they’re interpreting this.

CHAIRPERSON (Barbara Kuriger): It’s not part of the bill.

LAN PHAM: OK, thank you. Well, it was a question to the Minister and I’m hearing that the—[Time expired]

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

Dr Lawrence Xu-Nan: Point of order, Madam Chair—point of order, Madam Chair.

CHAIRPERSON (Barbara Kuriger): The question is that the debate on this question now close.

Motion agreed to.

CHAIRPERSON (Barbara Kuriger): I had already called the Ayes had it before I got objections.

Dr Lawrence Xu-Nan: Point of order, Madam Chair. I had a point of order before. Oh, that’s why—the mike wasn’t on. My apologies.

CHAIRPERSON (Barbara Kuriger): I’m sorry, I’ve taken a vote. We had a vote in progress. There was no party vote called for, and I have approved the vote and we are now going to move on Part 2. Thank you.

Dr Lawrence Xu-Nan: OK. Can I please make sure that the mike is on next time?

CHAIRPERSON (Barbara Kuriger): Yeah.

A party vote was called for on the question, That Part 1 stand part.

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 14

Green Party of Aotearoa New Zealand 14.

Motion agreed to.

Part 1 agreed to.

Part 2 Amendments to other legislation

CHAIRPERSON (Barbara Kuriger): Members, we now come to Part 2. Part 2 is the debate on clauses 9 to 20, “Amendments to other legislation”. The question is that Part 2 stand part.

Hon PEENI HENARE (Labour): Tēnā koe, Madam Chair, and thank you for the opportunity now to look towards Part 2. A lot of the contribution that’s already been made in the committee—certainly from this side of the Chamber—has talked about some of the nervousness amongst some of the Māori forestry owners. My question, with respect to Part 2, looks towards clause 11(3), where it says, “In section 4(4), repeal the new definitions of ‘misconduct’, ‘threshold volume’, and ‘unsatisfactory conduct’.”

I have read through that particular legislation, the Forests (Legal Harvest Assurance) Amendment Act 2023, and I’ve got comfort with what it’s proposing here. What is also, however, in that particular section, though, is the definition of terms like “marae”, and when I think about the caution that has been expressed from this side of the House with respect to Māori land owners and Māori forestry owners, and the example and the interpretation given for marae and the way that forests actually grow up against marae—and my colleague and relation Hūhana Lyndon knows this particular example very well. The Matawaia Marae, for example, which is built in the Ngāti Hine forest, has the forest hard up against the marae. Now, I suspect that some might say it was coincidence, but the argument that’s being put forward by landowners and forestry growers in this specific area talked about it being more by good planning than by coincidence. The first question I have for the Minister is whether he can give an assurance that the interpretation of “marae” in respect to forests and the way that we harvest against marae will continue to be protected and that the interpretation won’t change.

My next question for the Minister is on clause 13, and, in part, this is related to my question in Part 1. New section 6(3)(1A), in clause 13, inserts these new terms into the legislation, and what it’s done here is it has got rid of what would normally be in paragraph (e), which is about acting under a delegation. Members might recall that I spoke very briefly about whether or not the Minister would retain the ability to delegate, and he addressed it in part. This one here, however, with respect to clause 13, continues to talk about the protection of forestry officers, etc., and it does offer the words that will be now inserted into the legislation, but I  ask whether or not the Minister would keep what is in there, which is section 6(3)(1A)(e), which is about those powers of delegation. I know one is a bit of the cart before the horse, and this is why I’m asking whether or not the Minister will consider keeping paragraph (e) in that particular piece of the legislation. Those are my two questions for the Minister at this point in time.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. When we come to Part 2, it specifically looks at the amendments to the Forests (Legal Harvest Assurance) Amendment Act, and I think one of the things that’s really important for this bill overall is the way that it crosses over with the primary legislation. In this case, with the Forests (Legal Harvest Assurance) Amendment Act, it’s really important to tease out and get clarification from it, because I think that even for us, who are looking at this, we are constantly trying to do that level of cross-reference.

My first question on this is to do with clause 10(1), which replaces section 2(1)(a) with “1 August 2027”, and this is just going to be quite a straightforward question to the Minister. The primary legislation, and the principal Act in this part, says that section 2(1)(a) states, “3 years after this Act receives the Royal assent”, which would be 2026, and I guess I would like to know from the Minister the rationale why we are pushing it out for one more year as a result of the repeal of this system—I’m seeing shaking heads up there. This is why we really need that level of clarification, because there are so many cross-overs here. So let’s broaden it, and just say: could the Minister clarify why the date was changed from “3 years after this Act receives the Royal assent” to “1 August 2027”?

Hon JO LUXTON (Labour): Thank you very much, Madam Chair, for the opportunity to ask the Minister a question on this. I have a question to the Minister around the definition of “practice standards”: “with ‘practice standards’ in relation to legal harvest, means the practice standards set under section 158”. With this new definition of practice standards, is it just simply bringing into line what was in Part 1, “Amendments to Forests Act 1949”, or under the amendment to the Forests (Legal Harvest Assurance) Amendment Act, what are those new practice standards going to be? Why have we changed the definition? I’d appreciate if the Minister could give us an example of why and what the purpose of that has been.

MILES ANDERSON (National—Waitaki): I move, That debate on this question now close.

Hon Dr Deborah Russell: Oh, Madam Chair, we were waiting for the Minister to answer questions.

Dr Lawrence Xu-Nan: We were waiting for the Minister to answer.

CHAIRPERSON (Barbara Kuriger): There’s no obligation—

Hon Todd McClay: She didn’t take it.

CHAIRPERSON (Barbara Kuriger): No, I haven’t taken the closure motion yet. But the member putting the closure motion was the only person standing on their feet, and I have—it’s up to the Minister, as he gets up to answer the questions, OK? So—

Dr Lawrence Xu-Nan: OK. Apologies, Madam Chair.

CHAIRPERSON (Barbara Kuriger): That’s OK. I’m going to call the Hon Dr Deborah Russell, if she still wants a question.

Hon Dr DEBORAH RUSSELL (Labour): Oh, Madam Chair, I do want to ask some questions about Part 2 of this bill. Part 2 of the bill is actually the bit that has a whole lot of schedules that change other parts of the law. Now, as someone who is rather new to this, I think I can go to Subpart 2 of Part 2—excuse me, I’m sorry. I’m just struggling a little bit here—and in terms of—

CHAIRPERSON (Barbara Kuriger): Could the member please talk into the microphone?

Hon Dr DEBORAH RUSSELL: Oh, I am sorry, Madam Chair.

CHAIRPERSON (Barbara Kuriger): Could the member please move back to her seat so that the microphone can pick her up.

Hon Dr DEBORAH RUSSELL: Thank you, Madam Chair. I just want to go to Subpart 2 under Part 2—could someone just direct me to it? I’m just finding it a little hard to find it in the—

Hon Matt Doocey: It’s Part 2, just after Part 1.

Hon Dr DEBORAH RUSSELL: Yeah, I am looking for it—I am looking for it. Oh, I’ve got it here, Part 2.

Hon Scott Simpson: On the wrong bill.

Hon Dr DEBORAH RUSSELL: No, I’ve got the right bill in my hands. We’re just trying to make sure we actually give the Minister an opportunity to reconsider whether or not he’ll actually answer any of the questions. So going to Subpart—

Hon Matt Doocey: It’s a good question so far.

Hon Dr DEBORAH RUSSELL: I know, I’m working on it—oh Subpart 2. Thank you, Peeni. Thank you.

There’s a whole lot of secondary legislation that is being revoked, and I noticed that sitting in there is an instrument, Subpart 2—so it’s clause 18 of this bill, and we’re going to paragraph (d). we’re going to the partial waiver of fees and levies for certain classes of applicants for registration as and registered log traders and advisers, and so on. It’s a partial waiver of the fees and the levies in this Subpart 2. I am interested to know exactly what is the partiality there—how much it was a partial amount. Clearly, some of those fees are remaining. So if I could just get some explanation from the Minister as to that amount, the division in the parts, and how they arrived at that amount.

Hon TODD McCLAY (Minister of Forestry): Madam Chair, it’s lucky trees take 25 years to grow before we harvest them. The point that I guess I would make to colleagues is that this is the narrowest part of the bill, but I think it’s the most important part of the legislation—Part 2—and the reason for that is we’ve taken on obligations internationally, as well as under domestic statute, around legal harvest, and so we have agreements around the world and trade agreements and so on that we have to adhere to.

This is a part of the original legislation. Actually, it’s a system we’d set up so that we can give assurance to trading partners overseas that when logs are cut down and exported from New Zealand and sold, we’d meet the requirements we’ve taken on internationally, but, again, amongst our domestic legislation also, and, ultimately, the changes the member is asking about are not significant in the scheme of how we achieve this. But the one thing we are doing is pushing the date out by slightly more than a year, and the reason we’re doing that is so that, one, we can ensure that in establishing the new system in New Zealand, which the previous piece of legislation allows us to do, we get it right through consultation with all of the groups the members have mentioned, from iwi to landowners—across the board.

Secondly, we also want to have the opportunity to engage with a number of international stakeholders—countries we trade with—to make sure that what we stand up through regulation meets their requirements also. So we’ve said that we want to give ourselves almost another year to be able to do that, but we’ve also said that it is a year, or it could enter into force sooner, through Order in Council. So we’re not saying it enters into force on that day—1 August 2027—but we’re saying that it must be by that day, or before, by Order in Council. But we want to give ourselves time to be able to engage widely within New Zealand to make sure that, one, we achieve the obligations that we have and achieve the intention of the primary legislation, and then, secondly, that, actually, it will fit with what we’re doing elsewhere.

Although this isn’t part of the bill, by way of an example of the reason we want to do this, some members will know that the European Union has passed legislation previously about exports to their market and the impact that any exports—food, as an example, or trees—to the European Union has upon the equivalence of legal harvest. So we want to go through a process with them because what they are looking to do would place great cost on New Zealand, because the things they’re trying to stop are not able to take place legally in New Zealand, and so, actually, our standards are the same or better than theirs. But the legal harvest provisions of this, when the system stands up, will perhaps give us an opportunity to show them that, actually, they don’t need to check everything New Zealand does, because we take our obligations seriously.

But, again, this is the narrowest part of the bill. The changes here, where it allows us to consult more, and the other changes around wording, and so on, are to ensure that this legislation and—from Part 1—the bits that we are relying upon in as far as our definitions are concerned allow us to continue to do our work properly.

DAN BIDOIS (National—Northcote): 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 48

New Zealand Labour 34; Green Party of Aotearoa New Zealand 14.

Motion agreed to.

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

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 14

Green Party of Aotearoa New Zealand 14.

Part 2 agreed to.

Schedule

CHAIRPERSON (Barbara Kuriger): Members, we now come to the Schedule. There is no debate on the Schedule. The question is that the Schedule stand part.

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

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 14

Green Party of Aotearoa New Zealand 14.

Schedule agreed to.

Clauses 1 and 2

CHAIRPERSON (Barbara Kuriger): Members, we now come to our final debate. This is clause 1 and 2. The debate is on the title and commencement.

Hon PEENI HENARE (Labour): Well, Madam Chair, just because of the way that we’ve pushed this particular legislation through and the narrow scope with which Parts 1 and 2 were debated, I think I’m going to capture the energy in the room and the comments that were made throughout—

CHAIRPERSON (Barbara Kuriger): That would be good, because I was waiting for some.

Hon PEENI HENARE: —about the progress of this particular bill this evening. When I think of the title and I think of the process from whence the legislation was first put in place, or the regime was first put in place, and then where we are now today, repealing it, why don’t I offer a title for the committee to consider, and perhaps it could be the “Forests (Matua Shane Jones Changed Tack) Bill”—I don’t know. Now, I’ll just let that one sit there and let it ruminate amongst all the members in the Chamber, as what we’ve discussed here is reasonably small, but it has a huge impact on the forestry sector. So when we look towards and we explain why we’ve made these amendments to some of those—perhaps the small and medium sized forestry owners—that have been mentioned at length here this evening, perhaps that particular title might be something that can give them a bit more clarity about what’s happening here this evening.

The other part, of course, is clause 2, which is talking about the commencement date. The Minister made clear the programme ahead of us—August 2027, if I recall correctly. I do put to the Minister, though, that just for the sake of the committee of the whole House, and for those listening at home, whether or not he could just one more time make it very clear about the date that he mentioned in 2027, the time in between, and the process that will take place, and say why it is important that everyone understands when this Act comes into force, after the day of Royal assent.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. When we’re looking at this, I appreciate what the Minister has mentioned before, which was that this bill itself has a very narrow scope. But, as we have heard through the committee of the whole House stage, this particular bill actually has much broader implications when it comes to the revocation of the log traders and forestry advisers regulations.

So I think a more appropriate title in this case should be the “Forests (Log Traders and Forestry Advisers Repeal Without Considering Broader Context) Amendment Bill”, because in this case we have mentioned on multiple occasions the workers in terms of the health and safety component from the imbalance and the inequity we’re seeing with our forestry, going from small forestry—and, again, going back to the supplementary analysis report which said that the people who benefit are going to be log exporters and trade entities but that the main costs would come to small-forest owners. I think this has a much broader implication than what the Minister has mentioned, so I would really encourage the Minister to consider seriously, when we are looking at the title, broadening it out to the scope that is not just simply looking at this but it is looking at the complete ecosystem that it would affect.

With that, I genuinely think that we should be looking at, potentially, in terms of the title, something that is more along the lines of the “Forests (Log Traders and Forestry Advisers Repeal and What is Going to Happen to our Industry?) Amendment Bill”. I just feel that in this case the Minister—

Hon Todd McClay: It’s like country—it’s quite a catchy one.

Dr LAWRENCE XU-NAN: And I really appreciate the Minister’s engagement and advice on a lot of these areas, but, really, we haven’t been able to get a straight answer from the Minister on the broader implications that the repeal of this will create.

CHAIRPERSON (Barbara Kuriger): I think we need to be careful—I’m going to call on the Hon Todd McClay, but I just think we need to be careful that the suggestions for the title don’t put the scope of the bill out of the scope of the title.

Hon TODD McCLAY (Minister of Forestry): To the last speaker, Dr Lawrence Xu-Nan, the public had such great hope and expectation when he came here, and, so, we’ll work on that.

Look, I guess the point of this is, actually—and, to the Hon Peeni Henare, I did consider a change to the name and I thought it could have been the “Hon Shane Jones (Thank You) Bill”, because, actually, what Shane Jones did four years ago was send a very clear signal to the sector that they should take responsibility for themselves and, actually, there is a need for legislation or regulation where they don’t. In the intervening period of time, as a result of the great foresight of Shane Jones four years ago, the sector has stepped up. It has taken the responsibility and has said that they want to do that for themselves—firstly.

Secondly, we could also call it the “Shane Jones (Getting Rid of Additional Costs) Bill”. It’s not necessary, I suppose, because the cost of this legislation or regulation on the sector is greater than the benefit that’s being derived, and so that’s the reason that it’s coming away. So a heartfelt thanks to Shane Jones because he’s a man of great, great vision, and we should recognise that collectively in the House by unanimously supporting this bill.

The final point in as far as the entry into force upon Royal assent, the part that is being repealed happens straight away so we can give money back to those that have paid it and we can get absolute certainty and we don’t have to send out more invoices. Around legal harvest, we’re pushing the date out for the new system to enter into force to 1 August 2027 to give ourselves time, appropriately, to engage very broadly and widely with stakeholders in New Zealand and international stakeholders. But it could well come into force before that by Order in Council, should that work have been done, and in the third reading speech, I’ll be able to talk a lot more about that.

MILES ANDERSON (National—Waitaki): 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 48

New Zealand Labour 34; Green Party of Aotearoa New Zealand 14.

Motion agreed to.

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

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 14

Green Party of Aotearoa New Zealand 14.

Clause 1 agreed to.

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

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 14

Green Party of Aotearoa New Zealand 14.

Clause 2 agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Barbara Kuriger): Madam Speaker, the committee has considered the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Maureen Pugh): This bill is set down for third reading immediately.

Third Reading

Hon TODD McCLAY (Minister of Forestry): I move, That the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill be now read a third time.

The Government has set ambitious goals to reduce Public Service spending through identifying and cutting wasteful spending while removing unnecessary red tape from being put on business. This bill will play its part in helping to achieve these goals for the forestry sector.

Whilst the administration of this regulation system was designed to be fully cost recovered, there has been a lower number of registrations than originally anticipated. This, along with the need to continue resourcing the delivery of the system, has meant the Crown has not fully cost recovered the registration system to date, nor does it look like it will be able to, under the current settings. It’s anticipated that the ongoing annual operating cost to run the system will be approximately twice as much as received from those currently registered. Therefore, the system is using Crown funds to remain functional. This does not align with the Government’s priorities, another reason the repeal has been a priority for the forestry portfolio.

As for the legal harvest assurance scheme, I want to ensure the full engagement with international trading partners and the sector is delivered so that we can ensure market access is achieved in perpetuity whilst making the system as simple and cost-effective as possible for the sector. Extending the commencement date will ensure this can be achieved in order to provide a durable, fully cost recovered system that does not cost the Crown and that benefits all participants.

Regarding any potential concerns that members may have around removing the registration system for log traders and forestry advisers, I want to make it known that I do support the intention of the registration system; I just don’t agree that more than self-regulation is required to achieve these ambitions. As I mentioned in my previous speeches in other stages of the legislation, I consider the New Zealand Institute of Forestry’s (NZIF) voluntary registration system for forestry advisers is a better pathway for people to register as forestry advisers, and for others to look for the expertise that they need. I encourage those already registered with the NZIF to retain their membership, and others to look towards joining the sector body.

Separate from this, but, as Minister for Trade, I’m committed to growing the export value of forestry, just as with every other part of the economy, supporting the growth of the wood-processing industry, removing unnecessary regulation, and providing certainty as a big part of enabling this. Ultimately, the repeal is one part of ensuring that we can get the policy settings right to support the sector, to expand, to innovate, to unlock investment, and to trade.

I intend to publicly announce our strategic direction—indeed, I have publicly announced a strategic direction for the forestry and wood-processing sector just a few weeks ago at Fieldays. It has the aim to help restore confidence and support investment that we need in forestry and in wood processing. Through supporting the sector to expand, innovate, unlock investment and trade, we can double the value of our exports, provide higher-paying jobs, help meet our climate change obligations, and support land-use resilience and adaptation. The registration system regulations do not support these outcomes, and, therefore, there is no reason for them to continue.

Can I thank all members in the debate on all sides of the House. Whilst not everybody is supporting the legislation, the questions that were raised and comments were reasonable. Can I reach out to the Hon Peeni Henare and thank him and the Labour Party for their support today. The House, by a very large majority, is supporting the New Zealand forestry sector.

DEPUTY SPEAKER: The question is that the motion be agreed to. No, sorry—yeah, that’s right. That’s right. The Hon Peeni Henare—I was just making sure I had the words right.

Hon PEENI HENARE (Labour): Fantastic, Madam Speaker. It’s always important that we get things right—

DEPUTY SPEAKER: Absolutely.

Hon PEENI HENARE: —which is why we’re here this evening. I want to acknowledge the Minister, the Hon Todd McClay, who reached out and, with the support of the industry, made it very clear why getting these things right is important.

To the Minister’s credit, we were very clear that we would still prosecute a number of matters; we will still continue to push the Labour position on forestry while also supporting this bill. That’s important because it is very clear, Labour’s position when it comes to forestry, and the Minister touched on a number of those matters in his third reading speech—that is that we do want to see more logs, more raw timber products processed and developed here in New Zealand.

I mentioned it earlier: that all members of the House have driven past the port and said, “Why are there so many logs sitting there in raw form ready to be exported overseas?”, and then thought, “We want to have jobs, we want to grow the economy here locally, and why don’t we continue to do more of that manufacturing and wood processing here in New Zealand?” The Labour Party has been staunch supporters of that. In fact, during our time in Government, we set aside quite a large amount of money in order to support those aspirations that small communities have to be able to process the timber that is around them.

I’m always reminded, when I think of forestry, about one example—and I’m going to be very careful about the names. I won’t mention the names, but it’s an example that I’m sure resonates with every member in this House. Not too long ago, in a staunch forest community by the way of planters, harvesters, and processors, a new community building was opened. All of the materials used to build that building were imported from Australia, and that building was erected in one of the biggest forestry towns in this country. To me, that’s ludicrous. To me, that doesn’t make sense. To me, we want to show the forestry sector that we support them.

I support the Minister’s push towards growing our exports and log value offshore—I think that’s a good thing. But I do want to highlight one of the things that came to my attention last year, in July, when the Rt Hon Chris Hipkins led a trade delegation to China and we noticed—and it was made very clear to us—that, in particular for Māori land owners who have forests, we are over-invested in this space, and that the risk that it exposes Māori land owners and Māori forestry owners to was great, it was significant, and couldn’t go without clear direction about where that particular sector is heading.

I believe that, in passing this bill this evening, we are providing that to the sector. We’re allowing the sector to create a registration system. As the Minister has already mentioned, there is another example that he favours, but we’re going to put that in the hands of the sector to say, “That’s fine, but let’s make sure that we get it right this time.”

What we’re also saying, though, is that in entrusting the sector to do this, we want to encourage the sector not simply to meet with the big owners—not simply to meet with the big operators—but to meet with the small to medium sized owner-operators, growers right across this country. I think that’s a really important step to make sure that we do have a system that works for the entire sector, not just for the big players. I respect the big players—the role they play in leading our industry—but we know there are a large number of small-forest owners, medium-sized forest owners, who are looking to be part of the action that is really important to the forestry sector as we export our logs overseas.

I do want to also reiterate our point for the Labour Party about the protection of indigenous species and making sure that we’re not feeding into a black market offshore. The Minister made it very clear that, in his role as trade Minister, he’ll continue to promote our forestry products offshore, and I totally support that. What we can’t support, though, is the illegal trade of indigenous species of timber from New Zealand into black markets—and I’m sure every member in this House will agree—and we want to continue, as the Labour Party, to reiterate that point through the passage of this bill.

The other point we want to make: the term “cowboys” was used regularly throughout the debate, we want to make sure that we have a good system that certainly doesn’t see the increase or the rise of cowboys in the sector, but that continues to support the growth in the forestry sector, to make sure that, in the future, no cowboys can come back. Others, as my colleague described it, someone with a ute and a laptop could go up and offer services to somebody who might not have the full expertise to be able to export their logs and simply be taken advantage of. We can’t tolerate that, and we want to make sure—and I’ve said it throughout the progress of this bill—that we want to support the Minister in what he said about how we can look towards having a robust system moving forward. But we will need to continue to ensure that those safeguards are in place so that people aren’t taken advantage of. I take the Minister at his word in his assurances that we will be able to make sure that those safeguards between now and the August 2027 date will continue to keep our sector safe.

The other point I want to make: the forestry sector relies on security and long-term vision. However, it doesn’t mean it isn’t impacted by the influx of the market. It doesn’t mean that it isn’t impacted by what is and has been a fair amount of instability in the log exports for this country. It has been challenging. What we’ve seen in places like China was best described to me by one forestry owner as “a turning down of the tap” or of the volume that they’re looking towards—knowing full well that we export large amounts of wood product into China.

So we want to make sure that we can actually look towards protecting those markets while also looking towards growing more markets, and doing so in the right way, knowing full well that those who do trade with New Zealand with respect to logs as we export them out of this country, come to New Zealand because they like our reputation when it comes to the way that we grow forests—the way that we trade in logs offshore.

I do want to, though, reiterate that as we do that, it would be remiss if the Labour Party didn’t mention the health and safety of those workers who work in the forestry sector. We are the Labour Party—it’s what we’ve stood for: protecting workers to make sure that the reputation that foreign buyers look towards our forestry sector, they know that they’ve got a strong reputation here in New Zealand that can continue to be protected into the future. We can’t see workers going to work and not coming home. That’s just not the way we do things in this country.

My final comment is to our families on the East Coast at the moment. They’ve been hit so many times over the past 18 months by huge weather events. We know the forestry sector is a big part of the economy on the East Coast. We hope that the bill that we’re passing here this evening may help the forestry sector—in particular on the East Coast, but right across the country—to be able to rebound from what has been a difficult time. Our thoughts and our hearts go out to those on the East Coast as they continue to be pounded by rain, and make sure that we in this House can support them to recover, and I believe the forestry sector is one of those sectors that will help them to do that.

We support this bill and we look forward to supporting the Minister in making sure that the safeguards that were mentioned by the Minister throughout the passage of this bill will continue to protect the sector—a sector this country needs.

HŪHANA LYNDON (Green): Tēnā koe, Madam Speaker. Tēnā koutou e te Whare. I stand on behalf of Te Rōpū Kākāriki to maintain our ongoing opposition and our concerns, because, ultimately, it was our colleagues from Labour, and our Matua Shane, who brought the original legislation into this House. So I need to remind the House that, actually, it was brought in for a reason.

There was a call from our people, with widespread support within the pre-consultation and the consultation, for the register to be established to provide regulations and protections for the sector and for landowners, and to provide a credible register where we could go and find the smorgasbord of advisers available to us when we needed to purchase services. So, as I was sitting here listening in the House, I did a google, and I checked out, actually, how awesome the website is for the Ministry for Primary Industries (MPI), with nearly 500 pages of registered advisers. It’s quite cool. If you go on there, you can see their name, you can see their location, and you can see what they’re registered for, their hapū iwi affiliations, and how to contact them.

Now, I know that we’ve spoken tonight about “Let’s hand it back to the industry. They’ve got the model.”—yep, it’s the New Zealand Institute of Forestry, and I mihi to their many years of mahi. For us, in Tai Tokerau, we have nine registered New Zealand Institute of Forestry advisers on that list. But, certainly, it’s voluntary, and that’s the risk when we go back to it being voluntary, because, as I shared earlier in the piece, we had 10 to 12 percent of advisers within the sector registered in the voluntary system, and now we have over 500 through the regulations brought in by my colleagues from Labour and our good old Matua Shane.

So let’s reflect on the need for a sector to be strong, to be robust, and to be credible and transparent, and that was the original intent of this legislation. It was to provide regulation to support both the growth of the industry and to provide a record of who’s who in the zoo, and then also know their credentials and their experience to support us on the ground. We won’t have that anymore, so I’m looking forward to working with the Minister and seeing the consultation that takes place, because it can’t all be for the big players. You have to remember rural New Zealand. In the Cabinet advice in 2022, it said that “A well-functioning forestry and wood-processing sector supports rural communities to thrive.”—this was an in-confidence paper.

Māori also, during this process, in pre-consultation as well as the consultation, raised the need for transparency as to who’s trading our logs and who’s providing the forestry advice. Māori also said, “We need to see the disclosure of conflicts of interest.”—and that’s always important, eh, for transparency. The registration process that MPI was administering provided a robust system whereby we could put forward complaints and concerns, and see an external party then go forward and look to facilitate or mediate a process for the parties. Now, we’re going back to the centre to self-regulate, so we have high trust now, and I think that’s part of the disappointment. It is that we had only just started to implement this system to bring in a robust and rigorous registration process and provide additional safety and security to those of us on the ground to be able to inquire and look for those professionals who can support us in making robust decisions.

But that’s OK—we move forward, and we ask for the Minister to come to the North, and let’s have some more hui. Let’s have some more hui within the sector and landowners, because there are nine registered advisers through the New Zealand Institute of Forestry, but let’s grow those numbers. How do we transition those 500-odd on the MPI list across? What are those transition arrangements so that we can support them into an industry-led system, because when they go back to being voluntary, they may not register. So those are some of the concerns and the worries, I think, in terms of being a land administrator, as to how we can get robust advice in the sector and in our communities.

As my whanaunga and colleague Peeni spoke to, again, one of the key purposes was to save our value and keep our value within the kāinga—particularly for wood processors—and to see whare built from our wood. That remains a goal. So, in terms of the advice that we would receive, for those of us preparing for harvest, it would be my hope that through this new system and through the transition that we’re going to see and the consultation that’s going to roll out, we will know as to how we can get robust advice for landowners to ensure that they’re engaging the right people to do the work at the right time.

Finally, in terms of the Green Party position, we always think that it’s good to have a robust system in place—something that is well consulted on—and because this bill has come through in urgency, we are missing out on the voice of the people. We are missing out on the robust consultation and sending it into select committee to actually hear from the people on the ground. So one of the failures that we have in this urgency process is that’s it’s gone so quickly, we’ve missed the opportunity to hear from community, from landowners, and from the industry themselves.

We can only look to anecdotal kōrero, like myself, last night, sitting in Kawakawa and in Kaitāia, talking to Māori land owners about this proposed repeal—of which the feedback that I got from the land administrators, or the owners, that I spoke to was like, “Oh, why are they doing that? Is it needed?”, and I said, “Well, actually, that’s a really good question. I can’t tell you why they’re doing it, but they said it’s about red tape. So they’re taking away the red tape.” But, for us on the ground, whether we’re in Kaitāia, Kawakawa, Moerewa, or even in Whangaruru—where I’m from, and I administer a block—we want to get good advice. So my challenge is: will our advice continue to be robust, who is going to be the caretaker and the independent person who will be the mediator when push comes to shove and complaints are made, and how can we grow a good system that is industry-led—because that’s where we’re going—and ensure that there are protections in place for the time of harvest and processing?

Heoi anō tāku e mihi atu ana ki te Whare; ahakoa te tere hoki o ēnei mahi a te Kāwanatanga ki runga i a mātou, kei konei te Rōpū Kākāriki e whakahē tonu ana i tēnei pire. Kia ora.

[All I need to do is acknowledge the House; despite the incredible haste of these actions of the Government upon us, here the Green Party remains in opposition to this bill. Thank you.]

MARK CAMERON (ACT): I enjoy these debates. Thank you very much, by the way, for the opportunity to speak in this third reading on this piece of legislation and litigate some of the points made by the Green member Hūhana Lyndon and sort of highlight the fact that I think they’re sort of Noddy-no-mates in this instance—they’re out on a limb. This is a good piece of legislation. I mean, they always seem to advocate for the little guy, and the little guy in rural New Zealand absolutely loves legislation like this. We would argue it’s making life in rural New Zealand a little bit less onerous. I, for the life of me, can’t reconcile a lot of the remarks that seem somewhat contradictory, given we are having a debate in this third reading about the premise of the legislation and who it actually helps.

The primary industry sector’s worth billions of dollars—I think we’ve all reconciled that. The forestry sector, as we sit here today, is the fourth-largest one. It is worth billions of dollars, and I think you would all agree—and Green members included—that we would like to see, as the Government has asserted, a doubling of revenue export earnings inside the next decade. Well, I make the point: in the absence of this legislation, should it not come to pass, what’s the Greens’ vision of the forestry sector?

I just want to touch on one point that Hūhana Lyndon did raise about the trust mechanism that would be needed for the sector to self-regulate. Well, I’ll just make the point—and I think some of the other members may agree with me in this House—I really trust Kiwis. They’re bloody good people. They work exceptionally hard in rural New Zealand to make a bread, to make a crust, to add a bit of coin to their community. For the life of me, I cannot reconcile why the Green member who’s just sat down, resumed her seat, wouldn’t support that reality. I think her arguments—respectfully to the member—are poor.

This is a great piece of legislation. We, as a Government, campaigned on reducing the red tape for everyday Kiwis. Our colleagues on the left—the Labour Party, by virtue of that narrative—they’ve seen the light; not always, but they’ve certainly seen it here. And this emboldens that outcome.

I just want to touch on the remarks from the Hon Peeni Henare when he did highlight that iwi Māori are big investors in this industry. Well, “Go them.” is what I say, because they are some of the hardest-working people in New Zealand—and how dare we stand in their way? The disestablishment of the registration system that puts a trust model back into the equation to me, to the ACT Party, to every other party, excluding our mates in the Greens who are on a limb, is a good thing.

Dr Lawrence Xu-Nan: Because we’re principled.

MARK CAMERON: Well, I would argue that your principles, in this instance, are flawed. This is great for rural New Zealand. We absolutely support iwi Māori, small communities, and the foresters that this bill enables. I commend the bill to the House.

Hon MARK PATTERSON (NZ First): Thank you, Madam Speaker. I rise on behalf of New Zealand First to also support this legislation through the third reading. It’s legislation that’s obviously a little bit complex for us because we were part of bringing into play this piece of legislation that’s being repealed.

There were some issues within the sector that had been highlighted. There were some cowboys out there. It was a sector in need of a tidy up. But the solution that has come to pass, that we’re repealing now, has proved to be relatively ineffective as far as we’ve been able to ascertain, in regard that it’s actually costing more than we’re able to recover from it. There has been a tidy up, which has given Minister of Forestry McClay and the coalition Government the confidence to make a more voluntary, trust-based scheme available in terms of what’s already out there with the New Zealand Institute of Forestry (NZIF) and the registration system that they have. As Mr Cameron just alluded to, a key theme within this coalition has been about cutting red tape, getting unnecessary regulatory burden away from the primary sector, and indeed the wider economy as a whole. This is core to the theme of what we are doing here today.

The forestry industry is, as has been alluded to, a large contributor—I think, some $6 billion to the New Zealand economy. But picking up on the comments of Peeni Henare, we absolutely do need to grow that through more value-add in New Zealand, and a manufacturing base—regrowing that. There is some good stuff happening out there, as you get around. Indeed, it’s not just timber; it is things like biofuels and biochar, and the like, that are other uses for timbers—maybe not the premium cuts or slabs, but some of the offcuts and the slash, which is something, obviously, that’s been of some concern in terms of making sure we’d better do a job of tidying that up. So we are able to monetise some of that stuff as well. So Minister McClay and his—we’ll be keeping a very close eye on engaging with him on his plans to grow the sector, because we think there is a big swing back to natural fibres. There is quite a lot of flexibility in what you can do with timber beyond just building and framing.

Without further ado, I think that summarises New Zealand First’s position. We do recognise that the previous legislation had been ineffective and had added cost. We’re happy to support the Minister in repealing it, letting a higher-trust model, through the NZIF, be the industry standard, I guess. As someone who has sold forestry blocks before—as the Green member Hūhana Lyndon alluded to—when you’re doing that, you do have to get a trusted third party involved, or third parties, but that’s not that hard. In rural New Zealand, you know who the good operators are—you just talk to your neighbours, you talk to other people in the industry; they’ll give you a short list of people for who you can go out and engage and get quotes and the like. So, probably, we had a solution looking for a problem, in that sense. So New Zealand First is happy to support this legislation.

DEPUTY SPEAKER: Thank you. The next call is a split call, and I’ve been advised by the Māori Party that there’ll be two Green speakers with five minutes each. So I will call Steve Abel.

STEVE ABEL (Green): Thank you, Madam Speaker. I appreciate having the opportunity to speak to this bill. I’m sad to have to disagree with my colleague Mark Cameron, despite him being the chair of the best select committee in the House—and my colleague Mark Patterson, as well.

Self-regulation looks like the original problem for which the registration of advisers was brought into place. The Minister said that the sector stepped up, and the sector stepped up because of the requirement of registration. It stepped up because it was made to step up by the laws that required them to fulfil the obligations of registration, to keep a track of the advice they were giving to small-forest operators. So the registration system actually protects the small operators.

It is not uncommon in this country for us to register professional advisers. We do it for very good reason: the reason your mortgage broker has to be registered and has to be bound by a series of obligations. The reason your real estate agent, your dentist, your psychiatrist, your electrician need to be registered is to protect people who are ignorant of their practice, who do not know who is a good operator or a bad operator.

In an instance of advice to foresters who are small scale in regional areas, that is exactly why it’s advantageous that the forestry advisers are registered, so that if they are giving poor advice—and this poor advice could come at some cost to a small operator if they’re advised to log their trees too soon, to prune them in an incorrect way, to plant them too densely or too far apart—these sorts of advice decisions could add up to thousands of dollars’ worth of lost value to a forest operator. The ability for that operator to have a recourse to a register that requires the adviser to have told that person—kept a record of what advice they’ve given—is a protection for the small operator.

I have some experience of the arboriculture industry in my efforts to protect urban trees, which is that when general tree protection was removed, arborists told me that the effect of that was to de-professionalise the industry, so you’ve got a lot more cowboy operators. Anyone with a truck and a chainsaw could clamber up your tree for a handful of dollars and cut it down in a dangerous way or prune it in an ugly way. So the actual requirement of a professional register improves the general quality of work in the industry. It causes the industry to step up.

What is the burden that it causes for a professional who’s serious about the practice that they offer, who has a profitable business, the $500 for registration? What is the burden for them? The burden is nominal, but the advantage to those small operators and those foresters can be quite significant. De-professionalisation of this industry is not a good thing. The reason that we will oppose this bill—and we might be Noddy-no-mates, as Mr Cameron called us—is because, on principle, we think that this is a way that we get a better-quality industry.

As our friends on the East Coast are once again grappling with the nightmare that is another massive weather event for them, they are no doubt wishing that the sort of requirements that might have seen better management of slash in the forestry sector over recent decades—had they been in place sooner, had they not been weakened further this evening in this Parliament, then perhaps there would have been much less damage by the floods and the extreme weather events that we’ve seen. So the Green Party will be opposing the repeal of this piece of legislation. Thank you.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Speaker. There are a couple of things I would like to address regarding this bill, and particularly I want to draw from the committee stage, as we had some robust discussions around this.

The first thing is that this bill comes in two parts, and I kind of want to address the second part first, which is some of the amendments to the Forests (Legal Harvest Assurance) Amendment Act. One of the things that we do agree with is for Aotearoa to follow international standards and particularly some of our trade obligations. We’re really appreciative of the Minister, the Hon Todd McClay, for highlighting some of the needs and some of the expectations that the Minister has set out in the process of this, in order to delay that particular element by a year, and some of the goals that we are hoping to achieve. That is a good thing in itself. But, of course, this particular bill doesn’t depend on just that one section.

I want to draw attention to the first part of the bill, which is the amendments to the Forests Act. Again, we’re looking at the repeal of the log traders and forestry advisers. We have already heard from my colleague, who, again, has personal experience when it comes to small forestry operations and when it comes to what it looks like for Māori forestry operators. This is something that has caught them by surprise. Part of the reason is, as we were discussing through the committee stage and we were talking about some of the repeal, there was no point where we were able to get some sort of reassurance that the urgency of this particular bill is needed. And the removal of the select committee stage and hearing from our communities, and particularly, in this case, hearing from our Māori communities, is to remove a necessary step. So that’s something that we’re kind of coming back to when we’re looking at the principle of appropriate decision-making: those who may be most affected by the repeal have not had the real opportunity to feed into this. And I think it leaves a real question mark.

We already heard our hopes and aspirations, but in the current state it leaves a real question mark as to whether those small forest operators are going to be able to see the same level of robust advice and service they have come to know and appreciate over the last few years. So, when we are looking at this, we as the Green Party—and also what we heard from Te Pāti Māori—cannot support this in its current form. Again, like many of the other pieces of legislation we’re looking at when there is urgency, maybe there would have been room for us to reconsider if we were able to take that appropriate decision-making step of going through a select committee process. So, when we are looking at the broader implications of the forestry advisers, we have heard—again, from our colleagues from Labour as well—the aspirations we want to see. Hopefully, this is going to work out. It hasn’t worked out before, which is why we had this scheme in the first place, but, hopefully, this time it will be different. So, again, there is this idea that there is this uncertainty. And I too echo others in the sense that I hope we are going to be seeing something different this time around.

