Tuesday, 5 November 2024
Continued to Wednesday, 6 November 2024 — Volume 779
Sitting date: 5 November 2024
TUESDAY, 5 NOVEMBER 2024
TUESDAY, 5 NOVEMBER 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.
Members Sworn
Members Sworn
SPEAKER: I understand that Benjamin Cody Doyle is present and wishes to make the Affirmation of Allegiance. Would Benjamin Cody Doyle please come forward to the chair on my right.
BENJAMIN DOYLE (Green): Ko ahau, ko Benjamin Cody Doyle, e kī ana i runga i te pono, i te tika, i te ngākau tapatahi me te whakaū anō ka noho pirihonga, ka noho pūmau ki a Kīngi Tiāre te Tuatoru me tōna kāhui whakaheke e ai ki te ture.
Petitions, Papers, Select Committee Reports, and Introduction of Bills
Petitions, Papers, Select Committee Reports, and Introduction of Bills
SPEAKER: Three petitions have been delivered to the Clerk for presentation.
CLERK:
Petition of Gayleen Mackereth requesting that the House of Representatives make English an official language of New Zealand
petition of Robyn Cain requesting that the House urge the Government to remove all court and legal costs for New Zealanders
petition of Raina Vermani requesting that the House urge the Government to select applications from the expressions of interest for the parent resident visa ballot whose ballots are expiring in October 2024.
SPEAKER: Those petitions stand referred to the Petitions Committee. Ministers have delivered 27 papers for presentation.
CLERK:
2023-24 annual reports for:
Broadcasting Standards Authority
Callaghan Innovation
Creative New Zealand
Criminal Cases Review Commission
Electricity Authority
Health and Disability Commissioner
Law Commission
Ministry of Foreign Affairs and Trade
New Zealand on Air
Public Service Commission
Racing Integrity Board, and
Waka Kotahi, and National Land Transport Fund
statements of performance expectations for:
Broadcasting Standards Authority
Creative New Zealand
Māori Language Commission
New Zealand on Air, and
Waka Kotahi
statement of intent for Waka Kotahi
updated statements of intent and performance expectations for Health and Disability Commissioner
strategic intentions for:
Ministry of Primary Industries, and
Oranga Tamariki
reports in relation to selected non-departmental appropriations for:
Ministry of Primary Industries, and
Oranga Tamariki
reports in relation to selected non-departmental appropriations for the year ended 30 June 2024 for the following portfolios within Vote Business, Science and Innovation:
Auckland, and
Energy
Government responses to:
report of the Environment Committee on petition of Royal Forest and Bird Protection Society
referral of petition of Aly Cook, and
referral of petition of Fabio Reis
financial statements for the year ended 31 March 2024 for Māori Purposes Fund Board.
SPEAKER: I present the report of the Controller and Auditor-General entitled How well four councils are responding to a changing climate. Those papers are published under the authority of the House. Nine select committee reports have been delivered for presentation.
CLERK:
Report of the Economic Development, Science and Innovation Committee on the Crown Minerals Amendment Bill
reports of the Health Committee on the:
Smokefree Environments and Regulated Products Amendment Bill (No 2), and
Therapeutic Products Act Repeal Bill
reports of the Justice Committee on the:
Privacy Amendment Bill, and
review briefing on the 2022-23 annual review of the Parliamentary Counsel Office
reports of the Māori Affairs Committee on the:
review briefing on the 2022-23 annual review of Ngāpuhi Investment Fund Limited (trading as Tupu Tonu), and
review briefing on the 2022-23 annual review of Te Taura Whiri I Te Reo Māori (Māori Language Commission
report of the Petitions Committee on the petition of Jennifer Bolton: Police contact mental health services for advice when a person is suicidal, and the
report of the Transport and Infrastructure Committee on the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill.
SPEAKER: The bills are set down for second reading, and the review briefings are set down for consideration. The Clerk has been informed of the introduction of a bill.
CLERK: Oversight of Oranga Tamariki System Legislation Amendment Bill, introduction.
SPEAKER: That bill is set down for first reading.
Motions
Invasion of Parihaka—Anniversary
DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Mr Speaker, I seek leave to move a motion without notice and without debate that this House commemorate the anniversary of the invasion of Parihaka that took place on 5 November 1881, known as Te rā o te pāhuatanga.
SPEAKER: Leave is sought for that. Is there any objection? There appears to be none.
DEBBIE NGAREWA-PACKER: He hōnore he korōria, he maungarongo ki runga i te whenua. He whakaaro pai ki ngā tāngata katoa.
[Honour and glory to God, peace throughout the land. And goodwill to all people.]
I move, That this House commemorate the anniversary of the invasion of Parihaka that took place on 5 November 1881, known as Te rā o te pāhuatanga, on which 1,600 men, women, and children were brutally attacked, abducted, and imprisoned by colonial troops for peacefully resisting the theft of their whenua; that this dark moment in Aotearoa history caused more than the destruction of physical property—it caused extreme personal, emotional, and physical harm that is still felt today—that the legacy of Parihaka is not just history, it is alive and well today; and that we honour our tūpuna’s commitment to peace and aroha, which they understood cannot be achieved without justice.
SPEAKER: The House comes now to—
Rt Hon Chris Hipkins: We’ve got to vote on it.
SPEAKER: I’m sorry—what—
Rt Hon Chris Hipkins: We’ve got to vote on it.
SPEAKER: OK.
Motion agreed to.
SPEAKER: Thank you very much for your intervention there.
Rt Hon Chris Hipkins: I’m here to help.
SPEAKER: And so am I; so you can have a question now—first one up.
Oral Questions
Questions to Ministers
Question No. 1—Prime Minister
1. Rt Hon CHRIS HIPKINS (Leader of the Opposition) to the Prime Minister: Does he stand by all his Government’s statements and actions?
Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes, and in particular I stand by this Government’s action to conclude negotiations on a trade agreement with the Gulf Cooperation Council which will deliver duty-free access for 99 percent of New Zealand’s exports over 10 years. Growing trade relationships across the world is a key part of our plan to grow the economy, to lift incomes, and to create jobs for Kiwis. Can I just acknowledge the fantastic work of trade Minister Todd McClay in getting this deal over the line and setting our exporters up for more success so that we can grow our economy and earn the money that we need to invest in the world-class health and education that Kiwis deserve.
Rt Hon Chris Hipkins: Does he stand by his statement “We’ve got very good processes for managing conflict of interest.” and that “Ministers need to understand and internalise the responsibility that they have.”; if so, is he confident that all of his Ministers are managing their conflicts of interest appropriately?
Rt Hon CHRISTOPHER LUXON: Yes, I’m confident real or perceived conflicts were managed, declared, and are being managed appropriately.
Rt Hon Chris Hipkins: Can he confirm if any conflicts of interest were declared and managed by any Cabinet Ministers regarding their association with the tobacco industry when the Government made changes to New Zealand’s smoke-free laws and the taxation of tobacco products?
Rt Hon CHRISTOPHER LUXON: Well, what I can confirm is that any real or perceived conflicts are raised. We’ve assiduously followed Cabinet Office advice from day one of this Government, and we take that very seriously.
Rt Hon Chris Hipkins: Point of order, Mr Speaker. I asked the Prime Minister whether any conflicts of interest were declared and managed regarding a specific issue that Cabinet has considered, and he did not address that question.
SPEAKER: The Prime Minister might like to consider his answer.
Rt Hon CHRISTOPHER LUXON: As per the previous Government, the policy of the Cabinet Office is not to publish conflicts, as has been the policy for successive Governments.
Rt Hon Chris Hipkins: Did any Ministers leave the room when the Smokefree Environments and Regulated Products Amendment Bill (No 2) or the $216 million tax break for heated tobacco products were discussed by Cabinet?
Rt Hon CHRISTOPHER LUXON: Again, Cabinet conflicts, perceived or real, are managed appropriately and assiduously through the Cabinet Office guidelines. We have taken that very seriously. We operate very differently from the previous administration. We don’t need 16 reminders from the Cabinet Office to manage conflicts.
Rt Hon Chris Hipkins: Point of order, Mr Speaker. If Cabinet does indeed take their responsibilities very seriously, then the Prime Minister should have no difficulty answering the question.
SPEAKER: Well, that’s true, but there will always be aspects of Cabinet Government that aren’t in the public arena at the time that the question might be asked. The Prime Minister has answered, I think, quite reasonably given the nature of the question.
Rt Hon Chris Hipkins: Who provided the advice to the Government that nicotine is as harmful as coffee?
Rt Hon CHRISTOPHER LUXON: Sorry, can you ask the question again.
Rt Hon Chris Hipkins: Who provided advice to the Government that nicotine is as harmful as caffeine?
Rt Hon CHRISTOPHER LUXON: That would be a question that would be best directed to the Associate Minister of Health.
Rt Hon Chris Hipkins: Who provided “independent” advice to Casey Costello justifying the $216 million tax break on heated tobacco products his Government agreed to?
Rt Hon CHRISTOPHER LUXON: Well, I’d say to that member what we are doing is this country has had tremendous success at lowering daily smoking rates. We’re down at 6.8 percent, heading to 5 percent to deliver on Smokefree Aotearoa 2025. We are now in a place where we actually have really hard, stubborn smokers that we’re trying to get off cigarettes and into alternatives. We’re prepared on this side to try something different. When he represents the $216 million, I think, as a tax break, it’s not a tax break. What it is is a difference of moving from cigarettes into an alternative product at a lower excise duty. We are good, prudent economic managers on this side of the House, and we’re making sure that we are allowing for that, in an accounting sense, for the most conservative transition.
Rt Hon Chris Hipkins: Point of order, Mr Speaker. Despite the very long answer the Prime Minister gave, he didn’t actually address the question of who provided the supposedly independent advice to Casey Costello justifying the decision to remove the tax on heated tobacco products.
SPEAKER: Yes, I know, but he did say that the Government doesn’t consider it to be a tax break, which would kind of nullify the rest of the answer. But take another question, without penalty.
Rt Hon Chris Hipkins: Who provided independent advice to Casey Costello justifying the tax changes when it comes to heated tobacco products?
Rt Hon CHRISTOPHER LUXON: Again, Ministers receive a lot of advice from a lot of different sources all of the time. They don’t always take it, but I just ask the member to direct the question directly to the Associate Minister of Health.
Rt Hon Chris Hipkins: If he doesn’t know who’s providing advice to the Minister, how can he be confident that conflicts of interest are being appropriately managed?
Rt Hon CHRISTOPHER LUXON: Because I know that that Minister is determined to lower smoking rates across this country and is doing so incredibly passionately and is determined to do it. I’d just say to that member: if he cares a lot about conflicts, I wouldn’t call a sister-in-law a distant relative.
Rt Hon Chris Hipkins: Point of order, Mr Speaker. [Interruption]
SPEAKER: Points of order are heard in silence.
Rt Hon Chris Hipkins: Mr Speaker, last year the Prime Minister objected to the fact that he himself brought a member of his own family into the debate, and you required me to withdraw and apologise for the Prime Minister doing that. We’ve now got a situation where, repeatedly, the Government have named a public servant who happens to be related to a member of the Opposition in the House—a public servant who cannot speak back, a public servant who is part of a politically neutral Public Service, a public servant who declared their conflict of interest and has done absolutely nothing wrong. As you required me to, the Prime Minister should be required to withdraw and apologise for that. We had a situation in the House before the recess where the point of order process and personal explanation process was abused by the Deputy Prime Minister. I don’t think you should allow the Prime Minister to continue with that.
SPEAKER: The Prime Minister might like to consider whether he withdraws that particular remark.
Rt Hon CHRISTOPHER LUXON: I don’t consider I named anybody.
SPEAKER: No, the inference.
Rt Hon CHRISTOPHER LUXON: I withdraw and apologise.
Rawiri Waititi: Does he agree with the Minister for Children that allowing providers to use force against children may be seen as “increasing the potential risk of abuse in custody”, and, if so, why is he allowing boot camp providers to use force on children, especially when it perpetuates the abuse in State care detailed in the Whanaketia report?
Rt Hon CHRISTOPHER LUXON: Again, what we want to see across Government, across the delivery of social services, is enhanced child safeguarding and protection. We want to see advocacy available for those young people in those facilities. But we’re also acknowledging that these are some of our most serious young offenders, and if there are issues around absconding or if there are issues around harm to each other or to themselves, then restraint is appropriate, but it’s got to be used under strict guidelines.
Question No. 2—Finance
2. DAVID MacLEOD (National—New Plymouth) to the Minister of Finance: What recent reports has she seen on the economy?
Hon NICOLA WILLIS (Minister of Finance): I have seen the latest monthly ANZ Business Outlook survey. Primarily, this measures how firms are thinking about the future but also has some indicators of how they are feeling about the here and now. In terms of the here and now, on the whole, firms think their business activity has declined compared to 12 months ago. This measure has improved compared to the previous survey but is still weak, reflecting where the economy is at the moment.
David MacLeod: How are firms feeling about the future?
Hon NICOLA WILLIS: Firms are feeling much better about the future. The ANZ Business Outlook includes a measure of firms’ outlook for their own activity, looking 12 months into the future. This is very strong—in fact, the strongest it has been since 2014. Investment intentions and employment intentions are also rising, again looking a year into the future. The survey also measures overall business confidence—a net 66 percent of businesses think that general business conditions will be better in 12 months’ time. This measure of business confidence continues to rise at a new 10-year high.
David MacLeod: How does she interpret these results?
Hon NICOLA WILLIS: The results of the ANZ Business Outlook survey indicate that firms feel the end of the recession has been reached and they see better times ahead. Businesses have been doing it tough for a long time, but they are increasingly optimistic about the future. This is consistent with economic forecasts. The Reserve Bank, for example, is expecting a negative GDP result in the previous quarter—the September quarter—but a positive result in the current quarter and a steadily growing economy in 2025 and beyond. Inflation is back within the target band, and the Reserve Bank has begun reducing interest rates.
David MacLeod: What are the key economic releases before Christmas?
Hon NICOLA WILLIS: Well, tomorrow, Statistics New Zealand will release labour market stats for the September quarter. Typically, unemployment lags economic activity, meaning that the unemployment rate will rise for a time, even as the economy picks up. That will not continue for ever, however, and unemployment is expected to come down next year. GDP for the September quarter will be announced on 19 December, and both the Reserve Bank and Treasury will issue new forecasts before the end of the year.
Question No. 3—Children
3. TAMATHA PAUL (Green—Wellington Central) to the Minister for Children: Will private for-profit organisations be able to run military-style academies and use force against young people?
Hon KAREN CHHOUR (Minister for Children): I want to make two points. Firstly, the member is referring to the development of a bill which is still subject to Cabinet consideration. Secondly, as is already publicly available, Cabinet has agreed that a military-style academy provider and their staff—whether Oranga Tamariki or another agency—would have the power to use minimum force as reasonably required. This would be to prevent a young person from being harmed, harming themselves, or harming others, or to stop them from absconding from any location. These are our most serious offenders, who must have committed at least two serious crimes with convictions of at least 10 years or more, which could be a range of things including sexual violence, aggravated robbery, or injury with intent to cause grievous bodily harm. We need to make sure that anyone working with them has the ability to keep themselves safe, keep the community safe, and keep other young people safe.
Tamatha Paul: Will she, in this House, promise that for-profit organisations will never run these military-style academies?
Hon KAREN CHHOUR: I would have thought that the member on the other side would have wanted to create any ability for iwi and hapū to have some involvement in self-determination for what happens to their young people. This will give them the ability to be able to run a programme in the future. [Interruption]
SPEAKER: Let’s wait for the House to calm down.
Tamatha Paul: If it was her intention to allow iwi and other community organisations to run these academies, then why didn’t she or her officials consult with them?
Hon KAREN CHHOUR: There is a process to go through when decisions are being made. No decisions have been made yet, and when those decisions can be spoken about, we will.
Tamatha Paul: How can she make the recommendation to Cabinet that third-party providers should be able to use force on young people, without speaking to the Children’s Commissioner, when there are very obvious children’s rights implications and risks from her proposal?
Hon KAREN CHHOUR: The Children’s Commissioner and I meet regularly face to face, and I always say to her if there’s any concerns that she would like to speak about, I’m open to speaking about them. If she raises this issue with me, I will speak to her about it.
Tamatha Paul: Does she support for-profit organisations being able to run military-style academies and use force against young people?
Hon KAREN CHHOUR: I would just like to reiterate again that it is the power to use minimum force as reasonably required. There are situations where young people may abscond, put themselves in danger, put the community in danger, and put a whole lot of people in circumstances that they shouldn’t be put in. So we need to make sure that staff have the ability to deal with that.
Tamatha Paul: Does she understand how disingenuous it looks to label something as a pilot and then seek Cabinet agreement to cement it in legislation before it’s even finished and before it’s even been evaluated?
Hon KAREN CHHOUR: Look, I’m proud of what we’ve achieved this year. I’m proud of the fact we’ve managed to step up a pilot, have 10 young people have a chance to turn their lives around, and invest in making sure they have every opportunity to be the best that they can be. I’m proud of that and I’m looking forward to seeing many more children have that opportunity.
Question No. 4—Finance
4. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Malo le soifua manuia, Mr Speaker. Does she stand by her statement that FamilyBoost “will make a difference to more than 100,000 Kiwi families”; if so, why have fewer than half of that number actually received it so far?
Hon NICOLA WILLIS (Minister of Finance): Yes. Inland Revenue estimates that in the next year alone—that is, the year from 1 October to 1 October next year—100,000 families will be eligible for the FamilyBoost payment. However, I would stress the fact that the FamilyBoost payment is intended to exist into future years and not just this year. I’d also stress that families may be eligible for payments in some but not all quarters as they come and go from early childhood education during the year or as their household income changes as parents shift in and out of work. They may also submit all their claims at the end of the tax year and people have a full four years to put in a claim. Clearly, it is early days, but in just four weeks there have been, already, 36,514 payments made into the bank accounts of New Zealand parents. I would say this is very good progress and I would also say this: if there are any parents in New Zealand whose children have been in early childhood education for which they have been paying fees, go on to the IRD website today and make your claim. I want to see as many eligible families as possible get the payment that they deserve and I would welcome this question being asked again tomorrow and the next day so we can get that message out to Kiwi parents.
Hon Barbara Edmonds: Isn’t it the case that most of those that have received FamilyBoost to date got less than $30 a week?
Hon NICOLA WILLIS: I would put to the member this: $30 a week is around $1,500 a year, and if that member thinks that amount of money is not material to a New Zealand family with young children, I’d invite her to go and meet a family with young children, who will confirm for her that that is a meaningful sum of money. We’ve always been clear that the FamilyBoost payment is paid in proportion to two things: one, the fees that a family pays—so up to $75 a week of refunded fees, up to 25 percent of total fees; and, two, the income that a family receives. So there have been a range of payments made depending on the personal circumstances of families. [Interruption]
SPEAKER: Some would suggest that rare and reasonable is not being exercised when it comes to interjections on questions.
Hon Barbara Edmonds: Was it fair to promise up to $150 a fortnight when, as of yesterday, only 3 percent of those who have received the payment got $150?
Hon NICOLA WILLIS: Yes, because the policy that we advertised is the policy that we’ve delivered, whereby families are eligible for up to $975 in payment over the period—a sum that more than 1,200 families have received; 1,243. There is a range of other payments that have been made, many in excess of $500. Hundreds of dollars are being put into the bank accounts of New Zealand parents, and members on the opposite side of the House think that’s a bad thing. They oppose a policy which directly provides cost of living relief to New Zealand families and I’d invite them to reconsider that position.
SPEAKER: I’d just make a point again that questions are being asked because they’re on serious matters and people should at least attempt to listen to the answers.
Rt Hon Chris Hipkins: If only they were given.
SPEAKER: Well, sorry, are you—no comment.
Hon Barbara Edmonds: Isn’t it the case that FamilyBoost is so hard for parents to navigate and get it right that Inland Revenue has declined 7,700 claims, or 16 percent of total claims?
Hon NICOLA WILLIS: No, that is incorrect. In fact, I’m advised by Inland Revenue that they have had feedback that the application process for the payment is straightforward. In fact, one person has gone so far as to say, “I feel like I’ve done something wrong because it was too easy to fill out.” To members opposite, I’d just remind you of your responsibility here: there are people in your electorate who deserve this money, and the feedback that we have had is that when they go on to the website, they find it straightforward. The member has continued to repeat a claim that National wants to make it difficult for people to get this money. That claim is false—the member should stop making it. She should also stop mixing her metaphors and saying that my face is both blue and that my pudding is severely lacking.
SPEAKER: Both sides need to exercise a bit of calm, and I would just make the point that it’s not the Government’s responsibility to inform the Opposition of what their responsibilities are.
Hon Barbara Edmonds: Why is she doing nothing to make it easier for families to access support when, a month in, there is only a 33 percent uptake and 7,700 applications have been declined?
Hon NICOLA WILLIS: We have made it easy for 35,000 families to get money put directly into their bank accounts and I stand by that. In addition, 3.5 million New Zealanders have had tax relief go directly into their bank accounts. What I would put to the member, once again, is this: any family who has children in early childhood education, who is paying fees, I would encourage strongly to go on to the IRD website and to make a claim for the payment they are due, and when they do that, to remember that they payment that that member wanted to put into their bank account was zero.
Question No. 5—Education
5. MIKE BUTTERICK (National—Wairarapa) to the Minister of Education: What update can she provide about her Make it Count action plan?
Hon ERICA STANFORD (Minister of Education): This Government is continuing to supercharge our plan to lift student achievement. Yesterday, I was delighted to announce we’re introducing a targeted maths acceleration programme to give more Kiwi kids confidence in mathematics. From term 1 and 2 next year, around 2,000 year 7 and 8 students who need the most help will take part in an intensive support programme to support them progress towards required curriculum levels in mathematics. The trial will be small groups that will have tutoring and supervised online tuition as well—so a hybrid approach—for 30 minutes, up to four times a week for each student.
Mike Butterick: Which schools will be eligible?
Hon ERICA STANFORD: Intermediate-age children have been specifically chosen for this, as they will have the least time to benefit from our curriculum changes and our resourcing changes before starting high school. The trial will be held in a cross-section of schools and kura across the country, teaching maths using The New Zealand Curriculum and teaching pāngarau using Te Marautanga o Aotearoa. It will run for 12 weeks and cost around $2 million, and we will work with schools to select those students who need the most support. It’s my intention that the findings from this trial will inform decisions about scaling it up across the country from term 3 next year.
Mike Butterick: How else is the action plan supporting schools?
Hon ERICA STANFORD: Last week we released the new maths curriculum for years 0 to 8, ready for schools to use from term 1—a year earlier than planned. Like our structured literacy approach, the maths curriculum is knowledge rich; sets out a structured, evidence-informed approach based on the science of learning, similar to the best from across the OECD. To support teachers with the curriculum roll-out, this Government has invested $30 million into high-quality curriculum-aligned workbooks, teacher guides, lesson plans, and resources free of charge. I’m pleased to share, as of today, that 369,966 students will benefit from those resources from term 1 next year—an increase of over 60,000 students in the last 24 hours and an additional 241 schools who’ve placed their order since 8.30 a.m. yesterday.
Mike Butterick: What feedback has she received?
Hon ERICA STANFORD: Feedback from schools has been really positive. A number of schools have already contacted me and the ministry to get involved in the trial. In relation to the maths action plan, one principal wrote to me to say, “I’d like to reiterate my compliments to you and your team for relentlessly focusing on improving the primary school curriculum with an important emphasis on literacy and maths.” And another wrote: “This is incredibly exciting and I thank you for your commitment to our students, our teachers, and our schools.” Our work programme is one that is defined by pace, clarity, and outcomes, and we are delivering.
Question No. 6—Health
6. Hon Dr AYESHA VERRALL (Labour) to the Associate Minister of Health: Does she stand by all her statements and actions regarding her release of official information?
Hon CASEY COSTELLO (Associate Minister of Health): Yes, in the context they were made. I acknowledge there has been widespread reporting and discussion in the House about the release of documents and handling of official information requests in my office. I don’t deny there were challenges during a transitional period very early after receiving my ministerial warrant. Once my office was fully staffed, operational issues regarding management of information was remedied. I am far from the first Minister not to meet some of the obligations imposed by the Official Information Act, and I’m sure I won’t be the last.
Hon Dr Ayesha Verrall: How did she determine that the statement “nicotine is as harmful as caffeine” was given to her by an official, when she made decisions to withhold that statement?
Hon CASEY COSTELLO: There were redactions in a document that were still considered a point of debate—of full and frank discussions around advice that I was being given. That information was redacted at the time because it was still part of full and frank discussions.
Hon Kieran McAnulty: Point of order, Mr Speaker. Thank you, Mr Speaker. The question was very specific and I don’t believe that response addressed it, but also earlier, when Chris Hipkins asked the Prime Minister a similar question, the Prime Minister suggested that a question be made to the Minister. Surely in doing so and avoiding addressing the question himself and putting the responsibility on to his Minister, there should be a higher expectation in the House that the Minister would address it.
SPEAKER: Well, your point of order raises the issue of the appropriateness of the Prime Minister suggesting another Minister might answer it. The reality is the Minister who the question is directed towards would be expected to know more. In this case, the answer was that there was free and frank advice that was redacted. That’s not unusual for a Government to redact free and frank advice from official information.
Hon Dr Ayesha Verrall: How did she determine that it was appropriate to withhold that statement under section 9(2)(g)(i) of the Official Information Act if she did not know that they were an official?
Hon CASEY COSTELLO: The statement that she’s referring to was part of a broader document that was a range of advice that was given. The redaction was later rectified and the information is fully available now. The statement in it was an extract from a broader document in which talk discussed nicotine and caffeine.
Hon Dr Ayesha Verrall: When she withheld statements that efforts to reduce smoking constitute “nanny State nonsense”, employing a section of the Act that specifically applies to advice tended by Ministers, officers, and employees of the Public Service, how did that conform with the Act if she doesn’t know who wrote it?
Hon CASEY COSTELLO: I think we’re traversing a document that was used very early on, as has been discussed repeatedly in this House, which had a range of policy positions and advice—policy positions and previous New Zealand First policy positions and manifesto statements. It did not become part of the Cabinet paper. The work that was undertaken in this space was the implementation of the coalition agreement commitments.
Hon Shane Jones: Broad background.
Hon CASEY COSTELLO: There was broad background documentation that was provided—that has fully been traversed and the information has been discussed at length regarding the source of that information.
Hon Dr Ayesha Verrall: Is it correct that when she issued a revised information release to Radio New Zealand, after having been found to have acted contrary to the law by the Ombudsman, she has continued to unlawfully withhold information?
Hon CASEY COSTELLO: I have not withheld any information under the Official Information Act. The documentation that was referred to was referring to the same piece of information that was redacted early on. Through the course of the discussions with the Ombudsman, the full document was then released unredacted, for which I apologised in this House and I have rectified the situation that the Ombudsman raised. As I said earlier, I am not the first Minister that has had to rectify issues around Official Information Act disclosures.
Hon Shane Jones: Point of order, Mr Speaker. Sir, I want you to consider that last question. There are many Speakers’ rulings against any imprecation or imputation of legal wrongdoing, and that member has deliberately broken them. I’m surprised you allowed that question to go ahead.
SPEAKER: Well, I actually listened very carefully to the question, and the question reflected upon the—I assume it was a law relating to the Ombudsman and the Ombudsman’s office, and that would bring it into an appropriate space. But what I would say is that it’s not appropriate for members to use question time to make accusations against Ministers in a way that might not be well understood by the public, and that’s probably where this question was. We’ll now go to—
Rt Hon Chris Hipkins: Point of order, Mr Speaker. Can you clarify exactly what you mean?