Just to finish, when we are looking at this bill, the other thing that we haven’t been able to get reassurance on is this idea of the levy. We understand that, when we are looking at removal of this, people who are currently paying for the levy no longer need to pay for the levy. But one of the questions we did ask—and we didn’t get a full response from the general committee stage as well—was whether those levies needed to be refunded. One of the comments that you see again in the supplementary analysis report—this is something that we didn’t manage to tease out—is that this is going to come under the Ministry for Primary Industries’ baseline, and it’s going to be a baseline of $0.6 million. So that’s another thing that we haven’t been able to get any form of reassurance on. Why do we need to refund it when the service has already been provided?

Unfortunately, there is still a lot of question marks to this bill, so we cannot support this in its current state. Thank you.

MILES ANDERSON (National—Waitaki): Thank you, Madam Speaker. Look, as a small forestry block owner, I’m very pleased to support this bill through the House, and I commend it to the House.

Hon JO LUXTON (Labour): Thank you, Madam Speaker. I’m pleased to rise and take a call in support of this piece of legislation, the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill.

Before I begin my contribution, I would just like to acknowledge those on the East Coast that are suffering with the severe weather events that we’re seeing unfold at the moment. And I know—we all know, I guess—that the forestry sector is a big part of industry on the East Coast, and I have no doubt that there’ll be some serious impacts there with these weather events. So I do just want to acknowledge all those folk who are being affected by these severe weather events, and I hope that everyone stays safe during this time.

Dan Bidois: Tautoko.

Hon JO LUXTON: Thank you. This piece of legislation is an interesting piece of legislation and Labour does support it, but we do want to ensure that there are certain provisions continued during the time between now and 2027 when it commences, and we are really keen, as a party, to work with the Minister to support him and work towards getting some really good systems in place where this piece of legislation is concerned.

This piece of legislation was introduced initially because it was something that the sector themselves were asking for. We’ve had some, as we’ve heard in the House tonight, terminology used around the word “cowboys” in the industry. I think it was a way of the industry to, I guess, professionalise itself and put some safeguards in place for the sector, because we do know that we want this sector to be a prosperous sector. We want to support exports and we want to support our foresters, our loggers, our traders in all aspects of this area. It’s really important for New Zealand because it brings in a large amount of money to the economy.

What we have seen since this legislation was brought into place is that perhaps it hasn’t achieved quite necessarily what it was intended to achieve. I note that the sector now itself, who had originally asked for this piece of legislation in the first place, are now asking for it to be repealed. I guess some of the reasons for that that we’ve seen is that perhaps the size of the problem , or perceived problem, wasn’t quite as large as it was anticipated. So I understand that it was initially thought that there was a huge amount, maybe thousands, of forestry advisers out there, but it seems that there’s only, from what I have seen, been about 500 that have registered under this piece of legislation. I also note that, within the first couple of years of this legislation coming into place, there has only been two complaints and both of those were not upheld.

When I come back to the terminology around “cowboys”, I’d like to acknowledge the point that Minister Mark Patterson raised, as far as when there are cowboys in the sector, they don’t tend to last very long in rural areas, because rural folk talk to rural folk, and you act as a cowboy at your own peril when it comes to those involved in the primary industries. You certainly—not you, Madam Speaker, but cowboys—will not last very long when it comes to that kind of behaviour.

I note that this piece of legislation also refunds fees or levies that have been paid under the system, and I guess that’s fair, because I guess they weren’t due to come into force until 1 July, and perhaps those that have been very keen or very organised may have already paid those fees. It is only fair that if this legislation is being repealed that they are refunded in that way.

The idea of voluntary registration is an interesting one. I do think that, given that the sector originally asked for it, the sector are now asking for it to be repealed because they’re not seeing the need or the necessity for it, as such, there is going to be a bit of an onus on the sector to ensure that those that are registered in a voluntary capacity continue to uphold the expectations and the professionalism that has been required of them should they have done it under the mandatory process. So I think that’s just something that we need to really bear in mind—that the professional responsibility is absolutely upheld, that there is a responsibility to their clients, and that there is professional work standards upheld by these forestry advisers, who are going to be doing this on a register on a voluntary basis. I mean, registering on a voluntary basis isn’t a new concept. There are those that do that on a voluntary basis and provided by such as those in the building industry or the meat industry.

We do want to ensure, though, that WorkSafe practices are completely upheld. We know that this sector has been one that has been fraught over the years with tragic accidents and we do want to ensure that we reduce and continue to reduce those as much as possible.

The other thing that I wished to talk about is—if I could just find my notes around this. Oh, yes, we talked a bit about the legal harvest assurances system—that was the next point I wanted to get to—because we do need to protect the industry. We need to protect our traders and those that are exporting the logs, to ensure that when they export, they can prove that they have legally harvested the timber, because it has been an issue for the sector for quite some time. I was part of the select committee that dealt with the legal harvest assurance system; it feels like it was quite some time ago now. But what we do know is that it has been a real issue in the past and we do want to ensure that whilst the reference to the forestry advisers in a registered capacity is removed from the legal harvest assurance bill, we do need to ensure that this is something that is still continued. I think that the Minister has said that this is an area that will still continue as it is, just simply with the removal of the advisers having been mandated to be registered.

One of the things that has arisen from this, the advisers having to be registered, is that there’s been the concern around the cost being passed on from that to the foresters and such. And that isn’t fair when you consider that not all foresters are big, large corporate forests. There are a lot of small players in the industry, and if we can do whatever we can to ensure that they are not burdened with additional costs, then I think that that is good for us to do, because it is good for the sector, it is good for the economy, and it is good for the primary industries overall.

So, without further ado, we do support this piece of legislation, but we want to ensure that some of the things that I’ve talked about, as far as concerns that we have as the Labour Party, on this side of the House, are taken into consideration, and I guess there will be the time to ensure that happens between now and the commencement date in 2027. Thank you, Madam Speaker.

SUZE REDMAYNE (National—Rangitīkei): Forestry is our fourth-largest exporter. These changes will support the forestry sector to boost export growth, and they will help rebuild our economy. I commend this bill to the House.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Speaker. Well, this is a strange little bill in many ways. It’s not a huge imposition on the industry, but the National-led Government has decided that it’s not for them, and, in our view, on balance, we’ve got some concerns which we expressed in the committee stage about the health of the log industry.

I asked the Minister, as you may have heard, a number of questions about what non-legislative measures he will be taking to support the forestry and log-exporting industry generally. To be honest, I wasn’t entirely satisfied with his answers, but I would really suggest that that’s something we should be looking carefully at, because voluntary codes of conduct are all very nice—well and good—as are voluntary industry organisations. But we know that they struggle. They struggle for technical support, they struggle for resources, but they serve an important purpose. So if that’s the road that this Government’s choosing to go down, I would suggest that that’s really necessary.

And, of course, the irony is that this was a New Zealand First initiative that Shane Jones pressed hard for. It probably shouldn’t be called “log trading”; it probably should be called the “Horse Trading Bill” because it sounds like that’s actually what’s gone on. Or perhaps the “Log-barrel Politics Bill”.

Hon Dr Ayesha Verrall: What about “log rolling”?

Hon Dr DUNCAN WEBB: Yeah, a bit of log rolling, indeed. It could be any number of those things, because, clearly, there’s some deals that have been done on the other side of the House, and we know how desperate they are to cling on to power. [Interruption] The fact of the matter is that these—well, you know, that’s right, that Northcote seat’s at risk. And there you go, Banks Peninsula. That’ll be coming back home real soon.

Hon Dr Megan Woods: Especially with her pro-mining stance.

Hon Dr DUNCAN WEBB: Yeah, that’s right. The mines on Banks Peninsula—that’ll go down real well. All those quarries.

But the point, back to this bill, is that if the other side could have twigged, we are actually supporting this bill, because, on balance, we think it’s probably the best thing to do. We do agree with the suggestion that we want as few costs associated in compliance costs as possible. For my own view, I think a dispute resolution framework was a good idea. The fact that the Government provided a quick, easy, and effective dispute resolution framework for people in the industry seems to be an effective thing, and it happens in a lot of other industries. But, at the same time, we have a much more comprehensive judicial framework, and there are other ways to resolve disputes.

My friend and colleague Peeni Henare has certainly outlined the overall concerns we have about the health of the industry and the need to support it. But we don’t want to be an obstructive Opposition; we want to be a constructive Opposition where appropriate. And, by a fine margin, this is one of those situations. The conduct of the industry is now in the hands of the Government. We’ll be watching closely to make sure that it doesn’t fall back, because, as has been said time and time again, there were some rogue traders there, there were traders who weren’t doing the best by the industry, and there was a real problem with local industries—local mills, in particular—being squeezed out of the market by sharp practices by larger players. That’s a concern.

There’s a competition concern in there. And we know that a market with no constraints or controls doesn’t work. These were some controls and, look, perhaps they weren’t working as intended. That seems to be the case put by the Minister. But what we want to make sure is that we don’t see a market which isn’t a balanced one, where contracts aren’t fair and reasonable, where some players abuse their power or position or knowledge, or where there’s worse—there’s outright dishonesty where people are just setting themselves up and presenting by a web page and a fancy ute that they’re a lot more knowledgeable, a lot more skilled, and have a lot more credentials than they actually do.

So there are the risks. But we’re supporting this bill because we want people to get on with it. So we will support this bill through the House.

JAMES MEAGER (National—Rangitata): I invite all members to venture to the “Riviera of the South”, because if you visit PrimePort Timaru, you will see logs for Africa. Except they aren’t for Africa; they are stuck on shore because bad rules and bad regulations stop things from happening. Red tape, green tape, insulation tape, sellotape, whatever kind of tape is jamming up the system, it has got to go, and that is what this bill does. It is a good bill. Shortly it will be a good Act. Let’s get it done.

Hon DAMIEN O’CONNOR (Labour): That just summarised the ideology—or “idiology”—of the Government of the day. I’ll read out a couple of things here and one is from Dr Elizabeth Heeg, chief executive of the New Zealand Forest Owners Association. She says assurance schemes are important for maintaining integrity throughout the supply chain. She goes on to say that “the registration scheme was meant to improve information across the forestry and woods processing supply chain, improve professional standards, and build greater confidence in the sector. Unfortunately, it has achieved the opposite—delivering added cost rather than added value.”

Let’s have a look at the added cost. So what are we talking about? This is the fourth-biggest industry in our country—fourth-biggest export sector. As I say, logs everywhere in Timaru, Wellington, Gisborne, you name it. So there was a regime where anyone with a ute and a computer could roll up to a farmer, see a few trees, and say, “Look, we’d like to buy those trees and we’ll just put them into—”. The farmer might want a bit of cash and so they’d say, “OK.” No assurance; didn’t know whether the guy was a crook or not. Others could roll up and say, “Look, you should plant some trees there, you’ll make a whole fortune, 10 percent return on equity. Great deal.”

Hon Mark Patterson: Who’s the Labour whip? Tell him you’re supporting the bill!

Hon DAMIEN O’CONNOR: You didn’t know whether that person was a crook or not. And, Minister Patterson, there is a classic because his mate Shane Jones had the wisdom and the vision to know that it should be tidied up—it should be tidied up. Indeed, that’s what he passed in 2022, and do you know what the cost—and I’ll come back to that, because all that regime did, according to the Government, was add cost. How much? For someone to register, $444, and $320 to renew—annual fee. That small amount provided assurance through the Ministry for Primary Industries (MPI) for biosecurity standards that the trees came from the right place, that the people were paid, that we didn’t have slave labour involved in the export of trees or the supply, because those requirements are core components of our right to export to many markets.

So the question I have for the Government—in trying to reduce, through the passage of this legislation, the $444 that it costs for someone to register as a log trader able to trade millions and millions and millions of dollars of logs into markets that are sensitive to biosecurity requirements, sensitive to slave labour, sensitive to deforestation requirements—and so we, the taxpayer, through MPI, will have to provide that assurance. We won’t be receiving any money for it and we won’t know who the person who’s traded the logs has done. “Oh, there’ll be a voluntary scheme.”; that’s what they say. Well, Minister Patterson over there, he knows how effective voluntary schemes—do you know why? Because he’s currently intervening in a wool industry that has had a voluntary contribution to its future and development. Do you know what happened there? So can I say that I reluctantly, personally, support this piece of legislation.

Steve Abel: You don’t have to—you don’t have to, Mr O’Connor.

Hon DAMIEN O’CONNOR: I do. As a party, we have decided that we’ll side with the industry. The industry has asked to take away the huge burden of $444 to register as a log trader, and the $320 annual fee, to remove that huge impost for someone who might be trading millions of dollars of logs. Well, I asked the dairy owner or the person who’s got a licence to sell at a market and sell a bit of food what they’ll be paying for registration for the right to do that—probably about 300 or 400 bucks; relative to their income, a huge impost. Is the Government going to take those registration requirements away? Silence. So they’re happy to help the forest industry.

I did a quick survey. Half a million dollars was donated to ACT and New Zealand First from forest industry interests—half a million dollars. I wonder if that money was donated on the basis that this fee be removed. I can’t answer that question. It’s up to—

Hon Chris Bishop: Point of order.

Hon DAMIEN O’CONNOR: Ah, here’s a sensitive Minister.

Hon Chris Bishop: Madam Speaker, the member is, I think, the longest-serving member of the House and he knows that to make imputations in the way he just made is grossly out of order and a breach of Standing Orders and he should apologise.

ASSISTANT SPEAKER (Maureen Pugh): Speaking to the point of order, Arena Williams.

Arena Williams: Thank you, Madam Speaker. Appreciate the point of order from the Hon Chris Bishop. The member did not make an accusation in what he said; I was listening to that carefully. He raised a question and he hasn’t provided an answer to that question.

Hon DAMIEN O’CONNOR: Madam Speaker?

ASSISTANT SPEAKER (Maureen Pugh): Just before we move on—excuse me, member—I’m just going to take some advice on this from the Clerk. In response to the Hon Chris Bishop’s point of order: if the member took offence, that’s one thing. I think what the member Damien O’Connor said was probably close to the wind but not quite a slur. But it was very close so I do caution the member. But if Chris Bishop took offence to that, then that’s another matter.

Hon DAMIEN O’CONNOR: Madam Speaker, I’m referring to publicly available information and anyone can go and look at that register and draw their own conclusions; I’ve drawn my own. I’m asking the question: what will other people think? Because one of the concerns that people have across this country is the robustness and the health of our democracy, and I have been here a long time, and one of the things I am most passionate about is that that remains robust; absolutely. So all I’m asking, in what seems like a strange proposition that for—after a wise piece of legislation introduced by the Hon Shane Jones in 2022 to tidy up a rogue industry, and I could go back and quote some of his astute quotes in the House to actually say, “Let’s tidy this up, that those with a ute and a laptop driving around the country seeing opportunities to buy, sell, or advise on forestry were undermining the integrity and the credibility of the forest industry.”

Therefore, registering those people and knowing that there was some accountability, particularly for the export trade, but also to ensure that people who had contracts for local supply could actually get their wood when they needed it—this is what it’s all about. So removing this and going back to the wild west of log trading will be something that this coalition Government regrets. I know Minister Patterson over there understands the flaws in a pure market ideology.

So, in supporting this piece of legislation, I leave the question, not about funding—people can make their own conclusions—how will a Government assure people who import logs from New Zealand that they were harvested from sustainable harvest regimes, because that’s what we say; that they are free of any pest or diseases, because the incoming market doesn’t want them; and that they weren’t felled or processed in any way by slave labour, because that’s also an assurance that has to be given to the international market.

MPI, funded by the taxpayer, squeezed by the coalition Government, will then have to step up and do that work with no cost recovery regime, because this piece of legislation takes away the registration and certification requirements and says anyone can go out and buy and trade logs, and anyone can go out and advise on forestry. I worked on behalf of a good, honest tradesperson who had bought into a forestry investment on bad advice and suffered a huge loss because of it. The legislation that’s in place at the moment, until this passes, of course, enables us to search back and find out who that person is and deregister them. That will no longer occur, so for those people looking to invest in forestry or trade in logs: beware—beware.

We have supported this on the basis of good faith. I’m very, very uneasy. I’ll say that and I’ll put that on the record. None the less, there’s quite a bit of unease over that side of the House as well. There’s enough pragmatic members, members like at the back there who sat on the one of the biggest companies in the country, understands the value of cooperation and of legislation and good regulations to ensure Fonterra operates properly. We don’t have rogue traders in dairy. We certify that and tidy them up. We’re going to have rogue traders in forestry and that potentially will undermine the integrity, the credibility of the fourth-largest export industry in this country. So we’ll support it, but beware—beware.

Steve Abel: Cross the floor, Damien.

Hon DAMIEN O’CONNOR: Well, we’re a democracy here. We’re a democracy over this side of the House too, so, occasionally, I get outvoted. None the less, beware of the passage of this legislation and its effect on the forest industry.

MIKE BUTTERICK (National—Wairarapa): Thank you, Madam Speaker. I’m thrilled that the member over there—Damien O’Connor—is supporting this bill. That’s great news: $400 saved here, $300 saved there, all savings. As the member over there will know: if you look after the pennies, the pounds will take care of themselves. This bill will save unnecessary costs and I’d hope that some of those savings will filter down to forest owners and also to those on the tools providing relief—just like the tax relief this Government’s about to provide to hard-working New Zealanders. I commend this bill.

A party vote was called for on the question, That the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill be now read a third time.

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 17

Green Party of Aotearoa New Zealand 14; Te Pāti Māori 3.

Motion agreed to.

Bill read a third time.

Voting

Corrections

HANA-RAWHITI MAIPI-CLARKE (Te Pāti Māori—Hauraki-Waikato): I seek leave to correct the votes for Te Pāti Māori earlier today.

ASSISTANT SPEAKER (Maureen Pugh): Can I just get you to repeat that, because your mike didn’t come on—just for the members.

HANA-RAWHITI MAIPI-CLARKE: I seek leave to correct the votes cast for Te Pāti Māori earlier today.

ASSISTANT SPEAKER (Maureen Pugh): Leave is sought for that purpose. Is there any objection? There appears to be none.

HANA-RAWHITI MAIPI-CLARKE: The votes for Te Pati Māori on the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill, first reading; the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, first reading; and the Sentencing (Reinstating Three Strikes) Amendment Bill, first reading and instruction to the Justice Committee should be recorded as three opposed in each case.

ASSISTANT SPEAKER (Maureen Pugh): The record will be corrected accordingly.

Hon Chris Bishop: Hang on, was there anyone in the House?

HANA-RAWHITI MAIPI-CLARKE: I’m changing it from six to three.

Hon Chris Bishop: Yeah, but what did you vote when you voted?

HANA-RAWHITI MAIPI-CLARKE: Six, and I’m changing it to three.

ASSISTANT SPEAKER (Maureen Pugh): It’s in order.

Bills

Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill

First Reading

Hon CHRIS BISHOP (Minister of Housing): I present a legislative statement on the Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill.

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

Hon CHRIS BISHOP: I move, That the Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 1 November 2024.

The bill amends the Overseas Investment Act to create a streamlined pathway for build-to-rent developers. It responds to concerns raised by stakeholders that the Overseas Investment Act presents undue barriers to selling established build-to-rent assets to overseas investors. This uncertainty over the ability to onsell assets is creating liquidity concerns for developers and disincentivising housing development and supply. So the changes in this bill seek to boost housing supply by providing clarity and certainty to investors that they will be allowed to build and, when required, sell build-to-rent and similar large-scale rental assets.

I think it’s well known amongst the House that New Zealand needs more houses. That is an understatement. We have a chronic housing shortage affecting almost every metric in society we care about, and build-to-rent can make a contribution towards the solution. It’s not a silver bullet—I’m not pretending for one second it will be the solution to our housing crisis—but it is a useful and important step forward.

Build-to-rent provides the opportunities to increase supply and diversity, in particular of secure, quality rental developments at scale; exactly the sort of housing we need. People out there listening—if they are on Wednesday night at five past nine in the middle of winter—might wonder what build-to-rent is. Purpose-built, medium- to large-scale rental properties, often within walking distance of key transport links. The key difference is that they’re often funded by institutional investors. They tend to be professionally managed, good amenities, and offer residents a variety of lifestyle options.

In fact, just the other day, the Prime Minister and I opened Resido at Sylvia Park in Auckland, which is a Kiwi Property development—it’s a New Zealand company. Those are quite upscaled apartments: a lot of them, all in the same place, next to Sylvia Park, right next to the train station; concierge down the bottom; they’ve got a gym; I think they’ve got a co-working space. It’s quite an upscale development, and that’s an option for people, and, clearly, Kiwi Property think they can make a quid out of it and it’s an option for people to choose.

That’s what we need in New Zealand. We need housing choice. The small apartment in the Auckland CBD will be right for some people—a more upscale apartment at Sylvia Park will be good for some families. We need terraced houses, we need duplexes, we need apartments, we need suburban homes, we need houses on the city fringe, we need houses on the CBD. We just need a lot more of everything, and build-to-rent’s part of that.

We know from overseas it’s made a contribution to housing markets: 100,000 homes in the UK; Australia has seen quite a lot of growth. We’re at an earlier stage, but we do have a sector with potential for growth. There’s currently 23 developments, I’m advised, under way across Auckland, Christchurch, and Wellington. What they need—the developers of these products—is access to domestic and foreign capital to help get the sector off the ground. So you’re talking significant upfront investment—upwards of $200 million—and, given our limited domestic savings and limited experience with build-to-rent, we are going to need overseas investment to support projects at this scale.

Again, if you look overseas, institutional investors such as pension funds are making quite big contributions to build-to-rent, but our overseas investment laws—as I think many people in the House know—are very complex and they’re creating uncertainty around investing here. So, again, as the House knows, since 2018, the Overseas Investment Act has generally—not always, but generally—prohibited foreigners from purchasing residential land in New Zealand, except in limited circumstances.

Under the current rules, overseas investors have a streamlined pathway to develop new housing, but they can only purchase established housing developments if they meet the onerous “benefit to New Zealand” test. As a result, developers report they are not confident that overseas investors will be able to purchase build-to-rent assets after they are built. So this doesn’t give enough certainty that they’ll be able to sell their assets when it comes time to exit or if they face fiscal distress—ultimately disincentivising new housing from being built.

So what the bill does is create a new pathway under the Act—a streamlined pathway—which enables investors to purchase established large-scale rental developments if they intend to continue to operate them. The new pathway is primarily designed for build-to-rent, but it will also enable investment in similar large-scale rental developments which may face liquidity issues, such as key worker accommodation, affordable housing delivered by community housing providers.

The pathway has been designed to maximise certainty for investors, so it removes the need to demonstrate a benefit to New Zealand to obtain consent for these purchases. The pathway operates similarly to, and in conjunction with, other streamlined pathways within the Act—such as the “increased housing test”, which people will be already familiar with.

I want to be clear: the bill retains the foreign buyers ban. We recognise that owning residential land in New Zealand is a privilege. So this bill does not affect existing restrictions which prevent foreign investors from purchasing homes to live in, becoming small-scale landlords in New Zealand, or holding empty homes for speculation. The new pathway is limited to investors who seek to purchase existing large-scale developments which have 20 or more units that can be made available for rent. Investors will be required to lease units under a residential tenancy and meet any other conditions of their consent. As with other consents under the Act, the conditions will be actively monitored and enforced by Land Information New Zealand.

So it’s a relatively simple bill within a very complicated legislative schema. I think we should be clear about that. The Act is complicated, but this is a relatively small change. I’m not pretending for a moment it’s the solution to our housing crisis, but it is, of course, one useful thing we can do. Ultimately, the solutions are around land, infrastructure, funding and financing, and incentives for councils—and that is what the Government is working at pace on. But this was part of the 100-day programme the Government said we would take policy decisions on. We did that within our first 100 days—introduced to the House a few weeks ago. I’m looking forward to it being considered by the Finance and Expenditure Committee—I know that committee will do a good job. I hope that we will be able to legislate it before the end of the year.

As I say, I’m not pretending for a moment that this is a silver bullet—there is none—but it is a useful contribution. I commend the bill to the House.

ASSISTANT SPEAKER (Maureen Pugh): The question is that the motion be agreed to.

Hon Dr MEGAN WOODS (Labour—Wigram): I’m happy to rise to take a call on this—thank you, Madam Speaker—and indicate Labour will be supporting this bill to the select committee. This is, of course, a category of work, build-to-rent, that I think we’ve seen is an evolving category in New Zealand over the last few years. Indeed, our Government brought legislation to the House in 2023, just over a year ago, where we really started to define the category of what build-to-rent was. We did that by using a lever to encourage more build-to-rent, and I think we share that with the Government—the desire to see an increased build-to-rent. The lever that we used back in March 2023 was, of course, applying in perpetuity interest deductibility to newly built build-to-rent developments.

But there was a quid pro quo for that. As we were giving a privileged position to build-to-rent, we were in the process of defining a category. In that category, there had to be some benefits that accrued not only to the owners of these assets, which are an important part of how we solve our housing crisis by increasing supply, but it offered a different way of renting; that these are dwellings that are built with the idea that we start to develop a rental market, such as we see in overseas jurisdictions, where people enter into far longer-term leases and make their lives in a rental home. Some people—and many of these that we’re already seeing being built quite upscale homes—are seeing making their home in a rental property as a permanent way of life; it’s not a stage of life that they pass through.

One of the things that we did is we put a definition around what build-to-rent was. We said there had to be 20 or more dwellings in a single development on a single block or adjacent blocks, held in one or more titles. So it is about getting scale, and that was a critical component of what we wanted to do. They needed to be owned by the same person, and that person included a legal entity, like a company. Each dwelling had to be prepared for use, available or occupied under the Residential Tenancy Act. But the difference from the standard provisions of the Residential Tenancy Act was there was an option of a 10-year term for tenants, with the ability for the tenant to give 56 days’ notice of termination. What we were doing was creating a far longer-term framework for tenants who were entering into these arrangements.

We also said that every tenant agreement included a personalisation policy—that these were people that were entering into long-term rentals. They may want to paint a room a particular colour; they might want to make some changes. These are people making their lives in these dwellings, and the legislative framework that provided for that needed to reflect that. So when this bill comes to select committee—my reading of the legislation is it’s a very small piece of legislation that we have before us; it only makes a very particular change. But one of the things that we will be ensuring at select committee, and asking questions about, is that those different provisions for tenants are perpetuated with any changes that are made through the legislation that will be going.

One of the other changes that we will be wanting to look at is the onsell. This is about liquidity in this market. I accept that. While we received advice while in Government that the Overseas Investment Act was sufficient and there didn’t need to be more, we always said we were open to changes to the legislation if it was required. But one of the things that I will be wanting to seek assurance of at select committee is around the provision that at least 20 of the dwellings will be made available for lease to occupiers within a satisfactory time frame. I’m perplexed as to why 20. We have some developments that are as large as 295 individual dwellings in a build-to-rent development. This is fewer than 10 percent at that level. Why 20? I don’t know that 20 in a development as large a scale as 295 is sufficient to say that we are onselling the same asset class.

So these are the kinds of questions that we will be asking at select committee, but Labour is more than happy to support it to select committee and have that conversation.

Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Madam Speaker. Affordable, secure housing is one of the single biggest investments that we could make—

Hon Shane Jones: What did the Greens do?

Hon JULIE ANNE GENTER: —in Aotearoa New Zealand. Madam Speaker, I’ll just wait for Matua Jones there to calm down before I continue with my speech.

Affordable, stable, healthy housing is one of the single biggest investments we can make in our society that will address so many other problems. There’s been research, even recently, undertaken in New Zealand in 2023 by Motu, which found, surprisingly, that tenants in public housing have higher levels of wellbeing than those in private rental housing. That’s despite New Zealand, over the last 20 to 30 years, having an inadequate, poorly managed public housing supply.

Michael Joseph Savage completely transformed Aotearoa New Zealand when he started the State house programme back in the 1940s. It made a huge positive difference until about the 1980s or 1990s when we stopped building public housing to keep up with our population growth. That has correlated with an increasing level of homelessness. Those who are concerned about crime should be much more interested in the amount that we invest in housing and public housing—affordable, safe housing for people—than what we put into prisons and the length of sentences we give people. That’s just evidence-based planning. Rather than short-term, populist, blaming the bad people, let’s focus on solutions that we can work on together. It is not possible to take seriously this Government’s commitment to increasing the—

Hon Member: It’s not possible to take seriously the Green Party.

Hon JULIE ANNE GENTER: —supply of—I’ll wait. Madam Speaker, can I speak?

ASSISTANT SPEAKER (Maureen Pugh): You haven’t been stopped.

Hon JULIE ANNE GENTER: The way to get affordable, stable housing in New Zealand is by enabling more State housing, more public housing—that is the way to do it—and to improve our tenancy laws. At the very same time that this Government is saying that they supposedly want to make it more affordable for people to rent, and more secure, they’re going to change the tenancy laws to make it possible for people to get evicted for no cause at all—no-cause evictions. It’s the exact opposite of what the evidence tells us we need. If we do want to enable more affordable, reliable, stable housing, the way to do it is through the programme that Kāinga Ora was building up, under which now 3,000 homes have been paused—hundreds of tradie jobs lost thanks to National and their coalition partners stopping a build of housing that was actually going to increase the supply of homes. Then they say that the problem—

ASSISTANT SPEAKER (Maureen Pugh): Can I interrupt the member and ask her to come back to this bill.

Hon JULIE ANNE GENTER: Madam Speaker, the bill is the Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill, and the Minister spoke at length about how it’s not the silver bullet but there are many issues affecting housing. The Minister spoke to those, not just this bill, and I will too because the argument for this bill is that supposedly we need overseas investors to own more large-scale build-to-rent things, when the Minister is cancelling the 3,000 homes that were going to be delivered under Kāinga Ora.

We have the ability, as a country, to invest in public housing and build-to-rent. We don’t need to open it up to overseas owners. What this Government’s real agenda is is making it possible for the overseas capitalists to profit off housing in New Zealand—

Hon Member: Yeah, foreign landlords.

Hon JULIE ANNE GENTER: —foreign landlords—while they’re changing the tenancy laws to take away rights from renters, and they cancelled the one thing that we know is the baseline that we need more than anything else, which is public housing, because we know it’s directly related to levels of homelessness. The Green Party will not support this foreign-ownership bill.

SIMON COURT (ACT): Thank you, Madam Speaker. It’s so disappointing to hear the Green Party are opposed to building homes for people who might want to rent. Now, it wasn’t that long ago—in fact, a couple of times in the past 10 years—that I’ve been one of those people queueing up to view a home, hoping that I could convince the agent to let me rent it. There were lots of people in the queue—lots of professional people, maybe people with a dog. It turned out there were not enough rental homes available for the number of people who want to rent, but that doesn’t seem to matter to the Green Party. They don’t care about renters—that’s what we’ve heard tonight.

What this Government is doing by making these changes to the Overseas Investment Act 2005, no less—a piece of legislation which in 2005 probably seemed radical, allowing people to send their money to New Zealand to invest it. Through these build-to-rent, and similar, rental developments, we’re going to remove barriers to overseas investment in rental property. It’s going to allow medium- to large-scale developments—in fact, any development over 20 dwellings—to take advantage of this investment opportunity to build homes for Kiwis who want to rent.

When I look at some of the commentary from people involved in delivering rental apartments and complexes to their clients to people who want to rent, actually, it’s not just about the social housing element that the Green Party complained we weren’t doing enough of—well, we certainly are. Actually, there are a whole lot of people who come to New Zealand to work on major engineering projects and major corporates. They work in our businesses, and when they arrive in a place like Auckland or Wellington or Christchurch or even Napier, as I know somebody did just recently, or Tauranga, as I know an engineering company looking for staff, there was nowhere for the people to live. There was nowhere for them to rent. This Government is going to sort this out. I’m very proud to support this bill tonight. I commend it to the House.

Hon SHANE JONES (Minister for Regional Development): A very short contribution in contrast to the blather that we heard from an earlier speaker. Naturally, New Zealand First will support the bill, and I want to acknowledge the wisdom rarely seen in the Hon Megan Woods’ agreeing to support this bill.

We all understand that the housing shortage is an issue. International capital can be deployed. Obviously, we need to look after key essential interests that are of value to the broad swathe of the Kiwi population. But we must overcome the inflation and the spectacular explosion of costs driven by Kāinga Ora, where it now costs for a bog-standard Kāinga Ora house $6,500, whilst $1 million a day is spent to keep people in motels—sadly, the majority are the tangata whenua. This will be a contribution to reverse the excesses and the egregious conduct of the last housing Minister. We support the bill.

ARENA WILLIAMS (Labour—Manurewa): Nonsense. Nonsense from that member in this House. Labour is supporting this bill because it is a smart step forward. It is one step forward, which is useful. But there are so many other measures which have delivered housing—particularly for vulnerable communities—like Māori housing, which has been cut by this Government. So we have a Minister who is aspirational for Māori housing come down to this House and deliver a speech where he says, “Look over here—look over here and don’t pay attention to my record of cutting those very initiatives which, when I was in Government, I was a champion of.” Nonsense.

This is a well-intentioned bill, and it will do some things which are useful. It will make sure that those providers of build-to-rent housing are ready to go when this Government enacts those changes which it proposes will make a difference to the housing supply in this country. And, though these aren’t the measures that we would have chosen to do, these are the measures which the Government believes in. So, yeah, let’s give it a go. Let’s see if this is something which will fundamentally increase the supply of housing and will help the demand for rentals in New Zealand. That is a useful measure, and it’s useful for this House to be able to be open-minded when it comes to these solutions which don’t fit with the values, necessarily, of the Labour Party. But, look, it’s a useful thing that we should try because we all agree, fundamentally, that we must build more houses in New Zealand. It is pretty well understood around the spectrum here that we do not have enough houses in New Zealand for not only our growing population here but also for the number of migrants coming into New Zealand.

In a place like Manurewa, which I represent and am very proud to call home, we have a situation where people are in overcrowded housing, where rentals are prohibitively expensive for people, and they’re, essentially, now based on not only the income of one family but of two, because that is the norm for many Manurewa families who live in, say, a three-bedroom house amongst two families, or intergenerational families who are choosing to live together but are also in very cramped conditions. So we need to make sure that we are making interventions in the housing market from both the supply side and the demand side. I heard the Minister of Housing stand earlier when he gave his contribution and talk about how this was an essential measure and, you know, it wasn’t the be-all and end-all. I think a number of those kinds of interventions are really good. But we also need to see proper investment in the demand side, because this Minister is too focused, in my view, on the supply side measures which he has signed up to ideologically.

The demand side of the equation is really important too. We need to make sure that the Government is putting aside allocation to make sure that the most vulnerable New Zealanders who have trouble getting into housing are supported to do so. One of those housing initiatives is He Kūkū Ki Te Kāinga, which is an initiative which has been cut by this Government for kaumātua housing. I raise that initiative particularly, because this kind of build-to-rent measure will not address those housing needs faced by these vulnerable people. They’re over 65 and they are Māori. They face intergenerational barriers to getting into housing, because not only did they not own a home but their parents did not own a home, and their parents before them did not own a home.

When we look at the history of Māori housing in Aotearoa, in the 1930s, homeownership for Māori was higher than other groups. But because of successive decisions made by Governments and because of the kind of economy that we have designed and the kind of economic development that we have pursued in New Zealand, we have seen that not only rural Māori have lost their connection to their whenua but also Māori in urban environments. So we have this structural problem where some of the most vulnerable New Zealanders and Māori are being locked out of the housing market, and measures like these don’t go far enough to address that, in my view.

But being able to provide a larger number of houses in the market and being able to provide for people who choose to rent or are renting because they are saving to afford a home is a really good idea. We need to make sure that we’re also doing everything we can to do that. We also need to make sure that community housing providers and those large institutional investors who are interested in building large numbers of homes are ready to go, too. So this kind of investment is a good mechanism to allow for that. I’m happy to be able to support this initiative. While it’s not what I would have chosen to have done, let’s give it a go. I commend this bill.

Dr VANESSA WEENINK (National—Banks Peninsula): We have a crisis in housing in New Zealand, and our Government is using a suite of tools to tackle that crisis. There is no one silver bullet, as has been mentioned, but build-to-rent is part of the solution. I commend the bill to the House.

Hon WILLIE JACKSON (Labour): Minister Jones needs to hang his head in shame.

Hon Shane Jones: Ha, ha!

Hon WILLIE JACKSON: He can laugh all he likes—he can laugh all he likes. I thought Dan Bidois was bad, and the other Māori, but, actually, the worst one is Minister Jones, because he worked with us—he worked with us—at a time when his relations are struggling. They’re fighting to live at the moment in the North. It’s a kura there, it’s a kura, is it, Willow, up there in the North—Shane Jones’ relations?

ASSISTANT SPEAKER (Maureen Pugh): And this is going to circle back to the overseas investment—

Hon WILLIE JACKSON: Oh, yes, Madam Speaker—absolutely. It’s all about the Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill, which we are supporting, because we are a pragmatic party—very pragmatic—although we do have an element of distrust here, particularly with Minister Jones involved, who would sell off his relations in the North.

I’m saying that because what we’re seeing here with the Government is that, though this is a good idea—and I think Minister Bishop did express some reasonable views in his presentation tonight—what they’re giving with one hand, they’re taking away with the other, and that’s the problem. And, of course, we’ve had a magnificent Minister in Megan Woods, who built more houses—more houses—than any other housing Minister in the last 50 years. She’s done a fantastic job.

Cameron Luxton: Oh, she had a hammer, did she?

Hon WILLIE JACKSON: I’m glad that my ACT colleague over there agrees with me. At least, I think he agrees with me! Maybe I’m reading it wrong. We’ve got a former Minister here who said, “Yes, of course we’re interested in this. Of course, we’re going to be pragmatic.” We’ve got a housing crisis, but it’s a housing crisis that, I’m proud to say, we were starting to confront. And, actually, were we getting on top of it? Well, it might have taken us a few more years to break down the waiting list, but this is certainly some of the work that our Minister started. But she didn’t start it at the expense of Māori housing. She didn’t start it at the expense of community housing. And that’s the problem we’ve got here.

We’ve had a recent Budget—$40 million down in terms of the Māori housing area. Our Government had the best “by Māori, for Māori” partnerships going in terms of housing in this country. And Minister Jones knows this, because some of those relationships are with his relations, who have disowned him. They’ve disowned him because of his tr—well, I’d better not say that word, or I might get point of ordered. But they’ve decided—I mean, he knows what I’m talking about. We need partnerships with Māori.

This type of bill—and I want to say this to my Green friends over there, and I know where they’re coming from—will help Māori. There is just no doubt about it. I know what the ideal is—and I heard that from the Greens—but the reality is, when you have people struggling everywhere, we will make an attempt to correct things, and this bill does that. It’ll give our people an opportunity to get into homes. They are struggling at the moment. We’re seeing it on television—well, all the time—but I just can’t help thinking how much progress we made, particularly in the community housing area, particularly in the Māori housing area, particularly in the Kāinga Ora area, which is continually being run down.

The Government will need to clarify, though, what an expansion beyond the build-to-rent to include what the explanatory memorandum called “similar rental development” is. I think Megan Woods talked about that. We just need some clarity around some of the intricacies within this bill, because, whilst we support the intent, we support the principle, only a fool would not support an opportunity to give New Zealanders—not just Māori but Kiwis—an opportunity to get in homes. We have to be careful about this, because there is obviously a sensitivity in terms of overseas investors coming in. But I just want to say that this is something we’ll support and commend the bill to the House. Kia ora, Madam Speaker.

PAULO GARCIA (National—New Lynn): The basis is clear. We need to increase the supply of secure, affordable, and quality rental developments, of which there are very few. The bill will amend the Overseas Investment Act to incentivise, to allow a fast-track consenting process to incentivise and get overseas investors to come in and build these rental accommodations. I commend this bill to the House.

Hon WILLOW-JEAN PRIME (Labour): Thank you, Madam Speaker. It is a pleasure to take a short call on the—

Hon Shane Jones: Short.

Hon WILLOW-JEAN PRIME: —short as in five minutes, not 10—Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill.

Dan Bidois: Willow, Matariki!

Hon WILLOW-JEAN PRIME: Sorry, I’m not going to give you that Matariki gift tonight and keep it shorter than the five minutes that I’ve got.

But I want to support the contributions from my colleagues on this side of the House and the points that they have made about not only the work that Labour did while we were in Government to address the housing crisis that we have but also the disappointment that we have with some of the announcements and the things that we can see in the Budget. It would be remiss of me, as Labour’s spokesperson for youth, if I didn’t point out that I am disappointed in the $20 million cut to youth homelessness in this year’s Budget.

As you have heard this evening from my colleagues on this side of the House, we are supporting this bill and we are supporting it to select committee. There are some important things that do need to be teased out at select committee and understood by the select committee. I want to elaborate a little bit more on those. But if I can first say, for the benefit of the Hon Shane Jones—if I refer to a news story which quotes the Property Council of New Zealand’s chief executive, Leonie Freeman, who told Newsroom that this is a journey the sector has been going through in recent years. During the last Labour Government, housing Minister Phil Twyford and his successor Megan Woods publicly shared their support for build-to-rent developments. In fact, under Woods, the Government carved new build-to-rent projects out of its decision to end interest deductibility for investor rentals, and Land Information New Zealand issued a guidance note intended to make it clear that such developments were not subject to the Labour-led coalition’s foreign buyers ban.

I’m pleased to say that I can see, in a recent article, that the Property Council has launched a build-to-rent tracker in the last month or so, which has shown that more than 1,300 units had been completed, with at least 4,000 more under construction or in the pipeline. Is Shanan Halbert here? I understand he’s joining us shortly, yes? Over 95 percent of those are in Auckland, and as our spokesperson for Auckland, I’m sure he will be pleased to hear that.

Now, the one thing that I wanted to bring the House’s attention to and just raise in the debate this evening and leave it for the select committee, which I am not part of, to consider and to question officials and tease out a little bit more is the new section 11A, inserted by clause 6, how the large rental development test is met. So that is, in particular, 11A(1)(b). That one is that “at least 20 of the residential dwellings will be, or are likely to be, available for use, within a time frame that is satisfactory to the relevant Ministers, as a residential dwelling occupied under a residential tenancy to which the Residential Tenancies Act 1986 applies or would apply (the large rental development outcome)”.

The reason why I have some questions about that is because in order to be eligible it has to be 20 or more, and, of course, some can be and, hopefully, will be much larger than that. So what we want to know is how did the Minister determine that the number would be 20? Is this a percentage basis? Just the rationale behind that, but also a bit of a concern that this isn’t or couldn’t be used as a loophole to get around it. So that is something that I want to raise in this debate for those who are going to be on that select committee to consider, to probe officials on that, to understand that a bit more so that we can have confidence that it won’t be used or is a loophole. I look forward to the select committee reporting back and giving us more clarification and assurance around that. Thank you, Madam Speaker. I commend the bill to the House.

DAN BIDOIS (National—Northcote): Let’s speak less and build more. I commend this bill to the House.

A party vote was called for on the question, That the Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill be now read a first time.

Ayes 102

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.

Noes 14

Green Party of Aotearoa New Zealand 14.

Motion agreed to.

Bill read a first time.

That the Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill be considered by the Finance and Expenditure Committee.

A party vote was called for on the question, That the Land Transport (Clean Vehicle Standard) Amendment Bill be now read a first time.

Ayes 68

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

Noes 48

New Zealand Labour 34; Green Party of Aotearoa New Zealand 14.

Motion agreed to.

ASSISTANT SPEAKER (Maureen Pugh): The question is,

Motion agreed to.

Bill referred to the Finance and Expenditure Committee.

Instruction to Finance and Expenditure Committee

Hon SIMEON BROWN (Minister of Local Government) on behalf of the Minister of Housing: I move, That the Overseas Investment (Build-to-rent and Similar Rental Developments) Amendment Bill be reported to the House by 1 November 2024.

Motion agreed to.

Bills

Land Transport (Clean Vehicle Standard) Amendment Bill

First Reading

Hon SIMEON BROWN (Minister of Transport): I present a legislative statement on the Land Transport (Clean Vehicle Standard) Amendment Bill.

ASSISTANT SPEAKER (Maureen Pugh): 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 Land Transport (Clean Vehicle Standard) Amendment Bill be now read a first time.

This bill does two things. Firstly, in relation to the clean vehicle standard, it enables the targets for the standard to be changed by secondary legislation rather than an amendment for them to be fixed in primary legislation. Secondly, it ensures that the standard operates on a user-pays model to minimise cost to taxpayers.

This Government is supportive of the clean vehicle standard to ensure that New Zealand has an affordable mix of clean vehicles. By encouraging suppliers to import vehicles with better fuel-saving technologies, it helps to reduce our emissions but also it helps to provide that mix of vehicles to the New Zealand market. Our Government is committed to this but we’re also committed to ensuring that we continue to provide the affordable supply and the range of vehicles that New Zealanders need into the market.

This piece of legislation does those two things. Firstly, it allows for the standard to be amended via regulation, and it also ensures that there is a user-pays approach to paying for the use of the standard. Effectively, the purpose of the standard—and the vast majority of countries have fuel economy standards of some description—is to ensure that countries and markets are able to get a fleet of vehicles into that market which meet those lower-emission profiles over time.

The problem, though, with the last Government is that, of course, they got up on their high horse and decided to set not only a standard which would become more stringent than some of the major manufacturing countries globally but they also chucked the ute tax on top—they also chucked the ute tax on top. So, of course, we’ve already got rid of the ute tax at the end of last year. But, in terms of the standard, they decided that even though we’re a country of only 5 million people—and the last time I checked, New Zealand doesn’t manufacture cars—

Dan Bidois: Oh, actually, Beach Haven does.

Hon SIMEON BROWN: No, no—well, we might, we might. There might be the niche car—

Dan Bidois: Fraser Cars.

Hon SIMEON BROWN: There might be the niche car here or there.

Tom Rutherford: They’ve only got one wheel.

Hon SIMEON BROWN: OK, “They’ve only got one wheel.”, says Mr Rutherford. But the point is that we’re a car taker, not a car maker. So we need to make sure, when we’re setting policies as a country, that we actually recognise that rather than setting a standard which says to the rest of the world, “We want you to manufacture cars to our standard.” Now, I’m sorry, but the major car manufacturers are not necessarily going to do that for little old New Zealand, as much as we’d like. So this legislation enables the review of the standard, which the legislation requires the Government to have started by June 2024, to be able to then make any changes which may flow from that review.

I instructed the Ministry of Transport to begin that review earlier this year. They have been engaging with the sector in relation to how we can ensure that New Zealand has the availability, the affordability, and the mix of vehicles that New Zealanders need, but also to ensure that it is cost-effective for New Zealand. Some of the advice that I’ve been seeing and receiving is that if we were to maintain the current trajectory, we could be increasing the cost of importing vehicles, on average, by thousands of dollars per vehicle. So this is an issue that we need to grapple with.

This legislation, quite simply, allows for any changes which flow from that review, which is currently under way, to then be implemented via regulation rather than for that to be set in primary legislation, which, I note, the previous Government, I believe, was advised not to set it in primary legislation when they actually put the legislation in place in the first place.

The second thing this bill does is it ensures that there is appropriate cost recovery for the administration of the clean vehicle standard. So the last Government, of course, set the standard up, and the deal at the time was that whilst the industry didn’t necessarily like where the standard was set and some of the targets which were not going to be achievable, the Government paid—well, through the taxpayer; the taxpayer ultimately paid—$11.8 million towards administering the standard on a per year basis. Well, firstly, I asked the officials “How much did it actually cost to run it?” Well, I found out that it only actually cost $6.4 million to run it. So the taxpayer was being taken for a ride in the first place.

Hon Member: Saved $6 million already, well done.

Hon SIMEON BROWN: So we saved $5 million already. But, secondly, actually, we have decided in this bill to take a user-pays approach so that as people import those vehicles, they’ll pay for it, rather than the taxpayer.

Hon Willie Jackson: Oh, user-pays, oh! Well, what a surprise!

Hon SIMEON BROWN: Well, I hear Willie Jackson on the other side, complaining about user-pays. Well, I guess the question the Opposition has got to ask is: are they prepared to increase taxes on working families to pay for the operation of the standard? Is that what the Opposition are going to do? Because I tell you what: whatever moves, they’ll tax it—whatever they see, they’ll tax it. They wake up in the morning, and all they can think about is what’s the next thing they can tax. That’s how the Opposition think. So this puts in place—

Hon Dr Megan Woods: You know you’re a Minister now, and this is actually an important part of statutory interpretation.

Hon SIMEON BROWN: —a user-pays principle and it’s about ensuring that—we have legislative statements now, as well, which are very important instruments. I acknowledge the process in which those were brought into the House. But what I would just say is that when the Opposition opposes user-pays, what they mean is, actually, they’re going to increase taxes on hard-working New Zealanders. Well, we stand on this side of the House with a far better and more principled approach to these things.

So that is, effectively, what the bill does. It’s a very narrow piece of legislation. There are two simple parts to it. I commend it to the House.

TANGI UTIKERE (Labour—Palmerston North): Kia orana, Madam Speaker. Look, it’s always a pleasure to rise and speak after Minister Brown because there’s so much content that he delivers that can just be—

Hon Dr Megan Woods: “The third-form pantomime”, he’s otherwise known as.

TANGI UTIKERE: Well, thank you, Dr Woods. I mean, there’s a lot in there that we need to digest. And do you know what? It’s good that the time of the House, unfortunately, is going to have plenty of hours and minutes to do exactly that because we are considering this piece of legislation under urgency when we don’t need to be here. It’s interesting: when we look at the context of this bill—and I’ll put the Minister of Transport out of his misery: we will not be supporting this piece of legislation this evening, and over the coming days we will tell you exactly why that is the case.

This bill actually was part of Budget day urgency in the motion. So this was a bill that was caught up alongside no scrutiny at the time, and still that is what this Government seeks to propose for this bill. It was alongside the waste minimisation levy, it was alongside the increase in the money that they’re going to take off councils in terms of a percentage of your fines, it’s around taxation, and now this bill, effectively, is introducing a new tax. It is a car tax. It is a car tax that is going to be applied on vehicles that individuals will be responsible for, and we’ll have a lot to say about this. But, in reality, this bill is seeking to give Simeon Brown, as the Minister of Transport, simply more power. That’s becoming a common theme that we will explore on this side of the House. It’s a common theme. I mean, Minister Brown is part of the panel of three—

Hon Willie Jackson: Fast track.

TANGI UTIKERE: —or the group of three around fast track—that’s right, Mr Jackson—

Hon Members: Back to the bill!

TANGI UTIKERE: —and that’s really important. Members opposite might say, you know, “Well, speak to the bill.” Well, this is about the bill. This is about giving power to the Minister of Transport to basically bypass opportunities that exist currently in primary legislation to set targets that will exist under regulation.

What that actually sends a signal around is that this is clearly a Government that is not prepared to heed the commitments under an accord that we should be taking responsibly and seriously around reducing our carbon emissions and not providing any support or substance around that. In primary legislation, which this bill seeks to amend, the targets are listed there for the next three years. What this bill, effectively, will do is run a ruler through those specified targets and hand over to Simeon Brown the opportunity by pen and paper to set those targets, whatever they might be about.

Now, we’re going to have a wee bit of time to talk about the level of consultation that has actually taken place up to this point in time. Actually, in terms of this piece of legislation, members on this side of the House have been inundated with members of the community; with other industry participants who are concerned about the fact that this piece of legislation is going through the House under urgency. I’m looking forward to hearing from the Minister, as this bill progresses—exactly who did he consult with? Who did he consult with in terms of forming his views around that? Let’s form a view around whether or not those people and organisations that the Minister consulted with are actually representative of the industry and of the community.

Now, if the Minister has actually been consulting with groups and industry participants and players that are representative of this community, well then, actually, we might reconsider our position on some aspects. So this is an invitation to Minister Brown—and I’m sure we’ll get to this—I invite you, Minister, to share exactly the wide breadth of consultation that you have indicated that you have taken. So we, with interest, look forward to that.

This paints a picture, though, in terms of the context within which this bill is introduced. It’s all—oh, they’re all silent now; I think they’ve been given the message, perhaps, that maybe they shouldn’t be interjecting. But I do look forward to the contribution from members opposite as this bill progresses. But this is a bill that is within the context of a bigger picture. There has been no replacement for the clean car rebate or discount; there is no incentivisation in the uptake of low-emission vehicles under this Government; and all the data indicates that, actually, and we will be talking about that, I’m sure. There is no Budget funding in the environment space that’s listed in Budget 2024.

This is a pure dereliction of duty by this Government, and members on this side of the House will be holding the Government to account, step by step, clause by clause, as we start to unravel some of the concerning features of this legislation. We do not commend this bill to the House.

ASSISTANT SPEAKER (Maureen Pugh): The question is that the motion be agreed to.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you, Madam Speaker. It’s amazing that the Government introduced this bill with the claim that it was going to provide more certainty to the industry, because it does the exact opposite. But I’ve come to believe that this is a deliberate strategy of the Government, and it’s quite Orwellian to just say that what you’re doing is the opposite of what you’re actually doing and then say the opposite about the previous Government as well. So everything that they say about what the previous Government did is really what they are doing, like cancelling contracts for ferries, for example. And here they say they’re introducing a bill to increase certainty when there is no way we can read this bill as increasing certainty.

It is increasing uncertainty; it is reducing certainty, because the targets have been set out in legislation for years, and New Zealand was well on its way to reducing emissions far beyond what those targets were, thanks to the Clean Car Discount. We’ve got the facts on that. And, now, because they removed the Clean Car Discount, our average emissions of vehicles coming into the country have massively increased. Now, we just have to put this into context, OK? Because literally the only solution this Government has for reducing emissions from transport is electric cars. And the only steps they have taken are increasing the emissions of the cars coming into the country. So they’re increasing emissions from cars. So there’s no way to take seriously their commitment to meeting any climate targets, carbon reduction targets. It’s just not true. They have no commitment to that, because their actions are doing the exact opposite.

And the sad thing about it is that it also is bad for New Zealand economically, because we spend a lot of money just trying to move around the country. And people and businesses and households have to spend a lot of money on fuel to move around the country. And all of that fuel is imported because, despite whatever you want to do with oil and gas exploration, we have never produced the kind of oil that is used in cars and trucks in New Zealand. So it just means importing more oil and spending more money on getting around. And who benefits from this policy? Well, they make it out that it’s some sort of individual choice, but actually the real beneficiaries of this policy are the manufacturers of high-emissions vehicles, because those are more profitable for them. But they aren’t in New Zealand. New Zealand doesn’t benefit from more New Zealanders buying high-emissions vehicles. It just means we have more pollution and we spend more money on petrol and diesel. And diesel, by the way, has a lot of harmful health impacts that are not being taken into account, so we’re paying for it over and over and over again.

But the Minister of Transport, of course, is very engaged in the public opinion, the opinions of the people who comment on his Facebook posts. We know that his version of reality is entirely shaped by the comments on his Facebook posts—not actual data and evidence about what New Zealanders want and what is actually happening. Some of the high-emitting vehicle importers are opposed to those targets because they want to sell more high-emissions vehicles in New Zealand. But what is happening overseas? There’s this claim that New Zealand can’t control what’s happening overseas. Well, guess what? The targets are entirely in line—and I know you won’t be able to see this graph; I’ll have to bring a larger version of it to future debates. But the targets were actually entirely in line with what other countries are doing.

What this bill is doing is it means that we are going to, again, fall behind, because before the Clean Car Discount and before the Clean Car Standard were introduced, we had some of the highest average emissions of new vehicles imported into New Zealand. We had 189 grams of carbon per kilometre, and it was decreasing at a rate of only 2.6 per year. After the Clean Car Discount was brought in, we saw a huge trend in reducing the average emissions of the vehicles coming into the country and the combination of the Clean Car Discount and Standard was transformational. We got to the point that the average emissions in May 2024 would have been down to 92 grams per kilometre. So if we hadn’t removed the price incentive, vehicle manufacturers absolutely would have been able to meet this.

I have to say, this user-pays plan for administering the scheme is really interesting, but there’s no detail about it in the bill. How can we say this is increasing certainty for the industry when, literally, you’re bringing in a power to be able to regulate and charge them money, and we don’t know how we’re going to do that. It’s just Orwellian. I congratulate the Minister on his mastery of doublethink. He’s master of absolute black and white lies and propaganda.

ASSISTANT SPEAKER (Maureen Pugh): Order! That was very unparliamentary. The member will stand, withdraw, and apologise.

Hon JULIE ANNE GENTER: I withdraw and apologise.

CAMERON LUXTON (ACT): Thank you, Madam Speaker. I rise on behalf of ACT to speak in support of this bill, which removes red tape which has been concreted in in primary legislation. It’s not as far as ACT would go, but it is a lot further than this Government would perhaps go without ACT. Having secondary legislation to set the standard means that unworkable targets can be modified. So when we’ve got unworkable targets, which are increasing the costs, that can be dealt with. I’m glad to hear the Minister of Transport speaking on moving towards a user-pays model for funding this scheme, and ACT and myself commend this bill to the House. Thank you.

ANDY FOSTER (NZ First): Look, I’m intrigued by all the noise from the Opposition, because this really is a very, very small bill. All it is doing is two things. The first thing it is doing is it is bringing forward by three to four years what is already set in the legislation now, which is to give the Minister of Transport the power to set the Clean Car Standard, by Order in Council anyway, from 2028, and the second bit is that—and I’m surprised particularly by the Green Party saying that they would like the motor vehicle import industry to be subsidised by the taxpayer—it allows cost recovery, which seems eminently sensible. I commend this bill to the House.

Hon Dr MEGAN WOODS (Labour—Wigram): There are some very clear and easily articulated reasons why Labour cannot and will not support this bill. And I ask members in this House to turn their attention to an open letter that the Parliamentary Commissioner for the Environment sent to the Minister of Transport this week, given that this is rushed legislation going through this House without the scrutiny of a select committee. So before members get up and say, “Thanks, it’s a small bill. It’s only bringing things forward by three years.” I suggest they do some reading and find out the facts of actually what is happening.

Bringing forward the ability of the Minister to make those changes by three years does have implications for our climate targets and how it sits there. I refer the member to the letter from the Hon Simon Upton, who I have a great deal of respect for and who understands these things really well. One of the things that he says is, “The amendment bill changes the date specified in the regulation making power under section 167C(1)(J)(iv) to bring forward by three years the ability of the Minister to prescribe the targets by way of regulations. It will also cancel the currently legislated ratchet of emissions standards for 2025, 2026, and 2027, anticipating that these will [already have been] set by regulation.”

This is a political decision, the Parliamentary Commissioner for the Environment spells out. Once again, we are seeing a political decision by a coalition Government who has made it clear that climate action is not a priority. It is a Government that stripped $3 billion out of climate action in the Budget. It has no plan. We have a Minister of Transport who is also the Minister of Energy, and who has no idea how these portfolios fit with what we need to do as a country in terms of our emissions reduction. We have a Government that is floundering and is putting New Zealanders’ future at risk.

Here’s the thing: if New Zealand does not meet its domestic emissions reductions, we have one choice. And that is we go and we pay other countries to reach their domestic emissions reductions, such as what Switzerland is currently doing, paying to put electric buses on the road in Vietnam. Now, every day of the week I will stand in this House and I will defend us reducing our domestic emissions, investing in New Zealand jobs, New Zealand industries, and New Zealanders’ futures, rather than going offshore to pay other countries to do it. That is the future our Government is consigning us to. They do not have a plan. What they are saying is domestic emissions reductions don’t matter, New Zealand jobs don’t matter, the ability of Kiwis to afford to get around doesn’t matter.

What we can see from the cost-benefit analysis that was done on the original legislation that we put through is there were fuel savings of $128.4 million for New Zealanders by bringing in the Clean Car Standard. There was a reduction in maintenance costs of $191 million, reduction in vehicle ownership costs of $32 million, and a reduced social cost of carbon emissions by $51 million. This is a Government that does not care about that. They are on an ideological crusade to expunge from the statute book any meaningful climate action because they are a Government that is intent on taking New Zealand backwards for their populist ideology. They need to grow up. They need to present New Zealanders with a real and meaningful plan of how it is that they are going to address carbon emissions. And when we had members stand in this House and say, “This is a simple bill that doesn’t do much.”, it shows they’re not even bothering to read the documentation that sits alongside the legislation that is being introduced into this House. This Government should be ashamed.

CAMERON BREWER (National—Upper Harbour): This is another example of this Government getting things done. During the election, National committed to reviewing the Clean Car Standard. Then, in January, the Minister of Transport the very good Minister Simeon Brown, directed officials to begin a comprehensive review of the clean car vehicle standard. Now, here we are in June, a few months later, and this Government is passing the Land Transport (Clean Vehicle Standard) Amendment Bill in all stages. We are getting things done. We’ve got a mandate from the people of New Zealand. I commend this bill.

Hon DAMIEN O’CONNOR (Labour): Look, it’s a pleasure to stand up and speak on this stupid piece of legislation. I say that because, as in so many things, this Government is just too late to the party. What we did was—and you’ve heard from my colleague the Hon Dr Megan Woods, who had a big part to play in bringing in what was termed the ute tax—this unfair incentive to get more electric cars on the road, to impose a greater cost on the high-emitting vehicles, and then to incentivise the low-emitting ones. And do you know what? It worked. It worked to the point where the uptake of that was so great that it was starting to cost us, but it had within that legislation the ability to fully cost-recover.

In its typically ideological way, the coalition Government has come in and said, “Oh, we’re going to get rid of that. That’s just stupid.”, at a time when we were reducing our emissions across transport, which all the farmers over there should acknowledge and applaud, you know, because that’s one area where there is technology and, in fact, we can make some progress. What was said at the time, particularly from the farmers—and a couple of members over there would be championing it—was “Oh, this is ridiculous. There’s no options for people in the rural sector.”

Grant McCallum: They’re right—correct.

Hon DAMIEN O’CONNOR: Oh, really? Well, maybe if you’d got out of your little head and got online and started to look at “What are the options in electric utes?”—well, let’s go through the list. Let’s go through: LDV, a T60; Volkswagen have an Amarok; Ford have a hybrid and an electric vehicle (EV); JAC are running electric trucks; Rivian in the US; Hilux are running a hybrid—up at the Fieldays, actually. The Ford Ranger will have a plug-in hybrid in two years. They will also have—

Grant McCallum: Oh, not yet—not yet?

Hon DAMIEN O’CONNOR: Well, just listen. The Ford Ranger will also have an H2X, a hydrogen vehicle. The Australians have got an ACE EV, Ford, Hummer, Tesla, RAM, Rivian—they’re all in what has been deemed the manufacturers’ race for the EV market.

You know what? We could have been, as we have been in the past, a very good test bed for that market, and, in fact, all of those, or most of those manufacturers would have probably put their vehicles down here to see how they’d perform in the market. I have to acknowledge that the conditions here in New Zealand are not quite as rugged as in Australia, but probably the utes in this market here are used to their full capacity and beyond, and that’s what manufacturers are looking for. That’s why we would have seen more of those utes in our market more quickly, because we had an incentive in place. The previous Government had the vision to get out there and talk to the manufacturers and say that there is an incentive for people to buy those low-emitting vehicles, and it’s paid for by the people with the higher-emitting vehicles. That is smart economic evolution and smart development of our economy, because if we don’t meet our targets, each and every New Zealander will be writing out cheques.

If we go way back to ask how did all this happen, well, Simon Upton, as a National Government Minister, signed up to our international obligation—and it included agriculture, may I remind the Government—in 1997. It was reinforced through the Paris Agreement—reinforced by the National Government and by the Labour Government—but, of course, we were struggling to work out how to implement it. We took a bold step in the area of transport and provided a cost-neutral incentivisation scheme that would have seen more of these electric vehicles alone.

Look, this piece of legislation we’re talking about here provides the ability to remove the targets in the Act—which is just crazy; that protects each and every politician—in order to enable targets to be set by regulations, which is a very risky process. This is a dumb piece of legislation. It’s too late, just at the time that the world is moving on, and we could have been at the leading edge of that transition.

GRANT McCALLUM (National—Northland): Well, this Government, we sure know how to get things done. We got rid of the ute tax. All that did was drive up the price of vehicles for some people. Now we’re going to bring in a piece of legislation that’s going to help reduce the price of vehicles for your average Kiwi, and I commend this bill to the House.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Speaker. This isn’t a good bill. This isn’t a good idea. There are some parts of this bill which I look forward to discussing more carefully at the committee stage, which are the regulation-making powers. This bill would enable a Minister to set regulations which are not appropriately set in secondary legislation. As my colleague the Hon Damien O’Connor has alluded to, there are some problems with that and in moving them forward in this way that the primary legislation does.

But this bill is also not a good idea, because it takes away those tools that the Government has retained to ensure that New Zealand is meeting its international climate obligations. When you look at this bill, it doesn’t really tell the full picture of how useful a tool like the clean vehicle standard can be for Government. We had the Minister of Transport presenting what was meant to be a legislative statement but was really a pretty politically charged speech about taxing everything. This wouldn’t have acted like a tax, and I want to quickly explain to the House, in the three minutes I have remaining, why it wouldn’t have acted as a tax. I think this was something that Andy Foster alluded to in his speech too.

These mechanisms in other jurisdictions are for sending the market a really clear signal on what sorts of vehicles should be imported and what sorts of vehicles shouldn’t be. In most jurisdictions that use this kind of tool, large importers are able to offset the high emissions vehicles that they import, with lower emissions vehicles. It’s also done on a weights basis. So if you were Toyota, for example, and you want to be importing the Hilux, which is one of your most popular products, you offset that by importing lots of the electric vehicles that are also popular products for you.

Hon Peeni Henare: Of a base.

ARENA WILLIAMS: So most—exactly. The Hon Peeni Henare is drawing the point here that most of the large vehicle importers in New Zealand that we have in our market are already doing this. They’re already offsetting, basically, those larger products with the smaller ones that are super popular in our market. Used alongside a tool like the Clean Car Discount, you then further incentivise importers to act in this way. It doesn’t act as a tax at all. This Government is interested in stepping out its use of taxes like that, which actually work as a signal for the market, and doing things like time of use charging in our urban centres. This is exactly the same kind of tool which sends a really clear signal to the market that if you are going to be an importer, you need to be making sure that the fleet that you’re importing balances your emissions across the fleet. That’s how we change our emissions profile in our vehicle fleet overall, over the long term.

We know that, basically, New Zealand’s emissions profile—the big levers that we have here are, one, improving our transport fleet, and, two, on agricultural emissions. We’ve got a Government that has just hours ago removed its ability to step out the agricultural sector’s contribution to our climate goals. It has the right to do that. But then you would think that it would be interested in using some of the other tools in its toolkit to be able to impact on the emissions profile of our transport fleet, but, instead, it’s going the other way on that. That’s something that we will have to tackle in the committee stage.

When we’re talking about the reality of this for consumers, this is also a bill that pushes costs onto consumers, with a regime that was originally designed to put costs on the importers. The funny thing here is that if you’ve got a properly designed system, you’re sending a clear market signal to your importers to spread their emissions profile across their import fleet. But now, in this legislation, there’s a sort of policy call which is being made here that the major benefits of the Clean Car Standard accrue to importers of vehicles, and consumers—and so those should be borne by consumers. But that doesn’t actually achieve any of the policy goals that the Government should be advancing here, which is to change the emissions profile of our transport fleet. Again, we really need to turn to this and think carefully in the committee stage about why we set these fees in the first place, what kind of tool this is meant to be for Government, and what kind of outcomes we’re trying to see when we set fees and when we push costs onto consumers instead of spreading them more fairly amongst the industry, to actually change industry and importer behaviour here.

Just returning quickly to my point about the regulatory making powers: yes, it’s useful for Ministers to have some flexibility to introduce new standards, especially if things aren’t ready to go or if we’re getting good feedback from the industry about changes that need to be made. It would be appropriate to do that as an amendment to primary legislation, which this kind of process would allow. So I look forward to the committee stage.

TOM RUTHERFORD (National—Bay of Plenty): Thank you very much, Mr Speaker. It gives me great pleasure to speak in support of the Land Transport (Clean Vehicle Standard) Amendment Bill, and I commend it to the House.

Bill read a first time.

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

Second Reading

Hon SIMEON BROWN (Minister of Transport): Thank you, Mr Speaker. I move, That the Land Transport (Clean Vehicle Standard) Amendment Bill be now read a second time.

Mr Speaker, thank you for the opportunity to speak on the second reading of this bill. It’s been interesting listening to members on the other side of this House try to argue the potential of this bill and say, “Well, actually, the cost recovery principles aren’t the right way to do it.” Well, actually, this bill does two things. One is it has a small cost recovery element to it. That is only a very small element of this piece of legislation. The actual cost of operating the system is around $6.5 million per annum for the operation of the clean vehicle standard. For the members opposite to say, “Well, that’s actually going to be the cost that’s going to disrupt the market.”, well, it is a very small amount, ultimately, of the entire cost of what actually—it’s $5 to $10 or $20 a car. It’s a very small amount. We think, when it comes to services the Government is providing, actually it’s important that there is cost recovery in place, because the alternative, which the members on the other side of the House don’t like to talk about, is: who has to pay?

The other alternative is taxes have to be increased on every single New Zealander—or the magic money tree. The magic money tree—just appropriate it. So this is about doing two things. This bill does two things. Firstly, it allows for the clean vehicle standard to be amended by regulation, and the argument in favour of that is to ensure that the market settings—we’re not arguing about whether or not there should or shouldn’t be a Clean Car Standard; we accept the importance of a Clean Car Standard; we accept the role that it plays in terms of ensuring New Zealand can get the mix of vehicles and that we can lower the emissions of those vehicles over time. But, at the same time, those standards need to strike the right balance between being stringent enough to ensure New Zealand continues to receive a clean supply of vehicles, but not too stringent that importers cannot meet them, leading to hiked vehicle prices for New Zealanders.

Of course, as members have been saying, the overs and unders in the system need to be met, but if the standard becomes too tight and, actually, the supply of vehicles to achieve its standard is not available, simply the penalties in the regime will be passed on to consumers, and we want to avoid that. So the other side is also arguing for higher vehicle costs for New Zealanders. They’re arguing for two things. They want to increase taxes for New Zealanders and they want to increase the cost of buying a vehicle for New Zealanders. That’s what the other side of the House is arguing by opposing this piece of legislation.

The bill does two simple things, and I think they’re very important. I think the third thing that the other side of the House—well, the point that the other side of the House are missing is that the legislation they passed requires me as the Minister of Transport to have started a review of the Clean Car Standard before 30 June 2024. Now, of course, we know 30 June 2024 is on Sunday. I was required to start that review before 30 June 2024. I started that review back in January, following the law that the last Government set, but the reality was they required me to review it, but they’d already legislated the standard, so that they required the Minister of Transport to review a standard that couldn’t be adjusted. That’s exactly the type of legislation the last Government put in the House. So if you think about bad lawmaking, that is the epitome of bad lawmaking. In fact, the officials at the time even said that it should be set by regulation rather than by legislation.

This is a very sensible piece of legislation. It simply changes one very small part of the clean vehicle standard regime in terms of the ability to set the standard by the Minister rather than by legislation. Secondly, it requires a cost recovery model rather than imposing the cost of that on to all New Zealanders, and, as the other side have failed to explain, where are they going to find the money to pay that bill?

SPEAKER: The question is that the motion be agreed.

TANGI UTIKERE (Labour—Palmerston North): Kia orana, Mr Speaker. Look, this is the second reading stage and usually in the normal scheme of things, we would now be referring to a select committee report; we would be thinking about the various aspects that those who had submitted to that process will have said about this proposed legislation. Whether it is narrow, small, or otherwise, it would have still been subject to the same process. What we’ve heard is less than five minutes from the Minister of Transport in his second contribution this evening on this bill, and I don’t think members on this side of the House are none the wiser as to some of the issues that we raised in the first reading contribution.

We’ve asked the Minister to share with the House who he consulted with as part of the process of bringing this bill to the House. It’s not as if he ran out of time—there were minutes on the clock—and yet we have still not had that particular issue addressed. I think that’s actually very serious, because usually by now we would have heard from the community and submitters and heard what their views are. Now, the Minister has clearly undertaken some consultation—we know that—but we do not know the details of who he has consulted with, and why is that? Is it because he is ashamed of the fact that he hasn’t actually consulted with some industry participants who would give him some information that actually it’s not a good idea to bring this bill to the House? We are still waiting for him to address that.

Look, the Clean Car Standard was phased in from December 2022 and the prime focus was to target a significant reduction in carbon dioxide emissions for light vehicles. Now, that has an everyday impact; it has an everyday effect. When we look at the context of light vehicle emissions across the entirety of the emissions spectrum, we know that they are a significant source of transportation emissions within this country of Aotearoa New Zealand. Yes, we know about the environmental factors, but what we’re still waiting to hear from the Minister is the level of consultation of the individuals that he’s had. Has he talked with any environmental groups?

Hon Peeni Henare: Probably not.

TANGI UTIKERE: Probably not; Mr Henare, we don’t know. I guess we will have the committee, the whole House stage to work through that. We can pose the questions to him, but we can only hope that the Minister will actually address them. There is an absolute need here in New Zealand to increase the number of low- to no-emission light vehicles within the fleet so that members of the public and others can actually—and companies and the like—access that in terms of their provision. That’s exactly what the Clean Car Standard does.

What we are talking about here is effectively enabling the Minister, by way of secondary legislation, to water down, potentially, what the standards would be. At the moment, they are in primary legislation. If the Minister chooses to execute it via regulation, yes, there is a requirement for the Minister to consult prior to exercising those secondary legislation rights. I am still looking forward to hearing, hopefully, from Simeon Brown how he intends to approach that—if he intends to approach that—and why it is that he identifies the industry participants or the individuals who he would consult with or thereabouts.

There is absolutely a need to encourage and incentivise an uptake of low- to no-emission light vehicles, and there is nothing from this Government—and certainly nothing in this legislation—that locks that in and seeks to address and support that as well. Earlier this evening, my colleagues the Hon Dr Megan Woods and the Hon Damien O’Connor talked about the fact that if we don’t do anything in this space, then our country will simply have to write a cheque to address the limitations as a form of mitigation as a result, and that is simply unacceptable. When the Government has an opportunity to do something about it and they’re choosing not to provide the certainty, that is completely unacceptable.

What we do have in front of us is a copy of the regulatory impact statement, so let’s have a look at that. The regulatory impact statement does have the numbers and it tells us that there are around 1,000 vehicle importers who import around about 300,000 new and used motor vehicles over the course of a year. Now, there are two options that have been identified in the regulatory impact statement as to how this particular user-pays charge—as the Minister has said it is—could be garnered.

The first is that you could simply just spread the total amount across all of the importers, and basically there would be an annual fee that would come out at the end of the machine. Now, there is some inequity in that because if you are a smaller player—a smaller importer—you still pay the same amount or the same fee on an annual basis as a big importer, right? So I get that.

The other option is that it could be by way of recovery, and I sense this is the direction in which the Minister is heading, by way of a per-car fee. So it didn’t matter what the price of the vehicle is, but the car would have a component—and there’s a table that outlines the various costs per vehicle and how much that would look like, noting that there is a set administration fee regardless of the price of the vehicle—and that’s how that would happen. Now, that’s perhaps a little bit more equitable, but there are administration costs in there as well.

What’s really interesting is this suggestion from the Minister that, “Well, it’s $5 to $20. It’s really a small amount, $5 to $20.” Well, how does that compare with the $2.25 that senior citizens got from this year’s Budget per week? Just a small amount: $2.25. Now, the Minister seems to think that $5 to $20 is a small amount. When he reflects on his own Government’s Budget—and noting that this was part of the Budget urgency motion originally that didn’t manage to get through for the Government—there are questions around that. So the Minister might take the view or the perspective, that this, in the general scheme of things, is a relatively small amount of money. But we need to balance that with the incentivisation that it provides for purchasers to think about what their choices will mean for emissions in this country.

Now, I do accept that, yes, the fixed-fee percentage might be small, but it could be seen as a tax. Call it what you like, it could be seen as a—it is a tax, actually. When you apply it onto a vehicle, it is a tax. Every single bit of dollar that this Government seems to need to meet the promise to fund $2.9 billion for landlords, perhaps that’s the reason that is driving this decision from the Minister. He will argue, of course, I’m sure—well, we don’t know because we don’t seem to hear from him; he doesn’t take his full call allocation as part of this debate. But he might form the view that, actually, all of this sort of stuff does add up in the end of the day, but it’s not actually really worth it.

I think this will allow the Government to effectively authorise and permit or allow dirtier cars, less efficient cars, to increase in numbers coming in of vehicles that would have higher operating costs over the tenure of the vehicle’s lifetime as well, and will also seek to penalise those for whom it’s a little bit more difficult to make the decision—it’s a little bit more difficult.

That’s why this standard and this piece of legislation worked in tandem with the clean car rebate—the Clean Car Discount; they were two pieces of legislation that worked in tandem. Now, we could give the Government a little bit of fair dues, I suppose, if they—as they have—rolled back and struck out the Clean Car Discount in that rebate. But they have not replaced it with any other adequate incentive to encourage purchasers to uptake no- to lower-emission vehicles as part of their household choices or their company choices, and this is really, really unfortunate.

It is important for those carbon dioxide targets to have a real sense of ambition. When we’re talking about the transportation sector—which we all know, the sector emissions are huge; they are significant—taking steps within this sector and making a change will make a huge difference in terms of our emissions profile and the role that New Zealand will play in terms of continuing to do our bit. In fact, if we are to have any progress or make any progress towards our climate change aspirations, we need to ensure that we are actively pursuing—and that the Minister is actively pursuing—ways in which the transportation sector’s emissions can actually be reduced. This piece of legislation is certainly not doing that.

So we continue to oppose this bill, and that’s actually a very easy choice for this side of the House. Because, from first reading to second reading, we have not heard anything in terms of addressing the concerns, answering the questions that we have posed to the Minister and others, and we still encourage the Minister—as we work through to the committee of the whole House stage—to provide the answers to give some answer to us at this stage. We continue to not support this bill.

Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. Before I get into the weeds of the Land Transport (Clean Vehicle Standard) Amendment Bill and the difficulties that I see with it, I just want to put it in the larger context of why we need an effective Clean Car Standard and an effective price incentive, like the Clean Car Discount, and why New Zealand benefits from those policies. Everyone in New Zealand benefits from those policies and that’s because we are in a climate crisis.