SPEAKER: Well, the problem is the question itself wasn’t all that clear. So what I’m saying to you is that in referring to the Ombudsman’s decision about using the law that governs him, to say that the Minister needed to release more information is not the same as saying that the Minister has broken the law, but it does perhaps suggest that. I think that’s the difficulty that we have here. So while I accept that that’s not the intention of the questioner, I’m just explaining why I accept that to the Minister.
Rt Hon Chris Hipkins: I’m not sure I follow that any clearer.
SPEAKER: Well, I’ll tell you what, if you’d like to drop by my office later, particularly if you’re having trouble sleeping, I’m sure I can give you an explanation that would see you doze off within seconds. Can we go to question—
Rt Hon Chris Hipkins: I’m not sure what you’ve just offered.
SPEAKER: Nor was I, halfway through.
Question No. 7—Children
7. KAHURANGI CARTER (Green) to the Minister for Children: Is she concerned that rangatahi in care and protection residences have not been given access to the basics, like healthcare, education, and freedom from violence, as Mana Mokopuna identified happening at Epuni?
Hon KAREN CHHOUR (Minister for Children): This report was written in April, not long after I became the Minister for Children. Prior to becoming Minister, I was shocked at the condition of Epuni. Once I became Minister, I asked Oranga Tamariki what could be done to improve conditions at Epuni, because it had been left in such a dire state. Since this report, we have developed and implemented an action plan with an intensive programme of work to ensure the safety and wellbeing of young people at Epuni. This has included returning to a full education programme, providing primary healthcare services and access to psychological services on site, and increasing access for advocacy services such as VOYCE - Whakarongo Mai and Mana Mokopuna. In June, I visited Epuni again, and I can confidently say there have been changes made to the way in which the residence operates, which, in turn, is creating a safer residential environment for our children and young people.
Kahurangi Carter: How does she reconcile her comment that Epuni has become “a nicer place to be for … children” with Mana Mokopuna’s findings that residents couldn’t access medication, didn’t receive head injury treatment, had only two hours of education a day, and experienced over-reliance on punitive measures?
Hon KAREN CHHOUR: I would suggest that the member listen to the answer to my question. That report was from April. I stated in the original answer that we have made changes since that report happened and that we have addressed the issues that the member has just asked about.
Kahurangi Carter: Is she concerned that even after refurbishments, the “overall feel of Epuni was that it was institutional and run down”; and, if so, what actions will she take to de-institutionalise the facility?
Hon KAREN CHHOUR: The refurbishment that the member is speaking to was refurbishment that was done prior to me being Minister. We have put a lot more into the operational site since then and also into the procedures around how we are educating and how we are giving medical care and psychological care to young people within Epuni.
Laura Trask: What work has been done to ensure staff and young people’s safety in youth justice residences and care and protection sites?
Hon KAREN CHHOUR: There are over 80 standard operating procedures in the process of being implemented across various care and protection and youth justice facilities at the moment. This means staff will now understand what the expectations of them are and what the consequences of them are if they are not followed. An example of this training that is provided would be de-escalation training and specific trauma-informed training, and I am happy with the progress that has already occurred and the trajectory of care within these residential facilities, but I can assure you we are doing everything in our power to help these young people turn their lives around and to give them the opportunities to make changes in their lives.
Kahurangi Carter: How will she ensure employment conditions are improved at Epuni, where vacancies struggle to be filled, staff work double shifts, feel like they can’t take leave, and don’t receive specialist training?
Hon KAREN CHHOUR: Once again, I suspect the member is referring to a report that was written in April. We have had a comprehensive hiring plan in place. We have looked at the culture around the residential facilities and the care and protection facilities. We are rolling out processes so that the things the member has raised today do not continue and that life is better for the young people within those residences.
Kahurangi Carter: What action will she take in response to Mana Mokopuna’s finding that Epuni—a site of historic abuse in care—continues to cause trauma to past residents who are whānau of current residents?
Hon KAREN CHHOUR: I think over the last few questions I have answered that question. We have rolled out 80 new operating practices. We are training people in de-escalation training. We are doing specific trauma-informed training for staff. We are supporting management to make sure that they have the tools they need to do their job and deal with things when they aren’t being done properly.
Question No. 8—Social Development and Employment
8. CATHERINE WEDD (National—Tukituki) to the Minister for Social Development and Employment: What recent reports has she seen on the time spent by people on welfare?
Hon LOUISE UPSTON (Minister for Social Development and Employment): The Ministry of Social Development’s latest Benefit System Insights report contains some very sobering forecasts of how long people on welfare are expected to require benefit support over their lifetimes. Some of the more concerning findings are that people under the age of 25 on main benefits are now forecast to spend an average of about 20 more years on benefit over their lifetimes. Under-25s on jobseeker support are forecast to spend on average about 18 more years on a benefit. Those under 20 who are receiving a youth benefit are forecast to spend an average of 23 more years on a benefit. Work-ready jobseeker support beneficiaries of all ages are forecast to spend on average about 13 more years on a benefit. These findings highlight how bad welfare dependency has become in recent years and underscore the urgent need for our Welfare That Works reforms to get more people off welfare and into work.
Catherine Wedd: How do these forecasts compare to estimates in 2017?
Hon LOUISE UPSTON: Many of the estimated future years for different population groups of beneficiaries have increased significantly since 2017. For instance, the estimate that young people under 25 on a main benefit are forecast to spend an average of about 20 more years on a benefit is 39 percent longer than it was in 2017. The forecast that jobseeker support beneficiaries under 25 will spend an average of about 18 more years on a benefit is 49 percent longer than 2017. These reports also show the blame can’t be placed at the feet of COVID, as the trend of people spending longer on benefits set in well before the pandemic, and the 2022 report stated its effects had mostly passed. By the end of 2019, exit rates for jobseeker benefits had already fallen to levels not seen since the unemployment benefit exit rates dropped at the peak of the global financial crisis, even though unemployment was relatively low at the time.
SPEAKER: That was a very long answer; I think answers should be more concise than that.
Catherine Wedd: What other insights does this modelling tell us about people on benefits?
Hon LOUISE UPSTON: We proactively released this report in its entirety, something that I note the previous Government didn’t do, because we are open with the risk factors that contribute to some people being on benefit. These risk factors include growing up in a benefit-dependent household, low educational achievement, mental health issues, time spent in social housing, and a history of run-ins with the justice system. Addressing these risk factors is critical for the Government, and members will recognise that many of them are reflected in the Government’s targets. Our Government will not tread the same path that has denied the opportunity to some of our most vulnerable. We want to make a practical difference in the lives of New Zealanders.
Ricardo Menéndez March: Why is she bringing Work for the Dole back from the dead as a punitive sanction when the evidence and official advice is clear that, “Work-for-the-dole programmes do not increase the probability of participants moving off the benefit and into employment.” and “Instead, participants remain on benefit longer than would otherwise be the case”?
SPEAKER: Yeah, that was also a very long question, so—
Hon LOUISE UPSTON: It’s completely outside the scope of this particular report, but let me answer: the risk factors that the member is so interested in, that contribute to people being on welfare for longer, are why we are introducing measures like the traffic lights—to support people into work faster.
Ricardo Menéndez March: Point of order.
SPEAKER: No, you don’t need to. That was well and truly in scope of the primary question, with all due respect.
Catherine Wedd: What are the Government’s plans—
Ricardo Menéndez March: Point of order.
SPEAKER: Oh, sorry, there is a point of order. Ricardo Menéndez March.
Ricardo Menéndez March: So in the supplementary question I talked about her policy which she received advice around on the probability of people staying on the benefit and the length of time that people would stay on the benefit as a result of that policy. That’s very much directly in line with the question in relationship to a report that talks about forecasts of time that people would spend on the benefit. It may have been a long supplementary question, but that’s just the advice that she received that I was quoting.
SPEAKER: Yeah, that’s right; I already agree with you.
Ricardo Menéndez March: Well, do you just—sorry, before you jump into the next supplementary question, I would like the Minister to actually address my question rather than say she’s going to answer another issue.
SPEAKER: Well, with respect, she did.
Catherine Wedd: What are the Government’s plans to support job seekers into work?
Hon LOUISE UPSTON: The job ahead of us to address these deep-rooted causes of welfare dependency are considerable, but so is our Government’s commitment to supporting more people into work and a greater life. Some of the things we’ve introduced already are a new phone-based case management service, 2,100 more places for young people to get community job coaching, more regular work seminars to support people with their job searching, and a traffic light system to help them stay on track with their benefit obligations. We are determined to reduce the number on jobseeker benefit by 50,000 within six years, because we know the difference that work makes.
Question No. 9—Children
9. Hon WILLOW-JEAN PRIME (Labour) to the Minister for Children: Does she stand by her statement that “this military-style academy has nothing to do with the boot camps of the past, which were absolutely horrendous”; if so, does she support giving third-party military-style academy providers the power to use force against young people?
Hon KAREN CHHOUR (Minister for Children): In response to the first part of the question: yes. The boot camps of the past I was referring to were around decades ago, with untrained staff, no proper oversight, and in an isolated setting of appalling conditions. In response to the second part of the question: yes. This may mean that, in the future, we can extend the enabling community and partnership arrangements to have section 396 providers able to be involved in the military-style academies and to be able to work alongside Oranga Tamariki in the lives of young people—this may be iwi—where they wouldn’t have been able to otherwise.
Hon Willow-Jean Prime: Does she agree with the advice from Oranga Tamariki officials that the provision of powers to use force may result in harm if not used appropriately, and, if not, why not?
Hon KAREN CHHOUR: Yes; that’s why it must be used appropriately.
Hon Willow-Jean Prime: Who is correct: the Prime Minister, who said his preference was not to use force; or the Minister, who said, in a leaked Cabinet paper, “I consider that clear authority is needed for the use of force”?
Hon KAREN CHHOUR: I won’t be referring to a document that I have been unable to verify.
Hon Willow-Jean Prime: What does she say to the Prime Minister, who said, “What I’m interested in is ‘Have we got the layers of child safeguarding?’ ”, when her paper had no safeguards?
Hon KAREN CHHOUR: Yes, I do agree with the Prime Minister. We do need a proper level of safeguarding. That’s why we need to have the discussion when there are risks involved. There are risks involved in everything we do. The whole point is making sure we mitigate those risks. You get in a car, you put on a seatbelt. You get in a boat, you put on a lifejacket. This is about us giving the young people the lifejacket and the seatbelt they need to better their lives. [Interruption]
Hon Willow-Jean Prime: Supplementary—
SPEAKER: When the House settles.
Hon Willow-Jean Prime: Has she learnt nothing from the royal commission into abuse in care that found that the lack of appropriate safeguards was a factor leading to the neglect, abuse, and trauma of children in care experience?
Hon KAREN CHHOUR: Yes; that’s why we’re having the discussion around appropriate levels of safeguarding. That’s why Mana Mokupuna, the Ombudsman, and most other agencies have been involved in the process of these military academies. There is oversight, there is proper training, and there are facilities that we’ve actually invested in instead of letting them rot.
Question No. 10—Trade
10. MILES ANDERSON (National—Waitaki) to the Minister for Trade: What actions has the Government taken to support trade with the Middle East?
Hon NICOLA GRIGG (Acting Minister for Trade): It is an exciting time to be a New Zealand exporter. Following the conclusion of the United Arab Emirates (UAE) trade agreement in September, our exceptional trade Minister, the Hon Todd McClay, announced the conclusion of yet another deal last week, this time with the six-nation Gulf Cooperation Council (GCC) after almost 20 years of negotiations. About 70 percent of New Zealand’s trade is already covered by arrangements, but until recently, the Gulf region had been a major omission in that coverage. That’s why our Government has moved very quickly to unblock progress and prioritise a successful and quick conclusion to the negotiations.
Miles Anderson: Why is this trade deal with the GCC significant?
Hon NICOLA GRIGG: The GCC is the ninth-largest economy in the world and our seventh-largest export destination. To date, this is the highest-quality deal the GCC has ever entered into; and, significantly for New Zealand, its first with a major agricultural exporter. The deal delivers duty-free access in 99 percent of our exports over 10 years, and when combined with our recently concluded UAE deal, 51 percent of our exports to the region will enter tariff-free from day one.
Miles Anderson: How will this agreement with the GCC benefit New Zealanders?
Hon NICOLA GRIGG: The GCC is a growing market for New Zealand goods and exports, with two-way trade between New Zealand and the GCC worth over $3 billion in the last year, and dairy alone accounting for $1.8 billion. Products like dairy, industrial products, red meat, and horticultural products will have locked in preferential duty-free access to that market, putting money into the back pockets of New Zealand farmers and manufacturers.
Miles Anderson: What is new and innovative about this deal?
Hon NICOLA GRIGG: The agreement promotes sustainable development policies and outcomes, recognising the importance of using labour and environment laws for legitimate purposes, effectively enforcing these laws and not weakening them to solely encourage trade and investment. For example, it affirms the International Labour Organization’s fundamental principles and rights at work. That is a first for the GCC in a trade agreement, and facilitates cooperation on matters relating to labour, including compliance and enforcing mechanisms for labour rights. It also recognises the importance of women’s economic empowerment, including commitments to fostering women’s entrepreneurship, exchanging best practice related to policies and programmes, and includes a commitment to the Convention on the Elimination of All Forms of Discrimination Against Women. Finally, New Zealand has also secured a Treaty of Waitangi exception to allow us to meet our Treaty obligations.
Mariameno Kapa-Kingi: You could be in the protest for the 19th.
Rawiri Waititi: Deliver that speech next week.
SPEAKER: That’s all the excitement over.
Question No. 11—Prime Minister
11. 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, and especially our action to turn around New Zealand’s unacceptable level of achievement in maths education. We are not prepared to sit by and accept that four out of five year 8s are not at the expected curriculum benchmark. So yesterday, we announced the latest step in our Make it Count maths action plan, a pilot programme with intensive support for 2,000 intermediate-aged students who have fallen behind the required curriculum level. We are giving the teachers the tools they need to set students up for success in a future with more opportunities than their parents had.
Debbie Ngarewa-Packer: Why have Māori faced disproportionately high rates of benefit sanctions and cancellations compared to non-Māori?
Rt Hon CHRISTOPHER LUXON: What I’d say is that we are determined to make sure that every New Zealander—Māori or non-Māori—understands that they live in a country filled with rights and responsibilities. They have simple obligations: get a resume, show up for the job interview, check in with your case manager, and your fellow New Zealander will support you on a pathway to work. But you have an obligation to look for work and to participate in work, and if you don’t, we’ll sanction your benefits.
Debbie Ngarewa-Packer: Why has the Government’s current housing strategy failed to adequately address the ongoing disparities faced by the 10,000 Māori households still on the waiting list?
Rt Hon CHRISTOPHER LUXON: Well, what I’m incredibly proud about is the incredible work that Minister Tama Potaka has been doing to actually reduce emergency housing in this country, because that was a shame from the previous administration, and to see over 1,500 kids moved out of motels and into proper houses is absolutely fantastic. I thought that if you cared about the kids, you’d back the policy—thank you very much.
Debbie Ngarewa-Packer: Why has the Government failed to effectively address the disproportionately high rate of suspected suicide amongst tangata Māori, which remains above the national average?
Rt Hon CHRISTOPHER LUXON: Again, this is a cross-party effort to work on suicide across New Zealand. We have a lot more work to do, as was evidenced in the last few weeks.
Debbie Ngarewa-Packer: How does the Government justify the slow processing of takutai moana applications, which directly affect Māori land rights and sovereignty?
Rt Hon CHRISTOPHER LUXON: Again, as we’ve talked before, what we are doing is making sure we go back to the legislation before, that balanced the interests of New Zealanders and also customary title for Māori. This is making sure that we go back to what was intended by this Parliament, rather than the lowering of a threshold interpreted by the courts.
Debbie Ngarewa-Packer: Will he meet with the tens of thousands of tangata whenua and tangata moana who are arriving with the hīkoi at Parliament: 12 o’clock on 19 November?
Rt Hon CHRISTOPHER LUXON: My schedule hasn’t been confirmed and I haven’t heard when they’re arriving.
Question No. 12—Justice
12. Hon Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Justice: Does he consider that all of the appointments he has made or recommended are suitably qualified and appropriately politically neutral?
Hon PAUL GOLDSMITH (Minister of Justice): Yes, in particular the recent appointment of the Hon Justice Simon Moore KC as chair of the Electoral Commission—very well qualified and appointed with the unanimous support from all parties across the House.
Hon Dr Duncan Webb: Why was he satisfied that Dr Stephen Rainbow had the legal knowledge required by section 12(c) of the Human Rights Act to be qualified for the appointment as Chief Human Rights Commissioner?
Hon PAUL GOLDSMITH: Because he has wide-ranging experience in terms of expressing strong views and making a good case for the importance of civil rights and human rights in New Zealand. The expectation has never been that you had to be an academic in human rights law. The legislation indicates that you have to have “an understanding” of human rights law, and I think that’s appropriate. We’ve got every confidence that he will do an excellent job.
Hon Dr Duncan Webb: Is it politically neutral for Dr Rainbow to have messaged the ACT chief of staff on 12 December 2023: “The pushback you guys are facing is not unexpected, but it is still incredible. Am keen to help if you’re needing any assistance. A gay human rights commissioner, for example?”
Hon PAUL GOLDSMITH: The gentleman that the member has named is perfectly entitled to communicate with people on a range of issues. What I’m interested in is his ability to clearly stand up for and articulate the importance of human rights in New Zealand and to do that in a way that is well communicated. I’ve got every confidence he can do that.
Hon Dr Duncan Webb: Why did he appoint Dr Stephen Rainbow as Chief Human Rights Commissioner given he is not suitably qualified; is not politically neutral; and was, in fact, assessed by an appointment panel of a retired Supreme Court judge, a former Attorney-General, a King’s Counsel, and an Iwi Chairs Forum representative as not meeting appointment criteria to be a viable appointment?
Hon PAUL GOLDSMITH: To the first part of the question: it is not I who appointed anybody—Cabinet made the decision and the Government made the appointment. The Government made the appointment because he is a very well-qualified person who would do a great job, and it’s very important in this country that we have a strong advocate for universal human rights, and he’ll do a good job in that area.
Hon David Seymour: Does the Minister consider that the quality of questions he’s received in the last few minutes are evidence that maybe a law qualification is not everything?
SPEAKER: That was not particularly helpful for the order of the House at all. The Hon Dr Duncan Webb.
Hon Dr Duncan Webb: Thank you, Mr Speaker. [Interruption]
SPEAKER: Just wait for the House to settle.
Hon Dr Duncan Webb: Isn’t it simply the case that the appointment of Dr Rainbow as the Chief Human Rights Commissioner is because he is a party stooge who will simply do the Government’s bidding?
Hon Shane Jones: Point of order. That question cannot possibly stand. We just had a long presentation from the Leader of the Opposition defending someone who he believes was imprecated last week. You cannot let that question stand.
SPEAKER: And I’m not going to. Thank you, that concludes oral questions.
Hon David Seymour: Speaking to the point of order?
SPEAKER: I’ve ruled on the point of order. That concludes oral questions. We’ll take 30 seconds to exit the House before we move on to the next business.
Points of Order
Personal Explanations—Speaker’s Ruling
Hon KIERAN McANULTY (Labour): Point of order. Thank you, Mr Speaker. I attempted to make this point of order before the conclusion of question time, but there was some confusion so I hope you’ll allow me to do it now. Last sitting week before the recess, you undertook a commitment to the House to report back on a personal statement that was made and whether that met the requirements outlined in McGee, and I was hoping you might be able to tell the House when we can expect that report back?
SPEAKER: Look, it will be this week. It’s something that needs to be properly considered and there are people whose advice I’m wanting to take who have not been available to this point.
Sittings of the House
Sittings of the House
Hon SIMEON BROWN (Deputy Leader of the House): I move, That the sitting of the House today be extended into the morning of Wednesday, 6 November for the second readings of the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill, the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, and the Crown Minerals Amendment Bill; further consideration in committee of the Contracts of Insurance Bill; and the interrupted debate on the second reading of the Fisheries (International Fishing and Other Matters) Amendment Bill.
A party vote was called for on the question, That the motion be agreed to.
Ayes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Motion agreed to.
Bills
Oversight of Oranga Tamariki System Legislation Amendment Bill
First Reading
Hon LOUISE UPSTON (Minister for Social Development and Employment): I present a legislative statement on the Oversight of Oranga Tamariki System Legislation Amendment Bill.
SPEAKER: That legislative statement is published under the authority of the House and can be found on the parliamentary website.
Hon LOUISE UPSTON: I move, That the Oversight of Oranga Tamariki System Legislation Amendment Bill be now read a first time. I nominate the Social Services and Community Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 6 March 2025.
The purpose of the bill is to strengthen the independent monitoring of the Oranga Tamariki system, or children’s system, and make it crystal clear to children and young people who their advocate is. The Oranga Tamariki system is defined as the system that is responsible for providing services and support to children, young people, and their families or whānau under or in connection with the Oranga Tamariki Act or the Children’s and Young People’s Well-being Act 1989.
The oversight of the children’s system was changed significantly in 2022 and two Acts were introduced: the Oversight of Oranga Tamariki System Act 2022 established the Independent Children’s Monitor as the independent monitoring agency of the children’s system and appointed the Ombudsman to investigate issues in the system, as well as handle complaints about the system. At the same time, the Children and Young People’s Commission Act 2022 established the Children and Young People’s Commission, equipping it with the functions, duties, and powers to protect and advocate for the interests and wellbeing of all children and young people who have interacted with the system.
This bill intends to amend the Oversight of Oranga Tamariki System Act and Children and Young People’s Commission Act—specifically to transition the monitor from a departmental agency to an independent Crown entity with a small, multi-member board; and the Children and Young People’s Commission from an independent Crown entity led by a multi-member board to an independent Crown entity led by a single Children’s Commissioner.
Feedback on the 2022 Oversight of Oranga Tamariki System and Children and Young People’s Commission Bill raised concerns about the monitor’s independence, suggesting that a departmental agency might not be as fully independent of political considerations. This bill responds to those concerns that were raised by many, many submitters, and will change the institutional arrangements of the monitor to an independent Crown entity to further strengthen its independence.
This bill requires experience and knowledge from the monitor’s board members to ensure that they possess the necessary skills and knowledge, such as quality assurance, data governance, and a strong understanding of the care system to assume these important roles.
Feedback on the 2022 Oversight of Oranga Tamariki System and Children and Young People’s Commission Bill also emphasised the idea of having a single individual acting in the role of advocate—in other words, having a clear Children’s Commissioner. This bill addresses this concern, again, that was raised by multiple, multiple submitters—very, very strong community views. This bill addresses the concern by disestablishing the current five-member board model of the commission and returning to a single Children’s Commissioner.
The value in having two distinct roles and voices in the oversight system cannot be overstated. The Independent Children’s Monitor plays the role of neutral observer and reporter, and the Children’s Commissioner has a separate role in amplifying the concerns and advocating strongly on behalf of children, young people, and their whānau. Keeping the monitor separate from the advocate role of the Children’s Commissioner will help ensure that their work continues to be impartial, which, of course, is vital to its role.
However, I acknowledge that the monitor, the Children’s Commissioner, and the Ombudsman are only part of the oversight of the children’s system and need to work collectively to give effect to their separate but complimentary functions. For the monitor to perform its role well and influence change, it needs to have the trust of communities and to be a trusted adviser to Government, independent of any specific policy positions or considerations. Equally, to be an effective advocate, the Children’s Commissioner often needs to take and promote a strong position, sometimes publicly. A Children’s Commissioner must be able to do this freely and without fear of impacting the work of the monitor.
The monitor and the commission, along with the Ombudsman, are also working closely together to ensure the monitoring, advocacy, and complaints roles are properly joined up to best support our most vulnerable children and young people. These agencies are taking a “no wrong door” approach, which means regardless of which agency is approached, either for complaint or for feedback, they will direct people to the right place.
The bill also covers consequential and transitional arrangements for the monitor and the commission to ensure a smooth transition of functions. I’m sure every member of the House will recognise how important the work is, both of the monitor and of the commissioner. To minimise any disruption to both entities’ work, the bill provides that the chief executive of the monitor will continue as chief executive of the new independent Crown entity from one year from commencement date. Similarly, the current Chief Children’s Commissioner will also become the Children’s Commissioner for one year from the commencement date of the bill. Continuing the current Chief Children’s Commissioner’s role will help to build on the visibility of the position and strengthen their existing relationships with children and young people, which, of course, is critical to the success of their role.
The timing of our changes addresses and complements some of the findings that were provided in the final report of the abuse in care that was the royal commission of inquiry. A key finding of the report is that the State failed to ensure that there was robust, independent oversight and monitoring of all care settings that interacted effectively for people at risk and that robust and independent oversight and monitoring is a critical way of ensuring that care providers fulfil their duties to people in care, including detecting when they are not complying with applicable laws, regulations, policies, or providing safe and quality care.
This view was shared by many, including the Human Rights Commission, which in its final report noted, and I quote: “Independence is crucial [to] the Independent Children’s Monitor to achieve its objectives of providing objective and impartial monitoring of the Oranga Tamariki system. … A monitor that is not completely independent of Government will struggle to gain the public trust and confidence … that is necessary to address [the failures of abuse in care].” Many people will not be surprised by these two simple but very important changes to the oversight of the Oranga Tamariki system. There was very clear feedback when the 2022 legislation was introduced and open for submissions, so we are resolving two of the issues that were very strongly submitted on at the time.
Overall, this bill strengthens the independent monitoring of the Oranga Tamariki, or children’s, system and makes it crystal clear to children and young people who their advocate is. I commend this bill to the House.
Hon WILLOW-JEAN PRIME (Labour): Thank you, Mr Speaker, for the opportunity to take a call on the Oversight of Oranga Tamariki System Legislation Amendment Bill. Can I start by saying that we support this bill going to select committee, but that is qualified support. I want to address the two main proposals in the legislation.
When Labour was in Government, we started work on strengthening oversight of the children’s system. The Beatie report highlighted how inadequate our system of oversight was, and Labour acted quickly to make it stronger. We established the Independent Children’s Monitor, and we enabled the Ombudsman to provide accessible and timely complaint and investigation processes for children and young people. We boosted the diversity and advocacy powers through the Children and Young People’s Commission. At the time, we also reduced the review period to three years instead of five to enable the review to take into account recommendations from the royal commission into abuse in State care.
I would like to take this opportunity to commend the work of the Independent Children’s Monitor and the five children’s commissioners in their tireless advocacy for children and young people, and the work of the Ombudsman. But I find it really difficult to be speaking on these proposed changes to legislation to improve the oversight of the children’s system when we have just had question time and serious questions being asked about safeguarding in the children’s system, to ensure when the ability to use force on children in custody is being discussed and debated and decided by Cabinet—I find it difficult to believe what the Government is saying, in terms of their desire to ensure that we have the best oversight and protection for our most vulnerable children and that we respect their advocate and the voices, when the Minister for Children did not even bother to consult the Children’s Commissioner on the proposed changes in the youth justice policy space.
We support any changes that will build the trust that has been spoken about in terms of the independence of the Independent Children’s Monitor, but in terms of the changes to the Children’s Commission, we do not support the reduction down to one single commissioner. When we established the Children and Young People’s Commission, we put in place a model with five commissioners, led by the Chief Children’s Commissioner, and we did this to get wider and more diverse representation on the commission, to enable more robust advocacy for children and young people. Because of that, we believe that we need diverse representation for children and young people, and we don’t support those proposed changes in this legislation.
Stakeholders have now had time to see in action the changes that Labour made, and we believe it is important to hear from stakeholders on this and their views on the current system and what this bill proposes. We look forward to the select committee process, where submitters will be able to give us their views on the increase of children’s commissioners to provide that diversity.