Putting fossil fuels into the atmosphere is changing the atmosphere, it’s trapping more heat, it’s creating more extreme weather events, and we’ve known about this for decades. I appreciate that maybe not everyone in the House has known about it for decades, but there are climate scientists, and certainly people in the Green Party have known about it for decades. We’ve been saying it, because a whole bunch of countries got together and signed up to the Kyoto Protocol in the early 1990s, and around that time—and I know, because I was growing up in the United States at that time—there started to be a kind of organised lobby against climate action, and the organised lobby was funded by fossil fuel companies because they didn’t want the world to take action; they wanted to sell more oil and gas, not because it’s good for all of us but because it was good for them, because they were making money out of it. But they knew that it was going to make life more difficult, and impossible in some parts of the planet, if we carried on doing it. Of course, it’s more than just fossil fuels, but that’s the big driving one.

In other countries, where they took climate change seriously and they didn’t have so many lobbyists from car manufacturers who didn’t want to change what they were doing, because they wanted to carry on making big profits, they brought in policies like fuel economy standards, and they brought in policies like feebates. And what happened? Their vehicle fleets became more efficient. That efficiency is good for everyone because it means we spend less money to drive a certain distance and to move our goods a certain distance. But the thing is that, without those policies in place, the car manufacturers—and the American car manufacturers in particular kept lobbying to not have those standards—found it more profitable in the short term because the higher-emissions vehicles were less costly for them to make and they could sell them for more. People don’t really take into account the ongoing operating costs of the vehicle when they purchase their vehicle, so they’ll pay more for a vehicle that actually costs them more in the long run.

Now, this is a very easy problem for a country like New Zealand to solve, because we don’t have an oil industry that actually powers our cars. All of our oil is exported. All of our oil has always been exported because it’s not the kind of oil that you refine into petrol and put in your cars and trucks. So we do import oil, and we could still have the benefit of exporting the oil that we produce while having the benefit of not spending money importing oil. For those who really care about farming and dairy and its contribution for New Zealand, they might be interested to know that all of our dairy exports do not pay for all of our car and fuel imports on an annual basis. So, if we can do the same amount of business with spending less money on imported petrol and diesel and spending less money on imported cars, that’s a direct productivity gain to New Zealand, something the Government parties should be interested in. But they are not, because the truth is the Government parties are the parties of the status quo and they are the parties of the big corporate lobbyists. They’ve been lobbied for this bill by the car industries that import the highest-emitting vehicles.

I welcome the Government parties to listen to reason on this, because the cost-benefit analysis of the Clean Car Standard and the Clean Car Discount together was positive, and it mainly benefited all New Zealanders, who would then be spending less money on petrol to drive around. If Government parties actually cared about climate change, which they clearly don’t, and making some sort of contribution, they would take seriously the evidence around the policies that are going to lead to more efficient vehicles in New Zealand and lower-emissions vehicles. They’ve already demonstrated they have no interest in making our cities more efficient for transport. They don’t want to make it easier for kids to walk and cycle. They’re actually going to make it more dangerous for kids to walk and cycle to school. They’re going to make it more difficult for people to take public transport. They’re trying to kill rail freight in this country by cancelling a contract with an overseas ally in South Korea—shocking, shocking for New Zealand’s reputation.

Here we are; we’ve got the data right in front of us. Before the Clean Car Discount and Standard were brought in, the average emissions of vehicles coming into New Zealand was 189g per kilometre. The car industry said, “We can’t change that. We can’t possibly change that.” But then, when we brought in the Clean Car Discount, it dropped quite rapidly to 165g per kilometre, decreasing 30g per kilometre per year.

Grant McCallum: The ute tax, you mean.

Hon JULIE ANNE GENTER: And when we had the Clean Car Discount and Clean Car Standard operating, it dropped to 136g per kilometre. Now, I hear members opposite bringing up a kind of pejorative description of that policy, and I invite those members to reflect what is really important here. We all need to work together in order to solve the climate crisis. We have an opportunity to work together to have a more efficient vehicle fleet, a more efficient transport system that is good for New Zealand’s productivity. The members opposite say no. They turn it into a culture war that is not based on any evidence whatsoever and then they blame it on me. Mr Speaker?

SPEAKER: Yeah, talk to the Chair, not engage across the House in conversation like that. Carry on.

Hon JULIE ANNE GENTER: Mr Speaker, I welcome you to notice the level of interjections and perhaps tell members opposite—

SPEAKER: And I just commented on it.

Hon JULIE ANNE GENTER: Thank you. So if we want an effective policy to reduce emissions from our vehicle fleet, which everyone in New Zealand benefits from, except the very small number of people who happen to be selling high-emitting vehicles, and they can switch to selling low-emitting vehicles—that’s the purpose of the policy. It’s not just about changing the consumer’s choice; it’s about changing the option that is even available for consumers to make. When we didn’t have fuel economy standards—and we were one of only three countries in the developed world to not have fuel economy standards, along with Russia and Australia, which is now bringing in some sort of standards—we were a dumping ground for the most polluting, inefficient vehicles in the world. How is that good for New Zealand? How? Can any member opposite explain to me how it’s good for New Zealand to be a dumping ground for high-polluting vehicles? Is there any rationale for that? No.

That’s why we have the Clean Car Standard, and what this bill is doing is actually introducing a whole lot of uncertainty, because it is taking away standards and targets that were set in legislation years ago, after a thorough consultation process and a full select committee process, in which everybody was able to make their voices heard. Those have been known by the industry for years now. It’s taking away that certainty and it’s saying, “We don’t know what the targets are going to be two years from now. We don’t know. The Government is going to make it up. It’s not going to go through a select committee process.” It’s going through this bill, under urgency, and they are clearly being lobbied by the highly polluting vehicle importers, who don’t want to have to meet the standard.

I welcome members opposite to show us how it is that they are introducing certainty by taking away already agreed and consulted upon targets that have been known for years and replacing it with nothing tonight or tomorrow, and then saying the Cabinet is going to make up its own decision about what those targets are and just pass them without going through a consultation process. Clearly we’re getting closer to those years of 2025, 2026, 2027, and what everybody has known would be the targets is no longer going to be the targets. And there’s this totally uncertain scheme for recovering the cost from the vehicle importers themselves. So I don’t see how anyone can say this bill is increasing certainty for the vehicle industry or for anyone when it’s clearly intruding a whole lot of uncertainty and an unknown cost recovery scheme, unknown targets for the next three years.

Clearly, combined with the removal of the Clean Car Discount, we have seen the average emissions of vehicles coming into the country jump up to 161g per kilometre, and there’s simply no way to practically achieve the outcome that we all know we have to achieve, which is reducing carbon emissions. There are huge benefits to reducing carbon emissions. There’s almost no losers in New Zealand from these sorts of policies. So it is a real shame that the Government parties in Opposition opposed these policies when they are policies that could have been supported across party and would be effective at getting a wide range of benefits for New Zealand.

CAMERON LUXTON (ACT): I rise in support of this bill, because, you know, New Zealand’s a beautiful country. It’s a great country. I love this country to bits, but I have to say, I don’t think the international motor vehicle developers are clinging on with bated breath to see how New Zealand goes on their clean vehicle standard. They are private industries who go about investing for the future of their company and making sure that their consumers get what they want.

I am very happy to have heard read out on the other side of the House a list of companies that have developed electric vehicles for utes for tradies and farmers to get a piece of, because it just shows that that sort of thing is happening in the world. Tradies like myself, who go out to work in a vehicle that’s supplied for them to go and do their job based on their requirements—it’s a great thing to have in a free country.

Facts matter. I mean, we’ve just gone a quick google search of this. Statistics New Zealand, for the end of June 2022—it turns out that fuel imports were $7.1 billion and car imports were $6.8 billion. So we’re talking roughly $14 billion. It turns out our exports of dairy were $25.6 billion. So I don’t know where this number that was being thrown about—that they are combined—was coming from, but perhaps we’ll hear some more later.

Look, we want to see lower vehicle costs for the hard-working, backbone tradies and farmers of New Zealand that Labour used to care about. I commend this bill to the House.

ANDY FOSTER (NZ First): Two quick things: it seems to me that the Opposition is assuming a couple of things are going to happen. The first one is that the downward trajectory that there is at the moment, in terms of the clean vehicle system emissions, is somehow going to stop. Well, it clearly is not going to stop. The second one is the assumption that somehow the Minister will actually turn that around, and I don’t think that’s going to happen either. So I think that this is simply allowing the Minister to give a greater degree of flexibility, and that’s why I commend this bill to the House.

Hon PEENI HENARE (Labour): Thank you, Mr Speaker. The contributions that we’ve heard from every member on that side of the House remind me of the many Remuera tractors, Pakuranga tractors that I see every day in Tāmaki-makau-rau from members in Auckland, who sit there with their arm out of the ranger, scoffing at Clean Car Standards that this country relies on.

We heard some data there that talked about facts from a few years ago, which was why we put these standards in place, to make sure this country can once again lead the world in being green. What this Government is doing is creating uncertainty in the market. The Minister’s going to say, “Don’t worry, the market will sort itself out.” Well, when these standards were decided upon, it was made clear that the inequities will continue to happen in this country, with those who can afford to buy the vehicles, and those who can’t. So the biggest cost gets heaped on the people who can’t afford it the most. Let that one sink in—not the Remuera person who drives a Ford Ranger, not the person in Pakuranga who drives a Toyota Hilux, but the opportunity for families to have a car that meets these standards that allows it to be affordable is being stripped away. When we remove these standards, that’s what it does. It makes sure that this country does become a dumping ground for old cars—fossil fuel - burning cars.

While the member on the other side of the House talks about “Oh, don’t worry, car producers, that’s not what they’re fixated on. They’re not fixated on New Zealand.”, that might be fair and well in his world, but when all of those diesel-burning, fossil fuel - burning cars get dumped here—and let’s be very clear: a large number of second-hand cars get dumped here—you continue to create further inequities in this country. That side of the House doesn’t understand the longer repercussions of removing this clean vehicle standard.

We heard on that side of the House that “Oh, you know, the cost is pushed out on to those who sell these vehicles, and ultimately they’re pushed on to the consumer.” When we don’t meet the standards we signed up to, we have to pay a bill, and the taxpayer is going to have to pay that bill. That’s what this Government is doing to the New Zealand taxpayer. But it’s OK, you’ll get to drive your Ford Ranger; you’ll get to drive your Toyota Hilux.

What I garner from a number of the interjections from the other side of the House is that the technology’s not there in the ute system. Well, that’s actually not the case. Interesting, I was driving along in Auckland the other day, and I got overtaken by two hybrid Toyota Hilux utes—trucks, utes that were designed to meet a very strict and demanding target, which is something that this country bought into. It’s something that taxpayers have bought into. It’s something that most of the world has bought into because they know the impacts of climate change. So when we see the Minister coming forward with the Land Transport (Clean Vehicle Standard) Amendment Bill, we can’t support this bill in the House. We need to make sure that we are a responsible citizen in the world. What we’re not seeing from this Government is a clear plan on how we’re going to meet these targets that we all signed up to—we all signed up to.

Once upon a time in this House, we all talked about the need for climate change measures to ensure that our children and our grandchildren have a future. This bill doesn’t do that for us. It takes us backwards. It continues to say, “Oh, the farmers.” We’re here for the farmers too—we’re here for the farmers too. I want to paraphrase Mr James Meager: “The right don’t own the farmers; the right don’t own the businesses.” Get the hell out of here! I can tell that member that all of those Aucklanders sitting there driving their utes and supporting their constituents to drive more utes—wow. When they go back to the voting booths in a couple of years’ time, they’ll see that ultimately the bill is going to fall to the taxpayer when we pay because we didn’t meet the obligations that we signed up to. It’s as simple as that—it’s as simple as that. They are kicking the can down the road; or, in this instance: well, they put the can on the back of a ute and set it off into the sunset. It’s not good enough.

What I can also say, because it’s the same Minister that has the challenges with supplying power in Northland—Mr Grant McCallum will agree with this—perhaps it’s the Government’s way of saying that they’re too scared to invest in proper infrastructure to allow electric vehicles (EVs) to operate in this country. That’s what it sounds like to me, Mr Grant McCallum: not enough power in Northland to fuel the EV cars in Northland, my friend. But that’s OK because, apparently, this Government have a plan. I’m yet to see one; what we’re going to see at the passing of this bill, ultimately the New Zealand taxpayer isn’t going to see one either.

FRANCISCO HERNANDEZ (Green): Thank you, Mr Speaker. I rise to take a call on this bill. I’m going to divide my speech into four parts. The first part will talk about the wider context that this bill operates in. The second part talks about one aspect of the bill, which is the user-pays aspect in clause 5, in new section 167BA.The third aspect sets targets under clause 6. Then, the last part of my speech will talk about the Government’s use of urgency. Just to be clear, I echo the words of my colleague and friend Hon Julie Anne Genter that we will not be supporting this bill.

The wider context that this bill operates in is, you know, since the Budget, this Government has passed legislation that’s undermined our climate response every step of the way. Earlier today, they passed a bill exempting the biggest emitter—the biggest emitter—in our economy, the biggest emitter in New Zealand, the agricultural sector, from having to pay its agricultural emissions. The second bill that they passed today was the Forests (Log Traders and Forestry Advisers Repeal) Amendment Bill. Now, we’ve heard during the committee of the whole House stage that the Minister of Transport didn’t commission any analysis around whether it might flood the markets and cause the emissions trading scheme auctions to fail further. The third aspect that they passed was the Waste Minimisation (Waste Disposal Levy) Amendment Bill, which, again, the Minister for the Environment didn’t say that they would guarantee that it would be used for waste minimisation funds. Now, I’m going to talk about why that’s important and why the wider context leads us to distrust the bill.

Now, the user-pays context that the polluter pays—it’s not a bad principle in theory. I think polluters should have to pay for the cost of the pollution. The problem is that clause 6 doesn’t actually set the standards; it gives the Minister of Transport the power to set the standards. Now, in the context of everything that’s going on so far, in the context of all the anti-climate action that this Government has taken, how could we possibly trust that this Government is actually sincere about reducing emissions?

Hon Member: They’re not.

FRANCISCO HERNANDEZ: They’re not—they’re not—that’s right. They’re absolutely not. We’ve seen that they’re willing to exempt our biggest sector from paying emissions. We’ve seen earlier this year how they were going to—in the changes around the road-user charges, how they charged petrol hybrid electric vehicles the same as the big polluters. So with the Minister setting these standards, in theory, the Minister could actually set higher charges for less polluting vehicles and lower charges for higher polluting vehicles. We just don’t know. With the sort of standard of climate policy that this Government is doing, I wouldn’t entirely rule that out.

Now, the second aspect of this bill is that it allows the Minister to set the targets, it abolishes the existing targets, which, as we’ve heard adequately from this House, are already set, are already established, are already certain, and they’re introducing more uncertainty. We simply have no idea what these targets might be. So the cumulative effect of all of that is to actually weaken New Zealand’s climate response. In the Minister’s speech, he explicitly made a commitment that the targets would be less stringent than the current ones. So in the context of that, how could we support this bill when it’s going to be a retrograde step for the climate, and it’s going to be a retrograde step for the people?

When we delay the climate transition, the cost of it doesn’t actually fall on the most well-off in society; the burdens of climate change and the burdens of climate change impact fall on those least able to pay for it. So by delaying the climate transition—which, let’s be clear, the Government has been very explicit that this bill has been designed to decrease the standards, which will delay the climate transition and which will lead to New Zealand beyond a dumping ground for high emission vehicles—it’s not doing anyone any favours. We’ve seen that global volatility around the world has led to higher petrol prices. I mean, I’m not a ball-gazer, I’m not a fortune teller, but if I were to make a bet, I would bet on more uncertainty in terms of oil, in terms of global markets, in terms of the price of oil going up.

In encouraging high-emission petrol vehicles, you’re locking the poorest in society in to forms of transport and forms of vehicles that will actually cost them more in the long run. It doesn’t make sense. And look, the urgency is really bad too, but I didn’t get to that. Thank you.

GRANT McCALLUM (National—Northland): Well, I rise in support of this very good bill. The farming community of New Zealand—we’ve got rid of the ute tax. I just want to assure the member on the other side of the House that I do not drive a “Remuera tractor”, I drive a “Maungatūroto tractor”. And from Maungatūroto, I can see the Brynderwyns, which are opening tonight—one hour from now. Great news. With that, I commend the bill to the House.

Hon DAVID PARKER (Labour): Thank you, Mr Speaker. There are 300,000 vehicles imported into New Zealand every year, roughly—25,000 a month. The only chance that you get to make those 300,000 vehicles efficient is when you import them and register them for the first time, because once they’re here, they’re valuable and someone uses them to the end of their useful life. So if you want to improve the efficiency of the vehicle fleet, you’ve got to do it at the point of import and first registration.

We know that by the time the last Government was voted out of office by the crowd on the other side, of those vehicles that were being imported every month, 48 percent were hybrids, 7 percent were plug-in hybrids, and 20 percent were full battery electric vehicles. That’s a total of roughly 76 percent. Three-quarters of the vehicles being imported were hybrids, plug-in hybrids, or battery electric vehicles. What’s that now? What’s that now? They got rid of the Clean Car Discount, because they’re all arse about face on the other side. They didn’t come up with a mechanism to replace the—

Hon Members: You can’t say that!

Hon DAVID PARKER: It’s perfectly parliamentary, I would have thought. Maybe I won’t repeat that comment, Mr Speaker.

SPEAKER: It speaks to the member’s own habits more than anything else.

Hon DAVID PARKER: What are we at now? Now, 41 percent of the vehicles are petrol and 16 percent of them diesel, which is a total of 57 percent being internal combustion motors rather than 25 percent as it was prior to the change of Government.

Now, if the Government was going to get rid of the Clean Car Discount, it should have already increased the standard to make the standard do the work, because every month that that is delayed, we get another 25,000 vehicles, half of which are internal combustion, increasing our emissions. And every one of them will be belching greenhouse gas emissions until they’re completely worn out in 15 years’ time. So the indifference that this Government is showing to emissions in transport is going to have a long-term consequence both for the environment in terms of those increased greenhouse gas emissions, for New Zealand’s imported oil bill, because we have to import more oil. The case for electric vehicles in New Zealand is better than virtually any other country in the world, because 85 percent of our electricity is renewable and generated locally and it’s going up.

If this was the only mistake that the Government was making on climate, it would be lamentable, but you’d think, well, maybe they’ll get it right eventually. But, of course, as others have said, this is part of a long litany of mistakes that are already being made deliberately by the other side on climate. They signed up to the zero-carbon Act, they pretended to buy into the budgets, just like they pretended to buy into the child-poverty targets, but it was just a ruse. It was just a ruse to get elected, because everything they have done tells the truth, and the truth is they’re taking this country backwards now.

No, there’s lots of reasons the National Party are going back in the polls. This isn’t the main reason; it’s one of the reasons, but it’s not the main reason. The main reason is because they’re dragging the economy into the dirt. But they show their economic illiteracy in this piece of legislation, because it increases the bills of New Zealanders, it increases our current account deficit, and it takes the country backwards on climate as well. They say they’re going to rely on the price of carbon through the emissions trading scheme (ETS), and what do they do? Well, they gut it by taking 50 percent of the emissions out that relate it to agriculture. Now, agriculture was always going to have a sweet deal. They were always going to have 90 or 95 percent free allocation or the equivalent thereof. But now they can completely let off the hook to the cost of the rest of the economy who bear that cost of the non - price based measure in agriculture.

Now, the guys on the other side, they say, “I trust the ETS. We’ll let the ETS do the work.” Well, I tell you what: that’s a market. That’s a market. And I tell you what: we understand markets on this side. The other side don’t. And I tell you what: the private sector understands markets. They understand that National’s ruining this market, because what’s happened to the ETS price that they say they’re going to rely upon more than the prior Government? The prices collapse. The private sector doesn’t believe that the National Party is going to use the price on carbon to release emissions, because it’s gone down from about $75 per tonne of carbon when we left office to $50. It’s $75 to $50, a 33 percent drop in the price of carbon.

I see we’ve got the ACT Party saying, “Hooray, hooray, hooray.” Well, that is absolutely typical, given the members that are sitting there, that they would celebrate the price and the collapse of carbon when the Government that they are part of says that they’re going to rely upon the price of carbon to drive emission reductions. As it happens, the price on carbon actually isn’t the most effective way of reducing your emissions in cars. Cars are the most energy-intensive item that most people ever own in their life. You buy a fridge in New Zealand that has an efficiency standard. You buy a washing machine that has an efficiency standard. You get a dishwasher. You get a heat pump. All these things have efficiency standards. That’s why you need efficiency standards at the point of import for the most energy-intensive carbon-producing item that most people use. That’s why you do need to have standards. That’s why this Government should already have toughened the standards.

This piece of legislation shouldn’t be here kicking down the code, leaving the discretion to the Minister to actually slacken those standards. I don’t trust that they won’t do that. But the shame is that they should have already done the analysis as to what is the effect of the abolition of the Clean Car Standard on the make-up of the fleet. The only way to compensate that, if you’re not going to use feebates, like that system had, is to have a more rigorous standard for vehicles at the point they are imported. So, every month, of those 25,000 vehicles that are coming in every month, the number of those that are petrol vehicles has gone up astronomically—and diesel vehicles—and the number of hybrids, battery electric—how backwards is that as a country? Aren’t you ashamed of that? I’m ashamed of that. We’re a better country than that. Members on the other side of the House should hang their heads in shame. We’re a better country than that. We’re going backwards, and we don’t even have an industry.

I can almost understand the economic illiteracy of the National Party members when it comes to agricultural admissions. They go in for simple tropes that somehow they’re protecting the agricultural industry. They’re actually not long term. They’re actually making a mistake there too. But I can understand their protectionist instincts. They’ve always had them on that side, protectionist instincts for agriculture. I can almost understand that. But you haven’t even got a car industry to protect. We don’t make cars in New Zealand. We end up producing the bag end of cars produced by the other parts of the world, in part because those cars often can’t be sold in the countries in which they’re made now, because they’ve got standards that are tougher than ours.

So, look, economic illiteracy—it’s why you guys are going backwards in the polls. You know you’re worried. Look at them smiling. You’re going to come back here and you’re going to one day apologise to the people of New Zealand for every month of an extra 10,000 petrol and diesel vehicles coming into the country that could be battery electric vehicles and plug-in hybrids and hybrids that would be saving people money at the pumps and actually helping save the world. I know that it sounds a bit dramatic to say that, but you know, we’re actually pretty close to the tipping point. Don’t you take fright at the fact that people are dying going for walks in Greece at the moment from these unprecedented heat waves? Don’t you worry about the temperatures of the sea being higher than has ever been recorded in history? Don’t you worry about that? I know I do.

I actually accept the science. I accept that New Zealand has to do our share, because if a country with all our advantages and no car industry to protect can’t do the right thing here and actually have a decent standard to make sure that those vehicles aren’t imported about 15 years before they’re worn out, it’s pretty poor policy, and that’s why this side of the House will be voting against this bill.

SPEAKER: I thank the member for the long list of things that I need to do.

TOM RUTHERFORD (National—Bay of Plenty): Thank you very much, Mr Speaker. I just couldn’t help myself, sitting there listening to that diatribe of absolute waffle from David Parker, when he said, “Oh, Labour is the party of agriculture.”, and, yet, they turned up to Fieldays for a day and then left, didn’t have a stand there, and rolled out their Red Bands from the packet, without a spec of dirt on it, and said to the community, “Hey, we represent you.” Nah, nah, nah—nah, nah, nah—we don’t buy it on this side and the New Zealand public see straight through it, and I commend the Land Transport (Clean Vehicle Standard) Amendment Bill to the House.

ARENA WILLIAMS (Labour—Manurewa): Mr Speaker, thank you for the opportunity to take a short call on this second reading of the Land Transport (Clean Vehicle Standard) Amendment Bill. I want to thank members around the House for engaging in what has been a really interesting and lively debate, and it points to a good committee of the whole House stage coming, where we can get into some of these issues. But there is still a misunderstanding about two important aspects of this bill.

On the one hand, we have members opposite shouting “ute tax”. What’s this then? Grant McCallum, what does this do? What is this? If one would think that the Clean Car Discount was a ute tax, then what is a piece of legislation which spreads cost from clean small cars to large, big cars? How is that different to the tax that you’re worried about? Luckily, I’m here to tell you, mate. The difference is that in this sort of legislation, you’re designing a tool that Government can use that isn’t intended to pass on those costs, because they’re costs that are designed to be borne by the industry, not the consumer. Those are generally large sector participants in the industry who can adjust what kind of cars they import so that they do not pay the tax. So when the National Party talks about things like time-of-use charging, you might say that was a tax, but it’s not intended to be paid; it’s intended to change the behaviour of people who, if they did not change their behaviour, would pay the tax. So in this scenario we have large importers but also small importers who are able to offset certain cars between themselves.

A really interesting and recent example is that this system as it’s being designed now would create some difficult costs for importers of small cars that are not hybrids or electric vehicles. So say a car like a Suzuki Swift, which is a small car so it doesn’t enjoy the weight settings that exempt, say, a Toyota Hilux from some of these requirements but is not an electric car. Those cars are on the receiving end of some of the more difficult parts of this. But you have Toyota actually saying in the media recently that they are interested in working with Suzuki because they have so many really good cars for a scheme like this and that they import lots of small electric cars that they would be able to offset not only their large Hilux offerings but also something like a Suzuki Swift imported here. So we see really good examples of where the industry can not only avoid this cost but are also interested in working together to make sure that the entire industry is lowering its emissions profile.

I wanted to make sure that we all know that point going on to select committee stage, because to describe this as a tax—one might see this as a tax, but it’s not something that will be paid by consumers. It’s not designed in a way that is designed to put costs on to consumers, and so we need to be debating what we’re really debating here when we get to that point.

The second point that I just want to clarify is that the Minister gave a bit of a confusing explanation of New Zealand being car takers in a world of car makers, because most of the cars that are imported into New Zealand are already compliant with international standards that far exceed our own standards. When the member Cameron Luxton stood and gave his contribution about the industry being far ahead of New Zealand standards, that’s right. But it’s not because industry are stepping themselves out faster and faster and faster than other legislation, it’s because in Europe they’re up to Euro 7 now, and in 2035, they will have banned combustion engines. So every large car manufacturer that imports into the European markets that share these standards needs to comply with much higher standards.

To give you another practical example, that’s why the Mitsubishi diesel-engine cars that we have in New Zealand use a diesel particulate filter, which is not required by these standards but is required by those Euro 7 standards. It’s a way of processing the particulates in diesel fuel to make sure that they are compliant with the emissions requirements in Europe. That doesn’t need to happen in New Zealand legislation, but it’s something that is a standard in all of those cars that are imported here. The flipside of that is that if we don’t have legislation like this, we get ourselves on par with those countries who will take any cars, and all of the cars that don’t comply with legislation anywhere else in the world.

CAMERON BREWER (National—Upper Harbour): This bill will amend the Clean Car Standard in line with our Government’s environmental commitments. Thanks to a user-pays model, it will save taxpayers money in what has been a prolonged cost of living crisis. I commend the bill.

Hon Dr MEGAN WOODS (Labour—Wigram): Mr Speaker. Prior—

SPEAKER: Wait for a moment. I think it’s just a really good idea just to cut down the conversations among members at such a loud level.

Hon Dr MEGAN WOODS: Thank you, Mr Speaker. Prior to the introduction of the clean vehicle standard, the Productivity Commission noted that New Zealand was one of three developed countries in the world without such a standard. One was Russia, one was Australia, and one was New Zealand. This was the group of countries that we were putting ourselves with.

What we can see, then, is New Zealand as a market—and the Hon David Parker talked about this in his contribution—was accepting cars with higher emissions than other parts of the world, because the market could see that this was a place that you could dump high-emitting vehicles that simply weren’t allowed into other jurisdictions. For example, the top-selling new light vehicle models, the most efficient variants available in New Zealand have, on average, 21 percent higher emissions than comparable variants in the United Kingdom. The very real reason is that they have a robust regulatory regime around the standards of emissions of vehicles.

What we have is a Government bringing legislation to this House to introduce under urgency and pass under urgency that wants to water down the standards that we as New Zealanders should expect in our vehicle fleet. There is no real cause that’s spelt out in any of the documentation. In fact, I’m going to go through some of that, and I note that the Minister, in his speech on this reading, didn’t address what I think are some really real issues that he needs to address from the Parliamentary Commissioner for the Environment that were released earlier this week in an open letter to the Minister, given that there is no select committee process and no process for expertise such as the commissioner to input into that.

There will be, as we go through this bill clause by clause in the committee stage, a number of questions that the Minister will need to address in regards to what the Parliamentary Commissioner is setting out. One of those that I think that this House deserves an explanation on is that we have a Minister that is bringing forward the ability of the Minister, by regulation, to change the standards outside of the statute by three years. This is significant in terms of our emissions targets. What the Parliamentary Commissioner is saying is that the legislation should contain some criteria and methodology that will inform the Minister’s decisions around vehicle emissions standards whenever they exercise that regulation-making power.

Now, it is not too much to ask, that a piece of legislation that allows the Minister to make decisions by regulation and brings that forward, that we should be able to see laid bare in the legislation how he is going to do this. What is the kind of criteria and what is going to guide that decision making? We haven’t seen any of that in this legislation. Something the Minister will need to address is why not? Because one of the problems the Minister is going to have when he gets into the chair is contained in the documentation that has been on the Table with the bill, the departmental disclosure statement, which I think is a very interesting read on this piece of legislation. Did the regulatory impact analysis team in the Treasury provide an independent opinion of the quality of any of the regulatory impact statements? No, they didn’t, because they’ve been reviewed by a panel of representatives through the Ministry of Transport. It’s been given a “partially meets” rating against the quality assurance criteria for the purpose of informing Cabinet decisions.

So Cabinet did not have all the information it needed when it made the decision, and yet the Minister thinks that he knows so much he can bring it to the House without any scrutiny at select committee. It hasn’t even had that. This from a Government that has set up a Ministry of Regulation and it is saying that they’re going to lift the standards around decision making like that. So the Minister’s going to have to explain to us why it is he is the world expert in this field that doesn’t need his Cabinet colleagues to have that analysis when they’re making decisions at the Cabinet table, and, certainly, we don’t need it as parliamentarians when we’re expected to pass laws in this House.

Then, something else I found very interesting in the departmental disclosure statement: are the aspects of the policy to be given effect by this bill that were not addressed by or that now vary materially from the policy options analysed in these regulatory impact statements? Yes. So not only did he not get the kind of information he should have been taking to his Cabinet colleagues in the policy advice, but then he changed it after that as well. So, obviously, this Minister is a genius when it comes to these matters and we look forward to him answering these questions in the chair, because unlike anything we’ve seen from this Minister before, I’m looking forward to a session when he actually answers some questions and has some information at his fingertips and things that he hasn’t just made up in his office before he’s come down to the House and had to come back and correct days later.

One of the things that we see is that the cost recovery impact statement developed for this bill did not address the aspects of the bill relating to the modification of the Clean Car Standard’s emissions targets. So, you know, why would you want a piece of legislation that is actually about how we are reducing our emissions? It’s baked into the emissions reduction targets that his colleagues and he, as a Cabinet Minister, are going to have to report on in only a few short months—didn’t even consider it; didn’t consider how changing the regulations around the standards in our vehicle fleet are going to impact on our targets. This is woeful lawmaking. This is lawmaking that makes absolutely no sense. It is lawmaking that is being made on the fly. It is lawmaking that is being made without advice. It is lawmaking that is being made that does not meet the standard of what New Zealanders should expect.

The Ministry of Transport, the Minister’s officials, had to give an exemption from the requirement to analyse that aspect of the bill, the aspect of the bill that was about the emissions targets. So, members opposite, you’re quite happy to pass legislation that is just giving an exemption to thinking about reducing our climate emissions—doesn’t matter. It is time this Government actually just owned what it is. It is a Government that cut $3 billion worth of funding out of climate action in this year’s Budget. It is a Government that has no plan when it comes to reducing our emissions. It is taking us backwards on every initiative that it was achieving against our emissions reductions plan.

The members of this Government are going to cost New Zealanders. We have two choices: we cut our emissions here at home and we keep jobs in New Zealand, we support New Zealand industries, and we back New Zealanders to have efficient cars to drive, or we go the way of, say, the Swiss, who are currently in the process of paying to put electric buses on the roads in Vietnam because they cannot meet their own emissions targets domestically.

As I said in my first reading speech, I make no apologies that my colleagues and I, every day of the week, will stand up and say that we will do everything to maximise our emissions reductions at home, to keep jobs in New Zealand, to keep highly skilled work in New Zealand, and to back New Zealanders, rather than thinking you can just trade your way out of this by going and buying expensive credits on the international market. What we’re seeing in this departmental disclosure statement is this Government isn’t even thinking about that. They’re not even considering it. It’s not part of their decision-making framework. They do not care about the cost impost that they are putting on New Zealanders, which is in the order, by Treasury’s estimates, of probably around $600 million a year.

Think about that. We have a Budget next year with a $2.4 billion operating allowance and Treasury’s own analysis would suggest if we were to block that as a contingent liability, then it would be in the order of around $600 million. This is what this Government is going to cost us, and every day they bring nonsense legislation like this to the House that further erodes our own domestic reduction, they are costing New Zealanders more. Every dollar we have to spend overseas buying credits will not be spent on schools, will not be spent on hospitals and it will not be spent on New Zealanders’ futures. That is what this Government is putting at risk.

DAN BIDOIS (National—Northcote): Mr Speaker, Happy Matariki to you. To quote from the Broadway show Hamilton: “Talk less, smile more.” I commend this bill to the House.

A party vote was called for on the question, That the Land Transport (Clean Vehicle Standard) Amendment Bill be now read a second time.

Ayes 68

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

Noes 48

New Zealand Labour 34; Green Party of Aotearoa New Zealand 14.

Motion agreed to.

Bill read a second time.

SPEAKER: This bill is set down for committee stage immediately. I declare the House in committee for the consideration of the Land Transport (Clean Vehicle Standard) Amendment Bill.

In Committee

Clause 1 Title

CHAIRPERSON (Barbara Kuriger): Members, the House is in committee on the Land Transport (Clean Vehicle Standard) Amendment Bill. Members, we start with the debate on clause 1. Clause 1 is the debate on “Title”. The question is that clause 1 stand part.

Hon SIMEON BROWN (Minister of Transport): Thank you, Madam Chair. This bill has seven clauses. This first clause is the title clause. The title clause states very clearly that “This Act is the Land Transport (Clean Vehicle Standard) Amendment Act 2024.”, and it has that name simply because it amends the standard in relation to the setting of it and in relation to it being user-pays, rather than a Crown-subsidised, scheme. It’s very simple; what it says is what it does.

TANGI UTIKERE (Chief Whip—Labour): Point of order. Thank you, Madam Chair. I just want to seek some clarification from you as we embark upon this stage of the process. The Minister of Transport has made some introductory comments that purely relate to the title. I refer you to Speaker’s ruling 127/1, which relates to basically the exact situation that the committee does find itself in, and you may be familiar—

CHAIRPERSON (Barbara Kuriger): I’ve actually brought the clause with me.

TANGI UTIKERE: Fantastic, you’re very diligent as per usual—we are on the same page.

CHAIRPERSON (Barbara Kuriger): Speaker’s ruling 127/1 basically says that “Members haven’t had a chance to view the bill and haven’t had much notice. There haven’t been any public submissions, so therefore clause 1 will be a more fulsome debate around the bill, but I will still require members to address the bill that is in front of them.” So in giving questions or speeches around the title—that can go wider than the title but not wide-ranging into the other clauses too much. Just be careful that we don’t debate the whole bill in the first clause, but it is more wide-ranging than just the title.

Hon David Parker: Madam Chair.

CHAIRPERSON (Barbara Kuriger): The Hon David Parker. Is this a point of order or a speech?

Hon David Parker: No, I didn’t call a point of order, no.

CHAIRPERSON (Barbara Kuriger): OK, so the member wants to speak. The Hon David Parker wants to speak on clause 1.

Hon DAVID PARKER (Labour): Thank for that honour, Madam Chair. Well, my comments are, in particular, in relation to the title, but I do have to cross-reference the relevant clause 7 of the bill, amending section 175 of the Land Transport Act, which talks about “Targets … reducing carbon dioxide emissions”, because I want the Minister of Transport to clarify that, in fact, the changing of those targets for carbon dioxide emissions could actually, given the breadth of that power, make the standard less onerous—i.e., vehicles would be less clean—which calls into question as to why the name is the clean vehicle standard if it could be made dirtier, so my question is whether that is—

Tim van de Molen: Point of order. Thank you, Madam Chair. Look, I just wanted to come briefly to the comments made or raised by Mr Utikere in his point of order. I was just quickly seeking some clarification. As I understand, this bill was introduced during the Budget urgency session, so there has indeed been plenty of opportunity to consider it. It hasn’t just been introduced to the House today—

CHAIRPERSON (Barbara Kuriger): Yes, that’s true, Mr van de Molen, given that we’ve had a period of time between that bill, but the Opposition have not had a chance to debate it at this point in time.

Tim van de Molen: But they have had a chance to view the bill.

CHAIRPERSON (Barbara Kuriger): Yes, they’ve had a chance to view it, but it has not been and it will not be going to a select committee.

Tangi Utikere: Speaking to the point of order—thank you—since Mr van de Molen has raised that, Speaker’s ruling 127/1—

Tim van de Molen: Well, she’s already ruled.

Tangi Utikere: Well, she had already ruled, but it didn’t stop you from doing anything about it.

CHAIRPERSON (Barbara Kuriger): OK. Move on with your point of order, Mr Utikere.

Tangi Utikere: Yeah, so I think what Mr van de Molen has done—

CHAIRPERSON (Barbara Kuriger): We’ll have points of order in silence, please.

Tangi Utikere: Thank you, Madam Chair. Thank you for the clarity. I didn’t get a chance to respond to that. But I think what’s important here is that, yes, the bill has been in the public arena, but the other components in that Speaker’s ruling are also that there have not been any public submissions. And also this is a very unusual step in which this bill is being considered clause by clause as opposed to part by part—and the House is in urgency. So it’s not just the fact that the bill hasn’t been able to be viewed, I take, by your interpretation and confirmation of that ruling, that there are many other aspects to that.

CHAIRPERSON (Barbara Kuriger): Yep. That’s fine. The Hon David Parker.

Hon DAVID PARKER: Yes, I will just briefly recap my question to the Minister: Could he confirm that the effect of this bill is to allow a change to the clean vehicle standard, which could in fact increase carbon dioxide emissions rather than decrease them?

Hon SIMEON BROWN (Minister of Transport): What this bill does is it does two simple things. One, it enables the standard to be set by regulation, and, secondly, it allows for a cost recovery of the cost of operating the standard. Those are the two simple things. Outside of this debate, there’s been—I think section 175A of the Land Transport Act requires that the Minister must undertake a review of the targets.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you. Further to my colleague the Hon David Parker’s question and the Minister of Transport’s answer there, I direct the Minister to the departmental disclosure statement where it said that “The CRIS developed for this bill did not address the aspects of the Bill relating to the modification of the Clean Car Standard’s emission targets.” So I think given that the regulatory impact work did not address the issues around the emissions targets, I think the question that my colleague put to the Minister has not been adequately answered to the satisfaction of the Opposition in terms of understanding where the Minister is coming from, given that that analysis has not been undertaken and the departmental disclosure statement states that. So I’d like the Minister to state what evidence he is relying on—given that there has not been that regulatory impact analysis done on the Clean Car Standard’s emission targets—that this will indeed fulfil the title of being a clean vehicle standard and not a dirty vehicle standard?