Over the past year, this Government has made significant cuts to Oranga Tamariki front-line services, they’ve introduced boot camps, and they are repealing section 7AA, and we have seen the benefits of having a robust system of oversight for our children, holding the Government to account on behalf of children and young people.
To reiterate, we support this legislation going to select committee; we support any enhancements to the independence of the Independent Children’s Monitor. We do not support the reduction of commissioners for Mana Mokopuna. We look forward to the select committee process, and we challenge the Government, in all that it is doing across the children’s system, to ensure that we have the best safeguards and monitoring in place—that is respected, that is sought out, that is consulted on at every opportunity—so that we can ensure we are doing everything that we can possibly do to ensure we do not have a repeat of the abuse in care we had in the past. Kia ora, Mr Speaker.
KAHURANGI CARTER (Green): Thank you, Mr Speaker. I rise today on behalf of the Green Party of Aotearoa in support of the Oversight of Oranga Tamariki System Legislation Amendment Bill. As my colleagues and the Minister have previously outlined, this omnibus bill amends two key Acts: the Oversight of Oranga Tamariki System Act 2022 and the Children and Young People’s Commission Act 2022. Specifically, it makes changes to the legislative status of the two core agencies in the children’s oversight and monitoring system. It changes te Aroturuki Tamariki from a departmental agency within the Education Review Office to an independent Crown entity (ICE). Secondly, it reverts Mana Mokopuna - Children and Young People’s Commission to a single commissioner model.
In supporting this bill, I want to acknowledge its origins. Changes to the children’s oversight and monitoring system were introduced in 2022. The Greens previously opposed changes that separated the children’s advocacy and monitoring functions for two main reasons, as it risked weakening both roles and compromised the independence of the children’s oversight system, and having the monitor as a departmental agency within the Education Review Office risked the autonomy of the monitor itself. The Greens are pleased to see the changes in this bill addressing these concerns now. The children’s monitor will have greater independence by being established as a fully stand-alone ICE.
I want to acknowledge the incredible mahi of the monitor and those working within it. These kaimahi uplift the stories, experience, and reality of tamariki across the motu. They do this daily while respecting the mana and dignity of tamariki and the experiences they seek to uplift. I want to acknowledge the integral mahi of the monitor since its inception in 2022. There’ve been many reports published by the monitor from tamariki’s access to primary healthcare to tamariki’s experience of returning home after State care, but the report that sticks with me the most is Towards a stronger safety net to prevent abuse of children, which centres on the tragic case of Malachi Subecz’s death and the State’s repeated failings. It concluded that tamariki are no safer in New Zealand than they were at the time of Malachi’s death. These incident reports are a vital part of our oversight system and make sure we care for our tamariki by holding a mirror to the decision makers within agencies and the Government so that we can make evidence-based decisions that reflect the needs of the community and centre the children.
As I have said previously, the Greens support the intent of giving the monitor further independence. However, increased independence cannot substitute for adequate funding. The Greens continue to call for sustained funding increases to ensure that the monitor can effectively continue to keep decision makers accountable.
I want to acknowledge this Government for listening to those on the front lines of our care system in New Zealand within this bill. Last week, I had the privilege of meeting again with VOYCE - Whakarongo Mai and recognising the incredible mahi they do nationwide to support care-experienced tamariki, and I want to share the words of Mary-Lynn Huxford, National Care Experienced Youth Participation Adviser, who said, “Reverting to an appointed Children’s Commissioner will simplify things for tamariki, with an identifiable and reliable person there for them to turn to. I’m so pleased to finally see a government decision about the care sector being informed by those who are care-experienced.”
This bill reflects the commitment to centring the voices of those with lived care experience in our care response, which the Greens wholeheartedly support. However, this cannot and must not stop here. The Government and Crown have profoundly failed survivors of abuse in care, and, next week, we have this apology, and we need to make sure that we are advocating for all 138 recommendations to be implemented. Thank you, Mr Speaker.
Hon KAREN CHHOUR (Minister for Children): Thank you, Mr Speaker. It’s an absolute privilege to rise on behalf of ACT in support of the Oversight of Oranga Tamariki System Legislation Amendment Bill. When I first came to Parliament, I came out of sheer frustration around, in my community, seeing and hearing issues that I knew about growing up, dealing with, in care myself. My mission, from day one coming into Parliament, is to make a real, true difference when it comes to young people in care and making sure that whilst they’re in care, they’re safe.
I am grateful to the work of the Hon Louise Upston in this space, because, while I was in Opposition, I was firmly opposed to the changes that were made in 2022, which muddied the waters of how a young person or a person who wanted to find a way to have a voice when things were going wrong didn’t know who to turn to or where to go. There cannot be gaps in our system when it comes to responding to reports of kids being in danger or kids being hurt or harmed in care, and we need to make it simple. We need to make it a “no wrong door” policy so that no matter where a young person or a family member goes, they can be directed to the exact right person who can monitor for them and the exact right person who can advocate for them.
I truly understand the importance of a transparent system when it comes to children in care, making sure that they are being provided with absolutely everything that they need and everything that they should have whilst in the care of Oranga Tamariki. Children in State care deserve a truly accountable system, and that means having a truly independent and accountable advocate in their corner. We need to gain back the trust. Things that are coming up now, where we’re hearing stories of how children screamed and cried for help, where they approached multiple agencies, multiple people to say they were being hurt and harmed, and nothing was done. This is unacceptable and it cannot continue, and we will do everything in our power in this Government to make sure that we put measures in place through bills like this one where young people’s voices can be heard easier, they will be listened to, and their concerns will be actioned appropriately. I have every faith that this will bring back some of that trust that has been lost in a system that is meant to protect our young people.
There are many changes going on, within not just Oranga Tamariki but multiple agencies across Government who have involvement with children in care. We must make sure that there are appropriate people who have that independence and that ability to speak up without fear of doing so. I truly am grateful for this bill—it’s been a long time coming.
Listening to the submissions when the changes were made in 2022 was heartbreaking. It was like listening to people, once again, screaming out to be heard and once again being ignored. I hope that this legislation being put through Parliament right now shows that we are listening, that we have taken on board the submissions from the changes in 2022 and the concerns from not only young people but organisations within the community from multiple different areas, including hapū and iwi, that were concerned about oversight for their young children. It’s just to reinforce: we listened, we heard, and we’re keeping our promise as a Government to make those changes that not only ACT campaigned on but, alongside the Hon Minister Upston, we—
ASSISTANT SPEAKER (Greg O’Connor): The member’s time has come to an end.
TANYA UNKOVICH (NZ First): Thank you, Mr Speaker. I rise on behalf of New Zealand First in support of the Oversight of Oranga Tamariki System Legislation Amendment Bill. I’d like to firstly just thank the member prior to me—the Hon Karen Chhour—for her heartfelt contribution and the tireless and dedicated work that she is giving to this space and the care of our children and young people.
As already mentioned, this is an omnibus bill with a single, broad policy to enhance the oversight and the monitoring of the Oranga Tamariki system. So many of the technical things have already been mentioned, but one of the things I will speak about is that whilst the Children and Young People’s Commission is now in a board model and is now being reduced to a sole position—a sole commissioner—it will also have a deputy in order to be there in the event of any absences and to ensure that there is a steady flow of work and process.
The other change is the Independent Children’s Monitor, which is now an independent Crown entity. Now, one of the great things about this is that it will be governed by a board of three members, and they will all have expertise in the area of Oranga Tamariki processes, systems, and duty governance. It is also just ensuring that like an audit, everything is done properly and efficiently, and the most important thing is that the intent of the bill is covered, and that is the care of our children and our young people.
In summary, the intent of the bill is to improve the outcomes for our children and young people. It will ensure independence and also ensure that the processes are not only efficient and effective but that people are accountable. There will be independence, and with this separation between advocacy and monitoring, it will be the beginning of the rebuilding of trust in organisations when it comes to the care and safety of our children.
I will keep it brief: New Zealand First supports the bill, and I commend it to the House. Thank you.
MARIAMENO KAPA-KINGI (Te Pāti Māori—Te Tai Tokerau): Tēnā koe e te Māngai, ā, tēnā tātou katoa e te Whare. It’s probably less of a pleasure and more of a duty to stand and bring a particular angle to this discussion and to this bill, to say that Te Pāti Māori will support it to select committee with the conditions which I’m going to express in my kōrero today.
Having been a social worker and then a care and protection social worker in the time in which the Children, Young Persons, and Their Families Act came to be, I’ve got some insight both clinically, culturally, and technically in terms of how these bills and pieces of legislation and law come into action and don’t always hit the mark, unfortunately, when they’re on the ground. That’s a bit of the backdrop for my discussion.
Weighing heavily on our collective Māori consciousness is the wellbeing of our mokopuna Māori, so it concerns me that 80 percent of all children abused in State care institutions are tamariki Māori. The time for action must be now, yet the actions we see from the coalition Government tell a different story. This bill intends to improve oversight and monitoring of Oranga Tamariki, and we’ve heard all the technical bits, how that’s described, making structural changes to the Independent Children’s Monitor. If the Government is truly committed to structural changes and it is actually sincere about the care and protection of mokopuna Māori, this seems to me tinkering at the edges yet again, this bill, this idea, this insight behind it all.
Here’s part of why I’m talking like this: so there’s the tinkering on the edges, but then there’s the section 7AA deal—which ironically, this is about monitoring and taking care of and keeping an eye on all New Zealand mokopuna, children, right? Yet to take away, to dismantle a cultural paradigm, a clinical paradigm under section 7AA, which is now dismissed—it’s off the books. We will treat you just like any other child, any other New Zealander.
You see, the difficulty that we have as a party with that is that, again, it does not at all really deal with structural change in any real, significant way. We want this to go to select committee and we want to listen to the stories that are bound to come through, but, again, it just feels like another piece of tinkering on the edges and over here the dismantling of section 7AA—tinkering on the edges and reintroducing boot camps; tinkering on the edges and then coming back to the potential abuse in custody with a military-style model. Why do I know this? Because my memory working in the field tells me this. Despite the reassurances or the comments from the Minister, I’m not confident at all, and many of us are not. And on the 19th, I think we’ll get to see that a little bit more closely outside on the grounds.
Seeking to improve oversight and monitoring of Oranga Tamariki through the re-establishment of an independent children’s monitoring board is a minor structural improvement. The independent authority would see the return of tamariki and mokopuna Māori. Coming to what we would replace it with, or we would ask the House to consider, is our mokopuna Māori authority. This independent authority would see the return of tamariki and mokopuna Māori from State care back into the rightful care of te iwi Māori.
I heard the Minister refer to a section 396. Again, back in 1989, in the 1990s, I used to approve 396s. I think over the whole time I was in the department, I maybe did three or four. The idea is good, but the implementation and the practice is hopeless, and I’m interested to see whether that’s going to be any different this time. I fear it won’t.
The mokopuna authority would both assert and protect the rights of our people promised in He Whakaputanga and Te Tiriti o Waitangi. It will be the primary national agency that prioritises whakapapa, because whānau do know what’s best for their own. Whānau Ora is a perfect expression of that. Whānau Ora’s by Māori, for Māori—and I see I’ve run out of time. What a shame. Tēnā tātou.
JOSEPH MOONEY (National—Southland): Thank you very much, Mr Speaker. It’s a pleasure to rise on behalf of the Government side of the House to speak in support of the Oversight of Oranga Tamariki System Legislation Amendment Bill at its first reading. This does two things, essentially: it ensures the independence of the children’s monitor; and, secondly, it creates a stand-alone Children’s Commissioner. The overall policy objective is to improve outcomes for children and young people in New Zealand through structural changes which will enhance the visibility of the Children’s Commissioner, which will become part of this process, and make one single person who will be a visible and identifiable face for advocacy in New Zealand, which is one really key point.
The second thing that this will do, that is a very important thing—it will strengthen the independence of the children’s monitor. This will take this out of where it’s currently, which is part of the Education Review Office, and will make the Independent Children’s Monitor an independent Crown entity—so separate from Government. The importance of that is to enhance confidence in people that wish to raise issues of concern that this is independent from any Government agency or Government; also to ensure that this commissioner is strictly focused simply on their role, which is to ensure the wellbeing of New Zealand children is being adequately addressed by other Government agencies. In particular, it’s the independent monitoring of the Oranga Tamariki system, which we have heard over the last few years—just the number of challenges that that has.
This is a very good piece of legislation that will enhance the system of monitoring that we have of the Oranga Tamariki system, and will enhance confidence that New Zealanders have in this. I commend it to the House.
Hon GINNY ANDERSEN (Labour): Thank you very much, Mr Speaker. It’s a pleasure to take a call on the Oversight of Oranga Tamariki System Legislation Amendment Bill. Labour supports this bill to select committee. In general, we support the change of making the Independent Children’s Monitor become an independent entity, and we recognise the benefits. This bill changes that monitor to be outside of Government, and it changes the constitutional arrangements to enable that to sit aside and be independent from Government. Having a clear Children’s Commissioner is a good thing. Where we have reservations is around the disestablishment of the board of five members. We believe that having that board provides additional diversity and a range of views if we are truly going to have children’s interests and their wellbeing at heart. We look forward to hearing submissions from the public on that particular issue.
As noted in the initial speech, the royal commission has stated that there wasn’t robust oversight of our children and young people in New Zealand, and we need to learn from those mistakes in the past. We look forward to these changes bringing an increased level of transparency. As the Minister for Children pointed out in her speech, it is really at the heart of the matter of rebuilding trust within our community—about rebuilding that trust in order for communities to be able to report, for children to be protected, and for there to be a more positive relationship going forward. I completely agree with rebuilding trust being at the heart and the necessity of the issues that underpin child welfare and child wellbeing. My problem is that many of the actions this Government has taken, particularly in the space of protecting the wellbeing of children, have gone to do the antithesis of that, which is to cause increased mistrust within the public.
Cutting critical front-line jobs at Oranga Tamariki means that there are front-line workers who are no longer there doing that good work. Contracts for Oranga Tamariki that enabled children to be kept within their whānau, to be kept out of State care—some of those key contracts right across the country have been cut. Those things, I believe, undermine trust in our system and undermine the ability for good reporting to take place. We’ve also seen the repeal of section 7AA. Strangely enough, when you look through the legislative statement here, it states that this bill we’re talking about is consistent with the Government’s Treaty of Waitangi obligations and that the bill retains provisions intended to recognise and respect the Crown’s responsibility to give effect to Te Tiriti o Waitangi. It’s great that that’s still in there.
The other point I would make, in relation to the rebuilding of trust and how important that is for this piece of legislation, is the fact that a lot of the young people we are talking about—whether they be in State care or within their own families—have been victims of family or sexual violence. I have a deep concern that some of the cost cutting this Government has done, whether it be Police pulling back from family violence or whether it be no additional funding for Te Aorerekura to build a network of support within our communities for family violence, again undermines the trust and the ability for reporting to take place.
Then, finally, we have heard today that the military-style academies—boot camps—will potentially now be able to have force used in them, and it is disheartening that the Prime Minister did not know in Cabinet that that had happened when questioned about that in the media. That does not go to building trust. While it is great that we have a bill that’s having an independent Children’s Commissioner, there are a range of actions that have been taken by this Government that undermine the trust that we need to build in New Zealand if we are really serious about preventing harm to our children, violence not only within State care but also within our communities—and we have a big job ahead of us to do.
I look forward to the submissions, and I encourage submitters, anyone at home who’s tuning in, to put their views in and make them heard loud and clear at select committee. It’s a very important part of our democratic process—that your voices are heard as part of the consideration of this legislation.
PAULO GARCIA (National—New Lynn): I stand in support of the Oversight of Oranga Tamariki System Legislation Amendment Bill. The bill covers two broad areas of change: one is to strengthen independent monitoring of the Oranga Tamariki system, and the second is to strengthen advocacy for children and young people’s issues.
The bill seeks to clarify the roles and responsibilities of the Government agencies that are charged with overseeing New Zealand’s child protection system, and must include greater advocacy and independence.
The bill will change the Independent Children’s Monitor from being a departmental agency under the Education Review Office to an independent Crown entity. This is designed to ensure independent monitoring, particularly as it is separated entirely from Government.
The bill returns the Children and Young People’s Commission to a single commissioner, taking it away from a five-member board structure. This, in turn, will give children and young people a single and visible advocate. It ensures that those transitioning out of care know who their advocate is, should there be any issues.
Ultimately, the bill is aimed at improving outcomes for children and all young people in New Zealand. I commend this bill to the House.
GLEN BENNETT (Labour): Kia ora, Mr Speaker. It’s interesting to listen to the debate this afternoon and to hear that there seems to be support across the House—although cautious support from us here in Labour. As I’ve been listening—you know, there’s the old phrase that everyone knows about how it takes a village to raise a child, but I really think sometimes you need to flip that around and consider that it takes a child to remind us of our responsibility to the village.
I think, looking at this legislation—and I was actually a member of the Social Services and Community Committee last term; I was deputy chair when we went through this process. The challenge for me then and the challenge for me now is, again, what is my responsibility to my village and for the sake of our tamariki, our rangatahi? I know that it was challenging when we went through the process, and many of my colleagues from previous years and my friends in my own community do question it, particularly around the five-person board, but I came to a place where I did support it wholeheartedly. The reason I did was because it was around diversity and it was around the whole concept of how you often have to be able to see yourself to be able to actually reach out and to seek the help you need.
We had people like the Hon Karen Chhour, we had people like the previous speaker Paulo Garcia, and other members, speaking about how it’s clumsy and it’s difficult having a five-person board as opposed to one commissioner, but my challenge back to that is: you need to be able to see yourself to actually be in the space or have the ability to actually connect and actually seek out the necessary help.
I look back to when the first iteration of the Chief Children’s Commissioner was established in 1989. There were eight chief commissioners up until we brought this new piece of legislation in, in 2022. Of the eight, two were female—and of the two, both were Māori. Of course, it’s funny that the two wāhine were also Māori. Of those eight commissioners—that’s what it was. I just think that’s where we need to look very carefully about who is stepping up and representing us in this space. My challenge as we cautiously take this to the select committee is for us to listen carefully to the advocates, listen carefully to stakeholders, around how it has actually worked in the last two years in terms of having the five-member board—what was good about it, maybe what was challenging about it; but the fact that that we need to be able to see ourselves in in that space.
The second part I want to briefly talk about is in terms of, I guess, my role—in my whole life, pretty much, particularly in my adult life—working with young people and their families, and, coming back to that village scenario, it’s around how do we in this House always look deeply into legislation, that, actually, the child is at the centre of that.
That’s where I have concerns, but I’m willing to commend the bill today to go to select committee, to look and to listen and to understand where we actually can best do what we can for the sake of our rangatahi, for the sake of our tamariki. The Minister for Social Development and Employment, who is putting the bill through this afternoon, and I sat in the select committee last term and we went through this. As I said at the start, it was challenging, but I thought we needed to look at a different way of doing it. The Labour Party are willing to move forward and to support this bill and to really critique it, to pull it apart but to listen carefully to our stakeholders and those engaged, particularly at the coalface of working with our rangatahi and our tamariki. I commend this bill to the House.
RIMA NAKHLE (National—Takanini): I too rise in support of this bill that the Hon Louise Upston has brought to the House, the Oversight of Oranga Tamariki System Legislation Amendment Bill. We’re in the first reading, and I tautoko what the speaker before me, Glen Bennett, said in terms of acknowledging that something different was tried, but I’m glad that this bill seeks to go back to having that one voice—that one voice that’s going to be there to advocate for our tamariki, for our children. That’s important because it’s such a delicate balance of advocacy that’s taking place in the realm of Oranga Tamariki, of our tamariki, of our rangatahi.
Essentially, there’s two areas of change that this bill seeks to establish: strengthening the independent monitoring of Oranga Tamariki, the system there; and strengthening, as we said, the advocacy for our young people’s issues generally. This is going to be done by making the monitoring independent, and that’s something that our Minister has stressed. In August this year, she said that we want to give our children a greater voice. In May this year, she said there’s going to be stronger oversight for our most vulnerable children.
I’m glad that this bill has got the support of the whole House. It will go to the select committee and go through those avenues that it needs to go to. I commend this bill to the House.
Motion agreed to.
Bill read a first time.
ASSISTANT SPEAKER (Greg O’Connor): The question is, That the Oversight of Oranga Tamariki System Legislation Amendment Bill be considered by the Social Services and Community Committee.
Motion agreed to.
Bill referred to the Social Services and Community Committee.
Instruction to Social Services and Community Committee
Hon LOUISE UPSTON (Minister for Social Development and Employment): I move, That the Oversight of Oranga Tamariki System Legislation Amendment Bill be reported to the House by 6 March 2025.
Motion agreed to.
Bills
Policing (Police Vetting) Amendment Bill
First Reading
Hon MARK MITCHELL (Minister of Police): I present a legislative statement on the Policing (Police Vetting) 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 MARK MITCHELL: I move, That the Policing (Police Vetting) Amendment Bill be now read a first time. I nominate the Justice Committee to consider the bill.
The police-vetting service contributes to public safety and national security by providing over 650,000 police vets each year to support approved agencies to make informed decisions about individuals, primarily appointing individuals to roles in contact with children and vulnerable adults. This bill provides a statutory framework for the police-vetting service and will provide clear and consistent policy for police and users of the service. It will clarify the information considered and the tests police apply before releasing information. This will assist vetting users to understand what to expect when engaging with the police-vetting service.
I note that the bill implements a key recommendation contained in a 2016 joint review undertaken by the Office of the Privacy Commissioner and the Independent Police Conduct Authority to provide greater clarity around vetting. The bill sets out that the purpose of police vetting is to assist agencies with their decision making about roles that involve the care and safety of children, young people, and vulnerable adults; roles that involve the education of children or young people; roles that involve law enforcement or national security and immigration- or citizenship-related decisions.
The bill provides that a vetting request can only be made by an agency that is either required under law to obtain a police vet, or that police consider it appropriate to make a vetting request. A vetting request may only be made if it is related to the purpose of police vetting, and police do not require any person to be police vetted.
Around 14,000 agencies are approved by police to request police vets to assist with their decision making about individuals and circumstances that meet the purpose of police vetting. A police vet is only provided with the consent of the vetting subject and can only be provided to an approved agency. It is a point-in-time assessment of police-held information.
The bill provides that the criminal-conviction history must be released, subject to the Criminal Records (Clean Slate) Act 2004. The bill also sets out the categories of non-conviction information police consider for release. These include active or past charges; warrants; infringement offences; demerit points; overseas convictions, if held; family violence incidents; investigations that did not result in charges; and interactions that the vetting subject has had with police. It is important to note that just because non-conviction information may be considered for release, it does not mean that it will be released. Non-conviction information may only be released if it is relevant to the purpose for which the police vet is sought.
Police are also required to take reasonable steps to ensure the information is accurate and not misleading. The bill also recognises that four categories of information are particularly sensitive and should be subject to additional disclosure tests before being released. This occurs where the information is subject to a suppression order, is about a person when they were under 18, where it relates to mental health or substance abuse information, or if it relates to involvement in family violence as a witness or a victim.
Ten percent of police vets include only a criminal-conviction history, and less than 5 percent include a summary of relevant non-conviction information. The bill requires police vets for children’s workers who are regulated under the Children’s Act to be updated when they are charged or convicted of a specified serious offence. This reflects current practice. The bill also enables police, in agreed circumstances and with the consent of the vetting subject, to arrange with an agency to provide updates on a police vet—for example, if a person was charged or convicted of serious offences.
The bill provides for the service to continue in substantially the same manner as at present. However, it also enables police to deliver future service improvements, which would require further investment in systems that could enhance public safety and increase the efficiency of the service. This includes enabling police to specify a class of individuals who could be authorised to request a police vet on themselves, noting that police vets will always be provided directly to approved agencies. This could enable the police vet to be provided to more than one approved agency at once, so long as they all need it for the same purpose.
The bill also provides an indemnity for police from liability for any actions taken in good faith responding to a police vet. This is similar to the approach taken in the Privacy Act and the Official Information Act 1982. Given the public-safety interest in providing police vets, I consider it appropriate to provide this indemnity, which will encourage police to err on the side of releasing information. I commend this bill to the House.
ASSISTANT SPEAKER (Greg O’Connor): The question is that the motion be agreed.
Hon GINNY ANDERSEN (Labour): Thank you very much, Mr Speaker. Labour supports this piece of legislation. It’s been a while in the making, but the improvements this makes seeks to protect vulnerable people from harm and it’s an important system that we believe provides reassurance in places where it’s needed. Police initiated the review via the Independent Police Conduct Authority (IPCA) back in 2016, and the review recommended that a statutory framework needed to be developed in order to address a lack of legislative policy direction and uncertainties and legal risks to all parties when police vets are conducted, and so this is a response to that inquiry, to that request from the IPCA.
This bill amends the Policing Act from 2008 and seeks to address the recommendations of the IPCA review. The proposed statutory framework will allow police-vetting services to operate as it does currently. However, the statutory framework seeks to provide additional clarity around the purpose and the scope of vetting, which is important for people’s privacy and rights. It will address who can access the police-vetting service, what information can and cannot be released to vet—as stipulated by the Minister’s speech. This framework will also enable the implementation of significant changes and improvements through provisions coming into force by regulation over the next two to three years. These additional developments are proposed by the Police in the space particularly for information technology, and that will no doubt be dependent on funding to enable police to have that funding for that IT platform to be in place for that to happen. We know that the storing of data, particularly in consideration to privacy, is critical.
Establishing this statutory framework that enables a police-vetting service to occur is an important fact as it sets out the purposes of what are we doing this for when people are being vetted. It sets out who can request a vet, requiring a request for a police vet made within the consent, and setting out the information that may or may not be disclosed, enabling an individual who is a member of a specified class of individual to make a vetting request to themselves and specifying the agencies they wish the police to vet is able to be disclosed. An example might be an individual may request that police vet about themselves be provided by police to a number of prospective employers instead of having each of the prospective employers separately request a police vet in respect of the individual, so it would save time in that space.
Having the statutory framework will provide a clearer legal and policy direction for police having vetting services, greater clarity on vetting service purposes, and also it will give greater consistency so we can have that framework in place. We want to make sure that, particularly if people are in charge of children or people who are vulnerable, the right checks and balances have been in place, and also that there is a framework in place so that people have trust and confidence that it’s working well.
This bill will require anyone subject to a police vet to consent to the request being made—that’s an important point. In line with the existing scheme, information provided in a police vet could cover anything from demerits to infringements to active charges, warrants for arrest, any other interactions between an individual and police, family violence incidents, police investigations, overseas convictions, and any other information that’s held by the police. The Police website says that vets can currently provide information, subject to name suppression, where that information is necessary.
It’s important to note that this is work that enables a great service that gives people security about children and other people being in charge of others and having that check in place. Police do an outstanding job at carrying out these checks and making sure that we have confidence in our system. This legislation, which has been in train for a number of years, enables that policy framework and certainty to be put in place. I commend the bill to the House.
TAMATHA PAUL (Green—Wellington Central): Kia ora, Mr Speaker. Thank you for allowing us the opportunity to speak about the Policing (Police Vetting) Amendment Bill for its first reading in the House today. I’m happy to say that we support this bill, and our contribution won’t be too long given most of the points have already been outlined by the Minister and by my colleague Ginny Andersen.
Basically, we are in support of this bill because it means that we are able to do those really important checks when people are doing a particular type of mahi, particularly those where there is a more, I guess, vulnerable group of people involved—for example, if you’re working with children or you’re working in a particular job where these checks are necessary. This bill will mean that that process is a lot easier and a lot more streamlined, which is really important given there are 650,000 requests every year to vet individuals. That’s quite a big demand, and so we’re happy to do things to make that process easier and more streamlined.
There’s two important points that we want to point out around this bill. The first one is around privacy and the way that we retain that information about the individuals and making sure that where that information is shared, the privacy of that individual is protected under all circumstances, because this information can traverse some quite deeply personal details about decisions that that individual has made throughout their lifetime. The distribution of that information and that data has to be very carefully made, and the Privacy Commissioner has obviously made that point very clear that we have to be very careful with the ways that we look after and maintain that information. That’s one big consideration that we have around the privacy rights of individuals and the rights that they have over their information and the collection of that.
The second point that we really want to make on this bill is we want to make sure that, through the passage of this bill, information that is thought about individuals and things that they may have done in their life doesn’t prejudice their ability to go on to do further mahi in their lifetime. For example, you might have a person who committed a crime, it could have been a low-level offence at some point during their life, but we don’t want that person to have to continue paying for that mistake that they made in their life. We’re giving some consideration towards how long some of those convictions might exist with a person and to make sure that they’re not being punished again and again, particularly those who have been released from prison and the way that those convictions and those records still impact them even after they’ve served their time.
We’re concerned about this kind of double jeopardy situation where someone continues to be punished for something that they’ve done time for. That’s a consideration that we have and that comes from the belief that we have in everybody’s potential to turn their lives around regardless of their actions. I’m not saying that, if somebody has committed a particular type of crime, we should disregard that information; what I’m saying is that they shouldn’t have to keep paying for something if they have done their time, done their sentence, and then are trying to reintegrate back into society.
That’s, basically, our two considerations in a nutshell. It’s really around those privacy concerns and around the fact that when people have done their time and have demonstrated that they’ve been able to turn their lives around, we shouldn’t continue to punish them in the ways that they can access different forms of employment or continue their life without continuing to, I guess, experience that prejudice. That’s our point, and happy to support this and to continue to scrutinise this bill as it moves through the House. Thank you.
TODD STEPHENSON (ACT): Thank you, Mr Speaker. I rise on behalf of ACT to speak on the Policing (Police Vetting) Amendment Bill in this first reading. Look, I think this is a very important piece of legislation. It is going to be considered, as I understand, by the hard-working Justice Committee, and ACT will be supporting it in this first reading.
A lot has been already said by my colleagues across the House, but it is important that we get this police-vetting framework in place. I was surprised to learn, actually, of the number of vets that are done each year: 650,000. Out of the population of New Zealand, that’s a considerable number. These are very important processes and checks that are done. As the member from the Greens, Tamatha Paul, said, particularly when you’re dealing with vulnerable people, children, etc., it’s very important that this work is undertaken. I was also surprised at the number of agencies—some 14,000 agencies that actually do use the police for these vetting services.
This bill does tidy up, really, a recommendation—again, this has been touched on already—from this joint report way back in 2016; again, work done by the Privacy Commissioner and the Independent Police Conduct Authority. I think it is great that we’re actually bringing this bill forward. It’s going to put in place this framework to make sure that these really important processes that are done by the police are done in an appropriate way, a transparent way, and in a way where the people who are having the checks done on them do consent to it and they understand how that information is going to be used.
Again, I think it’s been well-traversed some of the things that it’s going to put in place, but really it is going to set out who can make these requests, how they’re going to be done, and really what is the service that the police are undertaking for these many, many agencies to make sure that people being engaged, particularly with vulnerable children and young people—that their education, their safety, their welfare are being properly vetted and that information’s being made available.
I’m just probably going to leave it there. I look forward to, again, seeing this when it comes before the select committee. We can look at it in more detail, but I commend this bill to the House. Thank you.
Hon CASEY COSTELLO (Associate Minister of Police): I rise on behalf of New Zealand First to speak in support of the Policing (Police Vetting) Amendment Bill. I’d first like to acknowledge the effort the police make. As we’ve worked through this process, we recognise that police will often respond to a change of policy or process or system and just get to work delivering the service that’s being required of them. This vetting process, I think, is one of those ones where police have been inundated, to some extent, on the demands in this vetting process. It has been important that they commenced work straight away, and they have delivered a very positive service to New Zealanders, ensuring that we make sure that people are qualified, that they are suitable for the roles they’re put into.
This delivery of a framework has been a long time coming, as we’ve alluded to, but I think it’s really important that we now get this right and ensure that we deliver a service and a system that is robust, that is reviewed, that is protected—particularly that police are given some level of protection indemnity. I know it’s been raised, this issue about whether someone should be allowed to be cleared of any previous wrongdoings and allowed to continue with their life. I think it’s important to note that the police-vetting process is presenting information. They are not making the decisions on who should or shouldn’t work; they are just presenting information. I think it’s really useful that when they present that information, they have some level of protection that they can deliver full, detailed information without that fear of if they misstep or misspeak—that there is a degree of indemnity to ensure that there is a really frank and honest exchange.
A lot of these vettings relate to people in positions that need to have the highest level of trust in them because of the roles and tasks that we’re putting them under. This process that’s been put in place, this piece of legislation, will be important as we move forward, not only in the process but also in the ability to recover costs and ensure that we are delivering a better public service by investing in the systems and processes and equipment that we will use to maintain and control this information. It is with pleasure, on behalf of New Zealand First, that we commend this bill to the House. Thank you.
HANA-RAWHITI MAIPI-CLARKE (Te Pāti Māori—Hauraki-Waikato): Tēnā rā koe e te Pīka, otirā tēnā rā tātou e te Whare. Tū ana hau ki te waha i ngā kōrero mō te Pāti Māori. E tautoko ana mātou i tēnei o ngā pire.
[Thank you, Mr Speaker, and also greetings to the House. I stand on behalf of Te Pāti Māori. We support this bill.]
We are in support of this bill, the Policing (Police Vetting) Amendment Bill. We understand that police vetting involves background checks when people apply for certain jobs. Background checks are usually required for roles that involve working with certain children and vulnerable people, as well as Government roles, requiring a high level of public trust. It is not the same as the Ministry of Justice’s criminal-record checks, which provide information only about convictions.
Currently, there are around 14,000 agencies who can request police background checks on new applicants. The purpose of this bill is to clarify the law around this undertaking, including (1) who can ask what and about whom, and (2) the need for consent and what information can be gained.
In respect of mana motuhake, this bill does involve sharing data with employers, but this is mitigated by the need for consent. Another issue is the potential for double jeopardy—being punished multiple times for the same action—but this is mitigated by the need to ensure the safety of tamariki and vulnerable people.
Focusing on the safety of tamariki and vulnerable people is key for Te Pāti Māori. In respect of mana ōrite, I note that Māori are much more likely to come into contact with police. Māori are 37 percent of the people proceeded against by the police, despite being only 19.6 percent of the population. This law could disproportionately impact Māori because the police are more likely to hold data on Māori. We would like to hear more about these implications at the select committee.
In respect to mana mokopuna, Te Pāti Māori supports clarifying the rules around background checks that will ensure that those entrusted with taking care of our mokopuna are vetted appropriately. With a view to hear more about potential implications for iwi and Māori, Te Pāti Māori supports this bill in its first reading. Tēnā rā koe e te Pīka.
JAMES MEAGER (National—Rangitata): Thank you, Mr Speaker. I do apologise to the House for maybe sounding a bit under the weather after a week of prize-giving in a two-day event at the Ashburton Show—a great show. I may have picked up a couple of bugs on the way, but I will do my heartiest to support this bill through its first reading today.
It appears that this will be another bill sent to the busy and effective Justice Committee, so I want to acknowledge my colleagues in the House on the Justice Committee, who will be preparing furiously for the long-awaited arrival of this bill, the 23rd bill to be considered by the Justice Committee in this Parliament. I was doing some statistics earlier on today. We have reported 11 back, we have 11 under consideration, and four are awaiting us on the Order Paper. My message to my colleagues on the Justice Committee is to maybe clear your diaries for the next couple of Mondays because we might be very, very busy in the lead-up to Christmas. Can I support—
ASSISTANT SPEAKER (Greg O’Connor): Do I hear a kūmara speaking of its sweetness there, Mr Meager?
JAMES MEAGER: Well, I’m not too sure if the workload will be that sweet as we head into Christmas, but can I just say that this is a good bill that we will be supporting through the House. It puts in place and codifies the structures that currently exist for police vetting. I, like my colleagues, was a little surprised to fully realise that the vetting process isn’t actually in statute, and so some of the protections around privacy that should ordinarily be in place are not so.
The genesis of this bill has come from the 2016 report by the Privacy Commissioner and Independent Police Conduct Authority, which recommended that some structure and some rigour be put in place, because, after all, we are dealing with the situation where an agency holds your information and a third party is requesting that information, but not necessarily with your consent. When we do that, we must be doing that for very good reasons, and, Mr Assistant Speaker O’Connor, I suspect, given the history of some in this House—yourself included—of dealing with people in this area, including some offenders, we’d want to make sure that we are protecting children and we’d want to make sure that the people who work with children are thoroughly vetted. When we allow agencies to share information about individuals, we should do so with good intentions and good reasons in mind, and that is the protection of children and of vulnerable people.
I refer to some of the concerns back in 2017 from the likes of the Nurses Union, who were concerned, of course, about the extent of some of the information that was being shared. Hopefully, some of the protections that are in place in this bill will address some of those concerns. I draw members’ attention to some of the requirements in there about what the police-vetting service is required to do when a vet is made—some of the protections around vets against children. For example, I believe you will be unable to undertake a vet against an individual who is under 14—a child—and there are some additional protections in place when vets are being requested of workers and volunteers under the age of 18.
It’s important that we put this structure in place. It’s important that we modernise the law. A number of roles in our country are required by statute to undergo police vetting. That includes, of course, those working in schools and the education sector, nursing, healthcare, and the protection of children. I think this is a good step by the Government. We will be supporting it through the first reading, and I look forward to considering it as a member of the Justice Committee in due course.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe e te Mana Whakawā. I fear for the Justice Committee, given that member managed to stretch out a speech on such an uncontentious bill for so long—I hope he moves business before the committee at a slightly brisker pace!
I’m not going to take up a great deal of the House’s time, because this is an uncontentious bill. It’s not got a lot of high policy. I think, if there is policy in it, it is about the use of what could be seen as private information and what’s, essentially, delving into and investigating the private affairs of an individual and balancing that against the need for public safety. That’s, at its root, what this bill is about.
As has been said on a number of occasions already, the rules and framework that’s proposed is one that largely has been adopted by the police already, with some finessing. It is absolutely proper that it goes to select committee, which is the right place to do that detailed work and make sure that we’re not being overly intrusive, and at the same time the police-vetting process is effective and prophylactic in terms of public safety. To be perfectly honest, at this stage of the debate, in my view, there’s not a great deal more to say, although I’m sure my colleague Tracey McLellan will have much more to say. I will simply commend it to the select committee and to this House.
CAMERON BREWER (National—Upper Harbour): Mr Speaker, I’m very happy, like everyone else seems to be today, to be supporting the first reading of the Policing (Police Vetting) Amendment Bill. Just reiterating what our hard-working chair of the Justice Committee James Meager pointed out: that this legislation, to get it to first reading, has had a long gestation. When you look back at 2016 when the IPCA, the Independent Police Conduct Authority, and the Privacy Commissioner released the joint review into the police’s vetting service, that was their recommendation back then in 2016—coming up nine years ago—for a statutory framework for police vetting.
As the bill’s policy statement says, “The potential impact on individuals who are the subject of a police vet warrants a robust and transparent statutory framework being established to formalise the operation of the Police-vetting service.” Like others have said, I look forward to submissions and to working through this as part of the Justice Committee. I commend the bill.
Dr TRACEY McLELLAN (Labour): Thank you, Mr Speaker. Labour supports this bill, as several of my colleagues have said, and for good reason. I think it’s pragmatic and most of the issues or potential issues are pretty clear and have been worked through. I, like several other contributors today, was really surprised at how many police vets are done. I feel like I kind of remember when it came in—I’m not sure how long ago that was—but it may have just been as a younger person being fully aware that that’s something that the police did. It seems to have been well embraced and well used, which is relatively surprising given the lack of that regulatory framework. I think, following the review, it makes sense to put that structure in place just to provide that statutory framework.
One of the other issues, and I was just looking through the information, was that—notwithstanding the fact that this, essentially, just affords the opportunity for things to work as they normally do anyhow but with that regulatory framework and that backstop—the bill itself and much of the work and much of the consultation obviously started actually quite some years ago now. Whilst we talk about getting it to this stage, the public consultation actually sort of happened between May and July in 2018. At the time, there were 76 submissions that Police had received, and the Privacy Commissioner had also previously been consulted, so there’s been some legwork done in the background of this particular bill.
I did note, though, that the Privacy Commissioner, who was previously consulted, had some issue supporting the establishment—or certainly supported the establishment of the statutory framework but did have some concerns about the new section 54N, inserted by clause 5, which is “Indemnity for Commissioner and Police employees”. On the surface, when you look back through that information, you could see why that would need to happen, given that the police are providing the service of doing the vets for other organisations, so they wouldn’t want necessarily to hold the liability or be held accountable if something was to go wrong.
From the Privacy Commissioner’s point of view—it appears that there is some debate about whether they should or shouldn’t, given that the consequences for something going wrong could be quite drastic for an individual or a group if that wasn’t done properly. The Privacy Commissioner had raised the concerns with that provision. So, as we go through the select committee process, it will be interesting to see what other information comes to light or what other issues get raised by various submitters to the process, because, as the Privacy Commissioner said here, “Significant harms can result from the disclosure of potentially prejudicial information that may not be tested in a Court.”
I think, as a member of the Justice Committee—and a very busy committee, very ably chaired by one of the previous contributors, James Meager; I’ll just throw him a wee comment because it felt like he needed it from over here. It is a busy committee. I think sometimes these things can seem a little bit dry, but there’s some interest in here, and I look forward to hearing those submissions. On that note, I commend the bill to the House.
RIMA NAKHLE (National—Takanini): Thank you, Mr Speaker. Once again, I rise as the final speaker on a bill that we have before the House today. Right now, it’s the Policing (Police Vetting) Amendment Bill. For the benefit of listeners from home and from work, we’re at the first reading stage. As we heard earlier, but if they weren’t tuned in, this is a Government bill in the name of the Hon Mark Mitchell, our Minister of Police, and an excellent Minister of Police at that.
It’s good to hear that across the House at this first reading, there is support for this bill. I add my kōrero to those before me that I too was quite astounded that at this stage in Aotearoa New Zealand, we don’t actually have a statutory framework that allows for police vetting to work within.
I guess the question becomes: why is a framework important, in particular a statutory one? It’s for consistency. Consistency is so important. It’s so important, particularly when you’re dealing with people’s private information. When we, hopefully, establish this framework, there are those rules and those requirements and regulations that do need to be adhered to when vetting is being sought.
I look forward to being part of the Justice Committee, chaired by my good friend James Meager. I look forward to discussing these issues. We commend this bill to the House.
Motion agreed to.
Bill read a first time.
ASSISTANT SPEAKER (Greg O’Connor): The question is, That the Policing (Police Vetting) Amendment Bill be considered by the Justice Committee.
Motion agreed to.
Bill referred to the Justice Committee.
Bills
Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill
Second Reading
Hon CHRIS PENK (Minister for Building and Construction): Thank you, sir. I present a legislative statement on the Building (Earthquake-prone Building Deadlines and Other Matters) 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 CHRIS PENK: I move, That the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill be now read a second time.
Earlier this year, we came together as a Parliament to discuss a major problem in our country, and this bill will go some way, at least, but not the whole way that we need to go ultimately, to solve that problem. There are, in effect, two problems. One is, of course, the perils of inhabiting the Shaky Isles, as our land is affectionately but also fearsomely known. That’s a real-world danger. That risk is ever-present and we should not take that lightly at all; indeed, I don’t think anyone in this House would take that lightly.
A second danger exists, which is that in relation to the rules that govern earthquake-prone buildings, there is a large degree of non-compliance currently because of the operation of the rules, implemented, as they were, in good faith a decade ago, roughly speaking, but with barriers having become apparent in the meantime as to the strengthening or, variously, demolition of those buildings. The aim of this legislation is to mitigate the risk that we have a large number of buildings that are not legally compliant, even as we encourage those who are able to strengthen or demolish—again, as the case may be—those buildings which might represent a danger and a risk to life.
Before I go any further, I’d like to acknowledge the work of the select committees, plural—and I’ll explain that in a moment—but primarily the Transport and Infrastructure Committee, chaired ably by Mr Andy Foster, and I look forward to any contribution he may be about to make in the House on the subject, along with those of others across the House, of course. I do want to thank the committee for its careful deliberation. It’s obvious to me from the report that they’ve written that they’ve turned their mind carefully to a couple of very important matters within the bill, and I’d like to take a little bit of time to address those.
For the sake of completeness, I will note that with the legislative statement having been tabled, there are some technical matters that spell out a number of different elements within the bill that I don’t feel the need to rehearse, and that’s, of course, the whole purpose of us being able to table legislative statements. I don’t need to read that out carefully into the record. That exists as a matter of record, and I’d rather spend the time focusing on the earthquake-prone building aspects of the bill. That’s the main part of the legislation that was the driving force for getting it into the House, as the name suggests. As the name also suggests, there are “other matters”, and for any member of the public, or, indeed, member of the House, who wishes to familiarise themselves with those, then, of course, I would encourage them to do so.
ASSISTANT SPEAKER (Greg O’Connor): Feel free to coach your fellow Cabinet Ministers on that point.
Hon CHRIS PENK: I couldn’t possibly comment, sir—“You might think that”, as the saying also says, and you’re never wrong, Mr Speaker, of course, even when you are. In terms of the—
ASSISTANT SPEAKER (Greg O’Connor): The day will come.
Hon CHRIS PENK: —other matters, they’re not insignificant. For example, with the building warrant of fitness scheme, what are known as specified systems sounds very technocratic, but they are actually really important fire safety systems, and actually also to do, crucially, with the preservation of life and buildings. It’s not a small matter, and glossing over it reasonably quickly within the period of time allocated to me doesn’t indicate a lack of importance of that or a lack of attention on behalf of the Government or the Parliament, but, rather, I think it’s more helpful to ventilate some of the issues that were canvassed at select committee regarding the deadline that’s being offered.
Just to be clear, then, the deadline aspect is saying, in effect, that there will be more time available to those who own earthquake-prone buildings to get up to the standard that is currently required, technically, but having made it pretty clear that we intend to review—indeed, we are already reviewing—we intend to reach a place where the settings are likely to be different than they currently are. We are also, in addition to providing that extra breathing space of the additional four years, providing an opportunity for people not to be committed to a course of action that might not be appropriate, given the rules that will prevail following that review.
I do just want to set that scene as a prelude to discussing the fact that the extension is framed in terms of a four-year period but also with an additional possibility of the two years, and that’s an important point that we’ll get to in a moment. The point that the select committee—again, the Transport and Infrastructure Committee—made around the policy intent for the deadlines, I think, was a really helpful one. They suggested an amendment for the sake of clarity—which we accept—which is that if there should be not only a four-year period but also an additional two-year period, the extensions would apply to all those deadlines—namely, those extended originally by four years under the new section but also those issued between the commencement date of the legislation and the Order in Council being made under that new section. Just to be really clear, the idea is that the additional four years and then two years, if granted, would apply to any of the extended deadlines.
In terms of when the deadlines apply from, the date is actually 2 April. There’s a retrospective element, and, of course, usually in this House we are nervous, or at least mindful, of what we are doing in relation to retrospective elements within legislation. The general rule is that you don’t have them in the criminal law, and you don’t have them to disadvantage any party. In this case, the advantage would be that we are extending the effect of the extension back to the date that we announced that that would be available, even though, in the meantime, it’s the case that the law of the land is in accordance with the statute. It’s not something that I could change by mere Government statement or media release, as aficionados of Fitzgerald v Muldoon would know, and one of them is seated beside me—Mr James Meager is all over that. I mean, he’s all over, no doubt, the “Henry VIII” clauses, and that’s where we get to. It’s exciting—
Hon Member: Oh, Regs Review—the best committee.
Hon CHRIS PENK: —as a matter for the Regulations Review Committee, and I did foreshadow that I was grateful to select committees, plural. Not only the Transport and Infrastructure Committee but also the Regulations Review Committee have made an important point about “Henry VIII” clauses and the way that this legislation actually will make use of one. The point that they have made, quite rightly—both select committees; originally the Regulations Review Committee, and then, as acknowledged, but ultimately not acted upon by a majority of the Transport and Infrastructure Committee—is that if we have a piece of legislation that says that there shall be an extra four years available and there may also be an additional two, then that would be in the Minister’s discretion, but it should be Parliament that decides what applies in the matter of primary legislation.
If I can draw a very fine distinction, the select committee report says that the Minister would be allowed to set a date later than that expected by Parliament. It might be that Parliament expects only four years, but I think that Parliament is anticipating an additional two, should that be required—and I emphasise that it will be only if it’s required. The real-world imperative is that we would like to review the settings as quickly as possible, we’d like them to be in place, and we’d like the people to have enough time to be able to comply with those, but if four years proves too little a period of time for that, then I would be minded to grant an extension of an additional two years so that people have an opportunity to comply.
There’s an inherent lack of certainty, of course, when you review settings. We know that major decisions require technical analysis, require investment, and require cooperation of different parties, particularly when there are adjacent buildings, and require input from local government, bodies corporate in the case of unit titles, and so on. These are quite weighty matters, and we wish to resolve the matter in terms of new settings following the review as soon as possible, but if it’s not possible, then we would want people to have the additional two years, and that is why that mechanism is there. To allow that flexibility, I didn’t want to be too specific and be constrained in a way that might be subject to further uncertainty, in effect.
If the legislation were to include a clause along those lines, it might say something like “The Minister would grant an additional two years only if reasonably necessary in order to ensure sufficient time for compliance with the earthquake-prone building regime as it exists following the review of the earthquake-prone building settings.” I know that’s wordy, and it’s probably better that it didn’t go into the law, or at least not as drafted by me, but for anyone who’s paying attention carefully and for whom this is meaningful, please know that that’s the intent. We’d like to do everything—done and dusted—within four years, but if we need an extra two years, then we will do that for the benefit of those who need to comply.
Of course, we could have simply just said that it was six years from the outset, but I do want to hold my own feet to the fire, and those of the Government and of lawmakers in general, to try and get a result more quickly than that. Every day that we have uncertainty, and, of course, real-world risk associated with non-strengthening and non-demolition works of earthquake-prone buildings, represents at least a theoretical risk. So, for that reason, we’ve landed where we have in terms of the legislation. I’m grateful for the engagement of all the parties and I look forward to the contributions of others, and, of course, for myself, I do commend the bill to the House.
ASSISTANT SPEAKER (Greg O’Connor): The question is that the motion be agreed to.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Speaker. This has been a productive process through the select committee, and I want to thank everyone who has participated in it—it was a lively debate at the select committee—and thank the submitters who took the time to come along and really work through some of the issues that this bill raises.
Labour will be tentatively supporting the bill at this stage, and that is a change in position from the first reading. Having heard from the submitters and worked through the policy issues, we have some support for really working through the issue which the Minister has said, both publicly and in this House, is the reason for the extension of the deadline, and that is to deal with the underlying policy settings which need to be sorted out by the Government, and, look, they’ve been around for three decades.
We’ve been debating in this Parliament and through the Law Commission and through the courts the role of council, the role of central government, and the role of homeowners when it comes to who pays for the strengthening of existing buildings in our building system. It’s the Labour Party’s position that people should not be put in undue risk due to the buildings they’re in, and that homeowners—especially vulnerable homeowners—should not be in a position where they’re bearing the entire cost, which is really untenable, particularly for many of the apartment owners who are burdened by these rules at the moment and who have come forward during the select committee process and made their case very strongly.
However, I want to put it on record very clearly that Labour in Government had a solution to this which is better than the one that is being proposed by the Government now. Labour had a scheme called the Residential Earthquake-Prone Building Financial Assistance Scheme, which offered up to $250,000 for the below-market rates payable on sale to protect those homeowners who would have been at a significant financial disadvantage because of the compliance that was being put on them. That also meant that compliance was required as soon as possible, and it meant that building owners would have been required to remediate buildings which were at risk. We’re not only putting those people who live in them at risk, but casual users of those buildings—mixed-use buildings like car parks and commercial facilities, where people might not have the information about the kinds of buildings that they were going into—and neighbours of those buildings, which were also put at risk by earthquake-prone buildings being around them.
It’s in everyone’s interests that New Zealand buildings comply with earthquake standards as soon as possible, and that’s why Labour, at the first reading, was opposed to this bill. We’re now looking to the Government for leadership on some of those really big issues that submitters have come forward and said they want to address in these four years. We say, let’s go—let’s work on that together because bipartisanship and a long-term vision on this is really important, but let’s make sure it’s independent. We need to make sure that the Ministry of Business, Innovation and Employment (MBIE) is also working alongside independent experts on this, and Labour is still looking for the Minister to announce the membership of the independent review alongside the independent chair, which has not been announced, and we’re still looking for a broader consultation with affected homeowners, particularly, in this. But we support it, and we support it along with some of the issues that the Minister has outlined. We need to get our heads around this and make sure that New Zealanders are well served by the legal framework.
I’ll touch briefly on some of the issues around the safeguards here, and then I will speak to the independently qualified person’s rules, which are also being changed in this bill. Firstly, to the appropriate safeguards, we’ve just heard from the Minister that it’s his expectation that there will be a four-year period for this, but there is a possibility that there will be a two-year extension. We firmly believe that if it was the intention for six years to be used, it would have been set in this legislation, and our support for it is contingent on the fact that there is a four-year deadline here and there is only a two-year step-out if that is really required.
At the select committee stage, we pressed officials for a reason why they would not include a rationale for the Minister to use the extra two years that is being allowed for here in the primary legislation. That might have included, say, a reason and criteria that the Minister would have had to have satisfied himself were fulfilled if he were to use the extra two-year extension, because we don’t agree that there should be an extra two-year step out for purely administrative reasons.
The review that has been promised here by the Government into the underlying policy issues should be completed in four years. It should be properly resourced. There should be enough people in MBIE to be able to do that review in the four years, and if it is only a constraint on the Public Service which requires it to be six years, then that is not a good enough reason for the legislation to be extended—not by Parliament—and we should be very clear with the Public Service here that what we need to do is to settle these matters as quickly as possible. Four years should be the absolute maximum. The only reason, in the Labour Party’s view, that a six-year period should be used is if some event happens—either an earthquake event or some huge event like COVID—which disrupts the Public Service’s ability to be able to continue this work, and that should have been the criteria that was in the primary legislation to extend it. I’ll be asking the Minister for some further clarifications on that in the committee stage.
The next point I want to talk about is that if it is extended beyond the four-year deadline and into the six-year deadline, we then really do come back to those criticisms which were raised with the select committee in the select committee process by submitters—particularly those from Christchurch—who raised questions with us around “Isn’t this approach something which continually kicks the can down the road and that really rewards the behaviour of putting it off to the very last minute and rewards those insurers who are unable to settle with homeowners who are looking for a solution?” Look, I don’t think that that is what is happening here with a four-year period, but if it is any further than that, then I think those concerns begin to have real legitimacy in the public discourse. We have to set the Public Service very clear deadlines around wanting to resolve this as soon as possible.
On this side of the House, we are keen to continue to work with this and to continue to make it work in a bipartisan way, but that does mean resolving it as quickly as possible and getting right to the heart of the nitty-gritty up front. Who is going to pay for the strengthening, because the strengthening will cost New Zealanders, and it will cost everyone. Is it the Government’s responsibility, is it the local council’s responsibility, is it the homeowner’s responsibility, or is it all of the above, and do we need a scheme that shares responsibility within all of those? That is the question which we need answered here, and I will put it to members that, actually, there’s a series of value judgments that can be resolved within a four-year period and the information and the policy settings will not change within that four-year period. That work can be done and should be done as quickly as possible.