Hon SIMEON BROWN (Minister of Transport): One, this bill doesn’t repeal the clean vehicle standard; there will still be a clean vehicle standard. Secondly, this bill does not change the standard, and so there is no change to the standard by this bill.

Hon Dr MEGAN WOODS (Labour—Wigram): I acknowledge that the Minister of Transport is correct and it doesn’t repeal the clean vehicle standard, but what this does is bring forward by three years the Minister’s ability to change that by regulation. So given that he still hasn’t answered the fact that there hasn’t been the regulatory impact analysis done on the emissions target aspect of this, I’d also like to know what evidence he’s relying on that this will still be a clean car standard. But I’m also interested to know what the Minister is going to say in terms of fulfilling the name of the bill on the tin—the Clean Car Standard—what the criteria for decision making around changing those regulations will be, and whether he will be putting that in the bill, and, if not, why not?

Hon SIMEON BROWN (Minister of Transport): If the member read the entirety of the principal Act, she would find in section 175A that the Minister must not initiate a review later than 30 June 2024. In section 175A(2), it outlines the factors that the Minister must take into account.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you. I ask the Minister of Transport how he responds then to the open letter from the Hon Simon Upton, the Parliamentary Commissioner for the Environment (PCE), who, in the absence of being able to go through a select committee process, has very clearly written to the Minister—the very clause that the Minister is saying makes it all OK, the Parliamentary Commissioner has got some questions around. So I’d like to know the Minister’s response to that; how it is going to fulfil being a clean car standard when the Parliamentary Commissioner’s advice very clearly says—

Simon Court: Point of order, Madam Chair. I detect in the member’s question the same line of questioning that she has already pitched twice, the Minister has replied to twice.

CHAIRPERSON (Barbara Kuriger): The member’s actually brought new material into this question. I think it’s fine. Thank you.

Hon Dr MEGAN WOODS: Thank you, Madam Chair. So the question I put there is the paragraph in the PCE’s letter that said “Parliament clearly intended that any regulations, that are made to set targets, would be subject to review. To ensure this is carried through in your amendment bill, I suggest you make a minor amendment to the drafting of section 175A(a)”—which, of course, is the clause that the Minister referred to in his previous answer—“so that the text that follows ‘carbon dioxide emissions set out in section 175’ is replaced with ‘and not later than 30 June 2025, for targets prescribed in any regulations under section 167C(1)(j)(iv)’.” What does the Minister say to that?

Hon SIMEON BROWN (Minister of Transport): I always enjoy receiving open letters.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you, Madam Chair. I have a series of questions about both aspects that the bill brings in. One is: firstly, who has the Minister of Transport consulted with in deciding to bring this bill to the House under urgency? What specific organisations has the Minister consulted with before bringing this bill, under all stages, in urgency, to the House?

The second question is: how can this bill be increasing certainty when it’s removing targets that have been publicly available to the industry and to all of New Zealand for several years, and replacing it with none? What process is the Minister intending to use on consultation on any new standards he might be putting in for the years 2025, 2026, and 2027 before those are brought in through regulation? I’ll carry on with more questions after I get those answers.

CHAIRPERSON (Barbara Kuriger): Tangi Utikere, thank you for your patience.

TANGI UTIKERE (Labour—Palmerston North): Thank you—thank you for your diligence, Madam Chair. Clause 1—I have a number of Amendment Papers that have been tabled in advance, so the Minister of Transport has had an opportunity to, hopefully, look at those. They all suggest specific changes to clause 1, and I think that’s important because the title, in effect, reflects what is contained elsewhere in the bill. So I am interested in the Minister’s responses to those, the first of which is Amendment Paper 42—they’re actually 42, 43, 44, 45, 46, and 47; they all relate to clause 1—and whether the Minister is comfortable with some of those suggested amendments or whether he might have another few on that. I also think that it would be helpful—I don’t know if you want me to pause or—

CHAIRPERSON (Barbara Kuriger): Yep—carry on.

TANGI UTIKERE: I don’t know whether the Minister wants to elucidate on his response to the Hon Dr Megan Woods. I mean, the Minister might enjoy receiving open letters, but I think it’s highly unusual that, effectively, an Officer of Parliament has bevvied into this process and has taken the effort to point out what seems to be a very straightforward suggestion. I think it is only proper that the Minister might wish to have the opportunity to reflect on that and to perhaps provide a response to the letter, given that he is an Officer of Parliament. Perhaps I’ll leave it there and come back with some other questions.

ARENA WILLIAMS (Labour—Manurewa): A simple question for the Minister of Transport. It relates to one of my suggested amendments for this bill, about the title. We’ve had some back and forth in this House about whether the cost recovery mechanisms in this bill, alongside the ability of the Minister to set a standard which would, essentially, require the industry to change its behaviour in terms of what cars it imports—whether that would be seen as a tax. So there are amendments in my name that propose to the Minister that he should include “Budget Measures” in the title of the bill, which is the tradition in the way that this Parliament delineates its cost recovery or its revenue-gathering legislation which often accompanies Budget legislation and is the type of legislation which is usually introduced around Budget time.

Because this is part of their Government’s broader Budget urgency motion, it would also not be unusual for the legislation to include this in the title. And what I’m asking the Minister here is: is he interested in including “Budget Measures” in the title because he does see this as a revenue-gathering tool, or not? It would be useful for him to clarify, because some of his own members of his own party in their calls have been confused about whether this is a revenue-gathering instrument or whether it is not intended to gather revenue.

Hon SIMEON BROWN (Minister of Transport): Well, I thank the member for her question. This is a bill which I think the title is very clear in relation to what it does. In terms of the issue of cost recovery, it is a bill which has a cost recovery mechanism included in it, and, as a result of that cost recovery, it means that the general taxpayer won’t be required to pay for the operation of this scheme.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. In terms of clause 1 and the title of this bill, I recognise, as we’ve also heard from my colleagues, that there are some concerns around whether the title itself gives enough clarity on the purpose of this bill. I think one of the things is in one of my tabled amendments for this as well, because this particular bill looks like two components. The first one is looking at enabling the target to be set in secondary regulation, which then ties into what previously the Hon Dr Megan Woods mentioned in terms of the clean vehicle standard element of it. But, again, what we are hearing is that there is a second component to it in terms of the cost recovery scheme. So, again, we are in support of the amendment that has been put forward by both Tangi Utikere as well as Arena Williams around this because of the fact that there is clarity that is needed with regards to the title.

In terms of my amendment, in order to address both elements of this bill, I wondered if the Minister of Transport is open to the suggestion of amending it from “(Clean Vehicle Standard)” to “(Clean Vehicle Standard and Levy Charges)”. Now, I know that the term “levy” potentially is controversial, but based on the intention of this cost recovery we are looking at—and this is, again, something that maybe the Minister is happy to clarify. When we are looking at these cost recovery measures, are we looking at a potential levy? Because I know the term “tax” has been thrown around, but is this more akin to a levy? If it is more akin to a levy, would the inclusion of “levy charges” be something that is worth mentioning within the title to cover both elements of this bill?

Hon SIMEON BROWN (Minister of Transport): I think the answer to that question is that those matters are dealt with inside the bill.

Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Chair. I’ve followed this with great interest—as most Kiwis should. The departmental disclosure statement says in here, “This is critical to ensure that any changes to targets can be made quickly to increase certainty for the vehicle industry.” So a question to the Minister of Transport is: is he planning to make changes to this on a regular or semi-regular basis to clean vehicle standards? Because in a meeting I had with a senior executive from one of the biggest international car firms, her concerns were that New Zealand was able to change the standards, thereby offering uncertainty to companies like that, which actually made them less enthusiastic about even looking at our market. So the question to him is that given the statement here implies changes can be made quickly, how often is he going to make them?

Hon SIMEON BROWN (Minister of Transport): Well, the Land Transport (Clean Vehicles) Amendment Act that the last Government put in place allows for the standard after 2027 to be changed by a regulation. We are simply allowing for the standard in the years up to 2027 to also be able to be made by a regulation and making it consistent.

Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Chair. Look, I appreciate the clarification by the Minister of Transport because, as I said, in my meetings, the issue of concern around change was one made by the motor industry and the fact that we’re such a small market. So if the Minister’s now implying that change will be made before 2027, then that offers more uncertainty. And so can he confirm that or, otherwise, whether he intends to make a change prior to 2027?

Hon SIMEON BROWN (Minister of Transport): This is a bill which simply makes a change to allow the standard to be amended by regulation, just as it can be after 2027. It’s just simply about consistency. So it’s a very simple piece of legislation. And also, the Land Transport Act requires the Minister to undertake a review and commence that review before 30 June 2024. So in order for that to be able to happen, if there is to be any change, there also needs to be the ability for that to be changed by regulation. So that is why this bill is before the House. It’s a very simple piece of legislation.

Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Chair. And I appreciate the Minister of Transport’s attempt to clarify, but he completely avoids the question that I ask, and that is: is there an intention by Government? Because what we see in other areas of secondary legislation and in regulation is that the Government has implied economic concerns will override environmental concerns or animal welfare concerns, as the Associate Minister of Agriculture has implied with the National Animal Welfare Advisory Committee. So my question is: is the Minister going to use the powers that this new bill will allow him to change before 2027, and, if so, for what reasons?

Hon SIMEON BROWN (Minister of Transport): The Land Transport Act requires a review. The review must take into account the matters, including in section 175A. Those are the matters that I will take into account.

CHAIRPERSON (Barbara Kuriger): Thank you. I’m going to call Hon Julie Anne Genter. Some of the questioning is moving a little away from clause 1 and may be able to be pursued further down. So let’s—if we stick to the broad title.

Hon JULIE ANNE GENTER (Green—Rongotai): Madam Chair, I actually stood up just based on the conversation that the Minister of Transport was having right now. So am I able to continue questioning—

CHAIRPERSON (Barbara Kuriger): Given that we’ve started the conversation, I’ll let you have a question on that, but I’ll make it the last one, given you’re already on your feet—the last one for now until we get down into that part of the bill.

Hon JULIE ANNE GENTER: Thank you, Madam Chair. I wanted to ask the Minister: with the changes, which are brought in under this legislation, to the ability to change the standards for 2025, 2026, 2027, is it then possible for the Government and for the Minister to put in, through regulation, standards that are more ambitious than what was set out in the legislation?

Hon SIMEON BROWN (Minister of Transport): The legislation allows the Minister to make and set those standards and those standards could be above or below. But, ultimately, under the legislation that’s being proposed, just as it is, after 2027, up to the Minister by Order in Council to set it then, it is the same under this particular piece of legislation for those years preceding that.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. One of the things that I’m still waiting for an answer from the Minister of Transport, that he hasn’t addressed in relation to us, as a House, is understanding whether this bill does what the title purports that it does, in terms of the Land Transport (Clean Vehicle Standard) Amendment Bill. I am still waiting to hear the Minister give some kind of meaningful reply to the suggestions that the Parliamentary Commissioner for the Environment has made, who is an Officer of Parliament and I think deserves the respect of this House.

In particular, the piece that I’m interested in—now, the Minister tells us this is a very simple piece of legislation. What I’m seeing is a Minister struggling to understand this very simple piece of legislation. What I’m wanting to know is exactly what the Parliamentary Commissioner has set out, that “Parliament clearly intended that any regulations, that are made to set targets, would be subject to review. To ensure this is carried through in your amendment bill, I suggest you make [these] minor amendment[s]” to the very clause that the Minister is saying is the way that he can ensure that the Clean Car Standard is going to be maintained and therefore fulfils what is on the name at the front of this bill—the Minister needs to address this. He cannot just dismiss, in a committee of the whole House, in a bill going through urgency, some very real and meaningful questions from an Officer of Parliament.

Hon SIMEON BROWN (Minister of Transport): As I have said before, this bill amends the legislation which legislates the clean vehicle standard. It is not removing the clean vehicle standard and so therefore it is the Land Transport (Clean Vehicle Standard) Amendment Bill.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. I’m still waiting to hear a response from the Minister of Transport in relation to my suggested amendments to clause 1—

Hon Member: No.

TANGI UTIKERE: Well, the members opposite might say “No.”, but in fairness, these are clauses that have actually been put on an Amendment Paper. They have been made available earlier in the week, so this has not just been tabled late; they were tabled, basically, three weeks ago when the House was sitting. So I wonder then, given the Minister hasn’t given a response around those, if perhaps I do need to go in some detail as to what each of them actually identifies.

I did note that they were on Amendment Papers 42, 43, 44, 45, 46, and 47, and I was prepared to give—

Hon Dr Megan Woods: So sequential!

TANGI UTIKERE: They are. I was prepared to give the Minister an opportunity to just come back and say “Actually, no, I don’t agree with them” or not, but he hasn’t done that. So I will, I think, have to go through each of them.

Let’s turn our minds to Amendment Paper 42, clause 1. Now, I actually think this is very similar to what my colleague Arena Williams had said, and, actually, I would be very comfortable if the Minister preferred Ms Williams’ amendment over mine—I’m OK with that. But we do need to hear from him around that. He should tell us; he should be very clear around it. It seeks to insert, after “(Clean Vehicle Standard”, “and Budget Measures”. Ms Williams has articulated the very view that often when it comes to bills that are introduced to the House in urgency as part of the Budget urgency motion, this is a common approach, and so I’d be interested to hear from the Minister on that.

Moving now to Amendment Paper 43, this seeks to “In clause 1, after ‘(Clean Vehicle Standard’ … insert ‘and Targets for Reducing Carbon Dioxide Emissions’.” So we hear a lot around the label being what is on the tin. I’d be interested whether the Minister thinks that that would be an appropriate description for that, given that he hasn’t had an opportunity to respond to that. The next one is on Amendment Paper 44.

Hon Members: No.

TANGI UTIKERE: This is after—well, again, the members opposite might not like it, but maybe that’s the view, and they’re speaking for the Minister, but we have not heard from the Minister yet. This is “after ‘(Clean Vehicle Standard’ … insert ‘and Regulations Relating to Cost Recovery’.” Now, the Minister may actually be supportive of that and thinking about it, because he himself has said that it does relate to cost recovery and it was perhaps a suggestion from himself. So I’m happy, actually, if the Minister wanted to take that Amendment Paper as one of his own Amendment Papers—I’m very happy for that. We’re happy to do the work. He can have it. He can take it. He can have it in his name.

Moving on to Amendment Paper 45. It is in relation to replacing “(Clean Vehicle Standard)” with “(Transport Budget Measures)”, so this is no reference to “(Clean Vehicle Standard)”. And, actually, given that we haven’t had justification as to what that means or what it might look like, that might be an appropriate title for the Minister to consider. But yet he hasn’t replied to that, so we’ll wait and see whether that is in his purview or not. On to Amendment Paper 46—

Hon Member: Well, that’s good.

TANGI UTIKERE: Well, I think someone over there said that was good, so clearly they’ve read it. It’s “clause 1, replace ‘(Clean Vehicle Standard)’ … with ‘(Reducing Carbon Dioxide Emissions)’.” And so that might be something that the Minister might be interested in.

Then, finally, I think—and I do apologise to the committee, but I feel as though I’ve had to do that, given the Minister has not given a response—is Amendment Paper 47, and this is “In clause 1, replace ‘(Clean Vehicle Standard)’ … with ‘(Cost Recovery of Clean Vehicle Standard)’.” Actually, that’s probably more in line with the Minister’s thinking, so he may want to take that. I think we are still waiting to hear from the Minister about his views on those, and it might be that he agrees with some of them or none of them or all of them. That’s fine. But at the moment we have not heard from the Minister as to what his view is, so I do hope that he will take up the opportunity to do that, and I look forward to a response from him.

Hon SIMEON BROWN (Minister of Transport): I apologise to the member for not sharing my views more clearly and loudly, but I will do so: Amendment Paper 42, no; Amendment Paper 43, no; Amendment Paper 44, no; Amendment Paper 45, no; Amendment Paper 46, no; and Amendment Paper 47, no. The bill is very clear as to what the bill is, and it is the “Land Transport (Clean Vehicle Standard) Amendment Bill”.

CHAIRPERSON (Barbara Kuriger): Members, the time has come for me to leave the Chair. The committee of the whole House will resume at 9 a.m.

Debate interrupted.

Sitting suspended from 11.59 p.m. to 9 a.m. (Thursday)

TUESDAY, 25 JUNE 2024

(continued on Thursday, 27 June 2024)

Bills

Land Transport (Clean Vehicle Standard) Amendment Bill

In Committee

Debate resumed.

Clause 1 Title (continued)

CHAIRPERSON (Barbara Kuriger): Good morning, members. The committee last night, when we left the Chamber, was discussing the Land Transport (Clean Vehicle Standard) Amendment Bill, and the debate was on clause 1, which is “Title”. We traversed a reasonable level of discussion around title, and we also got some clarification from the Minister of Transport about some of the Amendment Papers, that he said he would not be changing the title.

Now, I know that Speaker’s ruling 127/1 is relatively broad ranging; however, I think we’ve been broad ranging around the title. So if anyone wants to take a call on title, I’m going to be very strict on title, and then I’ll be listening very carefully to make sure it relates and then we can traverse the other parts.

TANGI UTIKERE (Labour—Palmerston North): Kia orana, good morning, Madam Chair. It’s great to see you in the Chair given you were there at midnight, when we left off.

Look, I firstly want to thank the Minister for his response at the late hour last night—going through each of those suggestions—

Hon Simeon Brown: Very happy to.

TANGI UTIKERE: Very happy to do that—it’s unfortunate he didn’t do it earlier, because then I wouldn’t have had to go through that list but appreciate that got the answer in the end there. Still not quite clear—perhaps with the benefit of some sleep overnight, the Minister may have thought about that Parliamentary Commissioner for the Environment’s response, and we’ll work with that. But I’m satisfied with the responses around my Amendment Papers. This—

Arena Williams: No, no.

TANGI UTIKERE: Other members may not be, but I take the point around the broad nature but it being specific.

There is one point that I do want to raise because I think this is important. The information that has been made available, and had been tabled, that we’ve been able to access and have a look at—I draw the Minister’s attention to what is the regulatory impact analysis, and if we turn to page 6, there are two points that I want to tease out with the Minister, and I’m doing it at this early stage because it does set the tone for what might follow. One is in relation to the availability of appropriate information before the committee so that we are able to consider things appropriately. Now, when we’re looking at the table that’s referred to as “Table 2”, just above it, there is effectively what says “Error! Reference source not found”.

Hon Dr Megan Woods: I found that; I had that highlighted.

TANGI UTIKERE: Well, thank you, Dr Woods. I think it’s actually really important. This is a Budget-sensitive document, as is indicated. It has effectively referred to levels of information that relate to the average of 3,000 vehicles that are imported and the potential cost recovery that’s associated with that. Now we’ll come to that later in clause 5, I think it is. But this is a fundamental issue in terms of where this information comes from and the basis on which this document has been provided to the committee.

So my question to the Minister, and he may need to seek advice around this, is what specific reference is being able to be provided there? Because if there wasn’t anything, then OK, fine. But the fact is that there clearly is a reference that basically looks as though it’s just not there or it has been redacted, which would be very unusual—

Hon Dr Megan Woods: Or removed.

TANGI UTIKERE: Or—yes—or may actually exist somewhere else. So that’s the first one.

The second one is at the top of that page; it talks about the calculation rates. And this is important because my colleague Miss Williams and I both have Amendment Papers that relate to Budget measures. And so this talks about the calculation being in depth via consultation with the sector and with Waka Kotahi. So my two questions are: what is the reference, if he’s able to provide that? And the second one is still around the consultation, which we have yet to hear from the Minister around, so that the title of this bill is adequate based on the very limited consultation that he’s had.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Madam Chair. Just circling back to where we were last night, the Minister in his really fulsome and helpful answers to my colleague Tangi Utikere indicated his clear direction that this bill is a bill about the targets that relate to cost recovery within the system. So I want to speak to two of my amendments only, in clause 1, because he has given a really—

Hon Dr Megan Woods: Come back to the others later.

ARENA WILLIAMS: Well, the Hon Megan Woods is saying “I’ll come back to the others later.” But I hear your direction, Madam Chair; I’m not going to go through every amendment, but I just want to talk about two.

The first is on that cost recovery point. As I’ve heard various speeches around the Chamber, there is still confusion about whether this measure is a taxation measure: is it a behavioural change measure, or is it a cost recovery measure? We’ve heard from the Minister, though, in his answers to Tangi Utikere, that it is a cost recovery measure. In which case, Minister, I have an amendment for you that will help this committee to be clear on what is being done here by this bill. So my proposal is to delete the words “Clean Vehicle Standard” and replace them with “Regulations Relating to Cost Recovery of the Clean Vehicle Standard”. That will make this much clearer.

The second amendment that I’d like to hear from the Minister on whether he would support, from me—it is different to the one put forward by Tangi Utikere—is whether he will accept a deletion of the words “Clean Vehicle Standard” and replace them with “Targets for Reducing Carbon Dioxide Emissions”. This is a different point, Madam Chair. The reason why this would be different to what the Minister has said is he stood here and he said, in answer to a question from the Hon Megan Woods at about 11.45 last night, that there would still be a clean vehicle standard even if he were to change the standards in such a way in the schedules that they would be less onerous on the industry.

What we’re trying to gather here is: is the Minister committing to a clean vehicle standard which does further reduce the carbon dioxide? In which case, we would love that; we would be really keen on that. So we want the Minister to commit to that change by making a change to the name of the Act, which makes it really clear that he is intent on reaching New Zealand’s carbon goals on an international stage, that he will do his role as the Minister of Transport, and that he will commit to making sure that his portfolio, and the sectors that he is responsible for, is contributing its part to Simon Watts’ responsibility to deliver on New Zealand’s climate goals. So he should rename his Act “Targets for Reducing Carbon Dioxide Emissions”. I look forward to his answer on my two questions.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. I just noticed that the Minister might be taking a moment to consider the questions that have been asked about consultation, asked both by the Hon Julie Anne Genter last night and then was reminded again this morning by Tangi Utikere, and of course, the letter from the Parliamentary Commissioner for the Environment, asked by the Hon Dr Megan Woods last night. Still no answers to those questions.

Then just this last very good point made by my colleague Arena Williams about what the title means, as her first point. I agree with her second point about reducing emissions. Of course that would be a great thing to say, but there’s some irony to be speaking here about an Act that now enables the Minister to make regulations when, of course, we were here in December last year arguing about an Act that already enabled the Minister to change things—the Clean Car Discount that was—by regulations, but for some reason we needed to do that by primary legislation back in December. And here we are, when we do actually need to do something by primary legislation to enable changes to the making of secondary legislation. So I would be keen on the answer to Arena Williams’ amendment about removing “Clean Vehicle Standard” and saying “Changing Regulatory Powers”.

Also, I heard the Minister say in one of his first responses last night that what the bill is about is user-pays not Crown-subsidised—those were his words as I recorded them. So would the Minister also consider that as an amendment, so that it is “This Act is the Land Transport (Clean Vehicle Standards Enabling User-pays and Not Crown Subsidies) Amendment Bill.”?

Hon SIMEON BROWN (Minister of Transport): I thank the members for their questions. I think we’ve traversed many of these subjects already, including all of the tabled amendments that have been put on the Table. I made it very clear the Government’s view is that the title of this bill is the Land Transport (Clean Vehicle Standard) Amendment Bill, as it amends the legislation in regard to the clean vehicle standard.

CHAIRPERSON (Barbara Kuriger): The question is—

Tangi Utikere: Madam Chair. Madam Chair.

CHAIRPERSON (Barbara Kuriger): I’ve started voting—no, there were no calls, I’d started voting.

CHAIRPERSON (Barbara Kuriger): The question is that Tangi Utikere’s amendment to clause 1 set out on Amendment Paper 42 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 Tangi Utikere’s amendment to clause 1 set out on Amendment Paper 43 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

Tangi Utikere’s amendment to clause 1 set out on 44 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 Amendment Paper

CHAIRPERSON (Barbara Kuriger): The question is that Tangi Utikere’s amendment to clause 1 set out on Amendment Paper 45 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 Tangi Utikere’s amendment to clause 1 set out on Amendment Paper 46 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 Tangi Utikere’s amendment to clause 1 set out on Amendment Paper 47 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 1 to change the title to include “: Budget Measures” is out of order as being the same in substance as a previous amendment that has not been agreed, which was Amendment Paper 42.

Arena Williams’ tabled amendment to clause 1 to change the title to include “: Targets for Reducing Carbon Dioxide Emissions” is out of order as being the same in substance as a previous amendment that has not been agreed, Amendment Paper 43.

Arena Williams’ tabled amendment to clause 1 to change the title to include “: Regulations Relating to Cost Recovery” is out of order as being the same in substance as a previous amendment that has not been agreed, Amendment Paper 44.

Arena Williams’ tabled amendment to clause 1 to change the title to replace “Clean Vehicle Standard” with “Budget Measures” is out of order as being the same in substance as a previous amendment that has not been agreed, Amendment Paper 45.

Arena Williams’ tabled amendment to clause 1 to change the title to replace “Clean Vehicle Standard” with “Targets for Reducing Carbon Dioxide Emissions” is out of order as being the same in substance as a previous amendment that has not been agreed, Amendment Paper 46.

Arena Williams’ tabled amendment to clause 1 to change the title to replace “Clean Vehicle Standard” with “Regulations Relating to Cost Recovery” is out of order as being the same in substance as a previous amendment that has not been agreed, Amendment Paper 47.

The question is that Arena Williams’ tabled amendment to clause 1 to replace “Clean Vehicle Standard” with “167BB” be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 Arena Williams’ tabled amendment to clause 1 to replace “Clean Vehicle Standard” with “167BB and 167C” be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 Dr Lawrence Xu-Nan’s tabled amendment to clause 1 to replace “(Clean Vehicle Standard)” with “(Clean Vehicle Standard and Levy Charges)” be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 1 to replace “2024” with “2025” is out of order as not being in the proper form of legislation.

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 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Clause 1 agreed to.

Clause 2 Commencement

CHAIRPERSON (Barbara Kuriger): Members, we now come to the debate on clause 2. Clause 2 is related to the commencement.

CAMILLA BELICH (Junior Whip—Labour): Point of order. Thank you, Madam Chair. I just had a point of order relating to prior to the vote, and I’ve just waited until after the vote because, obviously, not wanting to interrupt the vote, and it’s the first available opportunity to raise this point of order. Madam Chair, when you decided to not take a final call from Tangi Utikere, you said that it was because the vote had begun. I’m not questioning your ability to decide when to take a vote—which I think is well understood to be at your absolute discretion—but my point of order is that if you refer to Speakers’ ruling 80/4, there is complete discretion that the Chairperson has in relation to being able to take a call—

CHAIRPERSON (Barbara Kuriger): Yeah, and I did use that discretion. There was no one on their feet when I started to take that vote, so—

CAMILLA BELICH: OK, thank you, Madam Chair; I just wanted to clarify for the committee that it was—because it appeared to us that you were saying that you were unable to take that call even though Mr Utikere was on his feet when you were taking that vote. So that’s my point of order, Madam Chair.

CHAIRPERSON (Barbara Kuriger): Thank you. I did use my discretion, and I was about three or four words into the vote when Mr Utikere stood to take a call. OK, clause 2.

Hon SIMEON BROWN (Minister of Transport): Thank you, Madam Chair. Clause 2 is the commencement: “(1) This Act comes into force on 1 July 2024. (2) However, section 5 comes into force on 1 July 2025.” Section 5 is the clauses in relation to cost recovery, and that allows for time for the cost recovery mechanism to be determined and for consultation with the sector in regard to how that cost recovery will be undertaken and for that to then be put in place from 1 July 2025.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. I’m happy to take a call on clause 2 of this bill, which is the commencement clause. Now, there are some pieces of legislation where the commencement clause is more material than others, and this is one of those pieces of legislation, because what this amendment in the Land Transport (Clean Vehicle Standard) Amendment Bill is doing is bringing forward the dates on which the Minister can make changes to the substance of the Act by regulation, rather than it being prescribed in the legislation. So, as the original legislation stands, those emission standards for 2025, 2026, and 2027 are prescribed in the Act, but the amendment we have and the commencement clause is pulling all of that forward so that the Minister can set those by regulation.

One of the things that I’m keen to understand from the Minister is in terms of how the phasing and the dates are going to work, because, of course, under the original Act, where we had it prescribed in the legislation, the ratcheting of the emissions targets was embedded within the principal legislation. Now that that is moving to having the Minister being able to change that by regulation, will he also be putting in that ratcheting of the emissions targets? I think that it is absolutely critical that we understand that in terms of the way in which the dates work.

The other question I have for the Minister is this. Of course, dates matter when it comes to this stuff because what we have is a series of pieces of legislation that are around reducing our emissions and how we reduce our emissions. These correspond to emissions budgets and emissions reduction plans (ERPs). Emissions reduction plan 1, I imagine, won’t be impacted at all by any changes here, but, certainly, there is the potential for emissions reduction plan 2 and emissions reduction plan 3 to be impacted by any changes; by regulation coming forward—as the commencement clause is allowing it to do—and having an impact on what the transport emissions targets look like within ERP 2 and ERP 3. I’d like to know from the Minister what, in terms of tonnes of carbon dioxide, the impact could possibly be, and what he will be doing to mitigate that in terms of making sure of the phasing in terms of the commencement of the legislation, and the timing of those emissions reduction plans and how they sit together.

The other thing that I think the committee would be keen to hear from the Minister on, in terms of the commencement date of this legislation, of course, is that we have had some suggestions for amendments from the parliamentary commissioner which actually are around changing dates. Obviously, everything in this bill is really around the amendments that will be made to section 175A of the principal legislation, but the Parliamentary Commissioner for the Environment, in his letter to the Minister that was sent this week—as there was no opportunity for there to be submissions at select committee, the parliamentary commissioner had set out for the Minister some suggestions, which we really have yet to hear the Minister respond to.

I reiterate that this is an Officer of Parliament who is offering advice to the Minister. I think it is disrespectful of this House for the Minister to not respond in a substantive way to substantive suggestions that have been made by an Officer of Parliament on a piece of legislation that is going through under urgency. So I think that it is simply untenable for the Minister to continue to not respond to these sensible suggestions. He doesn’t have to agree with them; obviously, that is his prerogative—he is the Minister. But what is untenable is that we have a Minister who is either unwilling or unable to respond to the complexity of the suggestions that have been made by the Parliamentary Commissioner for the Environment. There are many, but the one I’d draw the Minister’s attention to as we’re debating the commencement clause is the one around shifting the dates. He’s made that one in terms of what could be replaced under “not later than June 2025”.

There are three quite detailed and specific questions I’ve set out for the Minister in regard to commencement, and I look forward to hearing some substance from the Minister on that.

Hon SIMEON BROWN (Minister of Transport): I thank the member for the questions. This is in relation to the commencement of the legislation. The member is asking questions which are more in relation to the review. The Act requires a review to be taken, and that review is under way.

In relation to the Parliamentary Commissioner for the Environment’s letter: effectively, those questions also relate to the review and the certainty. This Government is committed to a clean-car standard, and that is a point we have made consistently. We are undertaking a review of it in line with what the legislation requires. The Act prescribes the matters that must be considered. But those are all questions for the review; they’re not questions which relate to the bill and the clause.

This clause is simply to do with the commencement of the bill, which will start on 1 July, and in relation to the cost recovery, from 1 July 2025. That is what this clause is about. Those questions are relating to wider policy considerations which are being dealt with through an appropriate process.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. Look, I acknowledge the Minister’s response there but, with respect, I think that he is incorrect in relation to his most recent contribution around what the Parliamentary Commissioner for the Environment is seeking.

Last night, it was known to the committee that this open letter had been sent to the Minister. I have to say that, just after midnight last night, I received an email that sought some confirmation as to where this letter was, and I was happy to pass that on. The letter itself actually does identify a number of points. We note that, as an Officer of Parliament—one of three—the Rt Hon Simon Upton has, I think the word I used was, bevvied him into this particular process, which it seems extraordinary that an Officer of Parliament would, effectively, send something to a Government Minister, without a request to do so. He has done so, one assumes, because there is no select committee process. The commissioner himself in his letter here—

James Meager: What date did he suggest to commence?

TANGI UTIKERE: —says that he understands that it would be—what was that?

James Meager: What date did he suggest to commence the bill?

TANGI UTIKERE: What date?

James Meager: For the commencement, what date?

TANGI UTIKERE: No, no. So in the letter, I don’t know if Mr Meager has read the letter or not, for the benefit of those—

James Meager: No, you didn’t email it to me, you’re rude.

TANGI UTIKERE: Oh, he emails you? He emailed it to you, did he?

James Meager: No, you didn’t email it to me. You’re very rude.

TANGI UTIKERE: Oh, I didn’t. Well, I’ll tell you what: you obviously haven’t read it. So I’m very happy to email it to Mr Meager. Perhaps a colleague could send that to Mr Meager.

Hon Members: Read it out.

TANGI UTIKERE: Well, actually, I think that’s probably appropriate. Mr Meager opposite has asked questions, Madam Chair. I’m responding to the questions that he has asked. As a result, I feel as though I need to read the letter out. That is in direct response to requests that have been made by members opposite.

CHAIRPERSON (Barbara Kuriger): The member could also request that the document be tabled so that—but that is up to the member.

TANGI UTIKERE: Thank you very much. I understand that this is an open letter and it is publicly available. It’s to Simeon Brown, Minister of Transport, dated 24 June 2024:

“Dear Minister, I note that on 30 May, you introduced the Land Transport (Clean Vehicle Standard) Amendment Bill. I understand that this bill could be passed under urgency in the coming weeks, thereby precluding the opportunity for comment through the normal process of having bills scrutinised by a select committee. Given that possibility, I am taking the liberty of providing some feedback.

“The amendment bill changes the date specified in the regulation-making power under section 167C(1)(j)(iv) to bring forward by three years the ability of the Minister to prescribe the targets by way of regulations.

“It will also cancel the currently legislated ratchet of emission standards for 2025, 2026, and 2027, anticipating that these will be instead set by regulations. Emission standards will have an important impact in helping New Zealand meet its statutory emissions reduction targets. How much of a role they should have is a political choice. That is not a debate I wish to enter.

“However, policy certainly is crucial in ensuring an orderly transition for our economy. Given this, I would urge you to reflect on”—in italics—“how any changes to emissions standards are made and what precedent the process for making them may hold for the future.

“Once these amendments come into force, it is important that any changes to the targets made by regulation are prescribed on the basis of a robust, evidence-based, and transparent process. Section 175A of the Land Transport Act already acknowledges this in the requirement for targets set in both the Act and regulations to be provided. Section 175A also sets out the matters that the review must take into account. Parliament clearly intended that any regulations that are made to set targets would be subject to review.

“To ensure this is carried through in your amendment bill, I suggest you make a minor amendment to the drafting of Section 175(a) so that the text that follows—carbon dioxide emissions set out in section 175—is replaced with ‘and not later than 30 June 2025 for targets prescribed in any regulations section 167C(1)(j)(iv).’

“Alternatively, you could spell out in the legislation the criteria and methodology that will inform the Minister’s decisions around setting vehicle emission standards whenever they exercise the regulation-making power. An amendment of this nature could leverage the drafting of section 175A as the criteria to be applied to those directions. I appreciate that this drafting approach would be more complex than simply requiring a review.

“Such a change would help ensure the public can have confidence in the standard set, regardless of what the”—Madam Chair?

Hon Simeon Brown: Oh, Madam Chair.

CHAIRPERSON (Barbara Kuriger): There was interruption, I’m going to let the member.

TANGI UTIKERE: Thank you, Madam Chair. I’ll start that paragraph—it’s the final one—

Hon Member: Start it again!

TANGI UTIKERE: No, I won’t start the whole letter again. It’s the final paragraph.

CHAIRPERSON (Barbara Kuriger): No, don’t start the whole letter again.

TANGI UTIKERE: “Such a change would help ensure the public can have confidence in the standard set, regardless of what the political mix of the Government is that sets them. I would be happy to discuss the issue with you at greater length. Yours sincerely, the Parliamentary Commissioner.”

So, for the benefit largely of Mr Meager, on the record now is the Parliamentary Commissioner for the Environment, an Officer of Parliament’s letter. So I now invite the Minister, perhaps in a fulsome response, to reflect on the letter and provide an opportunity to address the Hon Dr Megan Woods’ question around this, particularly around how the changes might be made and how that relates to the commencement date.

I have a number of Amendment Papers in relation to clause 2. They are numbers 42, 43, 44, 45, and 46. I invite the Minister to respond to those—I mean, hopefully, he will respond to those. I think the commencement is obviously pretty important, but the question that I also have for the Minister is: is he satisfied that the date that is currently in the legislation is a date that will allow a smooth transition in terms of the process, and, if not, which of the alternative dates that have been identified in those Amendment Papers that are in my name—and I know that there are members who have other Amendment Papers who may wish to speak to theirs—might be an alternative?

Hon SIMEON BROWN (Minister of Transport): Well, I thank the member for his reading comprehension skills. What I would say is that the issues raised in the letter by the Parliamentary Commissioner for the Environment would be best discussed in clause 7 because they relate to section 175 of the Act, which is being amended by clause 7. This clause, clause 2, simply amends the commencement of this bill, which is proposed to be 1 July 2024 and, except for clause 5, which will come into effect from 1 July. So whilst that’s very interesting what the member is raising in relation to that letter—and we can debate that in clause 7—the issue here is around the commencement of the bill.

I just note and I’ll take the liberty of discussing the amendments that the member has put forward. He suggested changing the date to 31 July 2024. We don’t agree with that. The advice is that if the bill passes this week, there’s no need to change the 1 July 2024 date. “In clause 2(1), replace ‘1 July 2024’ … with ‘2 October 2024’.”, we don’t agree with that. It’s inconsistent with Government policy. “In clause 2(1), replace ‘1 July 2024’ … with ‘2 October 2025’.” is also inconsistent with Government policy. Amendment Paper 45 is also inconsistent with Government policy, which is for the intended cost recovery to come in earlier. And Amendment Paper 45, “replace ‘1 July 2025 … with ‘1 July 2026’.” is also inconsistent with Government policy. So we will not be supporting any of those amendments.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you, Madam Chair. My question about clause 2 is about the fact that clause 5 of the bill doesn’t come into force until 1 July 2025. I wondered why the Minister didn’t consider having at least a short select committee period to consider the provisions around setting up the cost recovery scheme.

I note that in this bill—obviously, with urgency he’s trying to change the ability for Government to change the standards for 2025, 2026, 2027; you know, next week. That will come into force so that the Government will be able to just completely change the standards that have been set out for several years and introduce a lot of uncertainty, because they could be higher or lower, as the Minister said last night. But given that the cost recovery scheme hasn’t yet been designed, that it’s not clear what the preferred option is for the design of that and how it will be done, why didn’t the Minister consider having at least a short select committee period so that the public and people affected could have a proper parliamentary oversight of that provision, given that it’s not going to come into force for a year anyway. We could have taken that part to select committee with a specific provision for the design of the scheme and could have had fulsome submissions.

It’s unclear to me why any of this is being done, because it’s actually just introducing a lot of uncertainty rather than the certainty that the Government claims it’s about. But given that the cost recovery scheme isn’t going to come into force for at least a year, why aren’t we seeing specific proposals and having that referred to us, at least a shortened select committee, if not a full select committee process?

Hon SIMEON BROWN (Minister of Transport): This is an enabling clause. In terms of clause 5, in terms of when it comes into the force, it enables and there’s time between now and when it comes into force for that scheme, in terms of cost recovery, to be considered, developed, and appropriate consultation with the impacted parties to take place during that time period. So we have no intention to change the time periods in this particular clause, clause 2.

CHAIRPERSON (Barbara Kuriger): I’m going to call Arena Williams. Given that the Minister has just offered to have further debate on questions in further clauses down the line, we will keep this very strictly to “Commencement”, from here on in.

ARENA WILLIAMS (Labour—Manurewa): Madam Chair, I’m seeking to ask the Minister a series of questions in the way provided for in Speakers’ ruling 79/4, which offers and back a forth if they are brief. My first question to the Minister is: is the cost recovery system that will be enabled by this bill ready to go now? If the system is not ready to go now, when will it be ready to go? I ask that question because it’s relevant to the date when it will commence.

Hon SIMEON BROWN (Minister of Transport): Madam Chair, as I said in the previous answer, this is an enabling provision, and so that is why those issues can be debated in clause 5, but this simply is about the commencement of it. Clause 5 deals with the provision around those enabling provisions, and I suggest that’s the best place to ask those questions.

CHAIRPERSON (Barbara Kuriger): I call Arena Williams—if it’s not about clause 5.

ARENA WILLIAMS (Labour—Manurewa): I understand the Minister has answered that it is an enabling provision. It’s relevant to the date it comes into force, though, because if that cost recovery system is ready to go now, then we could move that date forward, and surely that would be something that the Minister would be interested in. That’s why I’m asking. Further to that question but a different system, is the system that the Ministry of Transport has built to enforce the clean vehicle standard ready to go?

GRANT McCALLUM (National—Northland): 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 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Tangi Utikere’s amendment to clause 2(1) set out in Amendment Paper 42 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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

CHAIRPERSON (Barbara Kuriger): The question is that Tangi Utikere’s amendment to clause 2(1) set out in Amendment Paper 43 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

Tangi Utikere’s amendment to clause 2(1) set out on Amendment Paper 44 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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

CHAIRPERSON (Barbara Kuriger): Arena Williams’ tabled amendments to clause 2 to replace “1 July 2024” with “31 July 2024”, “1 October 2024”, or “1 October 2025” are out of order as being the same in substance as a previous amendment that has not been agreed—Amendment Papers 42, 43, and 44.

The question is that Tangi Utikere’s amendment to clause 2(2) set out on Amendment Paper 45 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 Tangi Utikere’s amendment to clause 2(2) set out on Amendment Paper 46 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): Arena Williams’ tabled amendments to clause 2 to replace “1 July 2025” with either “1 July 2026” or “1 July 2027” are out of order as being the same in substance as a previous amendment that has not been agreed—Amendment Papers 45 and 46. The question is that clause 2 stand part.

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 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Clause 2 agreed to.

Clause 3 Principal Act

CHAIRPERSON (Barbara Kuriger): Members, we now come to the debate on clause 3, “Principal Act”.

Hon SIMEON BROWN (Minister of Transport): Thank you, Madam Chair. This clause is a very simple clause. It states that this Act amends the Land Transport Act 1998. That is exactly what this bill does—it amends the Land Transport Act 1998. Now, I note there are a couple of tabled amendments which seek to add any Orders in Council made by the Governor-General, which make regulations under the Land Transport Act. Effectively, if this Act does make any other changes, those flow through anyway, so there’s no need to actually have that stated within it. There’s also an amendment to add and regulatory mechanisms secondary legislation made under the Land Transport Act 1998. It seems like a very long principal Act. It’s called “principal Act”, so, by adding other things, it is unnecessary and is not how lawmaking is made, and, so, that is actually complicit within the Land Transport Act, in terms of what that does. So there’s no need for any of those amendments to be approved, and we won’t be supporting them.

Hon DAVID PARKER (Labour): Thank you, Madam Chair. The purpose of this part of the Land Transport Act is expressed in section 170 of the Land Transport Act and it says, “The purpose … is to achieve a rapid reduction in carbon dioxide emissions from light vehicles imported into New Zealand”. It’s, effectively, trying to improve the efficiency of the vehicle fleet. The main agency that has been responsible for improving efficiency in things that are energy inefficient for a long, long time in New Zealand has been the Energy Efficiency and Conservation Authority. So my question to the Minister is, and I want to explain why this is relevant, whether he gave any consideration to actually—rather than doing this as an amendment to the Land Transport Act—putting this within the purview of the Energy Efficiency and Conservation Authority under their legislation.

Now, the reasons for that, which I would be interested to hear whether the Minister considered, include the fact that that authority has been very, very effective at improving the efficiency of appliances that we buy every day. And we’re not aware of the background rules that drive the improved efficiency of those categories of energy-using devices because it happens behind the scenes, and they do an extremely good job of balancing this interest between the drive for efficiency and cost. One of the issues that I know the Government will be concerned about—as was the prior Government—is the trade-off between efficiency and cost.

The Energy Efficiency and Conservation Authority have managed to carry the improved efficiency of, you know, ranges, dishwashers, air conditioning devices, heat pumps, dryers, fridges—most of the things that are used by people in their normal lives that use energy now have efficiency standards that are regularly updated. We do a lot of it with Australia, and it’s done through the Energy Efficiency and Conservation Authority, and they have great systems and those systems have got public confidence. They, behind the scenes, will be identifying what technological choices are out there from the providers of these appliances, which are not generally made in New Zealand; they’re made overseas, which is also the case for motor vehicles. Behind the scenes, they are ensuring that they’re not driving the price of these appliances too high, whilst they’re also maximising, within reason, the energy efficiency that can be obtained by driving those standards higher.

In those appliances as well, as there are in cars, there are more efficient options and there are less efficient options. And it’s in New Zealand’s interests that we get the more efficient ones into our country so that we use less electricity, less energy, and have less environmental effect from energy production, because, as we know, any form of energy production has some form of environmental effect. So I would encourage the Minister to give consideration to whether this—which really is the expertise that sits in the Energy Efficiency and Conservation Authority—is the same skillset that is needed to set these standards properly. I suspect if we did it, there would be less public controversy around the standards that he’s going to have to set under this, because the public have confidence in the Energy Efficiency and Conservation Authority. So my question is: has he given any consideration to the Energy Efficiency and Conservation Authority?

My second reason for doing that, and he could address this, is, presumably, given that the regulatory impact statement tabled with this bill shows that there was not much consideration of what the effect of this was on costs. The Hon Dr Megan Woods highlighted that in a second reading speech yesterday. Presumably, he has some idea as to how this trade-off between cost and efficiency is going to be made.

Hon SIMEON BROWN (Minister of Transport): Madam Chair, I appreciate the member’s question, but this clause is very clearly around amending the legislation which the standard already exists within. Those decisions were made by the previous Government when the Act was first passed. We are making two targeted amendments to that legislation, and so the bill therefore has to amend the legislation to enable those changes. That Act is the Land Transport Act 1998 which is being amended, and that’s why this bill mentions that Act in this clause.

ARENA WILLIAMS (Labour—Manurewa): The expert in legislative design is here—he’s here! And you can see where I’m taking my lessons from, because my contribution to this debate is similar to the Hon David Parker’s, which pointed out that not only are the amendments that the Minister is proposing inconsistent with the purpose of the Land Transport Act and that it would better sit in the Energy Efficiency and Conservation Act; I would also point to the role of the Commerce Act here being a better place for these amendments to sit. Because the Minister is trying to do something different to what the previous Government was trying to do with the Clean Car Standard, and therefore it would better sit in legislation which actually gives effect to that purpose.

The members opposite are interested in this provision, so I will quote from the Standing Orders here—it’s 310, at page 89, at subsection (1) of that part—where the “committee of the whole House considers a bill to determine whether the bill properly incorporates the principles or objects of the [principal Act]”. That is the debate we’re having in this part. This is the only part in which we can do that. So we’ve heard from David Parker that the section that’s relevant for the purpose considerations is 170 of the Land Transport Act. That is really clear that the purpose of that Act is to reduce the amount of carbon dioxide emitted by the vehicle fleet. This amendment that the Minister has proposed today is not consistent with that part. So it should not be a part of the Land Transport Act. It should be a part of another Act. So whether it’s the energy Act is one consideration that this House should make, and I hope the Minister will give us a more fulsome answer on the role of the Energy Efficiency and Conservation Act in providing us with guidance about the standards for energy efficiency.

But as Labour’s commerce and consumer affairs spokesperson, my interest here is in the kind of legislative framework that we are creating for consumers of clean vehicles. And I would suggest that the Minister is actually regulating a market here in exactly the way that the Commerce Act does. He’s providing consumers with a user-pays model that incentivises industry behaviour in another way. In other words, he is creating a framework that regulates an industry that would not act in this way, but he’s giving them a really clear market signal—and a market mechanism, at that—to deal with consumers in a different way and to provide them with different choices. His own regulatory impact statement points to the fact that consumers are the main beneficiary of the clean vehicle standard. That’s not something I agree with, because I would say that New Zealanders as a whole benefit from the reduction of emissions over time.

But it’s clear that if he doesn’t intend to reduce emissions at the same rate that the previous Government would, then the main benefit is to consumer choice, and is to the kind of vehicles that are being offered to consumers in a larger array of vehicles. That is something which is clearly the domain of the Commerce Commission, and the Commerce Commission should be empowered to also make sure that that regulatory mechanism is working in favour of consumers and is helping them to engage with the industry to have a wider range of choice. The Commerce Commission should also be able to consider whether those industry players, and especially the larger sector players who have a bigger share of the market who will be most impacted by this amendment that the Minister is putting forward, like Toyota, are being regulated in the appropriate way. That is why clause 3 of this amendment bill should actually read—sorry, I’ll just find it—“This Act amends the Commerce Act 1986.” Thank you, Mr Chair.

Hon SIMEON BROWN (Minister of Transport): As I’ve already stated to the committee, this bill is making, effectively, two changes to the clean vehicle standard, and those are in relation to what we’ve already debated in relation to the enablement of regulations rather than prescription of legislation and cost recovery. Those choices in terms of where this policy should sit were made by the previous Government, and they decided to put it within the Land Transport Act. We are now making two targeted amendments, and so therefore the appropriate Act to amend is the Act in which the clean vehicle standard sits. So that is what this bill is doing. It’s a very clear clause, and that is stated in clause 3, and we’re not proposing any changes.

TANGI UTIKERE (Labour—Palmerston North): Kia orana, good morning; thank you, Mr Chair. I thank the Minister for eagerly addressing the two amendments that are in my name on Amendment Papers 42 and 43. I thought they were all right amendments actually, but he has said that he’s not intending to support those. I understand that’s his position.

I did have a question, actually that I was thinking through, around the interface that some components of this might have with the Land Transport Management Act of 2003. But actually I do want to just thank the former Attorney-General, the Hon David Parker, because Mr Parker has actually, I think, identified—and it’s not something that I immediately turned my mind to—something that I think actually is entirely appropriate when we’re considering clause 3. I did hear my colleague Miss Williams sort of reference that the Minister’s approach in this is a change from what is the current situation in law, and the policy goal or outcome or objective, therefore, potentially, is different. And so when we’re looking at what the appropriate principal Act is for it to be amended, that naturally needs to come into play.

What Mr Parker has identified is if we consider what some of the potential change might be with many of these aspects, is it actually appropriate that the Land Transport Act is the appropriate principal piece of legislation, or is it something more in the energy realm? And Mr Parker, actually—thank you for drawing a distinction there, because the other examples that have been cited around household items are very similar. You know, we’ve already in this debate, as this bill has progressed, talked about the various nature of cars and household use and all those sorts of things. So my question to the Minister is whether or not the nature of the item—in this case, a vehicle—is to be considered as part of that wider suite, and therefore it is purely more of an energy efficiency consideration, and therefore energy. Whether it’s a consumer-related Act or whether it’s an energy efficiency Act, that is important. The reduction of carbon dioxide levels, which the Minister has cited and Mr Parker has cited as well, we will get to that; that’s more specifically related to clauses 5 and 7, around those measures. But my question to the Minister is: does he not consider that the efficiency aspects—that these regulations, if they do come into force in terms of the timeliness of them, are better placed in the efficiency or consumer space?

Hon SIMEON BROWN (Minister of Transport): That question has already been asked by a prior member and I’ve already answered it. Our bill means the Act that the last Government put in place, which determined that the clean vehicle standard should fit within the Land Transport Act. We are amending that Act.

Hon DAVID PARKER (Labour): Thank you, Madam Chair. The Minister still hasn’t addressed the fundamental question, though. The effect of the Government’s policy has been to do away with the Clean Car Discount—the rebate system that was being run—and rely now on an efficiency standard. The expertise in respect of efficiency standards should not be re-created in a different department like the Ministry of Transport when we already have it in the Energy Efficiency and Conservation Authority.

I’ve already read out what was the relevant purpose clause in the energy conservation authority Act, and we should remember, of course, that this was originally designed by the late Hon Jeanette Fitzsimons, a former member of the Greens, who brought to this House the idea that we needed to focus on efficiency. She promoted the idea that we do this in a way that is cost-effective. She knew that when you drilled into these issues and ran a proper cost-benefit analysis, you can actually drive efficiencies that reduce people’s cost of living, reduce the cost to the country, and reduce environmental adverse effects, and it really is a win in every way in which you look at it. We’ve got deep expertise in respect of those issues in the Energy Efficiency and Conservation Authority.

Tom Rutherford: Come back to the clause.

Hon DAVID PARKER: I want to point out why the—

Tom Rutherford: Clause 3.

Hon DAVID PARKER: The Minister just gets up and he says, “Well, it says this because it is amending the Land Transport Act.” The point that we’re making is that it shouldn’t be. It should be amending the Energy Efficiency and Conservation Act to make that the principal Act that these sections sit within. In support of that argument, I asked the Minister whether he’s considered section 21 of the Energy Efficiency and Conservation Act, which shows what the functions of the Energy Efficiency and Conservation Authority are, and they include duties to assist the Minister to prepare and administer a strategy, such as this—

Tom Rutherford: Clause 3.

Hon DAVID PARKER: Well, this is actually about clause 3.

Tom Rutherford: No it’s not.

Hon DAVID PARKER: It’s a bit sad that the members—

James Meager: Cheer up.

Hon DAVID PARKER: Fair enough. I am a happy fellow. I’ll cheer up. Matariki tomorrow—good time to be celebrating things.

Section 21(1)(d) of the Act says that the functions of the authority include promoting practices and technologies to further energy efficiency, energy conservation, and the use of renewable energy. That’s exactly what we’re trying to do with the vehicle fleet, and I’m a bit surprised that having dumped the Clean Car Discount—which wouldn’t have been something that the Energy Efficiency and Conservation Authority had within their existing ambit—why you can’t just flick this across to the Energy Efficiency and Conservation Authority and get them to do this work, relying on their deep expertise and experience that they’ve shown over the years. Other functions listed in the Act include arranging for the conduct of research, assessments, demonstrations, reviewing the state of efficiency, publishing relevant information, promoting practices and technologies to further energy efficiency. This is exactly what we want to do.

Now, there’s a bit of a culture war going on in New Zealand at the moment in respect of utes in the farming sector. It’s an issue we do actually need to overcome. I trust the energy efficiency authority—I think most people in New Zealand do—and it would be good if we could come together on these issues rather than find these issues divisive within society, because it doesn’t need to be divisive. So, again, I would ask the Minister to stand and justify why this shouldn’t sit within the Energy Efficiency and Conservation Authority rather than sit as a very similar service delivery employing more people.

I’m also interested as to whether any cost analysis was done as to whether that would save money. I suspect that would save money, so if the Minister could rise to his feet and tell us how much money is being spent on these initiatives within the transport department—because that’s relevant I would have thought as to whether you could see whether that was likely to be more cost-effectively done within the Energy Efficiency and Conservation Authority. Because I would hope that the Minister, as he tries to minimise the cost of—I know that these costs now, if they’re pushed up, the Minister’s got the ability to cost-recover them under this legislation, but I would have hoped that he wants to minimise those costs that are recovered even if he believes in their recovery. So I’d be interested as to what the costs are within that ministry and whether any comparison was made as to how that could be more cost-effectively done by adding this function to the very similar functions that the Energy Efficiency and Conservation Authority already has.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. To put the counterfactual to the Hon David Parker’s arguments, and this could have been teased out at a select committee process—we could have heard from the Energy Efficiency and Conservation Authority (EECA) about how they play their role within industries; who they take a regulatory role with. If it’s not the role of EECA to consider the role of industry players in the car sector in the way that they self-regulate currently their standards for cars that they bring in, then isn’t it not useful to have protections for consumers of those cars? So if the Minister is trying to change the way that the clean vehicle standards works, not for a policy goal of reducing emissions and of improving energy efficiency across New Zealand’s various sectors, but if he does have a different policy goal and that is to empower consumers to have more choice in the vehicle market, then isn’t that the role of the Commerce Commission?

Neither of those policy goals, which the Minister may have here—I think he’s being a bit clearer that he has the first one, which is about an energy efficiency clean vehicle standard. But neither of those policy goals are met by the purpose of section 170 of the Land Transport Act being amended with this clean vehicle standard that he is proposing. Because it’s relevant for us in committee stage, when we haven’t had a select committee to consider, particularly under Standing Order 310, which I alluded to earlier, the purpose of the principal Act. The principal Act doesn’t have a purpose of protecting consumers and it doesn’t have a purpose of setting an efficiency standard across all sectors. Its purpose is really clear; it’s to reduce carbon dioxide emissions across the vehicle fleet.

This amendment could do entirely the opposite of that. It’s possible that this amendment—and my colleague Camilla Belich has more to say about this. But it’s quite possible that the Minister’s amendment would introduce a dirty vehicle standard, because this House will have no oversight over that. It’s not being done in primary legislation; it’s being done via Orders in Council. So if it’s the policy position of the Minister to in fact create a dirty vehicle standard, then that would completely fly in the face of the purpose of the Land Transport Act, which he is seeking to amend.

That’s fine. That’s a choice that’s available to this Minister. It’s a choice that he will be answerable to voters for. We will not be able to scrutinise that on this side of the House. But it’s not fine to put that in an Act which has an explicit purpose of reducing the carbon dioxide emissions. That would fly in the face of our legislative design principles. It would fly in the face of proper lawmaking. It’s not OK for the Minister to just say that because there was a clean vehicle standard in the Land Transport Act before, he’s sort of powerless to change that. There was a clean vehicle standard which reduced carbon dioxide emissions—that’s the point. So I want the Minister to stand and tell us, well, should he be deleting the clean vehicle standard entirely and creating some kind of other energy measure or some kind of other consumer protection? Why are we in the Land Transport Act at all if his policy goal is not to reduce carbon dioxide emissions?

GRANT McCALLUM (National—Northland): I move, That debate on this question now close.

CAMILLA BELICH (Labour): Thank you, Mr Chair. I appreciate the opportunity to take a call on this, because I don’t believe we have heard answers from the Minister of Transport. The purpose of the committee stage is for us to be able to, as Opposition members, or members from around the House, actually get answers from the Minister, and this question has been put to him: how is the principle of the legislation—and you have to go to the Land Transport Act to find the principle—consistent with the bill that he has put in front of the House? One of the key purposes of a committee stage is to look at the bill in front of us—

James Meager: Clause.

CAMILLA BELICH: —and to see how well the particular—this is actually a really good point, thank you, Mr Meager. The point that Mr Meager was making is that we’re actually looking at clause 3, the “Principal Act”, and that clause 3 says that it amends the Land Transport Act. When we look to Standing Orders and we wonder, you know, what is the purpose of the committee stage, we look to the Standing Orders and we see Standing Order 310 and we see that, in 310(1), the purpose of the committee of the whole House stage is “to determine [if] the bill properly incorporates the principles or objects of the bill as read a second time by the House.” Now, the question before the committee is: does this bill properly incorporate the principles and objects of the Act? This is the only time we can talk about this, because this is where the principles of the Act are outlined.

Now, the Minister could have put a different purpose in this bill. He could’ve put a more substantive purpose in this amendment bill; that would be totally within his ambit. He’s chosen not to do that—he’s chosen not to do that—and the reason we know that is because it’s not in front of us. So the only thing we have to do is to go back to the original principal Act, which is the only time we can talk about this, in clause 3; look at the Land Transport Act; look at the relevant part—we know that we’re amending Part 13. When we look at Part 13, we see that the object is “to achieve a rapid reduction in carbon dioxide”—not just a reduction; a rapid reduction, and when we look at this piece of legislation, do we see a rapid reduction? No; we see possible increases in carbon emissions. That is inconsistent with the object of the principle of this Act. It is a question before the committee that the Minister has not answered. I saw him looking at his phone—I hope he was looking at this section. I hope he was researching how he can answer, as the Minister responsible for this bill, how there is consistency with the principle of the primary principal Act that we’re discussing in the amendment bill that he is putting through.

The response that we have heard to date is that the last Government amended the Land Transport Act 1998, so he too, while amending the Land Transport Act, has also chosen that particular piece of legislation. Now, that logic doesn’t follow. It doesn’t follow, because there is a duty under the Standing Orders to make sure that the amendments are consistent. The question put by members of the Opposition is: how is it consistent? We haven’t heard an answer to that yet. I know that there is a desire to have a back and forth and to have engagement, and I think it would actually be a disservice to this committee to take a closure motion and move on to another part where we cannot discuss the principal purposes of this Act without having a response from the Minister.

So I ask again, Minister: how is the bill that you have put in front of the House consistent with the aims and objectives as in the principal Act, the Land Transport Act 1998, as outlined in section 170 of the principal Act? How is that consistent? Please don’t say it’s because the last Government did it, because we already know that that logic doesn’t stack up.

Hon SIMEON BROWN (Minister of Transport): I have already answered the question in relation to the reason we’re amending the Land Transport Act 1998. It is because the last Government chose to put the clean vehicle standard into the Land Transport Act. This Government is committed to a clean vehicle standard. We’ve already debated that as part of clause 1, which had a wider debate on the bill. This particular clause is incredibly narrow and this simply enables the amendment to this Act.

Hon DAVID PARKER (Labour): Thank you, Mr Chair, and thank the Minister of Transport for that answer but he still hasn’t addressed this fundamental issue that I had asked, which is whether consideration was given to whether this could be done more cost effectively through the Energy Efficiency and Conservation Authority (EECA) and whether—given that the Ministry of Transport now has no Clean Car Discount to administer, the ministry’s just left with the efficiency standard—that could be more cost effectively done through EECA.

Now, I’ve heard the Minister in the chair say on a number of occasions that there are two purposes of this amendment Act, one is to impose a cost recovery mechanism and the other is unrelated to this point. But in respect of the cost recovery issue, if those costs are now to be recovered, surely, and there is no—

James Meager: Clause 5!

Hon DAVID PARKER: No. Well, the operative clause as to where that cost recovery comes in is there, but the question as to whether that is best done through the Land Transport Act or putting these functions across to the Energy Efficiency and Conservation Authority actually rises in this clause 3. We know from the cost recovery impact statement that this issue is not addressed here. So I’m interested to know whether any consideration was given by the Minister or his ministry, and indeed whether he had any advice from the Ministry of Transport, as to whether this could be cost effectively done through EECA.

I’ve gone through previously why that so logically sits within their purview, and I just need an answer from the Minister as to whether he did receive any advice on this point from the ministry, because if he didn’t, I think he needs to admit that to the committee. He can admit that to the committee and then I can’t rattle on about this any longer because the Minister will then have addressed the question. But the Minister at the moment has not informed the committee as to whether any consideration has been given as to whether this could be done more cost effectively through EECA, given they are the agency charged with energy efficiency more broadly across the economy.

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

CHAIRPERSON (Greg O’Connor): We have now covered quite a bit of material. I’ll take a call from Mr Utikere, but we’ll be looking for some pretty new material.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. Kia orana, good morning to you. Look, I am surprised on two fronts. One is that members opposite are seeking closure motions when many of these issues—well, there are at least two issues that have not been addressed or answered and I’ll touch on both of them. But the second is the Minister of Transport has said that this is a very narrow clause, and he is probably quite right around that, but even though it is narrow, there is still an expectation that Ministers in the chair will address the issues that have been raised.

My colleague Mr Parker has raised some around any advice that has been sought, the basis on which I think would actually be very important for the Minister to provide a response to the committee around that, because on this side we are still trying to understand why it is that it’s the Land Transport Act that is sought to be amended without any consideration for any of the other ones. Now, if we were in a process where we had a select committee process, we would have actually had an opportunity as a select committee to perhaps seek that advice ourselves directly from the Ministry of Transport, perhaps invite the Energy Efficiency and Conservation Authority to provide some response around that. What the Minister is saying is that we don’t have that opportunity and therefore the House is none the wiser. This is an opportunity for the Minister to say, “Well, no. Actually, there was no advice sought.”, or “I didn’t ask for any.”, or “It did come back and it was suggested that this was the appropriate measure or way to proceed.”

What the Minister is instead saying is, “Well, we’re going to amend the principal Act as the Land Transport Act because the former Government had it this way.” What is different with this is that the whole policy proposal and the potential objectives are very different from what the former Government had and what is currently in legislation. What I say to the Minister is: since when did former Governments seem to bind future or current Governments around actions that they could take? That’s something that he has not considered or addressed.

When we’re looking at what the purpose of this particular bill is, it is around—well, actually when we look at section 170 of the principal Act, as my colleague Miss Belich has said, it is around, effectively, the rapid reduction of emissions. Now, there is no certainty in this bill that there will actually be a rapid reduction of emissions, because the proposal is that this would be given over by way of regulation. So the Minister still has not provided to the committee a response, particularly around—not just the advice, whether it was received or not—whether or not there is actually any other avenue to address some of the other issues that have been concerned, and I invite the Minister to provide an answer around that.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. I really appreciate the opportunity to raise with the Minister, now, some new points around my amendments. He has told the committee that he is not willing to accept my amendments. These are amendments that, despite the heckling from the other side of the Chamber, we have not had an opportunity to consider in this part.

My amendments—the Minister has said they are not necessary, but I need some explanation about why that is, because I want to understand whether the impact of his decisions put forward in the proposed amendments from him would in fact change regulatory decisions or decisions made under secondary legislation empowered by the primary legislation that are already in place. I want to know the impact of his future decisions under the regulatory-making powers in his amendments on previous regulation, because what we’ve got here is potentially a situation where regulations which were made under a previous Government’s regulation-making powers, which were different in the primary Act, will now be amended by his regulatory-making powers, which he proposes to give himself in this primary Act.

So it’s a difficult situation. It’s not open to scrutiny in any other way, because that’s not something that the Regulations Review Committee would be able to consider, because that’s the interaction of two pieces of secondary legislation which were made under a different primary Act. I think that the amendments, here, that I have proposed limit the Government’s risk and limit the ability of people who are affected by those regulation-making powers to bring a challenge against the Minister. So I want to know whether the Minister has had advice on his risk, if he doesn’t give us somewhere—and I grant that perhaps clause 3 is not the place that he wants to do it, but that is where I would do it. So if he is not giving himself cover, if he is not giving himself in primary legislation the ability to reject claims made against him, because of this regulation-making power that will conflict with previous regulation-making power, then what is he relying on to give himself the assurance that he’s not opening up the Government to further risk?

Hon SIMEON BROWN (Minister of Transport): I believe I’ve addressed the questions which are in relation to the Act and where this is amending the Land Transport Act. There’s been a range of other questions. I think some of them are best placed for—like that last one—clause 7. But the answer to all of the questions is very clearly the Land Transport Act enables the Clean Vehicle Standard and its regulation-making powers. We are amending, through this bill, those Acts, and that is exactly what we are doing, and there’s no further comment to make on that.

JAMES MEAGER (National—Rangitata): I move, That debate on this question now close.

CHAIRPERSON (Greg O’Connor): Tangi Utikere’s amendments to clause 3 set out on Amendment Papers 42 and 43 are out of order as not being in the proper form of legislation.

Arena Williams’ tabled amendments to clause 3 are out of order as not being in the proper form of legislation.

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

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Clause 3 agreed to.

Clause 4 Act binds the Crown

CHAIRPERSON (Greg O’Connor): Members, we come now to the debate on clause 4. Clause 4 is “Act binds the Crown”. The question is that clause 4 stand part.

Hon SIMEON BROWN (Minister of Transport): Thank you, Mr Chair. This is, again, another very simple clause within the bill. The Act binds the Crown because this Act binds the Crown, and it’s a standard clause. I would note there’s an amendment proposed which inserts—and I quote—“including those Crown entities defined in section 7 of the Crown Entities Act 2004”. That is not necessary because Crown entities are an extension of the Crown; therefore, it is an unnecessary change.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. I think Mr Rutherford was so quick to his feet that he was obviously wanting to make a contribution—

James Meager: Yield!

TANGI UTIKERE: So—you’d like me to yield? I’m very happy to yield my time to the member for him to make a contribution.

Tom Rutherford: I move that debate on this question now close.

CHAIRPERSON (Greg O’Connor): No, now, that’s out of order. Now, I think the member has been here long enough to know that that is not—when the member yields, there is expectation that there’ll be some contribution to the debate. The member will stand, withdraw, and apologise.

Tom Rutherford: I withdraw and apologise.

TANGI UTIKERE: Thank you, Mr Chair. I will resume my time after yielding it to the member. You know, isn’t that fascinating? There was a real opportunity there to have a contribution from the Government. I don’t think we actually have had any opportunity—well, no, I’ll withdraw that; we have had plenty of opportunity for members opposite to make contributions on this. It’s very, very unfortunate that, you know, the invitation to yield my time, which I was happy to do—and Mr Rutherford decided to head down a different path, which is rather unfortunate. But it is becoming symptomatic of how this Government is treating the process of urgency, this process where we haven’t had an opportunity for members of the public to—

Joseph Mooney: Relevance.

TANGI UTIKERE: Relevance—well, the relevance is that this is a Government that wants to seek to use parliamentary procedure to shut down debate after having a single call. I think that is actually unprecedented. I don’t think I’ve ever experienced—certainly in my time here, albeit short—a Minister speak, take the very first call on a contribution in committee stage, and then the very first call that’s allocated is to myself; I barely got under way and then members opposite suggest that they’d like me to yield, and then the only thing that they want to say is they want to shut down the debate. I think that is absolutely outrageous.

CHAIRPERSON (Greg O’Connor): And the Chair has dealt with that, Mr Utikere.

TANGI UTIKERE: Yes, thank you—thank you, Mr Chair. Now, the amendment that I have—we’re turning now to clause 4, and I guess this is a clause that does bind the Crown. I infer from the Minister of Transport’s response to my suggested amendment that’s on Amendment Paper 43—seeks to amend clause 4—that he says that it’s not necessary because they are already part of the Crown. I think that is what he was referring to—getting a nod of the head there, so that’s what it is. So I wonder whether that is the case, because the Crown entities themselves are identified in the Crown Entities Act, and specifically as listed within section 7, and there is a bit of a list there that provides some riders that relate to the meanings of Crown entity and the categories that exist thereof.

So my question to the Minister is: has he reached that particular view as to whether they are Crown entities, whether they are autonomous Crown entities, whether they be independent Crown entities—and there is a distinction and difference between those—based on specific advice? If so, where did that advice come from—so that we can effectively understand the position that he’s in.

ARENA WILLIAMS (Labour—Manurewa): Thank you for the opportunity, Mr Chair. I wish to take a brief call on the point here about my amendments—there are three—that seek to clarify, particularly, the point about who the regulations that the Minister of Transport is proposing to give himself the power to make will apply to and how they will open up the Crown for further risk, because in my previous contribution, which wasn’t answered by the Minister, I proffered a question to him about how his regulation-making power under this new principle legislation would amend regulations that have been set out under a different piece of primary legislation, which would now be extinguished by his amendments. So there is an interaction there between industry participants who have, say, ordered cars in June last year that are due to be delivered in June this year, because it’s quite common for the industry to place orders in New Zealand a year out. And so how the regulation-making powers of the Minister that he is providing to give himself interact with the regulations as they existed at that time is absolutely of interest to this House. Given that it hasn’t been through a select committee process, we’re unable to determine the impact of the differences in the regulations on industry participants.

What I’m proposing there is a clarification about how this Act binds the Crown and who it binds, because for Crown entities, the transport legislation picture is complex. Often the Office of the Auditor-General, when they come in to explain it to select committee, laugh at my silly questions about it, but I have learnt that there are a number of Crown entities and other entities in that picture who will be subject to those regulation-making powers too, and they will be open to challenge by industry participants and consumers. And it’s actually not crystal clear in any Act whether that’s set out in section 7, as Tangi Utikere has provided for, or whether that’s in the Standing Orders of this Parliament and subsequent advice. It’s not clear which entities we are referring to when we say the Crown.

So it would be useful for some primary legislation to set out—when the Minister is using his regulatory powers in this Act to amend regulations that were made under an old Act, which is no longer in force—who is open to challenge, who is open to legal risk, what kind of legal risk was created for those entities, particularly about Crown entities? It’s the Second Amendment that I’ve put forward, and I’d like the Minister to address that.

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

ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. Given that the Minister of Transport hasn’t been able to answer my question about Crown entities, I want him to focus then on the role of the New Zealand Transport Agency—of Waka Kotahi—in this regulatory system. I want him to tell the committee how his regulation-making powers will be applied to those two entities. I also want him to consider how regulatory bodies like the Energy Efficiency and Conservation Authority (EECA) and like the Commerce Commission—which, as we’ve already discussed, have a role in enforcing these standards on behalf of the industry and on behalf of consumers—might have a role in this, and how his regulation-making powers might impact on the regulations that apply to them.

I would like the Minister to consider whether giving some fuller explanation in his proposed clause 4—which is short, but could be longer—would be helpful to those other regulation-oversight bodies in clarifying their role when it comes to his regulation-making powers, because what he’s proposing in his primary amendment is to give himself regulation-making powers under the Land Transport Act which could impact on a number of different regulation-making bodies. He says, “the Crown as a whole”, but does he intend to create regulations which create new requirements of EECA? Does he intend to create regulations that create new requirements for the Commerce Commission? He’s told us that his policy intent does touch on the ambit of both EECA and the Commerce Commission in terms of his role in impacting not only the market via a market mechanism for cars but for consumers in providing them with more choice. Those are the policy goals which his own regulatory impact statement articulates very clearly, and not the goal to reduce carbon dioxide in the vehicles fleet.

Those two policy goals are what he’s told us are his goals. His regulations are likely to create regulations which impact on those two regulation-making bodies, and I would like to know whether he would clarify who it binds and whether he intends to create new binding recommendations for those regulation-making bodies.

TOM RUTHERFORD (National—Bay of Plenty): I move, That debate on this question now close.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. We haven’t had a response from the Minister of Transport, so there really is no other option for members on this side of the Chamber except to continue to put the—

James Meager: Oh, not another letter!

TANGI UTIKERE: Well, here we go. I mean, members, they love to pose the questions and, really, it’s an opportunity to respond to them, but the reality is this: we have posed questions to the Minister; he has yet to take a call. What members are seeking on this side of the Chamber is for him to simply address the issues that have been raised. My colleague Miss Williams has touched on some of the specifics around Crown entities. I’ve referred to what is cited in section 7 of the Crown Entities Act. All that’s required is the Minister to simply get up and provide a response. It’s the information that we’re wanting over here.

I want to just double back to something that was raised earlier, and it is of relevance, Mr Chair, because it relates to the information that is currently before the committee in urgency to make decisions on whether we will support particular parts of this bill. I have yet to receive a response from the Minister in relation to the regulatory impact statement which has informed the decision-making capability, capacity, and ability of members of this House. It’s important because it relates to page 6. Again, we’re waiting for a response from the Minister around referencing within that document. For your benefit, Mr Chair, it’s page 6 and it says “Error! Reference source not found.”, and then it goes on to provide some information.

This is Budget-sensitive information that is available to members of the House. We do expect on this side of the Chamber that where there is information where it simply says there’s an error, it needs to be rectified. So we’ve asked the Minister what is the issue with that, what is the nature of that, and we’re yet to receive a response. So I think it would be helpful even if he takes a call and says “Look, we don’t know.”. Or maybe it’s a formatting error—I don’t know. But when it appears in a document that’s tabled, what’s really important is that we need to understand that—the way in which this Act would seek to bind the Crown—and I don’t think that there is any dispute around that. Where there is perhaps some unease and a little bit of a lack of information is to ensure that the other components, where decisions may be taken or made, that that still exists.

So, for example, if we get through this process and actually the Minister suddenly sees the light and thinks, “You know what? The policy objectives and outcomes of this particular piece of legislation are such that actually it shouldn’t be fully within the Land Transport Act; it might be somewhere else.”—if there is another entity that is formed at some point in the future that might be responsible for delivering on some of the policy outcomes and objectives of the Minister, I guess it could be argued that that could be amended at that point in time. But is the fact that this Act binds the Crown—does it fully cover the independent Crown entities, the autonomous nature of other Crown entities and others? Those are questions that have been put to the Minister and we are yet to receive a response.

The whole way that this works is that members should feel free to put questions to the Minister, and the Standing Orders were changed to allow the Minister to respond to those questions and to those issues. So if the Minister continues to sit there and not actually address the questions that have been asked, that is a very poor strategy, I would suggest, because it means that—and I’ve said this before—we’re none the wiser and we have to keep asking the question.

All the Minister needs to say is, “Well, actually, no. I’ve addressed that question because of XYZ.” or “I’m not sure of why there’s an error.” I mean, he is free at any time to take some advice around this. But the responsibility is on all members of this committee to be asking questions in this space and the prime responsibility—

Arena Williams: Yep, 85.

TANGI UTIKERE: What is the reference there, Miss Williams?

Arena Williams: Speaker’s ruling 80/5.

TANGI UTIKERE: Right. So that should help—is that we need to be engaging. But it’s also actually a sole responsibility of the Minister in the chair to assist the committee through this process and to address the questions that have been put. And until that happens with this specific clause, we’ll continue to seek calls until the Minister provides a response.

Hon SIMEON BROWN (Minister of Transport): Well, Mr Chair, I’ve been listening to the debate, and the answers to all of those questions are that this is a clause that is inserted into legislation everywhere. It is an Act which binds the Crown; the Crown includes Crown entities. This is the exact same clause which is in the primary legislation that’s been amended. And so whilst it’s a very curious debate that the Opposition members are seeking to engage in, the answer is incredibly clear. This is how parliamentary practice undertakes the amendment of legislation, by putting a simple clause in which says: “This Act binds the Crown.” That is exactly what it does.

Dr VANESSA WEENINK (National—Banks Peninsula): 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 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Tangi Utikere’s amendment to clause 4 set out on Amendment Paper 43 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): Arena Williams’ tabled amendment to clause 4 to include a reference authorising regulations to allow applications to be declined until specific fees or charges have been paid is out of order as not being in the proper form of legislation.

Arena Williams’ tabled amendment to clause 4 to include a reference to Crown entities is out of order as being the same in substance as a previous amendment that has not been agreed.

The question is that Arena Williams’ tabled amendment to clause 4 to include an explanation of the meaning of “the Crown” be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 4 be agreed to.

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Clause 4 agreed to.

CHAIRPERSON (Greg O’Connor): Members, Arena Williams’ tabled amendments to insert new clauses 5B, 5C, and 5D should properly be inserted before clause 5, so we will address them now.

Arena Williams’ tabled amendment to insert new clause 5B is out of order as being outside the scope of the bill.