Now, just moving on quickly, before I run out of time, to the “independently qualified person” part of the bill, this is a good step to ensure that the standards that homeowners, that councils, and that central government have around the quality of buildings and their fitness for things like fire regulations are being upheld across the system. But it is, essentially, a fine that would be levied against people who are responsible for, say, carrying out these checks without the help that this industry requires in terms of making sure that councils are giving them the most up-to-date and accurate information, that the training and the qualifications and the certifications around this industry of practice are well supported, that there is the right kind of training available for these people, and that there is a register that independently qualified people can access and that is publicly available for the people who rely on them. Those are things that should be progressed alongside a fine.
It’s taking a punitive approach to solve the problem where there could be a supportive approach as well, and we’d like to see some work in ensuring that these fines are being levied in a way which actually achieves the result that certain people aren’t receiving more fines than others. We would like to see some reporting on that in the next year to make sure that it’s not overly punitive and is disincentivising people to even get into the professional practice in the first place, and so that we’re not creating a regime where it’s only very, very, very highly qualified and, therefore, expensive professionals who are able to undertake this work.
In closing, I just want to reflect that this has been a policy-intensive work programme for the select committee members involved. We have been extremely reliant on the submissions of the stakeholders who have been impacted by this—not only homeowners but insurers from the councils who have been involved in it—and I want to thank those experts who have been able to feed into this. It is something that many people are deeply interested in and that will affect people’s livelihoods and people’s retirement savings. It is something which has been incredibly emotive at the committee stages and for the stakeholders who have been involved with it, and so I’m just acknowledging how much of a stake people have in this. There will be many, many people who are not affected by it at all. There will be some people for whom this is their entire life savings and life plan ahead of them, and their retirement will look hugely different if we don’t get this right. We want to keep engaging with those stakeholders, we want to keep hearing from them, and we’ll continue to work with the Minister on something that will be long lasting.
Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Mr Speaker. Tēnā koutou e Te Whare. The challenge of earthquake-prone buildings is very, very real, and the difficulty in achieving all of the capacity that we need in this sector to address the many buildings is the reason why this bill was brought to the House. We didn’t hear a huge number of submitters at the select committee, but very few were opposed to the proposal of changing the deadlines by four years, although it could be another two years, as the previous speaker Arena Williams just alluded to.
I recently was looking at the numbers of earthquake-prone buildings across the country, and people may be surprised to know that there are over 1,500 in Auckland; still 930, almost, in Canterbury; and 822 in the Wellington region—so not just Wellington City, although Wellington City is the majority of those, with 572—and, actually, there are earthquake-prone buildings right across the country and in some of our smaller towns like Marton. Local councils, community groups, and building owners right across the country are facing the difficulty of remediating buildings to ensure that they are safe, and that’s really important. It is really important that we do have good standards and that buildings are safe, and yet meeting the standards that were brought in in 2016 by a previous National Government has proved extremely difficult. As things currently stand, there’s no means in the regulations or the legislation for prioritising which buildings must be remediated sooner rather than later.
One thing that the select committee did not consider, because it was out of the scope of this bill, but it might be considered in the review and what happens next, should the extension pass—which it probably will—is looking at how we can make this more achievable for people. There’s no point in having rules and regulations if it’s completely unachievable, and even if there’s all the good will in the world to remediate these buildings, there is a lack of cash, certainly for apartment owners here in Wellington who might be on a fixed income, or for buildings that are owned by councils or community groups. There’s even a lack of resource in the sector to remediate all of these buildings. They can’t all be done at once, and having blanket deadlines doesn’t take into account the fact that there is a limit on the number of expert engineers, project managers, builders, and everyone else that is needed to remediate the buildings.
Through the review, one thing the Green Party is particularly interested in is addressing those issues, because, ultimately, this bill is just a short-term band-aid on the problem. We support the bill, but it is just a band-aid, and we need a medium- and long-term solution to actually address the constraints to ensure that buildings can be remediated and that they can be safe.
One way to do that is to introduce the concept of prioritisation—so to really make a clear pathway and process by which Government and local government can work together to ensure that the buildings that are at the highest risk are the ones that are being remediated first. If you have a multi-storey apartment building that people are living in, or a commercial building that hundreds of people are working in, clearly that is a greater risk to life and wellbeing than a one-storey, hundred-year-old tennis club that doesn’t have anyone in it most of the time. That’s not to say that that building shouldn’t be remediated, but it’s a different level of risk. If we could bring some prioritisation to this process, that would certainly help those in the sector and those who are struggling.
That alone will not solve the issue of the cost, and that’s where I do think central government does need to come up with a viable solution, because it was the case that there was great investment and necessary investment in Christchurch after the Canterbury earthquakes. However, we haven’t seen that level of central government investment in Wellington or some of the other smaller communities that were affected by the Kaikōura earthquake.
The previous Government had a fund. Unfortunately, it was a little bit difficult to access. However, there were some people who had gone through all the trouble of trying to access this fund. I have a person in my electorate who contacted me. Their elderly parent lives in my electorate and they live in an earthquake-prone apartment building. They had just jumped through all the hoops to access that fund that had been set up and then the Government announced that it was being pulled, and so far, we don’t have anything in its place. That was causing enormous distress to this person, who is a pensioner who is on a limited income, and I think it’s really important that we all work together on this.
This bill has cross-party support, but we need to go further and get cross-party support on really sustainable solutions that address the fiscal issues faced, so that it’s not just left to local government or building owners but that they’re able to access the help that they need, especially in the cases where they may not even be able to pull the building down if it has heritage status. We need to ensure that the buildings are able to be brought up to standard so that they can be safe and we can protect our heritage so people can be safe living in them, and so that this enormous cost burden is not simply put on local government or local communities but is shared. I think central government has a really important role to play in that, so we look forward to the further steps to address those issues. The Green Party is supporting this bill.
CAMERON LUXTON (ACT): Thank you, Madam Speaker. It’s a pleasure to rise on behalf of the ACT Party to support the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill.
As the title gives allusion to, it’s extending the deadlines for conducting remedial work on buildings which are deemed earthquake-prone, which, for people at home, are at under 34 percent of the building code—but that doesn’t help explain much, though, does it? Really, what we’ve got here in New Zealand is a scheme in which engineers and other professionals come in and assess a building, and if they think that due to its geographic location, its structure—the knowledge of what is held in plans, sometimes at council; sometimes in museums. If that gives an engineer or a professional the tools to develop an assessment of that building that says that it is earthquake-prone, it will need to be remediated to make it safe for the occupants and for the community.
We’ve had lots of events in these Shaky Isles, as the Minister has alluded to, and this has meant that there have been a lot of changes to the way buildings are measured in New Zealand. There are so many small towns in New Zealand, which have got challenges, in some cases. Some small parts of New Zealand are growing for their beautiful location, the amenities—
Joseph Mooney: That’s right.
CAMERON LUXTON: —the type of life—and the ACT member for Southland over there is a prime—
Joseph Mooney: National—National.
CAMERON LUXTON: Yeah, well, the National member for Southland can speak with pride about his wonderful electorate, and it is a wonderful electorate and there’s many wonderful parts of New Zealand with historic buildings. Unfortunately, with building warrants of fitness, with fires, with earthquake-prone—many parts of New Zealand that are proud of their historic buildings are left in a situation where these buildings are very expensive to remediate, and they need to come up with a plan for both how they’re going to conduct that remediation and also how they’re going to pay for it: what’s the business proposition that this building can offer? It’s admirable for members of the Opposition to spend taxpayers’ money on offering incentives to say that we could give loans to be paid back on completion on a sale of a building, but, actually, that’s taxpayer money, and we need to make sure that we’re putting the money to work in a good way that is actually sustainable.
To that end, just yesterday I visited a hostel in Tauranga—a beautiful hostel. It’s called Wanderlust. It’s 105—it’s more than 105; it was built in 1905. It’s a historic building. It’s got a great deal of importance to The Strand in Tauranga and the life and times of Tauranga, and the owners, Sarah and Matt, have done an amazing job with their remediation. They have stripped the walls and they’ve spent a lot of time on the end of a paintbrush, by all accounts, bringing this building up to a place where they can be proud, and the people of Tauranga can also be proud, of it.
That is on the main strand of Tauranga, a place that has got up and coming commercial opportunities. It’s got a lot of emphasis and money being sent towards the CBD of Tauranga to make it a sort of a place that visitors will want to come. Young people from Europe and around the world will want to come and spend their OE having a backpacker’s experience, picking our beautiful fruit in the Bay of Plenty and working at the cafes and bars, and this sort of thing is a great asset to Tauranga. But the earthquake remediation that’s been done on it is only possible because of the economic future of the CBD. We need to give a chance for these councils in these smaller areas and the building owners who form part of it to take a step back, assess, and figure out where they want to spend their funds and how they want to bring their beautiful communities to life.
There is another part of this bill—and it’s referred to in the “Other Matters”—and that is the independently qualified persons (IQPs) part. Now, what is happening in this bill is an increase in the fines, and from my perspective, that’s increasing the stick to try and get compliance. The Labour member referred to the submissions, I believe, and we heard in the submissions to the Transport and Infrastructure Committee that it’s all well and good to increase the fines, but, actually, what is being done to improve the state of the IQPs, their skills, their registry, and their counterparts on the councils and in other professions?
You can’t just expect IQPs to carry the can all the way for something they’re intrinsically attached to, which is that the IQP assesses a building warrant of fitness. It’s kind of like the mechanic who has a look at your car’s warrant of fitness. An IQP comes and has a look at all the parts of a building that need to be maintained and kept safe, but they need to have access to training and a registry where competent people who are qualified can be found. They need to have people, as I say, who they interact with who know what they’re doing. They’re not just throwing out anything and hoping that the IQP with their skills will pick it up because they’re the ones that the stick is going to whack. We’ve talked about this in the commentary from the select committee, and I hope that the Government takes up some of that and looks at some of our recommendations around IQPs.
Another small part of the other matters was clarifying the exemptions for small heated pools. This is about how often an inspection for a small heated pool—otherwise known as a spa—would need to happen. Now, I think many members in this House would have had constituents come up to them and say, “Oh my God, why do I have to have my pool inspected so often? It’s very invasive. I’ve got my fence and it’s all sorted.” Well, I definitely feel the pain of those homeowners that are dealing with the pool compliance laws. I would say that they are in place for a good reason, though, and that is to keep kids safe from drowning, and that’s something that is laudable. But, when you’ve got a product which is a compliant product, such as a secure cover on your spa pool, it doesn’t seem like something that the councils need to be burdened with inspecting every three years.
Another part that is happening in these other matters referred to is the tidying up a little bit around what is a code of acceptance. A code of acceptance, for those who don’t have to deal with these, is basically where someone has gone and done some work that should have been permitted, as in with a building consent, but they didn’t go and get the paperwork filled out, and went and did the work without that, you can apply for a code of acceptance. A code of acceptance basically says that the council has had a look at this and to the best of the council’s or the building consenting authorities’ knowledge, it is deemed safe and compliant with the code, but they cannot guarantee that all the way down to every screw because it’s being covered up, perhaps. What we’re doing here is just clarifying it to say that if you’ve been issued with a code of acceptance, you don’t need to go for a building consent. It seems simple because a code of acceptance is supposed to prevent you from needing a building consent, but I guess we’re spelling it out in black and white for all to see here.
Another part of this that is quite good, I think, is the meetings that building consent authorities, or BCAs—other stand-alone BCAs that aren’t attached to a territorial authority. We’re giving them some guidance and statutory requirements on how and when they need to send information to a territorial authority, and this is a great idea. I think that we need to be looking more at stand-alone building consenting authorities, and this is a mechanism to allow it to happen. Specifically, it’s saying that that information needs to be supplied within five days, and the commentary back from the select committee is saying we should be making that five working days, which I’m sure will be seen as a sensible change by all.
New Zealand’s housing stock and our commercial and industrial stock is the place where New Zealanders live and provide for our economy, where they manufacture, and where they go and spend leisure time. It’s an important environment, and it is an environment—it’s the human environment that we live in. It’s somewhere where we need to make sure it’s safe, but we also need to make sure it’s affordable and it’s somewhere where people want to be. Taking away burdens, or at least alleviating them, even if it is for a short time, so that plans can be made, policies can be developed, and workforces can be trained is a very sensible initiative from this Minister and this Government, and I commend it to the House.
ANDY FOSTER (NZ First): Madam Speaker, thank you. I’m just going to start with a few thanks before speaking to the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill—it’s a bit of a mouthful, isn’t it?
First of all, can I say thank you, Minister Penk, for your generous comments, and it was a pleasure to shepherd this through the Transport and Infrastructure Committee. Thanks also to all the committee members. I think we work in a very collegial way and we try and find the best possible outcomes that we can, and everybody contributes in terms of asking good questions.
I also wanted to place on record my thanks to the officials and also to the submitters. I mean, we only had 23 submitters. Two of them didn’t like the bill for various different reasons and for nine of them, they were sort of a bit hard to work out whether they did or didn’t, but the majority of submitters said, “We think this is a very sensible bill.” What’s more, they brought to us quite a bit of perspective and quite a bit of expertise, and I’ll come to some of that shortly.
The bill is principally about, as I said, earthquake-prone building deadlines, and so I’ll deal with that first, and then other matters. Principally, it’s about extending the remediation deadlines for seismically prone buildings for four years, and it allows for another two years, if need be.
To me, this is a common-sense, pragmatic approach, and there are two major reasons for that. The first one of those is we have a large number of buildings with seismic deadlines which are looming, particularly in this city here. I’ll come back to that, but Wellington started the process of looking at earthquake-prone buildings early because we know it is a seismically active part of the country. The second reason for this is that the Government has launched a comprehensive—and I do say comprehensive—review of the reaction we take to seismic-prone buildings. Dealing with a seismically-prone building, particularly if it’s a complex building or particularly if it’s a heritage building—and by no means all are—is expensive, it’s complex, and there are also issues of capacity, both of the owners and also of the industry to be able to respond to dealing with these.
The reason for having an extension and why it’s so important is that what you don’t want to do, as a building owner, is be trying to respond to the existing set of rules as they are at the moment and then also know that you might be having to respond to a different set of rules that are being thought about. I’m going to quote from Inner City Wellington, who do a fantastic job in representing, particularly, the residential community in inner-city Wellington—so apartment owners—and a quote that they gave to us was this. They said, “The Government should not conduct the review of seismic risk management in existing buildings under the earthquake-prone building system”—i.e., the review—“at the same time as requiring building owners to progress towards compliance. The review could result in significant changes to the earthquake-prone building regime. It is not reasonable for owners to face potential enforcement action on current requirements if they do not comply while the review is under way.”, and that makes absolute sense, so it’s a very pragmatic and sensible response to that.
The whole issue—which is, obviously, going to be tackled in the review—is a challenging balancing one. We had a number of people who have made the observation both in submissions now but also over time that far, far fewer people have died in earthquakes as a result of buildings falling than have died on the road pretty much every year, and that’s with a reduced road toll. However, it is still a significant issue, and if you look at the potential risk in some parts of our country—and in this one more than in any other one—of a major earthquake and you look at what’s happened in major earthquakes overseas where building standards are poor, you see what the implications could be.
It is really, really important that we do have a really robust seismic building regime, because if we don’t, the consequences could be absolutely catastrophic. I mean, Christchurch was bad. Christchurch was bad, but if you had a major event in this part of the country—and we look at the likelihood of major events like the Alpine Fault going, the Hikurangi Fault going, or any of those major events—the potential could be catastrophic, so we have to be a prepared community. It’s that issue of balancing that preparation and that life safety with the cost of responding to that.
The issue has already been raised about who pays for that, and there is an element of public good and there’s an element of private good. I mean, there’ll be some people who will say, “Oh, look, it’s all public good.” Well, actually, if you live in a building, I think you’d get a private benefit out of it as well, but if you happened to be walking past, that’s a public benefit. If it happens to be a heritage building—why do we list buildings as heritage buildings? We don’t list them as heritage buildings for the good of the owner; we list them as heritage buildings because we value them, as a nation, as a district, or as whatever it might be, because we’re saying that those buildings add to the character, tell our stories, etc. There’s a balancing act that needs to be done there and some real thought needs to be given to this.
How many buildings are involved? Well, at the beginning of this process, we had something like over 7,000 buildings across the country which were designated as earthquake-prone buildings, and about 2,000 of those have been resolved. As of 6 August, when this bill was brought to the House—well, the first reading was on 8 August—5,421 buildings were still on the earthquake-prone building list. Almost 30 percent had been resolved by that stage, which is progress.
I am going to touch on Wellington because it’s particularly dear to my heart. It is a very seismically active city, but if I just remind members of something that I said during the first reading, it was that we’d just visited the crisis management centre downstairs. They said that, in the next 50 years, there was an 80 percent chance of an Alpine Fault event of 8-plus—80 percent—a 25 percent chance of a Hikurangi Fault event of 8-plus; a 1 percent chance—God help us—of a Hikurangi Fault event of 9.1; and a 5 percent chance on the Wellington Fault. If you do the maths and you do the exclusions in there, there’s about a 90 percent chance of a major earthquake affecting this part of the world in the next 50 years, so that’s a really significant thing that we need to be responding to.
Wellington took this very, very seriously. In fact, Wellington City started a programme in 2006—which you’ll note was before the Canterbury earthquakes—to assess all the buildings, and it assessed 8,440 buildings. I can remember at one stage going along to a conference and seeing that Wellington City had done more earthquake-prone building assessments than the rest of the country put together, which was pretty impressive. There were 1,100-plus of those which were designated as being earthquake-prone, and as of August, that was down to about 570-odd. Pretty close to 50 percent of those have been resolved, mostly by strengthening rather than by demolition.
What I would say is that, as I’ve said, there is a peak coming up, and in Wellington, that peak is a very large peak: by 2027, of those 570-odd buildings, 305 have to be resolved. It’s a very significant peak and the capacity is going to be challenged. Auckland, as we’ve already heard from Julie Anne Genter, might have a lower risk, but it has three times as many earthquake-prone buildings as Wellington does—at about 1,500.
We heard also from some of the provincial areas. The Manawatū District, which is often looked at here, they had 68 earthquake-prone buildings, particularly in Feilding, and they made the very, very strong point that the economics of strengthening those buildings just are not there. So there are going to have to be some really hard decisions that are made about which buildings are important to retain and how those buildings are supported.
Arena Williams spoke about the previous Government’s funding regime, but my recollection is that I don’t think anybody actually got through the hoops to actually get anything. Somebody might have got close, but they hadn’t actually made it, so I think it’s really important to bear that in mind.
I think also that in terms of the review, there are going to be real questions about people’s confidence in the assessments which are done. I mean, it’s great to say, “I’ve got a building which is 70 percent of the new building standard, and then five minutes later, it’s down to 20 percent.”, and you think, “Oh, what the heck has happened there?” That’s really challenging. Again, Inner City Wellington made the comment to us that if the new building standards change, effectively what that does is it changes the rating on the existing buildings, and they asked whether that is fair. They said—and, again, I quote from their submission—“Under the current system, there is no end point.” Building hasn’t gotten any less safe; it’s just that the goalposts have moved, so there are some issues that really need to be thought through very, very carefully.
Just to the use of the Order in Council to be able to extend the deadline—to me, it makes absolute sense. As I said, you don’t want to have the confluence of both the review going on with the legislation having maybe not been completed, because, of course, people will have to start thinking about the plans, the designs, etc., for their building. They don’t just suddenly turn that on at the end of the process, and so having that time, I think, is important.
Finally, in the last little bit, I’d just say that in terms of the other matters, such as the Independent Qualified Persons (IQPs), we’ve already heard about it clarifying the obligations, or introducing the stick, as my colleague Cameron Luxton has talked about. We did get some good submissions there about the need for better training systems, a register, and a better qualifications arrangement, because it’s really not good enough at the moment. Now, those things might have been beyond the scope of the legislation as it was, but they did make a lot of sense, and we do commend those for further thought, and—just finally to say—they also raised the issue of whether only IQPs should be held responsible if something goes wrong, because they also rely, of course, on a lot of other players, whether it’s the councils, whether it’s the engineers, the designers, or whatever.
I’m delighted to get to this point. Thanks, everybody, for getting us to this point, and I commend the bill to the House.
DEPUTY SPEAKER: The next call is a split call.
MARIAMENO KAPA-KINGI (Te Pāti Māori—Te Tai Tokerau): Tēnā koe e te Pīka. Tēnā tātou. This is a really timely discussion, given the other day, when I felt that very big thump—just yesterday, at 4 o’clock. I was like, “OK, I’m sitting here and I’m not in my safe Tai Tokerau home.”—so, anyway, here we are. I guess that I wanted to draw this discussion in relation to the probably 200-plus marae in Te Tai Tokerau and the marae around here—just over the road, actually—and the relevance of this piece of work to our marae.
Without the amendments we discuss today, many of our marae would have been at risk of closure and would be forced to be demolished if they had failed to meet the original deadlines. The extensions of time frames have saved various marae, but only for the next four years, and, for an unlikely cohort, the next two years. This is all the time these marae have left to somehow acquire the funds necessary for seismic upgrades; these extensions are, therefore, a temporary solution to a deeper systemic problem.
At the core of this problem is something that many hapū face, which is the inability to afford seismic strengthening of their marae. A marae is not a stand-alone building, but it’s comprised of wharekai, wharemoe, wharepaku—all of the places that make up a marae complex and a marae system. Keeping in mind that that is generalised, across differing hapū, marae will consist of whare outside of those that I have just listed. When we consider the cost of seismic upgrading to even just one of these whare, it is simply unachievable for many hapū.
Marae safeguard our identities, our history, our reo, our whakapapa, our tikanga, our cultural practices, and our collective memory that has passed through the generations in our magnificent whakairo that often dress many, many of our marae across the motu. They’re also a place of safety during civil defence emergencies—as they should be—as was seen during Cyclone Gabrielle. They are a haven for whānau from all walks of life in moments of crisis, to not only Māori but Māori mai, Pākehā mai. Tātou katoa, marae is your marae.
When we consider this and the reliance of Government on marae to feed and house our communities in these times, it is clear that Government must shift the burden of seismic upgrade financial stresses from hapū and into their own hands. The Government should fully fund seismic strengthening for marae. With the rising costs and limited funding, and with little to no resource available, the finance strain on hapū and their marae will leave our communities vulnerable. Hapū need targeted funding initiatives, meaning partnerships with Government agencies and actual collaboration in order to achieve that result.
All of us—Māori and non-Māori—must ask ourselves what it would mean if you lost your marae. We Māori know that there are a limited number of spaces where we can be our true, authentic selves, yet marae are some of the only spaces left in the country built off stolen whenua and Māori labour. Koia, te reo, tikanga, and whakapapa endures, but I must ask those non-Māori, tauiwi, tangata Tiriti, or however you may identify: what would it mean if your marae were lost?
This bill and its amendments foster a sense of urgency for whānau, for hapū, for marae, and for the country, actually. The preservation and safety of our marae is not only critical to the enduring legacy of our whakapapa but also to our obligations as tangata whenua in providing the necessary care for our manuhiri. Our marae deserve the support needed to thrive, and Māori need to be properly resourced to meet earthquake-proofing requirements. E tautoko mārika te pāti tēnei kōrero. Tēnā koe e te Pīka. [Our party wholeheartedly supports what has been said. Thank you, Madam Speaker.]
TAMATHA PAUL (Green—Wellington Central): Kia ora, Madam Speaker. Thank you for giving me the opportunity to speak to this bill on behalf of our party.
I actually want to do something very strange and very odd from this corner of the room: I actually want to acknowledge and mihi to you, Minister Penk, for reaching out to us early. Your office did a really great job at reaching out to myself and my colleague Julie Anne Genter, as the Wellington City MPs, to brief us on some of these changes, and I really appreciated having that early notice and being communicated with about what your intentions are. Living in a city where we have such a high earthquake risk and where so many of our residents, and also our city council, are so deeply impacted by these rules, it was really nice to be consulted on that. Thank you to you and your office for consulting with us on that.
I also wanted to acknowledge that this legislation doesn’t impact only Wellington. Yes, it has been the centre of the conversation and the centre of focus due to our vulnerability and due to the number of buildings that fall under this category that sit within our city, but it was really important to, I guess, our wider caucus to acknowledge the provinces and the small towns that are impacted by having an earthquake-prone building status. It’s not just a Wellington issue, but it affects our whole country and even—as my colleague Mariameno Kapa-Kingi was just saying—impacts our marae.
It impacts quite deeply when you take a broader look at it. It’s not just Wellington-centric, but I am really pleased to see the changes from a Wellington point of view, because we look around our city and we see the impact of having an earthquake-prone status on so many of our most important buildings. Our central library: you might have seen that it has been under construction for the last few years, and that’s because it was deemed to be earthquake-prone, and within the Civic Square area here in Pōneke, so many of our buildings have got that tape around them. It’s a tremendous financial burden, because there was previously this expectation that we would fix those buildings at a certain time, and our city simply cannot weather that financial burden to do that critical work.
At the same time, we acknowledge that it’s really important that buildings—especially those that have lots of people in them—are at the highest level of safety standards. We’re kind of trying to make this balance between having safe buildings that people can enter into without the fear of loss of life or of damage in the case of a major earthquake, but we’re also trying to acknowledge that the financial burden for the city, if the city council owns that building or the Government owns that building, is extremely high. There is also the financial burden on residents and people on fixed incomes who live in some of these apartment buildings and who cannot weather some of the earthquake-strengthening work that is required of them. There’s a lot of different things to juggle in this conversation, but I feel pretty happy at this point of the bill’s passage that many of those factors have been addressed.
I particularly wanted to echo those acknowledgments from my colleague Andy Foster, who talked about the really excellent work that Inner-City Wellington has done. For those who don’t know Wellington, Inner-City Wellington is like our inner-city residents’ association, and it has been doing a lot of advocacy, particularly for residents living in those buildings that are earthquake-prone who are on those fixed incomes and who can’t come up with the money to strengthen their buildings. I want to particularly acknowledge Geraldine Murphy for the work that she has been doing in this space to continue to advocate for those people.
We’re happy to support this bill at this stage of its passage, but I just want to reiterate our desire to make sure that that financial burden isn’t impossible or insurmountable, and we also want to acknowledge the really important role of human safety. From the briefings that we’ve received around this bill, it’s clear that we could look at some forms of prioritisation, and so we’d be making sure that the buildings that have the most people going through them and the highest risk are prioritised in those deadlines, above some of the more random, smaller, less consequential buildings that exist out there, like some of those heritage buildings, which I have strong views on—but I’ll park those for another day. Thank you very much, and that’s my contribution. Kia ora.
GRANT McCALLUM (National—Northland): Well, I’m very privileged to rise and speak on this bill, and I’d just like to acknowledge that it’s great that common sense has broken out on the other side of the House and they’ve finally seen the light and decided to support this bill. Thank you—I acknowledge it. [Interruption] There you go, they still can’t acknowledge that maybe we’ve got a good idea over here that they can support, but it’s great. Thank you and I appreciate it, and it has been a very collegial select committee on this one, to be fair. We—
Hon Phil Twyford: Even a stopped clock is right twice a day.
Hon Chris Penk: You or us?
GRANT McCALLUM: Ha, ha! Well, we’ll take that—as long as we’re picking the right pieces of the legislation to be right on, that’s just fine by me.
DEPUTY SPEAKER: I’d just also clarify that the clock hasn’t stopped.
GRANT McCALLUM: Yes, I’m sure you will all have heard enough of me by the end of that, anyway.