Arena Williams’ tabled amendment to insert new clause 5C is out of order as being outside the scope of the bill.

Arena Williams’ tabled amendment to insert new clause 5D is out of order as being outside the scope of the bill.

Clause 5 New sections 167BA and 167BB inserted

CHAIRPERSON (Greg O’Connor): Members, we come now to clause 5, “New sections 167BA and 167BB inserted”. Members, please note Arena Williams’ tabled amendment to insert new clause 5H inserting new section 167BAB should properly be an amendment to clause 5, so it will be considered as part of this debate.

Hon SIMEON BROWN (Minister of Transport): Thank you, Mr Chair. This is new sections 167BA and 167BB, inserted by clause 5. This is, effectively, a clause which inserts the ability for regulations to be made “for the purpose of prescribing, or providing for the fixing of, fees and charges payable by a person”, effectively, to cover the cost incurred by the agency and exercising the functions or powers, performing duties, or providing services under Part 13 or regulations relating to Part 13.

So, effectively, what this is doing is it’s saying, well, the clean vehicle standard, which up until this point has been funded via general taxation—there has been appropriation of, I think, around $11.8 million to fund the operation of the clean vehicle standard. Instead of it being paid for via general taxation, it will be paid for via fees or charges, and those will be determined under these sections, and this provides the powers for these regulations to be able to be set.

Now, the reason for having a cost recovery model in place rather than the previous taxpayer-funded model is, effectively, for two reasons: firstly, we on this side of the House believe that, where possible, where particular parts of society or industries are being provided by the Crown, and there’s a benefit to that industry, they should be paying for that. Of course, the argument from the other side is, “Well, the benefit is wider, and, therefore, it should just be covered by everybody.” There’s an argument that can be had around that point, but we’ve decided as a Government that it is our intention that those who import motor vehicles should be paying for the clean vehicle standard and the scheme. That is a fiscal saving for the Crown, but we’ve also made sure that we go through a process to ensure that it is going to be a much more efficient system.

When I became the Minister, I was advised that $11.8 million was allocated to the system. Actually, the real cost of operating it is much closer to $6.4 million. And so what we had was a Government which was overpaying, using taxpayers’ money for a system which actually costs a lot less than is actually required. So we’ve cut cost out; we’ve made sure that it is going to be focused on what the actual cost is and expenses to do the job, rather than simply just allocating a certain amount of money and then spreading that cost across all taxpayers. So that’s what this clause does. There’s obviously a number of elements within it in relation to the people who will be paying. There’s the empowering provisions around different rates or charges or both—may be prescribed or fixed. It’s, effectively, an empowering provision to achieve that purpose.

Then, after this is passed, there will be ability, before it comes into law on 1 July 2025, for a consultation and a process to be under way to determine what the appropriate mechanism is for this to be undertaken in consultation with the industry who will be paying this fee.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. Can I thank the Minister of Transport for the fulsome contribution. I still would like—and I’ll continue to remind the Minister—it would be very helpful if we go back to the regulatory impact analysis; a response around that reference. That would just close that one off, I think, and provide some certainty. It could just be an error, but—well, it is an error; we just need to understand what it is.

We’re now moving into the meaty part of this bill. Clauses 5, 6, and 7 are where all the action takes place. So I’ve got a lot of questions that I would like to put to the Minister. Firstly, in the proposed new section 167BA subsection (1), inserted by clause 5, there obviously is the discretion there around “regulations may” do a certain thing, but it talks about “the purpose of prescribing … for the fixing of, fees … to meet, or assist in meeting, the costs”. Now, the Minister has talked about a user-pays approach and a user-pays system. My question is then: shouldn’t it simply be that they either meet the costs or they don’t, and if not, how will that be managed?

Hon SIMEON BROWN (Minister of Transport): As I said, this is an empowering provision. There are a number of elements to it and the Government’s intention is for this provision to enable a process to be under way which will ensure that the costs of operating the system are covered by those, who, in new section 167BA (2), inserted by clause 5, import vehicles, are paying for the cost of running it.

CHAIRPERSON (Greg O’Connor): I’ll just indicate in the Chair that this is obviously quite a substantive section, so if members have a series of questions and the Minister—bearing in mind it takes two to tango. If there’s going to be an across-the-board question and answer, I’ll indulge that. Otherwise, we’ll keep moving around generally, depending on how long the questioner takes.

TANGI UTIKERE (Labour—Palmerston North): Thank you, sir. Can I move now to subclause (3) in that section, section 167BA, which talks about the different rates of fees or charges that have been prescribed—OK—in respect of different classes of vehicles or on any other differential basis? Could he provide some assurance or understanding for the committee on what that differential basis may look like?

Hon SIMEON BROWN (Minister of Transport): Well, as I said, this is an empowering provision which enables for regulations to be set, effectively, to determine the cost recovery model. So, of course, there are different classes of vehicles; there are different types of vehicles. If you read the remainder of this part of the Land Transport Act, there are similar types of references to this, and, effectively, that allows for an enabling piece of legislation, an enabling type of regulation to be put in place.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. Thank you, Minister. The other one of interest to me is subsection (5) of section 167BA—this is inserted by clause 5. This is about the role of the director in terms of either reducing or waiving the penalty for a late payment, and it really is around the process that would guide the director to do so, because what I see at the end of that subsection are the words “if the Director considers it is just to do so.” Now, “just” would mean different things to different people.

So my question is: will there be some guidance provided around how the director—who would have that power to effectively waive or dispose of the penalty, or reduce it—would go about that? Does he see that there needs to be some specific guidance by which they should go about that? Does the Minister of Transport see that he would consider that there is a need for there to be some guidance in the regulations, or would that be something that he would expect the director to in-house, basically, determine?

Hon SIMEON BROWN (Minister of Transport): Well, again, this is an empowering provision. The director is independent and this is enabling the director to be able to make those decisions where it’s just to do so. Ultimately, that provides the director some discretion. There are a number of times and cases where, as the member will be well aware, as an electorate MP, people come and see you in your office and raise issues that may well fit within certain policies but it may not be just. It’s a discretionary provision and it empowers the director to have that discretion, which I think is about fairness.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Minister. Can I just refer to the penalty component. Where is the penalty that’s outlined in clause 5 actually identified? Subsection (1) of section 167BA, in clause 5, doesn’t mention, define, or identify the penalty. It talks about only fees and charges. So it’s not appropriate as a penalty to fall perhaps under costs and expenses, as that falls under the agency’s actions or within the sort of realm of the director. In terms of identifying the penalty component, where would that lie?

Hon SIMEON BROWN (Minister of Transport): In section 167BA, my understanding is that section 167BA(4) provides for regulations for the purpose specified in subsection (1). The director may “do any of the things specified … (b) specify the persons to whom any fees or charges, or both, are payable: (c) provide for unpaid fees or charges to be recoverable as a debt due to the Crown.” So there’s a subsection there that provides for that. That’s my understanding.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Minister. Can I just refer to the penalty component. Where is the penalty that’s outlined in clause 5 actually identified? New section 167BA(1) doesn’t mention, define, or identify penalty—it talks about only fees and charges. So it’s not appropriate as a penalty to fall, perhaps, under costs and expenses, as that falls under the agency’s actions or within the sort of realm of the director. So in terms of identifying the penalty component, where would that lie?

Hon SIMEON BROWN (Minister of Transport): It’s my understanding that new section 167BA(4) provides for regulations “for the purpose specified in subsection (1) may—(a) do any of the things specified … (b) specify the persons to whom any fees [are charged] … (c) provide for unpaid fees or charges to be recoverable as a debt due”. So there’s a clause there that provides for that—that’s my understanding.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you very much, Mr Chair. I wanted to ask the Minister of Transport if he has received any advice or if there’s been any analysis done on the cost and administrative burden created by having a cost recovery scheme. I understand that the goal of having the cost recovery scheme is to put the cost on vehicle importers rather than more general taxation but, as the Minister himself has said, it’s a relatively low cost of administering the Clean Car Standard—$6 million a year. It’s a very small percentage of the overall transport budget. It’s very small compared to, just for example, I think the Government spent already $1 million investigating the long tunnel in Wellington. So $6 million a year is pretty small in the context of things. Has there been any analysis or work done to consider whether it’s worthwhile having a cost recovery scheme or whether that, in and of itself, is going to create some additional administration?

Hon SIMEON BROWN (Minister of Transport): Well, the New Zealand Transport Agency, as the member will know, has a range of different cost recovery systems in place for a range of different services, whether it’s small things or large things. They do this in their business across—whether it’s driver licensing, warrants of fitness, fines, tolls; they have these systems in place already. As I’ve already made clear, the advice we’ve received is that it will be around $6.5 million per year to operate this system. That is far less than the $11.8 million that the last Government was allocating towards operating it. We want to make sure we’re operating it as efficiently as possible whilst enabling the cost to be recovered from those who are importing vehicles.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you. Thanks very much for that, Minister. I don’t believe you’ve addressed the question about whether the Minister of Transport has received any advice about the cost of the cost recovery scheme—what that will be. The Minister mentioned tolls. Obviously, the revenue from tolls, at least 30 percent of that just goes to the cost of administering the tolls or collecting the tolls. So there’s a pretty large component of cost recovery schemes that is used just to run the cost recovery scheme itself. So has the Minister received any information about that?

I’ll reiterate a question I asked earlier in the debate—I think it was at clause 2—about why the Minister hasn’t referred this part of the legislation to a select committee, given that there’s still no indication of what the design of the scheme will be, and it would make sense for that to go through a select committee process, even if it is a shortened one, and we have a whole year before it’s going to be brought into operation.

So the questions are: has he received any advice, and, if so, what is it on the additional cost and administrative burden of creating a cost recovery scheme for something that isn’t very expensive? Secondly, as a very small percentage of the New Zealand Transport Agency’s overall budget—and why hasn’t the Government considered doing a proper select committee process around the establishment of this cost recovery scheme?

Hon SIMEON BROWN (Minister of Transport): Well, the advice I’ve received is in relation to the costs of operating the system, which is around $6.5 million. It says the importation process is largely self-service. The team receives a high volume of requests to support, from industry at various stages of the vehicle life cycle. So there’s a range of people who operate the system. There’s an automatic system which already does the work, and this simply puts a cost recovery mechanism on top. And the advice is that it would cost around $6.5 million to operate that. That is a lot less than the $11.8 million that was being allocated by the last Government. So we’ve found efficiencies and we are putting in place a cost recovery model.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you very much, Madam Chair. The Minister of Transport mentions that, previously, more money was allocated than it was actually costing to administer the scheme. Wouldn’t it be normal practice in Government for the New Zealand Transport Agency to then return any excess funding? Or, presumably, it would be putting it towards other parts of its business.

I’m just trying to understand what the outcome of the Minister saying it’s going to cost less than what was originally appropriated is, because, under normal practice, if a Government agency isn’t using the full allocation, then it just goes back to the Crown. But, again, presumably the process of figuring out how the cost recovery scheme is going to work is going to require some work from public officials. Then there’s going to be the work done by the car importers themselves to determine how much each of them owed, to pay for the operation of the service. So there is some additional administrative cost from running a cost recovery scheme. Has the Minister had any advice whatsoever on what that cost might be?

Hon SIMEON BROWN (Minister of Transport): As I said, the advice I have received is that the cost of the scheme is around $6.5 million per year, and we’re putting in place a cost recovery model so that people who use it pay for it. I know that can be a foreign concept to some parties, but, ultimately, we want to ensure this is a user-pays, cost recovery model. This is an empowering provision which allows that to happen. Over the next 12 months, that work will be under way so that it comes into force on 1 July 2025.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you very much, Madam Chair. I think it’s really ironic in a way that the Government is focusing on establishing a cost recovery scheme to recover $6 million, which is a tiny percentage of the overall transport budget, for administering a fuel economy standards programme that has wide benefits across New Zealand. It is true that the people who benefit the most when it is quantified as cost-benefit analysis are the people who will be spending less money on fuel as a result of having more efficient vehicles available to purchase.

However, the idea of user-pays—or, you know, individual responsibility; people making a contribution—was exactly the whole point of the Clean Car Discount, which was that people buying high-emissions vehicles were making some contribution to lowering emissions elsewhere in the fleet. The idea that everybody would pull their weight, that those who needed a high-emissions vehicle could still get that vehicle and drive it, but all together we had to make some sort of contribution towards reducing emissions from the fleet—and it makes sense that those purchasing the higher-emissions vehicles would make a contribution.

So, on the one hand, the Government has rhetoric around user-pays and everyone making their own contribution, but in reality it’s the exact opposite. They want polluters to be subsidised by New Zealand; for New Zealand to have a bigger burden of cost in terms of offsetting emissions because we’re not going to make those reductions. It’s very, very clear from the modelling that’s been done that removing a clean car discount means 100,000 fewer zero-emission vehicles on the roads. That’s going to mean higher emissions versus a given amount of travel. If the Clean Car Standard is watered down, which seems to be the intention of this bill, then that could mean hundreds of thousands more vehicles that are higher emissions right at the time when we need to be importing zero emissions vehicles to have any hope of reducing emissions from transport.

Now, the cost of not meeting our emissions target is actually going to be felt by all of us. It’s going to be felt in terms of the Government needing to spend more money on offsets offshore, presumably. There’s going to be higher costs just because we’re going to be spending more money on fuel to get around, and there’s going to be costs to New Zealand because we’re going to be making a larger contribution to, you know, devastating climate impacts. So I don’t understand how, on the one hand, the Government can say they believe in user-pays and people making a contribution, however, in the same breath, they’re taking away schemes that were enabling everybody in New Zealand who was bringing in new vehicles to contribute to a lower average emissions. But, clearly, the Minister hasn’t received advice or isn’t going to share with us the advice of any additional cost of bringing in a cost recovery scheme for the administration of the fuel economy.

Because we haven’t been able to have a select committee process, I think it is appropriate that we canvass the arguments right here in this debate today, because this is under urgency, all stages of the bill are going through. Ultimately, these changes will have a substantial impact on New Zealand, on New Zealand’s climate, whether or not we meet our climate targets, but more broadly on the overall impacts of our transport on health, on air quality, on noise. There’s so many ways in which higher emissions vehicles have costs on New Zealand—broad costs—and the goal of the Clean Car Standard and the Clean Car Discount together was to achieve an outcome which meant lower-emissions vehicles on the road.

If we go back to the public consultation that was done by the Energy Efficiency and Conservation Authority, sometime before we came into Government, on whether or not people would support a feebate, when people were presented with information on how a feebate works, generally there was broad support for it, because there was a sense in which those buying new, highly polluting vehicles should make some small contribution to more zero-emission vehicles on the fleet. In fact, those people directly benefit because they continue to drive the high-emitting vehicles that they need for whatever reason. And no one’s going to presume to know what that reason is, but it’s fair enough that they should make some contribution to getting more zero-emission vehicles on the road, because it offsets—

CHAIRPERSON (Maureen Pugh): Is there a question for the Minister?

Hon JULIE ANNE GENTER: Well, I’ve given up, Madam Chair, on asking questions—on getting answers from the Minister. So I think it’s appropriate for, on the Hansard, these arguments to be put forward, given that we have not had a select committee process.

Hon SIMEON BROWN (Minister of Transport): Thank you, Madam Chair, and as I’ve stated in previous answers to questions, this is about a cost recovery model. It will charge those who import the vehicles. I think it’s a very simple and clear piece of empowering legislation which then empowers regulations to be set.

There’s a number of tabled amendments in relation to this piece of legislation, or this clause, clause 5. There’s Amendment Paper 42: “replace ‘prescribing, or providing for the fixing of,’ … with ‘reducing and limiting’ ”. That’s not consistent with Government policy. It would not work in practice; limiting fees that don’t actually exist.

In relation to clause 5, another proposal, Amendment Paper 43, to “replace ‘services’ … with ‘back-office administration’ ”, that’s inconsistent with Government policy; potentially limits cost recovery in relation to front-line support services. “Services” is broader and more accurately reflects the policy.

Amendment Paper 44, clause 5, new section 167BA(4)(c): “replace ‘Crown’ … with ‘Agency’ ”. Well, the agency is an extension of the Crown; we’ve already had that debate.

Amendment Paper 45: insert “Before any regulations are made … the regulations will appropriately increase the supply and availability of vehicles with zero carbon dioxide emissions;”. This doesn’t make sense because this is to do with the cost recovery mechanism, which is, effectively, what we are doing here.

Amendment Paper 46: “authorise the Registrar or the Director to decline to process a person’s registration application until the person has paid any fee or charge payable:”. That’s already enabled by new section 167BB and could recreate conflicts regarding the interpretation if mentioned twice, and so we won’t be supporting any of those tabled amendments.

Hon DAVID PARKER (Labour): Thank you, Madam Chair. My first question of the Minister of Transport is this. The Minister told the committee—and I thank him for this information—that the budget for this part of the ministry is going down from $11 million to $6.9 million. Can he advise the committee whether that $11 million included the administration of the Clean Car Discount—not the cost of the Clean Car Discount, but the administration of the Clean Car Discount—in addition to this regulation-making function as to the standard?

Hon Members: Madam Chair.

CHAIRPERSON (Maureen Pugh): Ah—

Hon DAVID PARKER: Well, Madam Chair, I had a number of questions, but I was trying to do it on the backwards and forwards basis. If—

CHAIRPERSON (Maureen Pugh): The clock’s still ticking—so the Hon David Parker.

Hon DAVID PARKER: Well, OK, I call. The next question I had was that I would like to have some dialogue with the Minister as to how it is that the standards are going to be developed, because that goes to cost and, actually, relates partly to the issues I was raising in an earlier clause on the bill relating to whether this should sit with the Energy Efficiency and Conservation Authority. I hope the Minister will agree with me that one of the trade-offs that is being made in a standard is what is the capital cost of a more expensive, more efficient vehicle, and how that compares with the savings that are made by the user of that vehicle on lower fuel costs.

Those lower fuel costs have two reasons. One, electricity is a more efficient converter of energy to motion than the burning of a fossil fuel, so the same energy content of electricity takes a vehicle further if it’s electricity than it does if it is petrol or diesel because the conversion of petrol and diesel to motion results in a lot of that energy being lost as heat. That’s the essential physical reason. The second reason why electricity is cheaper, in a fuel sense, than petrol is that per calorie, if you like, or per unit of heat, electricity per unit of energy is cheaper than fossil fuels—renewables are.

There are two reasons why the costs are cheaper to the consumer, but those benefits of the cheaper energy price are spread over a long period. The capital cost is borne by the importer of that vehicle on day one, and so in order to compare the benefits of lower costs of, essentially, electricity compared with fossil fuels with the capital costs, there has to be a mechanism to compare the benefits that are received over a period of time compared with the cost that is incurred up front. That is achieved by applying a cost of capital to the upfront costs and comparing it with the benefits that flow over time, which are discounted to take into account the fact that they are not received until a future date in order to compare the cost of this. Now, this is technical work. It’s important work, but what drives the outcome is actually the discount rate that you use.

My next question to the Minister is: does he think that the ministry has got the headline capacity to actually make that proper assessment of the discount rate to do it? Again, I would make the point that this work has been done time and again already by the Energy Efficiency and Conservation Authority, who assess what is the appropriate discount rate to be applied. Until that discount rate was actually set at a fair level—and there were scraps on this in the early 2000s, when Jeanette Fitzsimons was in charge of the Energy Efficiency and Conservation Authority, when I was the Minister of Energy, and we sorted this out and we got to a decent discount rate. Unless the discount rate is appropriately low, you kill the economics in the cost-benefit analysis. So my first question is: why is it that these costs that are going to be recovered are going to include the cost of doing that cost-benefit analysis again in the Ministry of Transport, when we know that that capability already sits within the energy conservation authority?

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. I have a series of questions, but I’ll start with the first set of questions. This is with regards to clause 5, new section 167BA(2), which is around the definition of “The persons” and, in this case, a “vehicle importer” in paragraphs (a) and (b) around the type of vehicle that has not been registered.

Now, going by the cost recovery impact statement, we’re seeing that a lot of the modelling in terms of the cost of the charge that is going to be potentially implemented is on the basis of 300,000 imported vehicles a year. But what I’m not seeing in paragraph (b) is whether it has been specified whether these cars or these vehicles have never been registered, period, or have never been registered in New Zealand. So this is going to be incredibly crucial in terms of that estimated number and the kind of vehicle that we would be looking at that would have this particular charge incurred as a result. If the Minister of Transport, as a first question, wouldn’t mind just clarifying, in new section 167BA(2)(b), whether these registered vehicles are only for the first time being registered here in New Zealand, or are they looking at brand new vehicles, period, or whether that definition needs to be assumed or implicit and doesn’t need to be highlighted.

Again, kind of looking at this in terms of pages 5 and 6 of the cost recovery impact statement and in particular the publicist’s error: “reference was not found.” But looking at the table itself, which is, again, based on the average of 300,000, there’s the “Administration fee ($) partial CR” and, also, “Administrative fee ($) full CR”. Again, when we are looking at that particular definition and that number of the average 300,000 vehicles, it will be really good for the Minister to clarify where some of those numbers come from, because it then determines some of the cost that is associated with it.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Madam Chair—

Hon Rachel Brooking: Aw!

ARENA WILLIAMS: —for the opportunity to take a quick call. I understand that the Hon Rachel Brooking is upset, but she will, I’m sure, have an opportunity to take her call.

I need to bring us back to a few things that the Minister of Transport said in his contribution a couple of calls ago, when he spoke about the Government’s policy and some of the amendments being inconsistent with Government policy. This is the first time that the Minister offered us a view of what Government policy is for his proposed amendments, which has been at issue all morning, as we have made the case that he is amending the wrong Act here and that his Government policy is inconsistent with the purpose of the Land Transport Act—particularly section 170, which sets out a purpose for reducing carbon dioxide emissions over the transport fleet.

When the Minister stood and he said that my amendment to new section 167BA, to replace “for the purpose of prescribing or providing for the fixing of,” with “for the purpose of reducing” is inconsistent with Government policy, that is absolutely worthy of this committee’s attention. This is the first time that we have heard from the Minister that it is not his policy intent, that it is not Government policy, to use the clean vehicle standard to reduce carbon dioxide emissions. That is something that we really should have been able to consider at select committee. If the clean vehicle standard, which was introduced by the prior Government with very broad support around this House, is now not to be used to reduce carbon emissions over the vehicle fleet, is not to be used to contribute to New Zealand’s international climate change obligations, then that is something we really need to understand. I hope the Minister will be able to clarify what he meant when he said that it is not the Government’s policy intent to use it for the purpose of reducing carbon dioxide emissions.

I will be fair to him: I think that what he might have been trying to advance there was that it might be restrictive in some way to specify that the purpose of it is to reduce the carbon dioxide across the fleet. But, really, the question here becomes: should there be a split purpose to also prescribe, to provide, fix, and to reduce, or should we be clear that it is to reduce? In which case, that, I guess, would be a further commitment to the ratchet provisions in the secondary legislation that exists. It’s not an answer to the question for the Minister to stand and say that these are empowering provisions to create further regulatory mechanisms, when we know—and from the comments of the Minister in this debate, we understand—that he’s already given some thought to what those regulatory standards will be when he provides himself the power to set them. He’s already considered what they will be. So he needs to be able to give us an assurance, because this is the only time that the House will be able to have a debate on what he sets the standards to be.

He needs to provide us an assurance that it is the Government’s intent to continue to reduce carbon dioxide emissions across the vehicle fleet. We might disagree on how fast that needs to be. We might disagree on ratchet provisions which give the industry certainty. It’s certainly our position, on this side of the Chamber, that giving the industry certainty in each year is the most important thing Government could do—almost regardless of how fast you go, that providing the car industry with certainty would be the most important consideration. So if it’s not his intent to provide that reduction over time in his regulations, he needs to clarify that for us right now.

Hon SIMEON BROWN (Minister of Transport): Thank you, Madam Chair, and for the questions. There’s been a number of questions. I guess the Hon David Parker is asking questions in relation to the issue which was around who should be administering the standard. Ultimately, I’ve already answered those questions in prior debates, in relation to the fact that the previous Government ensured that it would go through under the Land Transport Act. That is the Act that the last Government put these provisions within, which means that it is managed by the transport agencies. So we’re not intending to change that. We think that they are the appropriate agencies, as they’ve already set up the system. There is already a Clean Car Standard system in place. This is simply just enabling cost recovery for that system.

In terms of the other questions, many of those questions in relation to what the standard should be are quite separate from the debate in this clause, which is in relation to cost recovery for administering it. That is, quite simply, what this particular clause is doing: cost recovery for the administration of the standard. There is a known amount of money that it costs to administer the standard, and this empowers regulations to be made to recover those costs. This doesn’t deal with the emissions standards or any of those particular elements; this is simply about making sure there’s a cost recovery in place.

TANGI UTIKERE (Labour—Palmerston North): Kia orana. Thank you, Madam Chair. Again, I know my colleague the Hon Rachel Brooking is keen; perhaps she’ll get a future call.

I want to turn to what I guess is a quite specific list of provisions that are contained within this new section 167BA, inserted by clause 5, that’s being proposed. It’s specifically within new subsection (4), and this is about the nature or the purpose of what the regulations will seek to do or achieve. Specifically, I only want to focus on (4)(a), and that references section 168 of the Land Transport Act and identifies a bit of a list. Now, it relates to subsection (4), and, basically, subsection (4) creates a whole list of criteria within which the regulations could seek to address.

What this subsection seeks to do is, basically, identify just five of the criteria that would relate; it doesn’t take them all. I know the first one is around specifying the persons who would be responsible for having fees or charges—or both, actually—being payable. Section 168(4)(ab) is around the provision for the imposition of a person to whom the fees are payable to have a connection with the administration of any payment. There are five of them. The third one is (d), which provides for “the refund, waiver, or the rebate or enabling the refund,” or the charge. Section 168(4)(e) is fixing, or empowering the fixing of, the date by which any fee or charge is to be paid. So that is quite specific. The final one is (f) and that is, basically, around the discounts for early payments, and penalties for late payments, which we have touched on in terms of the late payments.

There are two parts within that particular subsection that might have some relevance—perhaps one more than the other. My question to the Minister of Transport is: why haven’t they been referred or why are they not included in this new section? The first of them is section 168(4)(aa): “prescribe fees and charges payable, or provide for their fixing (including a means by which they may be calculated and ascertained, or a rate at which they may be calculated or ascertained):”. So my question for the Minister is: is that section not relevant, or that component not relevant, in the consideration of this; if so, why has it been excluded from the list defined in new subsection (4) of the bill?

The other is the final one. It’s just trying to cover off whether or not there any other catch-all provisions there. It’s (h), which relates to identifying those fees and charges that are land transport revenue for the purposes of the Land Transport Management Act 2003. Now, we’ve talked previously about the relativity of that particular Act and it not being relevant to being referred to as a principal Act. But there is a question there for the Minister, which is: could it be conceived that fees and charges in this context could be seen as land transport revenue?

Hon Member: Yeah, that’s the issue.

TANGI UTIKERE: That is the issue and it is quite a broad definition, but then it is captured by whether or not it’s for the purposes of the Land Transport Management Act. Now, it might be that that piece of legislation does have—well, it does have some correlation with this Act. But my question to the Minister is: whether (aa) and (h) have on purpose been left out from the relevant criteria in new subsection (4)(a), and, if so, why is that the case?

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. Despite my excitement, I do not have as exciting a contribution as some of my very learned colleagues have made on, particularly, policy issues and some very good questions that I’ve heard the Minister not yet answer.

I’ve got two questions, and one has already been briefly traversed by Tangi Utikere and the Minister of Transport, and that was around subsection (5) of new section 167BA, inserted by clause 5, which is: “The Director may, at any time, reduce or waive a penalty … if the Director considers that it is just to do so.” And the Minister responded about the discretion of that director. It would be useful to have on the Hansard whether or not the Minister expects that there would be guidance for what “just to do so” means.

But the main point I want to traverse, which I don’t believe has been touched on yet, is the definition of a “vehicle importer”. So that’s it—so we’re at subclause (2). If you look at the definition of a “vehicle importer” in the main Act, section 2 is the interpretation section for the entirety of the Act, and that doesn’t include a definition of “vehicle importer”—it does have a definition of “imported”, but not that.

Then you can go to section 172. It’s important to note that section 172 of the main Act is in Part 13 of the Act. And the parts are important because section 172 says: “for the purposes of this Part”, here are the definitions. So that’s Part 13. Part 13 is “Clean vehicle standard”, and, of course, it’s been traversed much in this debate. In section 172, a vehicle importer means, as the case may require, “(a) a category 1 light vehicle importer:” or “(b) a category 2 light vehicle importer”. But section 172 is constrained by “in this part of the Act”. So that’s Part 13.

Now, we’re looking here at a new section 167BA, and section 167BA is not in Part 13 of the primary legislation; I think it might be even in Part 10. But, whatever it is, it’s not Part 13. Now, then we see at subsection (7) of this new section that we’re looking at, it says: “In this section ‘and section 167BB’, ‘Type A vehicle’, ‘Type B vehicle’, and ‘vehicle importer’ ”—which is the definition that I’m interested in—“have the meanings given in section 172(1).” So, you might say, well, that fixes the problem, but I think it would be much clearer and better drafting—and I’m asking the Minister if he would consider an amendment to section 172 so that those definitions were not restricted to Part 13 of the Act. It could even refer specifically to the regulation-making parts of the Act or it might be better, in fact, that these definitions that are currently found in section 172 of the primary legislation would be better found in section 2 of the primary legislation, which is the general interpretation section for the whole of the Act.

So I think that would be useful to know in the Hansard—what the Minister’s thoughts are on either further amendments of section 172 or section 2 of the primary legislation so that it’s clear that those definitions apply to all of the relevant parts of what will be the amended legislation.

CELIA WADE-BROWN (Green): Thank you, Madam Chair. I have a number of questions about the recovery of costs in administering the clean vehicle standard (CVS). Given that there is no select committee process and officers have not been able to yet determine how to implement the Minister of Transport’s preference for option two as a fee per car, I’m very interested in hearing from the Minister where he will be receiving advice, not just on the administrative efficiency—and we’re all, I’m sure, keen on administrative efficiency as well as vehicle efficiency—but also how the effect of the mechanism chosen will affect the distribution of benefits.

I note that we talked about the general policy statement referring to the cost of administering the CVS and that there are number of benefits issued. Some of those benefits undoubtedly accrue to the individual owner of a new vehicle or the operator of a new vehicle in terms of fuel savings and maintenance spending, but surely the reduction in the social cost of carbon dioxide emissions accrue to the community as a whole, and one could be quite wide in who that community includes. It might not even be just our species.

Given that we are not having an open and robust process through select committee, will the Minister be, for example, seeking advice from, as the Hon David Parker suggests, the Energy Efficiency and Conservation Authority? Will the Minister be seeking advice from electric vehicle owners, from Electrify NZ? Or perhaps he could look at the cost recovery from the many different countries that have been far in advance of Aotearoa New Zealand in implementing some form of standards. If only we had done this 20 years ago, we would’ve saved so much money; we would’ve saved health; and we would’ve saved emissions. Let’s get on with it and find out the best way of charging for this that maximises the benefit not just to the individual but to our community. Thank you, Minister.

Hon SIMEON BROWN (Minister of Transport): I thank the members for their questions. I’ve already answered or addressed the issue there in relation to how to cost recover. I appreciate there are arguments for different ways in which you could do cost recovery. Either you say that the cost should be recovered from people who use the system or you could say that the cost should be recovered from society at large. This Government has determined, through the policy settings, that it should be recovered through the people who use the system. So we don’t agree with the member’s argument, but I do appreciate that there is an argument in that regard.

In regards to the question from Tangi Utikere in relation to new section 167BA(4), in clause 5, in relation to why paragraph (h) is not referred to—a very good question. That is because if that was referred to, then the revenue could go into the National Land Transport Fund, and so by not allowing it to go into the National Land Transport Fund, it means that the cost recovery is much clearer and it ensures that the money goes towards paying for the running of the system and not just for generally going into the Land Transport Fund.

Hon DAVID PARKER (Labour): Thank you, Madam Chair. I’d like to ask the Minister of Transport whether these new regulation-making powers that give him more flexibility as to the distinction between type A and type B vehicles—I understand the distinction between different classes of importer. If you have an importer that imports a lot of vehicles like Toyota, then they’ve got more flexibilities between models over a year, and the existing legislation also allows them to bank credits towards a future year if they’re doing better than the required average set by the standard—and that’s a good thing, probably. I’m not sure about the banking point, but it’s a good thing that they’ve all got flexibility within their own portfolio of vehicles.

I wonder if the Minister can tell the committee whether the flexibility introduced by these regulation-making powers increases or changes the ability of the Minister, or gives the Minister, on advice from the ministry, the ability to change the categories between different sizes of vehicles? This is a vexed question because the more specific the regulation is and the more classes of vehicle that are created, the less flexibility there is for the car companies to meet the standard in the most cost-efficient manner. I would hope the Minister is giving himself more flexibility through these provisions because we don’t have the chance to do this through select committee.

The reason why I would be supportive of that additional flexibility being given to the Minister is that if it’s more cost effective for Toyota, for example, to meet its average obligations by importing a larger number of very small, very fuel-efficient cars, or more Prius hybrids, which are obviously cost effective, to actually offset the emissions for a large vehicle that for reasons of utility needs to be a fully internal combustion car, for example—I know there are ute alternatives at the moment, but there might be some greater case for purely petrol or diesel large utes, and it would be more cost effective for consumers in New Zealand, including the buyers of utes, if Toyota could use the ability to bring in more of the smaller vehicles in order to meet the overall average that we’re trying to achieve as a country, which is to overall improve the efficiency of the fleet. We recognise there’s a transition that’s going to take longer for larger vehicles than for smaller vehicles. So my question in respect of that issue is whether that additional flexibility is being introduced.

My second point is just to return to a matter when the Minister wasn’t in the chair. I did ask the question as to whether discount rates—because discount rates really drive the outcome of the cost-benefit analysis as to how hard you drive the standard, because you’re trying to compare the additional capital cost of a cleaner vehicle with the fuel savings. There’s a timing difference, and you reconcile those two numbers by the application of discount rates to convert into current dollars the future benefit of lower fuel costs compared with the additional capital cost which is incurred today. And if you use the wrong discount rate, you actually kill the cost-benefit analysis; you’ll find that nothing makes sense. Those debates have been had ad infinitum within both the Treasury and Energy Efficiency and Conservation Authority. I would hope that the Minister is, within these regulation-making powers, able to keep an eye on that discount rate, because if that discount rate is inappropriately used, you will get the wrong outcome.

My third question for him in the short time I’ve got before I need to sit down here is: has the Minister considered just handing this whole thing over to the private sector? I know that a long time ago—like back in 2005 to 2008 when Jeanette Fitzsimons and I were looking at these issues—we considered giving the whole thing over to TradeMe. TradeMe were willing to set up a secondary platform which sits behind their main market platform but uses the same technology. They could very, very simply run a scheme, so long as the scheme is simple to run. And that’s why, if you set an average that’s declining over time and have simple rules and not too many classes of vehicle, you will find that the industry can do that through a platform that encourages trading between themselves as well as averaging within their own fleet in a way that would minimise the costs to the country.

Hon SIMEON BROWN (Minister of Transport): Thank you, Madam Chair, and I thank members for their questions. The question in relation to the type A and type B vehicles is defined in section 172 of the Land Transport Act—it can be declared by regulations, and is unchanged in this bill. In relation to the question around the discount rate; I mean, this is ultimately simply around the cost recovery. This particular clause is talking about the cost recovery, not the wider legislative place in terms of where this sits. We have made it clear in previous answers to previous questions that we’re not changing where the operation of this sits—those were determined by the previous Government. But the third question is an interesting point in terms of outsourcing it, effectively, to the sector. It’s not something we had considered, but I always remain with an open mind.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. Good to hear the Minister of Transport always has an open mind, because we’ve still got a lot to get through, and I think he might, you know, continue to do that as well.

Minister, I want to move to the reality that if a Minister was to create regulations under this provision—and thank you for also clarifying the suitability or not of paragraphs (a), (aa), and (h) of section 168 of the primary legislation. But if the Minister is to go on a process of basically putting regulations in place, there is a requirement for the Minister to consult with such persons as the Minister considers appropriate. So what I think would be really interesting to hear from you, Minister, is: what would guide you in determining who you would consider as appropriate, or what would guide new Ministers in the future as to who would be appropriate? Because one of the common themes as this bill is progressing through the Parliament over the last day or so has been around the fact that we understand that you have undertaken consultation in bringing this bill to the House. We have yet to hear, from you, in this Chamber, who the specific industry participants were, around consultation, even though that has been raised with you, Minister.

I think there are two things here. One is the opportunity to confirm the nature of the consultation that you’ve had in bringing to the House this particular provision to create regulations. The other is how the Minister expects to go about consulting prior to making regulations—which I think is actually a sensible thing, if we are to have regulations, that there is some form of consultation. But it’s even more important when those sorts of decisions and considerations are taken whilst the House is under urgency, but also whilst there is no select committee process. I know that other members have referred to this, about the lack of a select committee process. I am certain that if this was in front of a select committee—well, I know that if this was in front of a select committee, there would be industry participants, there would be others from all around the country, who would submit about who they consider might be appropriate for the Minister to consult with in the process of making regulations. I know that for a fact because some of those industry participants have been in touch with members of this House to indicate that they feel aggrieved that they haven’t been part of this process.

I think there is a responsibility on the Minister to identify who he would consider as appropriate participants. They don’t need to be identified specifically in the primary legislation—I’m certainly not seeking that. But what I am seeking is some understanding and some context around who those industry participants—or maybe they’re not within the industry. Maybe it could be that the Minister opens up—it might be a little bit unwise—a broad invitation to anyone. I don’t think that would really meet the purposes of having regulations—to ensure that there is some expediency around that. But I would like to hear from the Minister who he would consult with.

One of the questions that has been put to the Minister throughout this whole process is: has he consulted with environmental groups? The primary purpose of the Land Transport Act, in terms of this section that we’ve touched on previously, is around the reduction of emissions. We can still talk about whether this bill is the appropriate place or not. But, actually, I think it would mitigate some of the concerns that have been raised, if the Minister was able to identify exactly who it is that he has consulted with in terms of bringing this to the Parliament. But also, if he was the Minister who was going to be executing or making these regulations under this Act, if it is passed, who would he consider as appropriate to, effectively, get on the phone to or to allow for a process to seek their feedback before he embarks upon issuing those regulations?

CHAIRPERSON (Maureen Pugh): Members, my view is that the consultation aspect has been well canvassed and the Minister has addressed them, so I am looking for new material about the substance in this particular clause. I call the Hon Julie Anne—

TANGI UTIKERE: Point of order. Thank you, Mr Chair—Madam Chair, my apologies.

CHAIRPERSON (Maureen Pugh): Thank you.

TANGI UTIKERE: Madam Chair, I just seek your guidance on that because I am not aware of any response from the Minister to date in committee—not once has the Minister referred to any individual, any industry participant or organisation that he has actually consulted. So you’ve made the determination that that has been canvassed. I would encourage you to reflect on the Hansard, but I am not aware of a single response from the Minister to date—and I have been here for the huge majority of the time that the Minister has been in here. I know there was a different Minister in the chair for a period—that Minister did not take any calls to provide any responses.