Look, moving on, at the select committee—look, it’s a really tricky and delicate area, this, and it’s important that we get this right. It’s a serious issue around earthquake-safe buildings, and so forth. I think we’re doing the right thing by giving the full review time to actually progress, so that’s what this is all about. It’s just delaying and giving people time. We’ve got to make sure we don’t just keep kicking the can down the road, and I think the Minister has acknowledged that. It’s four years, with a potential of having two. We want to go and really focus on trying to solve this as quickly as possible, but we want to make the rules fair for people.
Just to acknowledge: at the Transport and Infrastructure Committee, we had 23 written submissions, and nine submitters came in and gave oral submissions. The vast majority were in support of what we’re doing. There were one or two who spoke against, but, overall, people could see that this needs to be done. It’s a really difficult area, as people have acknowledged, because you’re balancing off that risk/return trade-off in going forward about how much you spend to upgrade buildings and the potential loss of life. That’s important work that needs to be done, going forward.
As a farmer, I thought there was one part of the bill that I would just mention because I think it’s quite appropriate, actually. There is a part of the bill which removes the obligation on a dam owner—which a few of us are, here in the rural sector—to display a copy of the dam compliance certificate in a prominent place on the dam while retaining requirements for the certificate are to be supplied to the relevant regional authority to update them, and so forth. Maybe not every dam has got a maimai on it, like ours has, where we are able to go in and deal with the ducks that happen to fly in the wrong place at the right time of year—for those of us who enjoy a bit of duck hunting. I just think that that’s a very common-sense approach, because otherwise, if you did not have that sort of structure, you would not have anywhere to display it. So, on that note, I commend this bill to the House.
REUBEN DAVIDSON (Labour—Christchurch East): Thank you, Mr Speaker. We have a responsibility as a Government to keep people safe, and in speaking about the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill, that’s ultimately what it comes down to—it’s about keeping people safe.
I’m the MP for Christchurch East, which is often referred to as the mighty Christchurch East, not just by myself, but by at least everybody who lives in it. I’ve also been a resident in Christchurch since 1977, which was, coincidentally, the same year that Winston Peters entered this building—so it’s a lifetime for me—but I also lived in Christchurch in 2011, during the Christchurch earthquakes. We had a lot of earthquakes in Christchurch, but we had one particular earthquake that was incredibly strong, incredibly powerful, and, ultimately, had a devastating effect on our city and on the lives of a number of people.
The law that this amendment is pushing out was in response to the Christchurch earthquakes. It was a law from the lessons that we learnt from the Christchurch earthquakes, and I think it’s really important that we don’t lose those lessons and miss, ultimately, what we learnt from those earthquakes. Our solution when we were in Government was the Residential Earthquake-Prone Building Financial Assistance Scheme—which this Government cancelled—and, under Labour, owner-occupiers of units and apartments living in earthquake-prone buildings could apply for financial support to fix their homes.
If we’re talking about buildings and we’re talking about the impact that buildings that aren’t compliant with the building code can have, in Christchurch, that was the loss of 185 lives, and what we need to remember is that 115 of those lives—115 people—died in one building alone. The collapse of one building killed 115 people. Now, an earlier member compared road deaths, or deaths on our roads in New Zealand, to the loss of life in earthquakes, as if to say—well, entirely to say that in comparison, more people die on the road than die in earthquakes, but I think that doesn’t take seriously enough our role in this place to keep people safe. We can’t just say, “Oh, because more people die on the road, we can do less to keep people safe in buildings.”
Everyone who was in Christchurch on 22 February 2011 remembers where they were, because where you were mattered. It literally became the difference between life and death. I was in my office that day, but there were some people who weren’t at work because they worked in other businesses, because the industry that I worked in was full of people who worked freelance—who were contractors. Because they were rostered on to work in other buildings that day, they didn’t live; they died. They died because the buildings they were in weren’t compliant with regulations. They weren’t safe buildings, and what we’re talking about with amending this bill is pushing out the horizon for people to make buildings safe.
One of those people was a guy called Andrew Bishop. He was 33. He was an awesome guy. Another of those people was 21-year-old Isaac Thompson, who had so much potential and was such a hard worker, so focused and so passionate about his craft. Ordinarily, he would have worked with our team, but that day, he didn’t. On that day, he worked in the CTV Building, and on that day, as a result of that building and that building’s lack of strength and that building’s collapse, he lost his life. They’re not here any more. Andrew is not here. Isaac is not here. Hundreds of people are not here because of the building they were in—simple as that.
It’s pretty hard to stand up and suggest that we should just push the horizon out and that we should just say, “Take the time you need to make the building safe.” I think any support that we can give for this bill and for this amendment to stretch that time line out really has to be done with us being fully conscious of what that means for the people who are in those buildings. The reality is that a lot of the time, the people in those buildings have no idea—they have absolutely no idea of the risk that they’re taking or of the vulnerability of those buildings.
The tentative—and very tentative—support for this bill really comes with the plea to know what you are doing, to really understand that the difference between four years and six years is huge, to take responsibility for those implications, and to not lose the speed that should be given to this. We’ve all seen the speed that things can be done with—bad things—when this Government sets their minds to it. They can railroad things through. How come this isn’t being given the same priority? It is, instead, being slowed down, pushed out, and given a more distant horizon.
It’s disappointing to see the priorities when you look at legislation like this being used to slow things down and other legislation being rushed through to move things at pace. Based on my experience of living in Christchurch through the earthquakes and based on the really, really tragic loss of life that we saw in Christchurch—the really, really good people being lost simply because of the buildings they were in—and given, as another member has spoken of, the fact that the city that we’re standing in today moved just this week—approximately 24 hours ago—I think it’s really important that the full implications of what this legislation is proposing are understood and that it is not seen as an excuse to slow the process of making buildings safe and, ultimately, of saving lives.
TOM RUTHERFORD (National—Bay of Plenty): Thank you very much, Mr Speaker. Just acknowledging the prior contributor—Reuben Davidson—for his heartfelt and genuine contribution on that, and he did make some really valid points in what he’s been saying. I’m just acknowledging what he had to say there.
For us on the Transport and Infrastructure Committee, we heard from 23 submitters on this piece of legislation. It was not a huge amount, but it was still really vital and important, and the majority of the submitters spoke in favour of the bill for particular reasons in one way or another.
We, as a committee, did make two recommendations back to the Minister for Building and Construction that we thought would strengthen the bill—if you’ll pardon the pun—and I really want to highlight what those two are, because I don’t feel like they’ve been canvassed a huge amount. Clause 17, inserts new section 133AMC, which is an amendment to make it clearer that a further deadline extension by Order in Council would apply both to deadlines originally extended by four years as well as to earthquake-prone building notices issued following commencement of the amendment Act. It’s quite technical, but the other one is clause 26, which is inserting a new section 238. It says that this should be amended to refer to stand-alone building consent authorities, rather than territorial authorities.
Now, these may have been small amendments made by the Transport and Infrastructure Committee, but it’s been really clear across the discussion on this bill this afternoon that the support given from this side and from the other side is that they have listened to the submitters that gave those 23 submissions to the select committee. They understand the rationale behind the Minister’s obligations and why he’s bringing this bill to the House, and why it’s really vitally important that we progress this legislation further down the track to continue the progress of this legislation and why it plays such a vital role in our country. I commend it to the House.
HELEN WHITE (Labour—Mt Albert): Thank you, Mr Speaker. As members have heard, there are really torn emotions on this side of the House about this bill because there is a real concern about how serious it is to delay time frames when lives are at stake. I totally accept that many of the people who are struggling the most are living in houses and apartments because, actually, apartments are affordable, and so it is a very real issue that people are vulnerable to the cost of improving these properties as well.
I’m really proud of Labour for having put its money where its mouth was. In the scheme that it put forward, it was prepared to spend money on the situation, and that, unfortunately, is no longer an option available. What we have instead is an extended time period, and we are tentatively supporting that because there is a balancing act, but I was very moved by my colleague Reuben Davidson’s speech, and it is worth remembering that very, very real cost.
It is really important to remember what Arena Williams said about her concern that the second deadline after the four years would be extended out further. I also recall the Minister for Building and Construction saying that he had made sure that that second two years was really something that was not just a blanket thing that would happen but that he was prepared to hold his own feet to the fire. Well, I pretty much could assure him that Arena Williams will do that job for him at his invitation. She has got—
Hon Rachel Brooking: With or without an invitation.
HELEN WHITE: Actually, without the invitation, she would too. That is the job of the Opposition and that will be happening, and it couldn’t be on a more important kind of issue.
I do appreciate that there is a review that’s going to take place and that there are issues around the kind of increasing standard as we improve buildings, but I also just wanted to talk for a minute about something that is related, albeit please indulge me. That was the Grenfell Tower issue, and I recently listened to a podcast about that review and how serious the issues were and how they weren’t really dealt with. It became institutionally acceptable to actually defraud about the risk of that product, and I am very mindful that it’s really easy to go to sleep about these issues because they seem a long way out.
In that case, people paid a huge price for the kind of group mentality that can sometimes happen on issues like this. That was the industry faking tests about the quality of the product, and people paid a price for that that was incredibly serious. The podcast that I was listening to was fairly compelling on the fact that some of the mentality that went into the way that people were using those products in those situations came from a real belief that people were worth less because they were renting and they were poor, and so there’s always that risk.
I appreciate that the cost of this is very real to people and we’ve got to work with them to build up these standards, but there is a balance included. This side of the House has decided to support this, but very much on the basis of the goodwill to make sure that there is a good-faith response to this and that we use the time wisely. I urge the officials who are involved to use their time wisely because time is very important in this country, which shakes. Thank you. I commend the bill to the House.
Dr VANESSA WEENINK (National—Banks Peninsula): Thank you, Mr Speaker. It’s a pleasure to rise in support of the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill in the second reading. This is an important bill and a very practical one, and I want to take it from two perspectives.
I have a lot of lived experience in this. A previous speaker spoke about his experience in 2011. I was still in the Territorials—in the army—at that time. I was part of the earthquake response, and I led a trauma research team in the Pyne Gould building at the time. During continuous aftershocks, I stood in that building, clutching a vial of ketamine and a saw, ready to crawl through the building to assist some of the people who were stuck in that building. Me and my team stayed there until the last survivor was pulled out in the afternoon the following day, and that experience has deeply affected me on many levels. I don’t feel the same about the shaking of a truck going past as many people might do, and I know that there are thousands of people in Christchurch that are just like me who can’t bear the thought of earthquakes and what might happen.
I know that any discussion about this is deeply emotional to people in Christchurch, because it’s nearly 14 years, but it’s just like it was yesterday. It is important that we keep people safe. Those buildings that I witnessed up close did not keep people safe, and it was a huge tragedy. The fact that we’ve got thousands of buildings that are now deemed to be unsafe because of the codes is concerning. However, those buildings have stood through quite a few shakes already, and so I think that that doesn’t take away all risk, but there is some piece of mind. Most of the buildings in Christchurch that were problematic have gone, and we need to acknowledge that.
From the other side of things, I was the deputy chair of the New Zealand Medical Association. We had to wind up that organisation because we had owned a heritage building on The Terrace that was at about 15 percent of code, and when we went through the process to redevelop that building and had the business case for it, it looked like we could afford it. However, when the project started, inevitably there were foundation issues that pushed out the costs, and we didn’t achieve the business that we thought we would afterwards. As a result, the New Zealand Medical Association, which had started in the 1880s and was over 130 years old—we had to wind that up. We were able to sell off one of our other assets, which was the New Zealand Medical Journal, and thanks to the Pasifika Medical Association, which bought it for $2, that continues on.
There are real issues with heritage buildings and organisations throughout the country, and this has real-world economic implications of trying to work through a business case to redevelop things, with uncertainty in the future. I’m grateful to the Minister and for the work that the officials will be doing to progress this pragmatic thing, and I’m also mindful of the safety element of it. I know that the Minister and the officials will be keeping that in mind and taking care with this, and so I commend this bill to the House.
GLEN BENNETT (Labour): Kia ora, Mr Speaker. It’s been a thoughtful afternoon, listening to the different arguments and the different opinions but also the lived experiences, and I just want to acknowledge that in terms of my colleagues from both sides of the House who have lived experiences of earthquakes and other things.
We live in the Shaky Isles. I live in Taranaki, and—even though this is slightly off-piste—it’s part of that Ring of Fire that we live under. Everyone assumes that Taranaki is this dormant cone that erupted the last time in 1690, or something like that, but, actually, a report came out two years ago that it has a 50 percent chance of erupting within the next 50 years. We’re, again, in a position where we live in the Shaky Isles and we live on the Ring of Fire, and so we have to be prepared and have to expect these things. We don’t want them. We live in the most beautiful part of the world, but with that comes just a few shakes and a few volcanic situations.
That’s why we need to thoughtfully—and I’m glad that it’s in a bipartisan way today—look at how we move this forward to ensure that we get it right. We want to argue from this side of the House that we need to, you know, hurry up and keep moving faster, because, as my colleague Reuben Davidson said, it’s a matter of life or death in many ways. We sit in this building, which is one of the safer buildings in Wellington, and I sometimes look up there—and maybe one doesn’t think so—but in the 1990s, this building was strengthened. For those who go into the basement and see the big, ginormous rubber, um—
Hon Chris Penk: Base isolators?
GLEN BENNETT: Base isolators. I was going to say “stoppers”, but base isolators—thank you very much. As a Government, I think it was about $75 million that was spent. I mean, I know it included some refurbishment work as well, but it was around the strengthening of these buildings, and if we think about the price, we can think what it would cost today. We’re happy to sit inside these buildings and feel kind of mostly safe, but if you look around the streets of Wellington, there are more than 800 buildings within a short walk or drive from here which are actually earthquake-prone and need remediation work done. How do we actually support that mahi?
I think, for us, we’ve had some concerns and we’ve looked at the select committee process and listened really carefully to the arguments that were made. We were listening to councils and the key stakeholders, and, of course, for the councils, it’s their role to ensure that the buildings and their people are protected and well looked after. It is disappointing, as has been made clear by my colleagues, that there were things and processes that we had in place when we were in Government that have been overturned and now we’re in this position. That’s why I think we need to proceed with caution, but we none the less need to proceed because not only is it the harrowing stories of people who have been through the trauma of major earthquakes but it’s around looking to the future and asking how we prevent loss of life.
Again, as my colleague Reuben Davidson has said, it can’t be compared with road safety. It can’t be compared with other things, because it’s not as simple as having a seat belt. It’s actually some major structural work, and people often who have been brought into buildings who weren’t aware of it at the time, but it’s also in terms of building owners and what that looks like for them. So we’re here and we’re looking at whether we can find a way to speed this up but also at whether we can find a way where there is—we understand there’s costs involved, and there must be. We must take responsibility to ensure not only that councils have the tools and the mechanisms but that we are the enablers who can, not necessarily get out of the way, but actually ensure that we build good legislation and good bills that actually will ensure the safety, the protection and, but also the futures for people within our country.
We live on the Shaky Isles. We live with the beautiful Pacific Ocean and, of course, the Indo-Australian tectonic plate—where they meet. Just this weekend, I had the privilege of being down on the West Coast of the South Island, and the sea—fun fact, but I’m sure we all know that the ranges are growing every year. They grow because of those tectonic plates that are connected there, but I’d better not—I did fail geography, but that’s another story. We cautiously support this, and I think getting to the committee stage is going to be a good space for us to debate and thrash some of these concepts and ideas out, and, again, come to a bipartisan agreement on which we can move forward feeling comfortable, together. We support this bill.
Dr HAMISH CAMPBELL (National—Ilam): I’m proud to stand in support of the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill in this second reading. As a Christchurch-based MP, it would be remiss of me not to acknowledge those that lost their lives in the Christchurch earthquakes back in 2011, and I do just want to acknowledge the work that my colleague Dr Vanessa Weenink did in the immediate aftermath to help those who were so desperately in need of assistance. Also as a Christchurch-based MP, I’m well aware of the effects that having an earthquake-damaged house can have on someone’s mental health and also their physical health as they struggle to get it repaired and remediated. It’s one of the most common issues that I have coming through my electorate office door, and I’m there to help any constituents with those matters.
I do just want to point out that the aim of earthquake-prone building legislation was to reduce the risk to life and safety by requiring that New Zealand’s most vulnerable buildings during a moderate earthquake be remedied within set time frames. I also do want to just mention that there has been talk about urgency and the need of urgency, and I totally agree with people across the House that we need to move with urgency around some of these solutions. That is why we have brought forward the review of the earthquake-prone building system that was scheduled to take place in 2027. We have brought that forward to make sure that we can do this in a timely manner, but it is one of the reasons why we do need to extend the deadlines out, because, of course, there’s no point doing a review after a deadline has already passed.
I also just want to acknowledge some of the great work that goes on at the University of Canterbury—which, of course, makes up a big part of my electorate of Ilam—and the work of the structural engineers of the university and the laboratory they have there to work out best ways of construction. It’s always very interesting to see what technology they’re coming up and the benefits.
It’s not just homes that have been affected by this legislation; it’s also shops, and we’ve also heard about maraes, churches, and schools—it’s any building, really. This bill will alleviate the stress and sleepless nights as people struggle to get their building back in shape, whether it be their house or whether it be their place of work. Some of these repairs have turned out to be far more complex than initially thought, and we’ve heard about heritage buildings. That has left people with damaged properties that remain uninhabitable and underutilised, and the lack of any clarity has perpetuated the cycles of distress, which is contributing to the slower recovery of places like Christchurch.
I do just want to acknowledge the Minister for Building and Construction for his work on this legislation, and also around other regulations he’s put in place in building to really make sure that we can build back stronger. So I therefore am glad to be able to support this bill, as the last speaker.
ASSISTANT SPEAKER (Teanau Tuiono): Before I put the question, I would like to commend the Minister for Building and Construction for listening to the speeches of other members. It is not required for Ministers to remain present for all business in their names. Often, Ministers need to leave to attend other matters, and that is accepted. On the other hand, having the Minister stay for the speeches of other members does add to the debate.
Motion agreed to.
Bill read a second time.
ASSISTANT SPEAKER (Teanau Tuiono): This bill is set down for committee stage next sitting day. Members, the time has come for me to leave the Chair. The House will resume at 7.30 p.m.
Sitting suspended from 6 p.m. to 7.30 p.m.
Bills
Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill
Second 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.
DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Hon SIMON WATTS: I move, That the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill be now read a second time.
Agriculture is the backbone of New Zealand’s economy and a contributor to the world economy. It will play an important role in achieving the Government’s goal of doubling the value of exports over the next decade. In the year 31 March 2024, the food and fibre sector accounted for 80.9 percent of New Zealand’s merchandise exports. Over the last 10 years, food and fibre exports have grown by an average of 3.6 percent per year, whereas other elements of export growth have only grown by 1.6 percent. One in seven New Zealanders work in the food and fibre sector, and that figure increases to one in four in some of our regional economies.
Our relationships with our trading partners are linked to the economy and the prosperity of this country, and that’s why this bill exists. The agricultural sector is critical to meeting our economic, trade, and climate goals. However, to do so effectively, that sector must adopt, and adapt to, the evolving global expectations. New Zealand remains committed to its international climate obligations, which, I wish to emphasise, this bill is consistent with.
While we have committed to repealing legislation that imposes emissions trading scheme (ETS) obligations on agricultural activities, we have also committed to replacing it with a fair and sustainable pricing system outside of the ETS by 2030 to ensure that we do not send production or jobs overseas.
The Climate Change Response Act currently requires agricultural processors to pay for fertiliser and livestock emissions from 1 January 2025. Under the current legislation, animal farmers would begin reporting on their on-farm emissions from 1 January 2026 and paying for those emissions from 1 January 2027.
Economic modelling commissioned by officials suggests that requiring agricultural processors to pay for their emissions under the emissions trading scheme would have a negative impact on both farm production and revenue. If agricultural processors are required to pay for on-farm emissions, this could lead to a trickle-down of costs directly to farmers, regardless of their emissions efficiency rates. The requirements for farmers to report and pay for their emissions would likely require up to 100,000 animal farmers to be registered and begin reporting and paying for those emissions under the emissions trading scheme. This would have disproportionate adverse impacts on small farmers and would significantly increase the number of participants in that scheme, which could disrupt the operations of the scheme.
In summary, the current system would result in additional administrative implementation and compliance costs to our domestic agricultural sector. I want to be really clear here: this Government will not shut down our productive sectors and shift production overseas, and this bill presents an opportunity for a new pathway forward. It will pave the way for us to develop a fair and sustainable pricing system for agriculture that reduces emissions without sending production offshore to farmers who are less emissions efficient than here in New Zealand. Not only that, but this bill will support our farmers and our rural communities.
In July, the Government launched its climate change strategy, a plan aimed at reducing the impacts of climate change and preparing for its future impacts. The climate change strategy has five key pillars: infrastructure that is resilient, communities that are well prepared, credible markets, clean and efficient and abundant energy, world-leading climate innovation that boosts our economy, and nature-based solutions that address climate change. I would like to emphasise the importance of the fourth pillar—having world-leading climate innovation that boosts the economy.
This Government has prioritised developing tools and technologies that work for New Zealand’s pasture-based systems. Examples of key policies and initiatives to achieve this were included in the second emissions reduction plan (ERP2) discussion document and include accelerating the development of mitigation tools and technologies to reduce on-farm emissions, with the Government also partnering with the private sector with $400 million of investment, fit-for-purpose regulatory pathways for mitigation technologies, an independent review of the biogenic methane science target, and standardised methodologies for developing measurement of on-farm emissions by 2025. It is clear that this Government is taking the right approach to reduce agricultural emissions by working with the sector and not against them, as we will continue to grow our efforts and grow our economy to double exports and to meet our climate goals.
Despite the urgency to amend the Climate Change Response Act by 1 January 2025, we have had a rigorous four-month select committee process that scrutinised this bill. I want to acknowledge my ministerial colleague the Hon Todd McClay, Minister of Agriculture, who I have worked very closely with on this bill, alongside officials from both of our joint agencies.
I would also like to thank members across the House who are part of the Primary Production Committee. Thank you for your work in considering this bill and thank you for the contributions that you have made as part of that. It is important to hear and consider the feedback from the sector, organisations, and the wider public. I would like to acknowledge the Opposition’s feedback provided in the select committee report on the bill, which included the importance and the impact of climate change, fairness, and equity concerns with other sectors of the economy—and while not perfect, the New Zealand ETS is the only current tool for pricing emissions. Despite these concerns, I want to reiterate the Government’s commitment to establishing a fair and sustainable pricing system for agriculture outside of the New Zealand ETS by 2030.
This system will ensure domestic production and jobs remain in New Zealand rather than being sent overseas. Members of the select committee listened to the views on this bill, receiving submissions from groups, organisations, and individuals across New Zealand. The committee received 581 submissions and 26 oral submissions during this consultation process. Of these total submissions, approximately two-thirds were supportive of this bill, with the remainder one-third being against the bill.
Agriculture must play its part, and it will. As outlined in the second emissions reduction plan, to get the desired impact, the tools to reduce emissions must come before pricing, not the other way around. These tools must be in the hands of our producers so they can utilise them to adapt and to remain profitable.
After careful consideration of the submissions and the advice from officials, the Primary Production Committee recommended by majority that this bill be passed without amendment. Submissions did not identify any unintended consequences, administrative errors, or inconsistencies with the Government’s policy intent that requires amendment. This bill as drafted gives effect to the Government’s objectives to remove agriculture from the New Zealand ETS and has been factored into the Government’s wider emissions reduction strategy, including consideration of the second emissions reduction plan.
As I have previously announced, this bill supports the Government’s broader plan to keep agriculture out of the New Zealand emissions trading scheme. This bill will enable us to pave a new way forward, working alongside the sector, iwi Māori, and the public to fairly and sustainably manage agricultural emissions. Mitigation technology and this Government’s focus on getting the tools into the hands of the farmers will play a key part in this. Accordingly, I commend this bill to the House, and I look forward to the next stage of debating this bill in the committee of the whole House.
DEPUTY SPEAKER: The question is that the motion be agreed to.
Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Speaker. Just quiet, for a moment. [Drops a can] That’s the sound of the can being kicked down the road. Madam Deputy Speaker, it is good to have someone who knows something about this in the Chair.
In 1992, a National Government committed to a Kyoto Protocol, an international movement to reduce emissions. A National Government, in 2015, reiterated its commitment to emissions reduction, at Paris. Through that period, the National Government did nothing to implement any progress in the area where 50 percent of our emissions come from: agriculture. We tried, in 2000, in a Labour Government. We came in and we talked about a carbon tax. That was rejected by farmers—called a “fart tax”—and so we moved on to create an emissions trading scheme (ETS) as the next best option. It was accepted.
The National Government of the day—actually, it was the Opposition of the day—said, “We’re going to get rid of this.” When they got in, in 2009, they kept it in place because it was the only tool that we had to meet our international obligations, to provide some market signals for our economy and participants in our economy to reduce our emissions over time, because if we don’t, we’re going to be writing out cheques for billions of dollars under the Kyoto and the Paris accords.
We then said to farming sectors, when we came in in 2017, “We’ve got to do something here. We need a backstop, because, ultimately, the ETS is all we have, and if we can’t come up with an alternative, then agriculture must come in.”—even though the concession for agriculture was 95 percent discount; so, effectively, facing a 5 percent impost on the methane and other emissions from the agricultural system.
I know how important the primary sectors are to our economy. In fact, if you looked at the growth in our period of Government from 2017 to 2023, it was spectacular even through COVID, and we’re proud of that, but we still faced this dilemma of how we address agricultural emissions. So we said to agricultural leaders, “Look, we don’t want to put you into the ETS. If you can come up with a better scheme, then we’ll run with that.” We gave them the best part of four years. I was a little cynical; the Prime Minister was very ambitious. Lots of other people were a bit cynical as well, because agricultural leaders have failed to make the hard decisions many, many times.
Hon Mark Patterson: They did, and you turned them down.
Hon DAMIEN O’CONNOR: Because they have a legal obligation to represent their sectors—the dry stock sector that the Minister’s representing has a different way of farming from the dairy sector. That clash between who is emitting and who has the greatest opportunity to reduce was something that those leaders couldn’t resolve. They came back to the Government with most of the proposals, but some of the hard ones weren’t resolved. We went back to them and said, “Look, we’re going to have to go back and work through some of these hard issues.” We did not want to put them into the ETS, but it’s a necessary backstop. We failed with He Waka Eke Noa—the Government’s got rid of it. Now they’re going to take away the ETS. The question is: what are they going to do next?
I’ve just come from a Rural Leaders presentation, where Nuffield scholars—these are the brightest, most ambitious young rural leaders in this country—go out around the world. One of the presentations that came back was pretty blunt: “The systems that we have used to get us to where we are will not be the ones that have to take us to where we need to be.” That’s challenging, and I could see the unease among rural leaders in that room, but if we don’t do it, we will fail, because we don’t have the scale of South America or the US or other places. Some will say, “Oh, we’ll have GE technology available.” Well, we might or might not, and we need to see where the real, proven benefits of that genetic engineering come to play for a country that relies on the production of food for its existence—and that’s us.
There’s a member on the other side there who sat on the board of Fonterra, our biggest and most important company. Their customer of over 100 years, Nestlé, has said to them—and actually invested in a zero-carbon dairy farm in the North Island; working through that. I applaud both Nestlé and Fonterra for investing in it. In fact, Nestlé is investing 1.2 billion Swiss francs in initiatives to reduce emissions from agriculture systems, because they have said that they will aim to source 50 percent of their ingredients through regenerative agriculture methods by 2030. They have an ambitious goal. They are our biggest single customer of our biggest single company.
How are we going to do it? The Minister said, “Oh, we’re not going to make farmers do anything until we’ve got the tools.” Well, we actually do have the ability to reduce our emissions now: better pasture species, better genetic selection—without GE—
Grant McCallum: GE? He’s going to support it?
Hon DAMIEN O’CONNOR: Well, while that member goes on, can I say that changing farming systems will reduce emissions. We’ve seen huge progress made in the dry stock sector. The dairy sector has to make some progress.
Hon Member: We are.
Hon DAMIEN O’CONNOR: If they don’t, Nestlé will buy from other customers; from other suppliers. The ex-Fonterra member says, “Oh, no, they’ll always come and buy from us.” We produce about 2.5 percent of total dairy production across the globe. The US is ramping up its exports, South America is becoming more efficient, and Ireland is certainly ramping up too. We are going to face some severe competition into the future, and the question is: where will we be positioned? Well, Nestlé will say, “If you don’t meet these emissions reductions goals, we’re not going to buy from you.” There are many other customers, because the corporate obligations of those customers is to reduce emissions through all their supply chain. Fonterra have been out around the country talking about scope 3 emissions—that is, all the emissions from a farming system in our country will be accounted for.
The members on that side have been complaining about the impost on farmers of having to record more and do more. That is the world in which we operate now—that is the reality. If you weren’t at the Nuffield presentation just half an hour ago, you’ve missed a few clear messages from ambitious rural leaders who’ve been out around the world and are coming back. One of them was that we need to embrace GE carefully, to look at the opportunities into the future. I accept that. Those succession issues—that is, how we’re going to transfer farms to the next generation. But the idiots on that side of the House are going to open the door, are going to—
Hon Members: Oh, here we go!
Hon DAMIEN O’CONNOR: Well, because—[Interruption]
DEPUTY SPEAKER: That’s enough. That’s noisy.
Hon DAMIEN O’CONNOR: Can I just say: because opening the door to foreign investment in farmland will destroy opportunities for future generations of New Zealand farmers, and that’s what is being considered on that side of the House, supported by Federated Farmers. [Interruption] No, no, it is.
Can I come back to this: be careful what you ask for. There may be farmers and farming leaders who think that removing agriculture from the ETS without any alternative plan to incentivise and assist farmers to make the transition will leave us up a cul-de-sac. I fear that, as we see around the globe the climatic events—be it in Spain, be it fires—where the consumers and the voters are demanding more action from Governments, we’ll be caught in the crossfire between consumers who demand action to reduce emissions and us desperately needing to sell what are low-emissions products—I absolutely accept that.
As Neal Wallace, who travelled around the country—paid for by the agricultural sector. He came back and wrote 30 articles—and read them carefully, because he has said, “The speed in which the world is changing makes it more crucial than ever that New Zealand farmers have an eye on international market trends.” Those market trends that—
Grant McCallum: We do.
Hon DAMIEN O’CONNOR: No, that member doesn’t. Can I say: the market trends are for decarbonisation. They’re also around biodiversity, and the recent moves by the Government to remove obligations to acknowledge, to identify, and then promote biodiversity on farm—those incentives have been taken away. There’ll be some short-term celebration. The Minister talks the talk, but when this bill goes through, the absence of a clear alternative to give market signals to farmers to reduce their emissions, to get money to help them make that transition, will mean that our country, our economy, is at huge risk from this piece of legislation.
STEVE ABEL (Green): Thank you very much, Madam Speaker. Saying that one believes in climate change and then doing all the things that make climate change worse has the same effect as denying that climate change exists in the first place. That is what this Government is doing with bill after bill after bill. They are behaving like a Government that does not believe in climate change. The words are hollow; the words are as hollow and gaseous as the superheating gas methane.
That superheating gas methane is one of the most potent greenhouse gases produced by human activities, along with nitrous oxide. Nitrous oxide from fertiliser and manure is about 300 times more potent as a greenhouse gas than carbon dioxide, and methane is about 27 times more potent over a 100-year period. These gases are vital in us solving the global existential challenge of climate change. That is why we seek to address them on a planetary scale.
We seek to accept the existential threat of climate change, which is a threat not just to us as a nation, not just to us as a producer, a food producer—because let’s remember, farmers are on the front line of the effects of climate change: the extreme weather events, the droughts, the floods, the forest fires. These are things that hit people in the rural sector, in the productive sector, as much as anybody, as much as they hit people in the Pacific Islands. They hit people who are producing food, not just here in New Zealand but all over the world. This is a planetary existential threat, and it is seen as the biggest single threat to the ability of human beings to feed themselves over the coming century. This is a classic example of a Government that is in denial of the need to address that fundamental planetary problem of climate change. This legislation does exactly that.
When we hear that the Government is a backer of farmers, that they’re not going to leave farmers high and dry, in fact, what this legislation does is it does a big “stuff you” to all of the farmers who are doing all of the things to reduce their emissions. We know there are many of them in this country doing inspiring and innovative work to reduce their own carbon dioxide emissions and their own methane emissions and their nitrous oxide emissions. It’s one thing to say that we’re not even going to account for all those efforts; this legislation actually is literally not going to look any more to see where the emissions are coming from.
Since 2011, New Zealand has kept a track of the main sources of greenhouse gas emissions. This legislation takes away the requirement for processes to monitor and report the agricultural emissions under the emissions trading scheme. We’re not even going to look and see how things are going. The dairy farmer who presented to us from the Waikato, a guy farming 300 cows, who has eliminated synthetic nitrogen fertiliser from his production system and has cut his emissions by 25 percent, has done that unacknowledged. This legislation is saying to all those farmers who are doing that—who are making those breakthroughs—“We don’t care. You’re not going to get any benefit for that. You’re not going to get any acknowledgement for it. We’re not even going to keep a track of the emissions cuts that you are achieving.” This Government is saying we do not care about those farmers making those breakthroughs.
In terms of fairness, we live in a country where every other sector pays for its emissions under the emissions trading scheme. This is an agreement that was an across-Government agreement between the two legacy parties, between Labour and National, that the means by which we would deal with climate change was through the emissions trading scheme. Now, how is it that it functions if half of our total emissions are not even accounted for in the emissions trading scheme. How is it going to function? This is, essentially, another example of failing to seize the nettle on the greatest challenge that not only the world faces but that New Zealand faces in our agricultural production—yet again, kicking the can, as my colleague alongside me, the Hon Damien O’Connor, said. That is what it is. It’s saying we are not going to deal with this challenge.
Let’s be clear that in terms of the tools that are available to farmers, there are many tools available to farmers now. Most of them are to do with breeding and feeding and land use. Most of them are to do with how we do production systems.
Grant McCallum: And we’re doing it.
STEVE ABEL: And why don’t you keep a track of the achievements you’re making? This legislation explicitly takes away the accounting of where the emissions cuts are coming from. They are not making any distinction between that farmer who is producing a kilo of milk solids with far fewer emissions and the farmer who’s producing it with a lot of emissions. If you don’t account for it, if you don’t look, if you don’t count, you cannot measure the benefit. You cannot amplify the successes of those farmers who are making farm-gate profits through fewer emissions, who are decoupling the value of their production from the catastrophic impacts of climate change, for the good of the whole planet.
What about the fact that half of our emissions come from agriculture, but a full half of those come from only one sector: the dairy sector?
Hon Member: Oh, here we go.
STEVE ABEL: Yeah, let’s be honest about this. I’m going to put viticulture and horticulture and fruit and vegetables and even all of sheep and beef into one pile here—let’s call it the green pen—and I’m going to put dairy in this pile here, and this has as much emissions as every other form of agricultural production in this country—
Grant McCallum: And it pays a lot of bills.
STEVE ABEL: Are you saying that all the other forms of agricultural production don’t pay bills? Of course they do—of course they do. Why would we not incentivise those forms of agricultural production that put nutrition into human bodies without doing such catastrophic damage to the climate.
Miles Anderson: Subsidies—talking about subsidies, Steve.
STEVE ABEL: Without subsidies? Yeah. I mean, who’s subsidised in this country? The dairy industry is subsidised by the fact it doesn’t pay for its emissions. That’s exactly who is subsidised. It’s the failure of this sector to be willing to accept its responsibility. It’s saying we don’t want to be responsible and the biggest, most powerful lobbyist in this country is Fonterra. It is the dairy industry, and these guys are doing their bidding. This Government is doing the bidding of the big bully in the room, and that is Fonterra.
If the Government was actually willing to deal with the problem, they would rightly say—as people previously of other, more enlightened National Governments have rightly acknowledged—that we need to keep a track of what the emissions are doing, and we need to do something about it for the good of everybody, and there are solutions. There are ways to produce in a way that does not damage the climate, does not pollute our rivers, does not turn our water carcinogenic through contamination from nitrate. These are all things that can be achieved through a willingness to acknowledge the harm that is caused and those means of production that cause that harm.
It is a sad day in the trajectory of the challenge that we all do face in climate change, because if we’re not willing to take on the toughness of that challenge, we are choosing to put the pressure on to future generations to deal with it. If that price is not going to be paid in this generation, then the farmers of the future are going to have to pay that price, and they’re going to have to pay that price at a much greater level to catch up.
Not only is this Government kicking the cause and the consequences of climate change on all future generations, it’s putting the burden of the impact of dealing with greenhouse gas emissions from agriculture on to future farmers. That is what it’s doing. Or else, I should say, if it’s not doing that, it is choosing to decouple Aotearoa New Zealand from the global challenge. It’s saying that we’re no longer part of that global challenge; we’re not going to do our bit because we’re not going to be prepared to stand up to the biggest-emitting sector.
One of the burdens of us deciding to not do that is that, if we remain part of this Paris Agreement and these agreements to deal with climate change, we face a future bill of between $3 billion and $23 billion to buy overseas carbon credits to account for our failure to reduce our emissions in the way that we’ve committed to. Who’s going to pay that $23 billion come 2030? All of us: the public, the taxpayer; or is it going to be the dairy industry that pays it? Who’s going to pay the bills? Who’s going to pay for the clean-ups of the catastrophic weather events that are going to hit us with increasing frequency? It is going to be our children and our grandchildren, and that is a shame on this Government.
MARK CAMERON (ACT): Thank you, Madam Speaker. This will be colourful, as you can well imagine, as I share a few thoughts on the second reading of the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill. Gracious me, I’m fascinated by some of the language that I’ve just heard shared from the Hon Damien O’Connor. “Idiots” I think was the language on this side of the House—an inference to my rural friends. Absolutely comedic from the said member. I do wonder, just very quickly, incidentally, kind sir, why you’re now sitting in Opposition. There you go: an abandonment of rural New Zealand.
This was a great piece of work my committee, the Primary Production Committee, did. We heard a lot of submissions, 581 submissions; 26 were heard orally—gracious me. And 65 percent, give or take a bit, were in support of this bill; about 30 percent opposed; and, depending on who you asked on the day, about 5 percent disagreed. We have heard all manner of hyperbole in this House, and we’ve just heard it now—the end of days, the catastrophisation, climate change—it’s all over; rural New Zealand’s going to be the first to bear the brunt of it. I want to frame it, if I can—
Hon Damien O’Connor: Go to Hawke’s Bay.
MARK CAMERON: —for that member and others—if I can frame a few questions for the sake of their virtue in this House. What percentage are we talking about here? Carbon dioxide is 0.04 percent. Gracious me, Mr O’Connor. Methane is two parts per million, and we’re having this hyperbolic runaway conversation, end of days—two parts per million. That, Steve, is a nonsense.
Steve Abel: Do you know how much cyanide gas—
MARK CAMERON: Well, we can debate that after the fact. We’re not talking about cyanide; we’re talking about methane. So here we go. By virtue, that side of the House is willing to impoverish a nation; this side of the House—i.e., the Government—is absolutely not. That’s why we’re committed to keeping rural New Zealand out of the emissions trading scheme. That’s why we’re having a genuine review of methane—its warming effects—creating a genuine split-gas approach. They are totally different—their warming effects are totally different—and we know full well that methane decays back to carbon dioxide in 10 or 12 years and is, by virtue, plant food.
We’ve got to have an honest conversation about what the role is of all the gases that are atmospherically warming. Stop the conflation, stop the hyperbole, and actually protect the sector in which, we maintain on this side of the House, we’re going to see a doubling of export revenue inside of the next 10 years. That’s what we’re here for, right? We represent that part of rural New Zealand—certainly my committee does—where we reconcile the costs of lawmaking. Do the costs and the benefits; what does that look like? Do the costs outweigh the benefits? Perhaps, if they do, we shouldn’t do it. That’s the kind of rationale, I think, that was employed by my committee.
This legislation affords some common sense, and it goes back to the kind of submission that we heard, or submissions that we heard; 65 percent of people were in favour of having a logical conversation. Adults in the room, stop the conflation; stop this nonsense—the theatricality I talk routinely about. Submissions from DairyNZ, Beef + Lamb, Federated Farmers, individual submissions, all spoke to the 100,000 extra participants that would be involved should farmers and rural people have been otherwise caught by an emissions trading scheme. That is an inordinately difficult problem and extremely expensive.
I maintain a couple of logical things: we have to have a conversation about what mitigation tools look like in our future. That is a journey we are on as a country, and I am absolutely happy to maintain a couple of, what I call, core factoids or truisms. We are the most emissions-friendly farmers in the world. Why are we willing to even risk impoverishing ourselves as a nation, our people, with all the difficulties that we have in this world, hospitals that we want to build, roads that we want to create, kids in school, and teachers?
Grant McCallum: Where’s the income coming from?
MARK CAMERON: Where does all that money come from? We can’t just magic this stuff up because the left says, “We’re going to tax the bejesus out of the farmers and it will all come right.”
I think this is the kind of conversation that we need to have as adults in the room. We are an emitter—yes, admittedly. What does that look like? What does our role as a little country in the bottom of the South Pacific look like in terms of reducing emissions? I pose the question because I have heard members on that side of the House say, “Reduce livestock numbers.” Well, I ask them: how many cows, how many sheep, how many goats, how many animal ruminants would we have to get reduced by number to keep our emissions profile additional warming below 1.5 degrees? You don’t know—you don’t know.
Steve Abel: Not many.
MARK CAMERON: This is the problem, right? That side of the House doesn’t know, and yet they’re the first people to say, “You, the rural sector, we want to see a reduction in animal numbers. We think that’s the way forward.” I think that is a nonsense. We’re the most efficient farmers in the world, and by virtue—
Steve Abel: That’s not even true.
MARK CAMERON: —the 40 million people we feed, the 5 million here and the 35 million—that member can debate that issue tomorrow. I maintain we’re really good at this, and there are other parts of the world that are not. If we’re not making it, someone else is.
I’ll tie off with one other remark: we are fortunate enough, as the Primary Production Committee, to have long-term insights briefings from the likes of Ray Smith and others—clever people. They have actually said, frequently, several times—people like Ray Smith and others—that in the next 30 years the greatest economic growth and rural growth as an industry—dairy, beef, sheep, you name it—will be in the Sahel belt of Africa and South-east Asia. These people are poverty stricken. They are going to be a lower-middle class that is emerging. What do they want? They want energy and they want high-quality protein. This country—and I won’t apologise for that—makes the best high-quality protein in the world. That side of the House would see that diminished. This side of the House absolutely will not, and we will support rural New Zealand.
This bill is a good piece of legislation that affords that kind of logic, and I support the commentary that is about to come, because I think this is good legislation, and we support rural people.
Hon MARK PATTERSON (Associate Minister of Agriculture): I rise to add New Zealand First’s support for this Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill—by gee, that is a mouthful. It is another coalition commitment being honoured by this side of the House. Bringing this piece of legislation through to this next stage and supporting it through, we have taken the sword of Damocles off the rural sector.
Why have we done that? As Mark Cameron has just so well articulated, it’s not because we don’t care about these things. It’s not because we’re buying into the hyperbole that we’ve heard, and some of the dire predictions. We have done it because the emissions trading scheme (ETS) is a wholly inappropriate vehicle for which to deal with this challenge of reducing biogenic methane.
The metrics around this would have involved converting the biogenic methane into a carbon dioxide equivalent, and farmers would have had to pay essentially a tax on that, when, as Mark Cameron alluded, this is a short-lived gas. It has different characteristics to carbon dioxide. Most of us came here in an aeroplane emitting carbon dioxide that will be in the atmosphere for hundreds of years. We are talking about a biological system where methane converts into carbon dioxide and is sequestered back round into the soil.
We, as a coalition, are having a re-look at where those metrics sit. We’ve got a team of international experts so that we can get that target exactly right. We’re looking at no additional warming as our yardstick. It makes absolutely no sense to put such a handbrake on our most important industries, the primary sector, those 82 percent of our exports for which our standard of living is so wholly dependent.
There would have been unintended consequences of this. We knew this at the time; Minister O’Connor knew this at the time. That’s why I didn’t put agriculture straight into the ETS: because we knew it was totally unsuitable for the challenge that we had with biogenic methane. It would have ended up being a dead-weight tax—that’s all it would have been on farmers.
The unintended consequences would have been that, actually, you would have tried to farm a little bit harder just to make a little bit more revenue to cover the cost of a tax because it wasn’t actually going to—Steve Abel is a little bit mistaken in thinking that farmers on an individual basis would have been incentivised to reduce their emissions. They actually wouldn’t have been. That would have been a great averaging system, and they would have just paid a tax based on essentially production. To offset that, they would have probably just tried to farm harder to make a little bit more revenue to pay for it.
If you look at our sheep and beef sector in particular at the moment, the Beef + Lamb New Zealand financial service forecast predicting last year a $65,000 profit before interest, tax, and drawings—a cash loss, in other words, for almost all farmers. These farms are not in a position to carry a dead-weight tax for no actual gains. We on this side of the House see much more merit in the carrot rather than the stick.
There has been some talk, and I note Fonterra has been brought up on the other side of the House. They have a target of a 30 percent reduction in emissions by 2030. We’ve got Nestlé over here—the former Minister O’Connor alluded to that earlier; they’ve got market pressure.
I went to one of the most positive meetings that I’ve been to in recent times—actually, since I’ve been back in this House—the low-methane genetics and Beef + Lamb New Zealand and AgResearch and AgriZero and some leading livestock farmers. We absolutely know how to do this; we just need to get the market incentives right.
I’m pleased to announce that you will be able to buy cool wool rugs by Christmas. Bremworth were there; they saw the advantage in this. They saw the marketing angle in getting behind those very farmers that Steve Abel was talking about that are demonstrating a real willingness to lower their emissions. They’re going to take their wool, put it into rugs, and put it out into the marketplace. That is the sort of initiative that will take farmers with them, not just getting a one-size-fits-all stick to beat them with. The farmers of this country are sick and tired of being portrayed as climate villains.
The red meat sector—and I know Mr Abel will have seen these figures too, because they’re not public, but they have already exceeded the targets for 2030, but they’re not doing it for any other reason but they’ve been driven out of business. We’re having an incredible drop in livestock numbers—6.5 million less used than just a few years ago. This is a very, very worrying trend.
Whilst I wasn’t at the Nuffield New Zealand Awards Function tonight, I’ll tell you where I was. I was at Unity Books down in Wellington there at the launch of the Woolsheds book, an amazing pictorial book with stories of 15 iconic New Zealand woolsheds. In her speech, the publisher got up and said that the great tragedy of this is that many of those sheds are no longer being used or have very reduced numbers going through them than what they did. Our very heritage, our very history is being taken from us. We are driving these farmers into the arms of forestry, and this is what we’ve got to be so mindful of on this side. We have got to have a balanced approach, and putting a tax on that sector particularly would be absolutely devastating, would accelerate that trend. It would have massive impacts on our rural community.
This is not climate denial; this is looking out for our rural communities and taking a balanced approach, reflecting the reality of what’s happening out there in the real world. We are looking to technology. We are looking for nature-based solutions. We are reviewing the science so that the targets genuinely reflect what we have to reduce, but we cannot do that by just continuing to reduce stocking rates. We must do it by farming smart and innovating and the things that have made agriculture the backbone of this economy for the last 150-odd years—or certainly since the ship sailed out of Dunedin in 1882, was it?
I’d thank the Minister of Climate Change for bringing this forward. As I say, this is a coalition agreement that we are honouring. Congratulations to the Primary Production Committee for hearing some 581 submissions—a large and significant task. As has been said, 65 percent of them—two-thirds of New Zealanders that submitted on this bill—saw what we were trying to do. It’s not about denying climate change; it’s not about agriculture not doing its bit. It’s about stripping away a tool that was wholly inappropriate for the job that it was being asked to do. This is a sensible approach, it’s a balanced approach, and it will be a successful approach. I commend this bill to the House.
DEPUTY SPEAKER: The next call is a split call.
DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Tēnā koe e te Pīka. I stand to speak to this bill on behalf of Te Pāti Māori, and our view is that this Government must have some magical insight into Planet B that we’re not aware of. It’s not about being climate deniers; in fact, it’s about being tangata whenua deniers. If I was to summarise parts of the Māori perspective of the submission—and I can only share what it is that Māori submitted; you may not like it, but they have every right to put across their views—it’s that it excludes Te Tiriti.
Māori have not been adequately involved in the design and implementation of this bill. In fact, He Waka Eke Noa had at least included some input from Māori—Māori farmers who wanted to transition to sustainable farming were not supported to do so. I was going to say that again because they are the original rural people of this nation. I’m going to say it again for those who may have trouble understanding: Māori farmers who want to transition into sustainable farming were not supported to do so. The absence of emissions trading scheme could widen further economic disparities between Māori and non-Māori farmers. But this isn’t about Māori farmers and this isn’t about looking after good farmers. This is actually making it really easy for the lazy farmers, and that’s what this Government has been guilty of for a very long time.
Let’s talk about—again, this isn’t my view—my voters’, your voters’, our voters’ views. Let’s talk about the community we allegedly serve. The first thing is we’ve got Ngā Tai, who mentioned—again—“We are faced with the exclusion of Te Tiriti.” We’ve got Climate Justice Taranaki, who have stated in their submission: “Good farmers are already doing the right things, like reducing emissions and working with nature rather than against it. The Government framework should be supporting and encouraging good farmers.” Fridays For Future Whanganui have touched on the issue of intergenerational equity and a livable planet. “We can’t keep allowing”—listen to this, please, Minister Jones—“We can’t keep allowing the greed to dictate the future of our mokopuna.” I don’t know if this Government have any mokopuna, but we—Te Pāti Māori—are extremely focused on mokopuna decisions.
We go back to some of the other kōrero—[Interruption] Oh, you’re awake? I was worried that you may not have been awake. I mean, let’s talk about the fact that we have a whole agricultural sector that need to—and, actually, the good ones want to—be held to account. They want to be supported to reduce greenhouse gas emissions. What we’ve got here is that, again, we’ve been asked to support another bill that allows the desecration of te ao taiao. No surprise there, whānau—no surprise there. This is who we’re talking to. Once again, we have a Government that accelerates climate change. Even though you don’t want it, and even though you’ve come out with some amazing transformational recommendations and ideas, what we have here is, again, a bill that lets our biggest polluters—our biggest bad polluters—off the hook; our worst farmers off the hook. They do not give credit to the great farmers, and let’s make sure that a lot of that includes you and me.
What we have, in fact, is we have to support a bill that has had zero Māori input—surprise, surprise, surprise. The answer here, whānau, is kāo. Kāore—kāo means no: no way in this—again, we’ll just make it really clear for the understanding of this Government who actually sits here and tries to tell us they’re focused on the future of our nation. They’re actually focused on the future of lazy farmers, lazy polluters, and nothing transformational coming out of this Government. But hey, who’s surprised? Kia ora rā.
DEPUTY SPEAKER: I call Fernando Hernandez.
FRANCISCO HERNANDEZ (Green): Franciso Hernandez.
DEPUTY SPEAKER: Francisco, sorry—Francisco Hernandez. My apologies.
FRANCISCO HERNANDEZ: That’s all good—at least you didn’t call me Scott Willis!
DEPUTY SPEAKER: Ha, ha! No, I could never get you two mixed up.
FRANCISCO HERNANDEZ: Thank you, Madam Speaker. I rise here to take a call on the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill.
This is another piece of legislation where the Government’s rhetoric fundamentally doesn’t match up to the reality of their actions. This is a Government that talks about how they’re for law and order, but—surprise, surprise—there’s less front-line police in October than there were this time last year. This is a Government that talks about how they care about child poverty, but—surprise, surprise—they’re proposing weakening the targets. If you don’t count it, it doesn’t count, apparently. This is another example of how they’re saying they care about rural New Zealand, but have they looked at rural New Zealand lately with all the job losses that are happening in all the pulp and processing plants and all the meat processing plants? If this is what the Government thinks is care, I’m frightened to see what it looks like when they don’t care about something.
This bill is another example of them actually, rather than standing up for rural New Zealand, taking tools away from rural New Zealand, because the proposal of the previous Government was to actually not put agriculture in the emissions trading scheme (ETS); like everyone is saying, it was to work with the rural sector to come up with on-farm emissions pricing and a system that actually recognised the great work that farmers were doing through sequestration payments. Instead, they’ve torn that all up. They’ve said no.
My colleague Steve Abel has talked about already how farmers are at the front line of climate change, and, look, I’ve seen this. I’ve seen this when I visited Northland—great region. They talked about how in the events of Cyclone Gabrielle last year, the whole kūmara crop around the country was, basically, wiped out by the events of that. Farmers are at the front line of the climate crisis, and this Government thinks that by delaying action and by denying the actual reality of what’s happening; by relying on, you know, these fake scientific reviews, hoping to water down the metrics, they’re actually doing something about the issue, but that’s not the case at all—that’s not the case at all.
We know that climate delay is disastrous. We know the great work that He Waka Eke Noa was doing, which was actually going to fund—it was going to fund—farmers to come up with the latest emissions reduction practice. It was going to fund all that, because the proposal was to actually ring-fence all the funding that was going to be raised from the levy and redirect it back to the sector. There’s the rhetoric that “Oh, it’s just being taken by some Wellington bureaucrats to pay for free public transport.”, or whatever, but it was all going to farmers. That’s just not what the reality is.
There’s also another piece of rhetoric that’s—you know, they’ve said, “Oh, it’s going to be financially ruinous.” Well, if you actually looked at the proposal: the proposal in the ETS was to create a backstop whereby it was going to come in at a 95 percent discount—95 percent discount at a processor level. What does that actually look like? Well, I worked it out. I looked at the current ETS spot prices and it’s something like $63, and 5 percent of that is $3.15. Now, $3.15 for a ton of emissions—a ton of emissions—is not going to be, I’m sorry, financially ruinous. It’s a very small amount to contribute to research and development within the sector itself.
Another aspect of this is there’s been a lot of rhetoric about the EU, whether there’s going to be a split gas approach, and how other countries are going to do their bit and how we have the most emissions-efficient farmers. That might be true at the moment, but we should never be content to rest on our laurels. We should never be content to actually allow people to get complacent. We want the New Zealand farming sector to remain the best in the country, and the only way we’re going to do that is by funding research, by funding updated practices, and by funding good practice.
We’ve already seen protests happening in the European Union, in France, when they signed the free-trade agreement with New Zealand. Part of that protest was that the farmers over there don’t feel like New Zealand is going to pull its weight, and actions like this are going to absolutely—absolutely—threaten our market reputation. The Minister of Climate Change himself talked about the issue of the premium and how there’s strong market pressures to actually take action. Reputation—New Zealand’s reputation—is absolutely on the line, which is why we strongly oppose the bill and we hope that you’ll all oppose it too. Thank you.
MILES ANDERSON (National—Waitaki): Thank you, Madam Speaker. Pastoral farming in New Zealand is in crisis at the moment. We have had a significant drop—as my colleague Mark Patterson mentioned—in sheep numbers over the last few years. Our breeding ewe numbers in New Zealand are now at 15.6 million, down from the highs in the 1980s in the 70 million-odd sheep altogether there was. The answer to that, the Opposition thinks, is to tax the emissions on livestock. All that is going to do is drive more farmers out of business and add to the afforestation of New Zealand.