CHAIRPERSON (Maureen Pugh): Understood, and the point of order is noted. Thank you, Mr Utikere. The questions about consultation have become repetitive, and I’ve noted that in the documentation.

TANGI UTIKERE: Point of order.

CHAIRPERSON (Maureen Pugh): Is this a different point of order?

TANGI UTIKERE: It’s about how repetitive nature would apply in this context. Speakers’ rulings are very clear around the requirement for a Minister to address a question. If a matter has been raised by members under urgency, yet that matter has not been addressed or answered or addressed, how can that surely be repetitive? All the Minister needs to do is stand up and say, “I’ve consulted with X, Y, Z.”

CHAIRPERSON (Maureen Pugh): I understand. We’re going to move on now—I’m going to call the Hon Julie Anne Genter.

TANGI UTIKERE: Sorry, sorry, but, Madam Chair, are you indicating that consultation has been addressed?

CHAIRPERSON (Maureen Pugh): It’s not my role to referee—if the questions are being asked and not answered, that is up to the Minister. But the questions have been asked; it was one of the first questions, when I took over the Chair, that was raised—it’s been raised several times. I’m simply indicating to members it’s becoming repetitive, I’m looking for new material in the body of this clause.

TANGI UTIKERE: Point of order. Thank you, Madam Chair, and I accept what you’ve just said there. The issue, however, though, is, are you now saying that if members under urgency are posing questions to the Minister and the Minister refuses to address the questions, that members of this House are no longer able to ask those questions? Because that would be quite a deviation as to how Standing Orders have been interpreted up to this point in time.

CHAIRPERSON (Maureen Pugh): I understand the member’s frustration. I could invite the Minister—I’ve already called the Hon Julie Anne Genter. I could invite the Minister to address the question—I cannot make him answer.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you, Madam Chair. Because clause 5 is about the cost recovery scheme, and we’ve got the cost recovery impact statement, I wanted to ask the Minister of Transport a couple of questions. Obviously at the end of that statement, it says that they have not been able to consult with the industry on the effects of the proposal, that there are questions they would need feedback from industry on, like, “What administration cost would industry incur as a result of the proposal?”, “What method of recovery would have the least impact on industry?”, and “Would the proposal have disproportionate effects on smaller importers?” That was kind of my question, because it says in the statement that the Minister’s preferred option is a per-car fee.

Can the Minister speak to how he feels that is fair—if, for example, there are importers of lower-value cars, they are going to have to pay a higher percentage of the cost recovery relative to the vehicles they’re selling, as, you know, it’s a higher percentage as a price of the vehicle and perhaps the number of vehicles they’re importing relative to those who import small numbers of very expensive cars. So if we have importers who are importing large numbers of relatively inexpensive cars, particular second-hand vehicles, if we go with the preferred option of a per-car fee, then they will pay more, relative to speciality importers of brand new, very expensive vehicles. I’m just wondering, if the Minister could let us know: is there any chance that he will opt for a different option, what will the consultation look like after this bill is passed in the design of the cost recovery scheme to ensure that it is fair, that it’s not having a disproportionate impact on some importers relative to others? Yeah, I’d invite the Minister to speak to that.

Hon SIMEON BROWN (Minister of Transport): I thank the members for the questions. In regard to the issue of consultations, of course there are two different issues in relation to it. One is that this clause is relating to cost recovery. There are standard consultation processes in place in relation to the consultation for setting regulations, and it is intended that those processes will be under way. There is a 12-month period for those regulations to then come into force, so there’s plenty of time for that to happen. And, of course—

Tangi Utikere: With who?

Hon SIMEON BROWN: Well, that’s a good question and I intend to consult with people who import vehicles—is the intent.

So the second question is in relation to some of the issues around cost recovery. We’ve had a large number of questions around cost recovery. There are lots of different ways in which cost recovery can be done. Of course, this is an empowering provision which allows for a model to be put forward and for cost recovery then to be made of the cost of running the system.

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

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. I actually just have two short questions for the Minister of Transport on this, and the first one is on new subsection 167BA(3), inserted by clause 5, which is talking about “Different rates of fees or charges, or both,”. So the first question for the Minister is: in the cost recovery impact statement, it talks about fees but not necessarily charges, and I wanted to get some clarification from the Minister to provide an example of what those fees or charge could look like or both—particularly the “or both” bit—and whether that is something that has been considered.

The second part is actually around new section 167BB, inserted by clause 5, which is around ”Regulations relating to power of Registrar and Director if fee or charge unpaid”. This particular part, particularly new subsection (1), talks about “to decline to process a person’s registration application”. So, essentially, what we’re looking at is sort of like if you don’t pay, you don’t get the good or a small sanction-type thing. I wanted to kind of get a sense from the Minister, if the Minister wouldn’t mind clarifying: in this context, what does that look like and what sort of options have been made available to the Minister in putting this subsection together, looking at some of the process around this? If there is a declination of this particular process for registration, is there a duration of the pay and then they get the vehicle? So, yeah, I think that level of process-based questions around 167BB will be really, really helpful in clarifying and having on the Hansard.

And just a reminder, the first question is: what does the “or both” in terms of both fees and charges in subsection 167BA(3) potentially look like? Thank you.

Hon SIMEON BROWN (Minister of Transport): Well, thank you, Madam Chair. The questions all relate to the point that this is an empowering provision which allows for regulations to be set.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. Just a short call from me and also related to new subsection 167BA(3) in clause 5. At the end of that sentence, it says, “or on any other differential basis.”, and this phrase—or the whole phrase—is also found in the primary legislation in section 167B(3), “or on any other differential basis.”, and also found in section 168(2). But I’m wondering what it is that the Minister is thinking might be a “differential basis”, given that this has to apply to persons that are either a vehicle importer and an applicant for registration of a type A or type B vehicle—and those are, of course, defined in section 172 of the Land Transport Act that I was talking about earlier, and these are light vehicles. A differential basis: is there some thinking about what it might be—say, an individual importing a car from Japan themselves versus those vehicle importers, rather than an applicant, with the difference between that. And, in subsection (2)—I think it would be very useful for the Hansard if the Minister could comment on what he is considering a differential basis might be in the context of that subsection. Thank you.

GRANT McCALLUM (National—Northland): I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): I’m getting close to accepting a closure motion.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. I thank the Minister of Transport for providing a response to the consultation question. I think that is very unfortunate that he has adopted a very narrow approach to this. This is the first time in this House, while this bill has been progressed, that we have heard from his own mouth that, basically, the only people that are going to be consulted as part of any of this process are importers themselves. There is a much wider scope of industry participants who perhaps would’ve liked to have had an opportunity—not just for this bill but to be considered. The Minister has confirmed for the committee that the only people who are going to be considered on his watch when it comes to setting regulations are importers themselves—no one else. That is shameful and that’s pretty unfortunate.

I want to—actually, thank you, Dr Xu-Nan, for identifying new section 167BB, inserted by clause 5, because I had a question about that as well, and I hope the Minister is able to address it. Minister, your response said, “Well, this is an empowering provision.” Well, yes, it is, but it’s also giving an empowering provision to the registrar or the director to undertake a particular course of action. I think, in fairness, Dr Xu-Nan has identified that as an issue, and you still have not addressed his question.

My question is slightly different to my Green colleague, and that is—it refers to the fact that the registrar or the director could actually, if the regulations are authorised through Order in Council, decline to process a person’s registration application until the person has paid a specified fee or charge that they’re liable for. Now, my question is: is the registrar or director only able to decline registrations for application purely on the basis of the fee not being paid or met, because it seems as though that’s what that refers to in that particular new subsection (1), or will there be other grounds for the registrar or the director to decline an application?

It’s a very narrow area that I invite the Minister to respond to and address, and it is around that empowering provision—yes, I get that, but does it limit the registrar or the director to only decline a registration application? The Minister seems very familiar with importers, it seems, at the moment. If they make an application under the system—I get that regulations may be made under this clause to allow the registrar or the director to, basically, reject or decline the application, but is it correct, Minister, that they could only do so on the basis that the fee is not being made; there is no other way in which, under this provision, a rejection may exist or may follow?

TOM RUTHERFORD (National—Bay of Plenty): I move, That debate on this question now close.

GLEN BENNETT (Labour): Kia ora, Mr Chair. I’m just looking at, and continuing on, some of these spaces, but I’ve got a slightly different angle, and I may be wrong here but I’m willing to be corrected by the Minister—just looking at, obviously clause 5, new section 167BB(2), the type A vehicle or type B vehicle.

Now, I know that the Minister was at Fieldays recently and unveiled the new electric ute. The thing I’m just trying to understand with the type A and type B vehicles—again, I may be out of scope here, but I’m just trying to get a bit of understanding—is that they’re fully electric; they’ve also got diesel. But they also are more than just a vehicle; they’re actually a generator. They’re something that can be used around the farm or for tradies—that type of thing. And so is there any clarification needed when we talk about the type A and type B vehicles, with, I guess, the change in vehicle usage, the change in technology, and the nature of what a vehicle actually is now? I’m just trying to sort of get some clarification in terms of whether that creates any challenges or whether anything should be considered when looking at this part of clause 5.

Again, I’m sure that the Minister was super excited to be there and to see technology at its best and to be moving forward. But when we talk about vehicles nowadays, it’s a generator. It’s more than just a type A or type B vehicle. I wasn’t there when you visited the ute, but I did go and see the ute afterwards, but it did raise some questions for me just to figure out what that could look like. So the type A, type B vehicles—yeah, is that purely just a vehicle for transportation or is it now becoming more than that? That’s not only an office; it’s a generator; it’s many, many other things.

Tangi Utikere: Where would the line be?

GLEN BENNETT: Yeah, where is the line? What does that look like? So if the Minister has any thoughts on that. Again, I’d really appreciate it if I have missed something here—I’m really happy to understand that. But, firstly, I think it’s exciting to read some of the articles about BYD—it’s BYD, the company that imports them now, isn’t it? I’m just really, really keen to understand that, and if the Minister would like to inform me, I’d appreciate that.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. We still wait for a response from the Minister of Transport around those specific questions that have been posed around new section 167BB(1), inserted by clause 5, and I really do think that is important, because it might be actually that there is a bit of a gap that has been highlighted. If the Minister can confirm that the only basis upon which the registrar or the director could basically decline the registration application was purely because of a lack of a fee being paid or whether it was a partial fee.

I mean, last night in the House, the Minister referenced that we’re talking about a very small amount of money. He talked about it being only between $5 and $20. All of that adds up. I mean, he has himself cited what that adds up to in terms of the overall budget lines for this. So it would be quite helpful, for the benefit of the committee, if the Minister was able to identify that. But the point I was trying to make is: if this was, in fact, the only way in which an application could be declined, is the Minister aware of any other processes that might interplay with this? So, for example, if there is information that comes to the attention of the director or the registrar that is not purely related to the fee component but something else, perhaps, I think that would be quite helpful for the Minister to be aware of as well.

I want to just also refer to the Amendment Papers that are in my name, because the Minister did very kindly say, at the start of this process, basically: “No, no, no, no, no, not gonna support any of those.” We’ve had a—

Hon Simeon Brown: I gave reasons.

TANGI UTIKERE: You did give reasons for that. However, you also said, Minister, that you have an open mind and we’ve had quite an opportunity from yesterday to talk about these sorts of things. So I want to just briefly go through those, because it is important none the less. But before I do that, I’ve noted the Minister’s reference around who he would consult with and he tells us that it’s just importers, basically. So I know, for example, I’ve certainly received feedback as recently as this morning—someone says that they see this as a lack of consultation over the bill and that there are shifting market conditions, all of these sorts of things. Now, I hope that the Minister perhaps would think again around some of this space.

This one here I quite like; I think it’s quite apt. It refers to handpicked allies that the Minister might only be consulting with. I think that is very detrimental to the process if he’s only going to handpick the people who he might want to—

Ryan Hamilton: Speculation.

TANGI UTIKERE: Well, “Speculation”, right? So we hear that it’s speculation. We haven’t actually heard anything else from the Minister except to say it’s only going to be importers.

Hon Member: Excellent.

TANGI UTIKERE: Is that correct, Minister? It’s only going to be importers?

Hon Member: They’re saying “excellent” on that side of the Chamber.

TANGI UTIKERE: Right. So we hear, then, that it’s actually only going to be importers and that’s it. Well, the Minister has an open mind; we might hear something different.

Now, I just want to look to those Amendment Papers that are in my name. Amendment Paper 42, clause 5—this is seeking to: “replace ‘prescribing, or providing for the fixing of,’ … with ‘reducing and limiting’ ”. That actually ensures that there is kind of like—what do you call it—a sinking lid sort of approach that we continue over time, and we’ll get to this a little bit further, but it has been accepted as clause 5, so I hope the Minister might consider that; he might change his view with his open mind.

Amendment Paper 43 refers to replacing “services” with “back-office administration”. The Minister had referred that he wasn’t into supporting that particular amendment. I don’t know whether he has changed. I know his Government have a particular view about back-office administration that they seem to make clear from time to time.

Amendment Paper 44—so this again—no, I’ll tell you what, Minister. I’ll concede that you’re probably accurate on that one in terms of your response. I’ve suggested replacing “Crown” there with “Agency”, but you’ve answered that previously and it might be that I’m prepared to maybe just resile from that particular Amendment Paper, given the Minister has, I think, actually adequately answered or addressed that particular question. So I don’t have an issue with us, effectively, not—that’s number 44.

Amendment Paper 45 actually inserts a new section 167BA(1), and this is actually making sure that prior to the exercise of any of these regulations, that those sorts of factors are considered.

So I wonder whether the Minister might particularly actually address the concerns that have been raised by Dr Xu-Nan and myself.

Hon SIMEON BROWN (Minister of Transport): Thank you, Mr Chair. Many of those questions that members have raised I actually answered right at the start of the debate when I went through each of his tabled amendments, as he acknowledged, in relation to each of them, and gave reasons for why we’re not supporting them. In relation to the member Glen Bennett in relation to type A, type B, those definitions are not being changed in this piece of legislation.

RYAN HAMILTON (National—Hamilton East): 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 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Motion agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Tangi Utikere’s amendment to clause 5, new section 167BA(1), set out on Amendment Paper 42 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Tangi Utikere’s amendment to clause 5, new section 167BA(1), set out on Amendment Paper 43 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Tangi Utikere’s amendment to clause 5, inserting new section 167BA(1A), set out on Amendment Paper 45 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Tangi Utikere’s amendment to clause 5, inserting new section 167BA(4)(ba), set out on Amendment Paper 46 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Tangi Utikere’s amendment to clause 5, new section 167BA(4)(c), set out on Amendment Paper 44 be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): Arena Williams’ tabled amendment to clause 5 to replace “for the purpose of prescribing, or providing for the fixing of,” is out of order as being the same in substance as a previous amendment that has not been agreed.

Arena Williams’ tabled amendment to clause 5 to replace “services” is out of order as being the same in substance as a previous amendment that has not been agreed.

The question is that Arena Williams’ tabled amendment to clause 5 to replace “Crown” with “Director” be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Arena Williams’ tabled amendment to clause 5 to delete new section 167BA(5) be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Arena Williams’ tabled amendment to clause 5 to delete new section 167BA(6) be agreed to.

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

Ayes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): Arena Williams’ tabled amendment to insert new clause 5H inserting new section 167BAB is out of order as being the same in substance as a previous amendment that has not been agreed.

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

Ayes 68

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

Noes 49

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15.

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 48

New Zealand Labour 34; Green Party of Aotearoa New Zealand 14.

Motion agreed to.

Clause 5 agreed to.

CHAIRPERSON (Greg O’Connor): Members, Arena Williams’ tabled amendment to insert new clauses 5F and 5G should properly be located after clause 6, so we will address them at that point.

Clause 6 Section 167C amended (Regulations for purposes of Part 13 (clean vehicle standard))

CHAIRPERSON (Greg O’Connor): Members, we come now to the debate on clause 6. Members, please note that Arena Williams’ tabled amendment inserting a new clause 5E amending section 167C should properly be an amendment to clause 6, so it will be considered as part of this debate. This is the debate on clause 6, “Section 167C amended (Regulations for purposes of Part 13 (clean vehicle standard))”. The question is that clause 6 stand part.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. This is a significant clause within the wider scheme of the bill, and it, basically, relates to removing “2027” and replacing it with “2024”. Now, that might seem very simplistic in terms of what is on the page, but the implications of that are significant in terms of the points that need to be traversed this afternoon in the Parliament, because, basically, in essence, what this is doing is it’s saying regulations that were already going to be permissive under the Act are going to actually be brought forward. So, as it stands in law currently, regulations for the setting of emissions targets for these vehicles would have kicked in from 2027. This proposal is to scrap that and to bring the date back into 2024 so that for the coming year these targets could be set by regulation.

Now, I ask the Minister in the chair, the Hon Erica Stanford, please—and she may want to seek some advice around this. I note that the regulatory impact assessment indicates on page 6—we’re on a new clause—a reference around the source not being found. It’s the final paragraph there. It starts with “Error! Reference source not found.” So, Minister, the committee would be grateful if you were able to perhaps seek some advice and provide a response around that—specifically, why that is there.

It’s also really interesting that within that paper—and this reference there is earlier on—it talks about “Calculation will require in depth consultation with the sector”. The Minister of Transport has already identified that he believes the only form of consultation that needs to take place is with importers. It’s really interesting, though, that everyone, including importers and those outside of importers, will need to live with the consequences of this particular decision, and surely, Minister, there should be an opportunity to engage, as part of the process of consultation, with others outside of the sector.

I’m interested in hearing from the Minister what evidence they have seen regarding the health benefits of the standard and the implication that any changes will bring—in particular, this change. So this is, basically, saying that we’re going to rewire and wind back three years—as an envelope of time—when the regulatory powers could kick in. We’ll talk specifically about the targets in the next call, so I won’t go there, but I am interested in hearing from the Minister what evidence is the Minister and the Government relying on in bringing this back earlier by three years, given that the targets as they currently stand are set in legislation, and we on this side of the Chamber are still sort of puzzled as to why you would change that. You already have a process kicked in. It might be because the only people that were able to be consulted prior to this point and the only ones that will be consulted in the future are going to be the ones that are going to benefit, perhaps, by not having to have incentives to ensure what they are importing into the country are heavily favoured in the form of no- to low-emission vehicles.

So the question for the Minister is that I’d be grateful, Minister, if you could clarify that error source issue that’s currently in front of the committee, to clear that up. Secondly, just what evidence does the Government have regarding the health benefits of the standard and the implication of the changes—in particular, around the wind back by three years.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you, Mr Chair. I am just a little interested in this section of the debate because clause 6 and clause 7 are, arguably, the most substantive parts of the committee stage of this bill, and I wonder whether or not we’ll be able to get adequate answers, not having the Minister who is directly responsible in the chair. But I will go on and ask my questions, anyway.

Clause 6 is the bit of the bill that is now enabling targets for carbon emissions from light vehicles imported annually to be prescribed by regulations for any calendar year. So that means within the next year—2025, which is only less than six months away—the targets can change from what they have been for the last few years. Previously, the Minister for Transport had stated that this bill was about increasing certainty for the vehicle industry. He then subsequently answered my question to say, “Well, once we can do this by regulation, we can make the targets more stringent or we can make them more permissive.” The whole point is that within a year or two, we could have different targets and nobody knows what they will be and whether they will be higher or lower. How on earth is this introducing more certainty? This is creating uncertainty for everyone.

Secondly, just following on from the point that my colleague Tangi Utikere made, which is: is it the case that only vehicle importers will be consulted on any new targets for levels of carbon dioxide that are brought in under regulations, and, if so, how on earth could this be appropriate, given that this will have massive implications on New Zealand’s overall carbon emissions and air quality?

Thirdly, my question to the Minister is about whether there will be a full climate impact policy analysis done—a CIPA—on proposed changes to the standards for 2025, 2026, or 2027 before they are brought in through the regulatory-making powers. Will there be a full climate impact analysis, and will that be public?

CHAIRPERSON (Greg O’Connor): I’d just indicate to members that at the moment I’m aware that, obviously, the Minister in the chair will still be required to address those questions, and I’ll be liberal in the timing of the Minister to take advice, if necessary, and the pace of the committee will be reflective of that.

Hon ERICA STANFORD (Minister of Education): I’m good to go. Thank you, Mr Chair. Just in answer to the questions around the error source, that has been now fixed, and it says, “Table 2”. I just wanted to clarify for the member that that was just a formatting error. It has been fixed, and it says, “Table 2”.

I want to make it clear that we, as a Government, are committed to the Clean Car Standard, and the health benefits of that are obvious and you can find them anywhere. I mean, noxious fumes, clearly, are detrimental to human health, and the whole point of having a clean vehicle standard is to reduce those, which we are committed to.

I think the previous Government knew that there would always need to be some changes. We’re just bringing that forward so that we can take a look at that now to make sure that we’re getting the benefits of the clean vehicle standard: to make sure that importers are able to import the vehicles they need to meet the standards, as well as getting the reductions in emissions that we need for those obvious health benefits.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. Minister, can I thank you for that. I think you should just stay in the chair, because we’ve spent nearly six or so hours asking just that one formatting question, and it seems the only response that we needed was that it’s simply meant to say “Table 2”. Already, you have provided a direct response in a much shorter time, and so I thank you and encourage you to remain there. Transport might be your new calling perhaps. But can I just pick up on the issue around—

Tim van de Molen: Point of order, Mr Chairperson. Thank you, Mr Chair. Look, I just wanted to pick up on the comment you made before the Minister spoke, in which, if I heard correctly, you were suggesting that you would require the Minister to address questions. Now, that is a significant deviation, if that’s what you said, sir, from the current process where Ministers indeed are not specifically required—the Chair cannot require the Minister to answer questions. So I’m interested in whether you are making a new ruling to that effect, or if I misheard.

CHAIRPERSON (Greg O’Connor): No, you may have heard me say that of course there’ll be an expectation that the Minister will address the questions. That remains the case, and I’m sure that the member, having been on both sides of the House, would certainly understand why there would be such an expectation. But I thank you for helping me clarify that.

TANGI UTIKERE: Thank you, Mr Chair. I guess one of the questions that I do have for the Minister is how will the Government seek to maintain the ambition that is evident in the current targets—and we’ll come to clause 7 later. But how can that sense of ambition be maintained if, effectively, the Government is winding back the date upon which it would make it easier to water down what the threshold is for those targets and for those standards?

The Minister has informed the committee that the Government is serious about the work in this space, but that doesn’t really align with the ability to, carte blanche, with limited consultation—and we’ve heard previously from the Minister that in setting these regulations under his watch, the only people that will be consulted are vehicle importers, and that’s it. Now, vehicle importers clearly have an incentive when it comes to perhaps looking at what are the best cost options for themselves. That is very easily the case to be to the detriment of, potentially, the environment. There’s nothing in here as a stopgap measure in terms of the timing of this to suggest anything otherwise, so I am interested in hearing from the Minister a response around that.

The other one is that previously, we referred to the Parliamentary Commissioner for the Environment, an Officer of Parliament. The committee is extremely familiar with the contents of that letter now, but it was suggested, I think, from the Minister in the chair that the concerns that had been identified in the commissioner’s letter were more appropriately targeted towards clause 6—which we are at, at the moment—and it comes to timing. So my question there perhaps is for the Minister, around a response to the suggested amendment from the commissioner, and, in fairness to the Minister, it may require a wee while to come back on a response to that, because this was traversed in previous parts. But it was also, essentially, signalled to be parked for the latter clauses. It relates to the suggestion from the Parliamentary Commissioner for the Environment to make a minor amendment to the drafting of section 175A(1) of the principle Act so that it actually allows for the time frame to be set not later than 30 June 2025.

What this is currently suggesting is the date would kick in from 2024; what the Parliamentary Commissioner for the Environment is seeking is an amendment—which I think is quite significant, given that the commissioner has sought to make this particular view known. If this was at select committee, the commissioner would have no doubt submitted and would have made this point known to members of the committee. There would have been advice received on that. So my question to the Minister is: what is the Government’s view of the specific request from the Parliamentary Commissioner for the Environment to, effectively, have the date as not later than 30 June 2025, rather than sticking with, as currently proposed, a blanket-year rule of 2024?

ARENA WILLIAMS (Labour—Manurewa): Thank you for the opportunity, Mr Chair. My amendments for the Minister are about the dates that section 167C(1)(j)(iv) of the principle Act would apply from, and the reason I want to ask the Minister some questions about whether it should apply earlier is in relation to how, then, new section 167BB would come into effect—so those are those Part 13 regulation-making powers that are being moved forward here, essentially, by clause 6. I would argue that the Minister has got the timing for those wrong because of the operation of section 167B. The timing in moving it forward is a problem because we don’t have an explicit enough recommendation to the Minister when he considers what his decision-making power should be under the regulations to, essentially, ratchet up the requirements for the industry to continue to import cleaner and cleaner vehicles as technology changes around the world, and as our international agreements become more stringent and we get closer to those 2040 goals that we have signed up to.

I had recommended for the Minister to consider an arrangement where, under section 167B, he was also directed to consider the imposition of regulations under that section, which are appropriate for considering our international and domestic climate change ambitions. But because we won’t have that built into the legislation, to now move the regulation-making powers forward would then mean that he’s got to consider, not only in subsequent years, what our international obligations are, but in this, currently, there is no direction for the industry on how the Government intends to meet those international obligations, and, indeed, there’s no obligation for the Minister to even consider that when he makes his first round of decisions under the regulation-making powers.

I think it would be more appropriate for the settings to be clear for the industry now, as they are, and then for us to be able to step out those further regulation-making powers later, because, again, we get to this point where, if everyone around this House wants certainty for the industry—and the Government has been clear in other pieces of legislation and on an international stage, where the Prime Minister has recently made some remarks in this regard. New Zealand is still committed to our international obligations to reduce our emissions profile, and the transport fleet is an important part of that. So that is a really clear signal to the industry, and yet we don’t have, then, primary provisions which are giving the industry some really clear targets for how their contribution to that will be judged. We end up in this position where we’re sort of saying one thing on one side of our mouth and giving the industry another indication on the other, and so that’s why I’ve proposed two amendments. There’s an option there for 2025 and there’s an option there for 2026. The reason for that is for the Minister to consider whether it would be appropriate to give the industry certainty in that way by using the new provisions.

Also speaking to this point about the timing, the Hon Dr Megan Woods made some comments about the appropriateness of the timing for these regulation-making powers to come in, in her contribution on clause 2, I believe, of this bill. The Chair at that time, Barbara Kuriger, gave an indication to my colleague that there would be an opportunity for further debate on the timing provisions, particularly with regard to the regulation-making powers in this section, and so it would be useful if we could canvass with the Minister what the intention is here for the regulation-making powers. If they come into effect now, is there an intention to give the industry certainty over the next two years and three years, where, on the one hand, that certainty is being taken away by taking it out of the primary legislation? Those questions were raised by Megan Woods, then they were not answered by the Minister because he felt that it was more appropriately addressed later in the debate, and so here we are, at that point, but I haven’t heard the Minister address that timing point yet.

Hon ERICA STANFORD (Minister of Education): Thank you, Mr Chair. Look, just in response to Mr Utikere’s questions earlier, we of course respect the comments of the Parliamentary Commissioner for the Environment—a very knowledgeable man—but it is our view that this review is important because these targets are very key to realising the standard’s potential emissions and fuel savings. So we have to be able to strike a really good balance between being stringent enough so that we can accelerate the supply of low- and zero-emission vehicles, but not being too stringent so that those importers are then unable to source those vehicles at sufficient numbers and they then can’t meet those affordable prices. So it’s a balance.

What we’re trying to do with bringing this date forward much earlier than everyone would like is to make sure that we strike that balance so that, actually, we’re able to meet the targets that we need to meet. While I appreciate the views of both the Parliamentary Commissioner for the Environment and other members in the committee, it’s our position that we need to bring that date forward so that we can give those importers as much certainty as they can possibly have so that they can bring in the vehicles in the numbers that we require so that we can meet the standards. Thank you.

Hon JULIE ANNE GENTER (Green—Rongotai): I’m sorry if I missed it, but I don’t believe the Minister in the chair has addressed my question about whether a climate impact analysis will be undertaken of any new proposed standards for 2025, 2026, and 2027, and whether or not that will be public before those regulations and the new standards come into force. That’s relevant to clause 6 because clause 6 is the part of the bill that is giving the Minister the power to set those standards for those three years under regulation.

I appreciate the comments that the Minister has made about the importance of bringing in more low- and zero-emission vehicles into our fleet. I think at this point in the debate, it would be worth raising the concerns of a range of organisations like Drive Electric, Better New Zealand Trust, and some car importers, who have all expressed concern that their members support retaining the Clean Car Standard settings. They have not had the opportunity to provide those views. Because there was no select committee process on this bill, they have not been able to come and talk to this Parliament about why those standards were appropriate. They’re concerned that giving the power to the Minister to change standards undermines the certainty of direction for the industry. So, rather than providing more certainty, there are a range of people in the industry saying that this creates more uncertainty because we don’t know what the direction of travel will be.

We don’t know what the standards will be 2025, 2026, or 2027, and any changes to the standards have broad economic implications. They will have an impact on electric vehicle uptake, on emissions from transport, and on ongoing imports of petrol and diesel—which costs the economy and affect the current account deficit—and future liability to buy offshore carbon credits. It will also, potentially, impact our EU free-trade agreement because that trade agreement has in it an expectation that New Zealand will be making progress towards its emissions reduction targets, and this is one of the key levers that we can use to achieve those targets.

Since the removal of the Clean Car Discount, the average emissions of newly registered light vehicles in the first five months of 2024 have increased back up to 161 grams per kilometre, on average. Now, that’s up from 136 grams per kilometre last year. Before we brought in the Clean Car Standard and the Clean Car Discount, we were trailing the world. We had some of the most inefficient vehicles coming in, and it wasn’t second-hand vehicles, because we import our second-hand vehicles from Japan, a country that has standards that are far more ambitious than what—New Zealand had zero fuel-economy standards.

Clause 6 of the bill is what gives the Government and the Minister the possibility of setting new standards in regulation, rather than coming to the House—as is what happened previously, and it had a proper select committee process. So the reality is that the axing of the Clean Car Discount has led to a rebound. We’re importing more high-emissions vehicles. Our average emissions in the fleet—this isn’t just about electric vehicles; it’s about the average emissions from new cars coming into New Zealand, and it’s predominantly the brand new, large SUVs and double-cab utes and gas guzzlers that are driving the high emissions.

However, the standard and the discount were able to address that so that we would get lower-emission versions of a given vehicle in a given class. So the research before we brought this in showed that there were double-cab utes available in the UK that were lower-emission than what was available—

CHAIRPERSON (Greg O’Connor): Ms Genter, the opportunity to talk about targets comes in the next clause. I can understand you’re giving some context to this, but it’s relatively narrow and on the—

Hon JULIE ANNE GENTER: Well, I would really appreciate it if the Minister could address the question on what is going to happen with the climate impact analysis of any new regulations. Given that there’s been no select committee process, I think that it was important to state the concerns of people in the industry like Drive Electric, Better New Zealand Trust, and some of the other car importers who have expressed these concerns about this change being brought through, about it undermining certainty of direction for the industry, and about it having broader implications.

We want to understand—well, basically, this point just needs to be made in the Hansard because we’re not having a proper select committee process, and we’re only hearing from the Government that somehow they’re giving certainty to the industry. It’s unclear how that could be the case, other than they’re giving certainty to those who want to continue bringing in high-emitting vehicles, and that will have broad economic implications for New Zealand and cost to us in the long run.

Hon ERICA STANFORD (Minister of Education): Thank you, Mr Chair. I’m happy to address the question that was raised by the member the Hon Julie Anne Genter, and I apologise that I didn’t already do it because I was chatting with officials during her last speech. But I’m happy to answer the questions.

Regarding the climate impact analysis, there will be one. There will be a regulatory impact statement, and that will be done to inform the Government’s decisions on the targets set by regulations. So that will be done. But more broadly around the question of certainty for the sector, the feedback that we have had is that the sector is calling for this certainty. They’re calling for us to set these regulations, and there is broad agreement that that will bring certainty to the sector.

Look, I think the other point to note is that this was always going to happen eventually. The previous Government realised that this would have to happen at some stage; we’re just bringing it forward to ensure that the sector is getting the certainty they need so that they also have that forward-planning ability to bring in the vehicles that they need so that they can help us to meet the common goal that I think we all have of reducing emissions.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. Thank you to the Minister in the chair, the Hon Erica Stanford, for providing responses to my questions. I think it’s interesting that the Minister says that this is providing certainty to the industry. Actually, it’s the opposite, I would suggest, because what currently exists in terms of certainty are that the targets are set down in the legislation through to—well, for the purposes of this, and regulations don’t kick in until post-2027.

I’m interested in the Minister’s response there, because I would have thought that, actually, what was more certain was that at the moment, anyone, including importers, could go and have a look and they could see exactly what it is that the targets are for this year—currently, that’s done—for next year, the year that follows, then the year that follows, and then regulations would be kicked in. So it seems counterintuitive to suggest that this act of bringing back regulation-making powers much sooner, which is what this clause does, where the Minister, in exercising those regulation making-powers, would only consult with the industry and no one else—how is that providing certainty when it’s still unknown what those targets might be?

Arena Williams: No, she’s keen on my amendment.

TANGI UTIKERE: Well, that’s good to hear. So I’m a bit perplexed around that, because the certainty to me would be much clearer as it’s specified, as it is, in legislation. You can look up the date for the next three years and you can see exactly what the target limits are. This clause seeks to, basically, rule a line through those and basically say that, well, it’s over to the Minister, and provided that he consults with the industry, his approach seems to be unfettered in that regard.

I do have a couple of Amendment Papers in my name here—they’re Amendment Papers 42 and 44—and so I’d be obliged if the Minister was able to provide a response. I think it might be that it’s not one of supporting those amendments in relation to clause 6—

Hon Erica Stanford: Oh, give it a go.

TANGI UTIKERE: —but you never know. You never know, Minister. Amendment Paper 42 seeks to replace “2024” with “2028” in clause 6. I don’t think we need to be a rocket scientist to, basically, work out that what that would mean is that the regulations would kick in as they would be post-2027. So I’d be interested in the Minister’s thoughts, even if it was a fleeting opportunity around that. The other is on Amendment Paper 44, which seeks to, basically, delete clause 6 in its entirety—lines 10 through to 12.

I am encouraged to hear that the Minister has referenced that the Government takes the views of this Officer of Parliament, who has made his views known, seriously. It is disappointing, though, that it seems that dismissing the Rt Hon Simon Upton’s suggestions to try and make this a little bit more workable is going to perhaps be the outcome or the position that the Government have subscribed themselves to.

Minister, I do have a question that relates to the implications around the date change. New Zealand has obligations, as they stand currently, to meet targets and the expectations of the emissions reduction plans two and three. Has there been specific advice around the rolling back of the date and, therefore, the specified targets in legislation, and what implication, if any, that would have in terms of our approach to the emissions reduction plan?

I think that is important because that’s an overarching consideration, and this clause specifically enables regulations to meddle with that. So I’d be interested to hear whether there has been any advice that’s been either sought or provided around that, and, if so, it might be that, yes, the advice has been received and sought, but we still believe that the roll-back date is still in order—but I’ll leave my questions.

GRANT McCALLUM (National—Northland): I move, That debate on this question now close.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. A brand new line of questions for the Minister about the carbon dioxide accounts and, if the Minister retains the date as proposed by the Hon Simeon Brown, whether the carbon dioxide accounts are, essentially, ready to go. These were questions that I raised with the Minister earlier in this debate, and I was also told by the Chair at the time, Barbara Kuriger, that the appropriate time to ask those questions would be later in the day. So I’m dutifully doing that now.

The carbon dioxide accounts—just to explain this—are provided for under Part 13 of the Land Transport Act. It’s section 167C, and the provisions that empower those are set out at subsection (1)(s) of that section. Those carbon dioxide accounts have currently been set up under the Minister’s primary legislative powers, which provide for the carbon dioxide accounts to, essentially, back a system which allows importers to trade credits between the low-emitting vehicles, like a small electric vehicle (EV) that Toyota might import, and use it to import other higher-emitting vehicles, like a Toyota Hilux. Toyota have one of these accounts and it’s massively in credit because they’re so good at importing small, light EVs that actually offset things like their Hilux offerings. That’s great—it’s a system that’s working.

You’ve heard from my colleague the Hon David Parker that there are some policy choices that have been made in that situation. For example, he raised a question with the Minister, which wasn’t answered, about whether it was the correct policy of the Government to allow trading in those accounts—say, for example, what’s been reported on in the media where Toyota opined that it might be able to use the credits which it has built up, because its profile of the vehicles which it imports are better than the current settings, and that might be able to support those importers of small vehicles which are emitters, because those aren’t treated like a Hilux.

If you’ve got something like a Suzuki Swift, which is small and its weight class doesn’t push it into the category where it would be able to emit more, then it’s sort of a product which is not doing so well out of the system as it’s currently designed. There’s a policy choice there, which the Minister is open to make, and if she’s not open to my amendment which would push the date out further, then she needs to give us some assurance that those carbon dioxide accounts, which exist now and which have been set up under the current policy settings of the Government, where a number of policy choices have been set out clearly in primary legislation—whether the systems enabling those are ready for a Minister making regulations which are not available and which are not known now.

This is important for two participants in the system. One is the industry participants, because they hold these carbon dioxide accounts, but one is the ministry behind it, and we want to know whether the ministry system which it has built to allow for the administration of those carbon dioxide accounts is set up in such a way that it would be ready to deal with a new set of regulations from day one that made different sets of policy choices. The question there is: is it appropriate that it would apply from 2024—that’s this year—to, essentially, create a system that is not based on any of the policy choices which have been made earlier?

I mean, these regulation powers in section 167C, which have otherwise been set by primary legislation but will now be set out in regulation-making powers, provide the choices like how minimum standards should be applied to the lightest cars and how the maximum standards should be applied to the heaviest cars. If we tweak those, then the carbon dioxide accounts’ value changes, the way that they are tradable might change, and who holds them might change, and so we need to hear from the Minister about whether those systems are ready to go and whether she is confident that 2024 is the appropriate date, given the significant investment of the Government in that system, which backs the carbon dioxide accounts.

GRANT McCALLUM (National—Northland): I move, That debate on this question now close.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. I’ve just got a very short contribution to make here. It is a question for the Minister, obviously, but it’s one of clarification, and that is because what we’re looking at here is a change in dates, and why that is is that at the moment, the primary legislation—and what we will be talking about in the next part of the debate—sets out some numbers and some targets. Then, the Act also says that regulations can be made—they “may” be made—from 2027.

There’s a whole lot of this word “may” in the regulation in various sections of the primary legislation, including in section 167C. So when the Minister says that the Government is going to give more certainty to the importers, that makes it sounds like the Government must be making regulations, but my reading of the legislation is that the Government may be making regulations, and, of course, that is a very important difference because it means it’s discretionary as to whether or not these regulations will be made.

Earlier on, we had in the chair the Minister in whose name the bill is in, and he was saying that one of the two things that this bill does is to enable regulations—so “enabling” is the “may”. The certainty would come with a “must”. So is my interpretation correct that regulations “may” be promulgated and they “may” be enabled, but that’s at the discretion of the Minister?

CHAIRPERSON (Greg O’Connor): Members, the time has come for me to leave the Chair. Committee is suspended and will resume after oral questions.

Sitting suspended from 12.57 p.m. to 2 p.m.