The intention to introduce emissions taxes is hardly fair when there is no clear way to measure emissions on farm. We’re getting there. They’re working towards it, but currently there is no fair way to measure emissions. Essentially—
Hon Damien O’Connor: Well, how are Fonterra going to do it?
MILES ANDERSON: Exactly. That’s why they’re not doing it yet, Damien.
Hon Damien O’Connor: How does Fonterra do it?
MILES ANDERSON: They’re not taxing them, Damien. The members opposite are very happy to tax farmers on a guess—and that’s what it is, it’s a guess. The members opposite are happy to tax our pastoral sector when, as I said, all that tax will do is accelerate the transition into pine trees.
James Meager: How much methane from a blueberry?
MILES ANDERSON: Ha, ha! There are no tools available as yet to help farmers in the mitigation. There are tools being developed, there are breeding tools, there are vaccines in the future, but nothing on farm available now. It takes generations of breeding to get livestock that are useful for breeding purposes.
We are investing in solutions. What we need to do and what this Government is doing is reevaluating some of the science. We’re looking at the sequestration and how that needs to be properly evaluated. It would annoy members of the Green Party to note that the Canterbury Plains now have several centimetres more of topsoil due to irrigation and dairy farming than they had previously, but none of that carbon in that topsoil is able to be counted. The methodology is not scientifically sound at the moment and is far from standing up to scientific peer review.
I’m very, very happy to see that the Primary Production Committee has majority voted to return the bill to the House unchanged, because I think this is going to make a big difference to the pastoral sector. There are scientific investments happening right now that will help alleviate any concerns around the emissions. What I would like to point out is that we consistently get told that 50 percent of our emissions are from farming, but that’s a gross target based on what is now considered to be poor science. It has been considered to be at least overvalued by four times, possibly more. That’s what this Government needs to do and is doing—re-evaluating all that science—because we are basing a lot of our decisions on science that is old. With that, I commend this bill to the House.
CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti): Tēnā koe e te Māngai o te Whare. Heoi anō e te Māngai ko taku mihi tuatahi ki ō tātou mate huhua o te wā. Otirā kua haere tini koutou ki tua o te ārai, nā reira, haere haere haere atu rā koutou. Tēnei te tangi aroha ki ngā whānau e noho pani ana i tēnei wā. Heoi anō huri noa ki a tātou i tēnei pō, tihei mauri ora. Ngā mihi o te pō ki a tātou.
[Thank you, Madam Speaker. Also, Madam Speaker, my first acknowledgment is to our loved ones who have recently passed. You have all gone beyond the veil, and so farewell, farewell, farewell to you all. My heart goes out to the families who have been left bereaved recently. Therefore, everyone present here this evening, good health and wellbeing to you all.]
I rise to speak on behalf of the Labour Party tonight. First of all, I’d like to acknowledge the Hon Simon Watts’ mihi to the Primary Production Committee—great committee, I must say—but also acknowledge that while he correctly stated that this bill was passed by majority, it was not unanimous. That said, it sounds like you are correct, opposite, in saying that 65 percent of submitters did support this bill. However, I’ve spoken to several of those submitters who say while they supported it, they don’t know exactly what’s coming. And that’s the issue here: what’s the plan? It’s OK to get rid of something—you know, ladies, when we get rid of a pair of shoes, we got a plan for a new pair. What’s the plan here? [Interruption] Is that right? No objection from that side of the House. Miles knows—Miles knows.
Effectively, we all want the same thing. The opposite campaigned on the fact that Labour don’t care about farmers—that’s simply not true. We just care about all farmers. We care about farmers across the spectrum. Debbie mentions some of the implications for Māori farmers, and I’ll get to talking about some specifics about that later, but across the floor, I heard the word “gains”. What are we talking about when we say, “gains”? Profit. There’s nothing wrong with profit. I’ve said it once, I’ll say it all the time—there’s absolutely nothing wrong with making profit—but when we say gains, we’re saying we want gains for the farmers, for the whenua, and for foreign trade, and we can do that all sustainably.
We know farmers are efficient, but I just want to pick up on some of the implications for farmers on whenua Māori, whose book we could take a leaf out of, I reckon, because some of us don’t have the luxury of thinking about our own farm in this generation. Some of us have the obligation of maintaining whenua for generations to come and in honour of generations before.
Grant McCallum: Heard of family farm?
CUSHLA TANGAERE-MANUEL: I live on one—I live on a family farm.
Grant McCallum: Exactly. So do I—so do I.
CUSHLA TANGAERE-MANUEL: That’s why I’m making the distinction.
Grant McCallum: So do I.
CUSHLA TANGAERE-MANUEL: That’s why I’m making the distinction.
James Meager: My neighbour’s a sheep.
CUSHLA TANGAERE-MANUEL: This is not a farm-off. I just told you—this is not a farm-off. This is about big picture and not considering things in isolation. We’re considering one tiny aspect, as you know, because you own a family farm. It’s not just about emissions. What about the whenua? We’ve got to think about the fact that there’s the potential under this bill for people to overstock—you know, the temptation. We’re trusting people. As we see in the Primary Production Committee, and we know in our personal lives, there are several—the majority of farmers have the best intention. However, when you talk about gains in the sense of profit, the temptation to overstock will be something some—probably a minority, but you can’t rule it out—will not be able to resist. Then we get the risk of something that’s already a huge issue: erosion.
Then we get the risk of biological matter—for the whānau watching at home, that’s mimi and tūtae—getting into our waterways. Far out, where normally you criticise the Greens for being the ideological ones, now you’re sitting there saying you can guarantee 100 percent of farmers are going to do the right thing.
DEPUTY SPEAKER: Let’s not overuse the word “you”.
CUSHLA TANGAERE-MANUEL: Oh, sorry—members opposite, usually the Greens, are getting accused of being ideological, living in some “Pollyanna” Greens utopia. Yet members opposite seem to be implying that they can guarantee that all farmers will do the right thing to reduce emissions.
Now, talking about how we can do this sustainably, and the Hon Damien O’Connor has already outlaid the benefits to our trade relationships of doing this right. So I want to give a personal shout-out to a farm called—you will have heard of it—Whangarā B5 the East Coast, managing the whenua sustainably; managing the wai sustainably; and taking the trade, taking Aotearoa, to the world. When they put their beef on the market, you know what the world said? “Da, da, da, da, da, I’m loving it!” because they supplied McDonald’s. Yet, while doing that, they are maintaining that whenua for generations to come. So, of course, we want farmers to do well individually, ahuwhenua, all of them, but we must maintain our taiao—it’s the only one we’ve got, whānau. Farms come and go; economies rise and fall; Papatūānuku, Tangaroa, and our wai are only here once. We’ve got to think about our generations to come.
Heoi anō, Madam Speaker, I’m just going to see if I’ve missed any of my notes—no, I think I’ve covered it all. Just to reiterate that, on this side of the House, we are here for farmers, for whenua, and for foreign trade. Tēnā koe, Madam Speaker.
CATHERINE WEDD (National—Tukituki): Look, I rise with great pleasure to support this bill to take agriculture out of the emissions trading scheme (ETS), because on this side of the House, we recognise that farmers are the backbone of our economy. We are putting aspiration back into our primary sector again. To hear that side of the House refer to our farmers as “lazy”—I have never met a lazy farmer. Those farmers are up at the crack of dawn. They work hard all day, working to raise money, to get the wheels moving in this economy. Our famers are definitely not lazy.
That’s the thing, because that Government villainised our famers; they went to war with our farmers. Well, it’s about time that we put some confidence back into our rural sector, our primary industries, and we put some aspiration back again, and that is what this bill is about. It’s about practical sense. The purpose of this bill is to keep agriculture out of the ETS. Our dairy farmers here in New Zealand are among the most carbon-efficient in the world. They are some of the best farmers in the world. I’d actually vouch personally for—you know, a lot of my family are dairy farmers. They are hard-working dairy farmers. We’ve got some dairy farmers here on this side of the House. We know the realities of what it takes, producing some of the best, highest-value product in the world; our largest exporter.
To the point of the previous member, Cushla Tangaere-Manuel, they may actually need a bit of a lesson in what drives the productivity in this country. Our food and where it’s produced, our dairy, our butter, our milk, our red meat—it’s all produced by our hard-working farmers in New Zealand. We don’t want to give away our competitive advantage as a small nation at the bottom of the world, and keeping agriculture out of the ETS will ensure a profitable and sustainable future for our farmers and our country.
As I’ve already said, Kiwi farmers are the most efficient in the world. Farmers need the tools to reduce emissions before pricing agricultural emissions, and I think we’ve already spoken about that tonight and looked at our vision, looking at science and innovation and biotech, things that are going to power up our agriculture sector again, but we must not punish and vilify our famers. That is why this is a very good bill that makes practical sense, and that is why I commend it to the House.
Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Speaker. Look, this is a bill that takes us backwards—there’s no two ways about it. The member who just resumed his seat went on about—I don’t know if it was vilifying or villainising farmers. None of us are here to do that. Ultimately, that lesson was unnecessary because all of us know that our agricultural is vital to New Zealand. I don’t think anyone is arguing that point. We know that about 70 percent of goods exported—
Miles Anderson: 80 percent.
Hon PRIYANCA RADHAKRISHNAN: —are through agriculture—70 or 80 percent; whatever. The point I’m making is it’s pretty high. We all know that. We know that there have been financial insecurity and stresses and there’s pressure that farmers have been going through. None of us is here to vilify farmers, but the point remains that, currently, about half of New Zealand’s emissions come from agriculture. That is undeniable, as is the importance of agriculture.
What we are talking about on this side of the House is bringing some balance to this debate. We know that, primarily, emissions comes from biogenic methane and nitrous oxide. We know that this bill will take us backwards when it comes to our climate change commitments. We know that it jeopardises the trade commitments that we have made. All of those are facts.
The other point that we are making on this side of the House, and that colleagues have made eloquently, is the fact that He Waka Eke Noa was scrapped with no plan to replace it. That is the crux of the issue here.
Members opposite can stand up and wax lyrical about the importance of the agricultural sector. We on this side agree with that, but we also say, “What about our commitments to the environment and our trade agreements?” What about those very practical things as well? Where is the plan? Show us the plan. But there isn’t one, is there? I mean, I acknowledge the $400 million that the Minister of Climate Change has mentioned in terms of a commitment to technology and the tools being developed, but the point is that they’re being developed. If a commitment is made on the other side of the House to actually price emissions from agriculture by 2030, we’re running out of time. Where is the plan—once again. For that reason, I don’t commend this bill to the House.
GRANT McCALLUM (National—Northland): Well, it’s becoming really clear in this House that there is a clear division when it comes to supporting and understanding our rural sector, because the people on that side of the House have no understanding and no feel and no trust in the people that earn the money for this country. This side of the House gets it. We understand the importance of our rural sector to New Zealand and to its economy, and that is the real frustration.
Probably some of the most divisive arguments and debates that we have in this House are around the rural sector, and I’ve heard comment about the He Waka Eke Noa proposal. Well, the reason it died was because the former Minister opposite killed it. They had their chance. That was put on the table, and all they had to do was accept it. No, it wasn’t good enough—
Hon Damien O’Connor: It didn’t answer all the questions.
GRANT McCALLUM: —they threw it back in their face, and that was lost. You’ve had your chance, you failed, and now it’s up to us to fix the problem. That’s what we’re doing—we’re here to fix the problems that you couldn’t. Right, and now the other conversation we had—
DEPUTY SPEAKER: Don’t overuse the word “you”, please. Thank you.
GRANT McCALLUM: Thank you, and it’s the members opposite—thank you. The other point I would like to make is that they talk about, “Well, what are we doing to reduce emissions?” Speaking as a Fonterra farmer, we’re very focused on reducing our scope 3 emissions. We are measuring those emissions and we have been incentivised to do so, and it’s called the cooperative difference payment. That is what we are doing, and we don’t need attacks to come from you lot—from that lot on the other side—to achieve it.
I say to you—I say to the people on the other side—that you’ve got to understand the farming sector. Understand the importance and understand the investment that we’re making in our communities in our rural sector, who do the science and the research to actually find these solutions, because otherwise the only thing that’s going to happen is our country will get poorer and the globe will heat up more, because you’ll find that that’s where the emissions will come from. It’s from more emissions from less efficiently produced food from the other side of the world. I commend this bill to the House.
Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Speaker. It is amazing how patronising these Government members can be and how lazy they are in their speeches when they just say that anybody who dares to disagree with anything they say is vilifying farmers—what a load of rubbish! Total rubbish!
Now, I wanted to start this speech with three things that I thought the House could agree on, but I’m not so sure after listening to the member for Waitaki’s speech. Because the first thing I was intending on saying in a friendly and amicable way was we should all be able to agree that agricultural emissions are about half of our country’s emissions. Getting a shake of the head from the member from Waitaki—that’s very interesting.
Then, of course, I think we can all agree that agriculture is a critical and very important part of our economy, which, of course, is why the member sitting next to me, the Hon Damien O’Connor, worked so hard on those trade deals with the EU and the UK. Then the third thing is that the emissions trading scheme (ETS) is really what this Government is focusing on in terms of emissions reduction. They rely, and say in all of their policy documents, that that is what they want to do—ETS. None of these complementary policies—they’re all gone; $3 billion in the last Budget gone. “Going to rely on the ETS.”—but not, it appears, for half of our emissions. There is some inconsistency there.
I do note that the point of agricultural emissions being in the ETS was as a backstop. There was a lot of time taken—and we heard about that in some detail from the Hon Damien O’Connor—to try and work out a way to fairly price agricultural emissions. But there was a backstop. With this bill, that backstop has gone. Despite this, we have heard from the Minister that we need to adapt to evolving international obligations. We need a fair pricing system, he said, but we also need tools. What are those tools, and do we not already have some of them, and is this just an excuse for head in the sand?
I think, from what I hear from the members opposite, that future technology is one of those tools. Of course, on this side, we agree about the importance of research, which is why we funded much of it when we were in Government, but that research should not be treated as a magic bullet. There may be new technologies that come along and they may reduce the methane produced by our cattle in particular and our dairy herd, but it may not. We know that there are different farm management techniques that can be used now and must be.
Instead, the policy commitments we have from this Government are a combination of more pine trees; the ETS, but not for agriculture; and removing, as I said, all those complementary policies. I have a challenge to this Government, and that is to give farmers some certainty that doesn’t merely rely on pine trees and magical new technologies that we don’t yet have. We can make progress now and this needs to happen. Instead, all I see when I’m in this House and all I hear is an assault on biodiversity, a love for more pollution in our rivers, and no incentives for any sort of decarbonisation of any single gas.
Hon Shane Jones: Wind it up!
Hon RACHEL BROOKING: Oh! I was just asked to wind it up, and I was about to. I was going to say that this is a very sad, sad state of affairs, and that this Government should be ashamed of themselves. They say, “We’re going to keep to our budgets.”, yet there is nothing that they are doing to reduce emissions.
Hon Shane Jones: Algebra.
Hon RACHEL BROOKING: Now, Mr Speaker, there’s just been a very curious interjection of “Algebra.”
ASSISTANT SPEAKER (Teanau Tuiono): I was trying to make sense of it myself.
Hon RACHEL BROOKING: Well, it doesn’t make much sense because, of course, if you do nothing—or if, in fact, you go beyond doing nothing and you cut $3 billion of funding for doing things—then you are not going to reduce emissions. This Government has total magical thinking on this, and it’s going to hurt the economy in the long run because we’re not going to have those trade agreements that we’ve signed up to at the moment when countries realise that we are doing nothing. What this Government is doing is putting our farmers and our wider economy at real risk, and they should be ashamed of it—get on and make a plan, and do some things.
DAVID MacLEOD (National—New Plymouth): Thank you, Mr Speaker. I am pleased to take this call in the second reading of the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill—a mouthful.
Now, I’ve got to convey that I wasn’t actually part of the Primary Production Committee that actually sat for this here, but looking at the report, clearly a good number of submissions came forward, and obviously there was a good percentage of supporters amongst those submissions for the actual bill itself. In my mind, the heart of this bill is about feeding people with food that has been produced by farmers who are among the most efficient in the world at growing and producing products with the lowest emissions footprint.
We do this while, at the same time, having to transport our products vast distances around the globe. New Zealand’s ability to feed the world should not be underestimated nor trivialised. It is said that New Zealand feeds 40 million people around this world, and I’ve also heard commentators say that New Zealand contributes 10 percent of the diet of 400 million people. Just look at Fonterra. It exports to 130 countries or thereabouts. Silver Fern Farms exports to about 60 countries.
Hon Damien O’Connor: Point of order, Mr Speaker. I don’t like doing this, but to a member who knows so much about this topic, or should do, reading a speech is probably not the best thing in this House. There have been rulings from the Speaker on this.
Tom Rutherford: Yeah, at the discretion of the Speaker.
Hon Damien O’Connor: But the member knows—should know—about this topic.
ASSISTANT SPEAKER (Teanau Tuiono): I appreciate that reflection from the member, and I’m sure David MacLeod has taken note of that, and so I would invite him to do less reading.
DAVID MacLEOD: Thank you, Mr Speaker, and thank you for the input. Much appreciated. I was going to say, just before I was interrupted, about another very good company in New Zealand, called Zespri. They actually export to 59 countries. We’ve got some amazing countries in our agricultural sector, and everywhere you look at it, New Zealand is a significant contributor to the world when it comes to food.
Why would we ever want to pressure the agricultural industry and its sector to the point where the production is reduced here in New Zealand? All it does is allow that production to take place in some other country that doesn’t even produce it with as good a footprint as us. It is exporting—in fact, it’s actually increasing the global footprint of the emissions that are released globally. It just doesn’t make sense to me.
The future advancements to reduce the agricultural emissions, already spoken about by many people on both sides of the House, are working, but we also need to concentrate that in the future. That answers the question, what’s next? It’s all the investment and all the policy changes that this Government is making that’s going to help us to achieve these gains that we need. We need to be as good as we can because, yes, we need to be competitive for the important customers, just like Nestlé that the member on the other side of the House actually talked about.
This bill provides a pragmatic approach. This bill is an approach that is good for global emissions. This bill is an approach that will deliver some of the much-needed positivity to the agricultural sector and an approach that makes sense. A good day is coming for the agricultural sector. Coming from a very proud agricultural area, a rural sector, I back our growers. Everybody on this side of the House backs our growers. I commend the 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 second time.
Ayes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Motion agreed to.
Bill read a second time.
Bills
Crown Minerals Amendment Bill
Second Reading
Hon SHANE JONES (Minister for Resources): I present a legislative statement on the Crown Minerals Amendment Bill.
ASSISTANT SPEAKER (Teanau Tuiono): That legislative statement is published under the authority of the House and can be found on the Parliament website.
Hon SHANE JONES: I move, That the Crown Minerals Amendment Bill be now read a second time.
Why is this bill needed? To overcome the most dismal, destructive decision visited upon the energy landscape of New Zealand, when the gangrene tag team decided to cancel the oil and gas industry in New Zealand. Not only did they destroy—destroy—the appetite of the investment community to back our country and use indigenous resources; no, they went on a foolish flight into the future, thinking that everything would be devoid of emissions. And here we are, importing Indonesian coal as a consequence of the gangrene tag team. Make no mistake about that.
Of course, we need natural gas. It not only represents a fast track—on the point of fast track, wait! There is more good news. There will be a host of energy projects, there will be a host of mineral projects—but I must not be diverted. Electricity generation cannot rely solely on geothermal, hydro—shall I say—wind and solar. Therefore, we need a renewable resource, and we have acres of it, hectares of it, miles of it—indeed, off the coast of the South Island. We will now reopen, with the passage of this bill, the opportunities that were denied the industry, to maintain energy security through further exploration, extraction, and development of this rare but valuable indigenous resource.
Our gas fields have been in decline, driven down by the ban decision, at which point, investors, explorers, and those companies who had grown to love New Zealand were given the cold shoulder by that regime, by that Prime Minister with that vanity-seeking decision which will go down as the worst decision ever visited upon New Zealand’s energy policy environment. Let me mention no firm beyond Winstone Pulp International—closing down because of escalating energy costs, because we do not have the necessary mix of indigenous sources for energy. We are going to open them up, we are going to exploit them, and we’re not going to be guilt-tripped by these fanciful accounts that the planet is boiling. We are lifting well beyond our weight as New Zealanders, not only in creating food but showing that technology and common sense will maintain the quality of life highly sought after by millions of others who seek to come here. We need communities that are strengthened by having access to energy that is reliable and secure. We cannot throw our lot purely on renewable resources that suffer intermittency, and we need to move beyond Indonesian coal.
It is a tragedy that because the gangrene duo destroyed the gas industry, now we have worsened our current account deficit, bringing in Indonesian coal—that will transition to something better, otherwise known as New Zealand - based gas. Not only will we get rid of this wretched ban offshore in Taranaki, it will send a signal to the rest of the world that this Government is open for business. This Government knows that a transition must take place, but what fool leaps out of an aeroplane believing that they’re going into a new transition without a parachute? A fool dressed in green—that’s who does that.
Now, since the ban was announced, we’ve watched a dwarf-like condition emerge in our natural resources sector—from 88,000 square kilometres to just over 8,000 in terms of permitted exploration. The reversal of this foolish, dangerous, juvenile, puerile pursuit of climate purity will be reversed and we will now find ourselves in the clover-rich territory of many applications to develop our petroleum resource.
Beyond seeking further applications for petroleum exploration, we will also have a very efficient process for allocating those permits. This will be called the block offer, and it will be defined, like this Government, through the feature of common sense and pragmatism. There will be alternative permit allocation systems.
There has been, sadly, the development of misinformation around decommissioning. For the benefit of the House and the thronging number of people watching this speech, I can assure you that the regime that’s been in put in place, sir, to deal with decommissioning is not only based on a clear understanding that we must manage the risks in such a fashion that the regulations that are put in place are proportionate to the risk. No more of this business of understating costs and overstating risks.
From time to time, this industry, sadly, has been misrepresented. We all know of, and we’ve learnt some valuable lessons in terms from, the Tamarind imbroglio, but we cannot burden the investment community with such stringent regulations that they no longer are willing to invest in our country. Therefore, there will be flexibility in how mandatory financial instruments are held. There will be a limited trailing liability. By that, I mean there will be the ability for the State, in the event that a very ugly occurrence takes place, to hold people responsible. We will ensure that our decommissioning strategies, our decommissioning practices, are commensurate with other jurisdictions, something that was, sadly, ignored and abandoned by the last regime.
I cannot overstate how dire our energy situation is in New Zealand. Look no further than the other side of the House for the ruination of energy policy, energy security. [Points towards Green Party members] Look no further than that small portion of the House for the destruction of confidence and certainty, thus leading to a chilling effect within the community willing to invest in New Zealand.
This bill means that capital will be freed up. In addition to that, as “King Coal” of the mining industry, it’s my pleasure to announce we will have the most permissive regime in the entirety of Australasia for tier 3 minerals. These are relatively risk-free mineral activities, and we want to free these investors, we want to free these fossickers, we want to free these people who are actually going to develop jobs, develop industry in mineral rich areas from the unnecessary dead-weight hand of the bureaucracy, other than the light touch that may, from time to time, be required.
Now, there may be things said about the emissions impact. It’s important that we act with credibility towards our net zero 2050 goals. That is why gas is necessary. It is a far less harmful, emissions-wise, fuel to use than the coal which we currently have. To all the coal owners of New Zealand: I still have your back. Emissions from energy generation are more manageable when we rely on gas.
Once this bill is passed, the changes will take effect immediately. There will be, however, challenges in terms of staging the implementation—secondary legislation, otherwise known as regulation. When we get to the committee of the whole House stage, there will be a few refinements made and, at that point, New Zealand will see the full value of a pragmatic approach to energy security and the sector.
I want to acknowledge the efforts of the Economic Development, Science and Innovation Committee. I look forward to seeing the amended Crown Minerals Act serve New Zealanders now and into the future. I commend this bill to the House.
GLEN BENNETT (Labour): There were 5,524 written submissions, and of those, 96 percent opposed this bill—96 percent opposed this bill in that short, truncated time that was allowed to be through select committee. This bill does nothing for the future of New Zealand. This does nothing to build solutions for our energy future. It takes us backwards; it slows us down. It slows down the innovation into clean and new energy industries.
Now, as the Minister was speaking, I was looking up the Economic Development, Science and Innovation Committee report, and his own officials said this in response or regards to the fact that the 2018 decision was the end of the world and everything we put from there, and the gas industry left—and it’s just nonsense; it’s completely wrong. This is what the Government officials, his officials, said: “Exploration activity in New Zealand has been declining since 2014, before the 2018 ban on new petroleum exploration outside onshore Taranaki. This has been consistent with global trends in upstream oil and gas investment, which peaked in 2014.” This whole narrative of the fact that 2018 was the end of the energy industry is completely false, and that Minister is completely false when he states that, because his own officials, his own officials in select committee, told us that 2014 was the peak and the beginning of the decline.
Again, looking in Taranaki particularly, in terms of our last big major gas discovery, the year 2000—so that’s 24 years ago; 2014 was the major—
David MacLeod: This year.
GLEN BENNETT: Those large ones, as I say, the large major ones, the year 2000.
David MacLeod: This year—Greymouth.
GLEN BENNETT: Oh, so they’re finding them. The New Plymouth member just said this year they’ve found more. We don’t need this bill then, right? We don’t need to bother with this, because it’s already happening. The reality is that we did not ban offshore. We did not ban offshore; we stopped issuing new permits, Mr MacLeod, as you would know.
Hon Member: You’re from New Plymouth.
GLEN BENNETT: They were able to have new discoveries, which they did, so you don’t need this. And yes, I live in New Plymouth, as I said.
Carl Bates: Who’s the MP for New Plymouth? Oh, Mr MacLeod. Just checking the MP for New Plymouth.
GLEN BENNETT: Yes, and? So the reality is—
ASSISTANT SPEAKER (Teanau Tuiono): I would encourage members not to have conversations across the House.
GLEN BENNETT: Thank you. The reality is that the 2018 decision meant that permits continued, and as Mr McLeod said, there was a new discovery—the largest one was 24 years ago in the year 2000. When the Minister talks about the disarray and the appetite for new investments, as he mentioned, that’s just not going to happen, because we look at the evidence from the Government officials—that 2014 was the last time it was done.
As we go through and look at this piece of legislation, as I said, there were more than 5,000 written submissions, and we vehemently oppose this because this actually slows down innovation. This slows down our decarbonisation because the line in the sand of 2018 was around encouraging—
David MacLeod: Coal.
GLEN BENNETT: —no, that’s not true—investment in innovation; to look at decarbonising. And yet nothing changed in 2018. There were no new ones waiting to come on board, as people try to say; there were other reasons for what happened there. We look back at this and we just see it as a backwards step. We look at tonight in the House, when we look at our agricultural climate emissions obligations that just went through second reading, when we look at the Fast-track Approvals Bill, which, again, is a backward step for our environment, is a backward step for our climate. This is what this Government is on about and what they are doing, and it makes absolutely no sense, because we need to have a line in the sand. If we don’t, then we’re just going to keep doing what we’ve always done and we’re going to continue to pillage the land and our climate.
Now, we look at the impacts that have taken place in terms of what it means—what are the mitigating factors that are going to be put in place—when this bill becomes law. What are their decisions to make sure they meet their obligations in terms of international reputation? This has the potential to have impact on trade. Just today, I met with executives from Microsoft who talked about investment in New Zealand. A key reason for them looking at some options here is around our renewable energy, the fact that they can be in a place where their product is using renewable energy. So, to bring this back and just to flip things around, it makes no sense from an economic perspective, let alone from the fact around climate and our environment. This is just not good law. This is a step backwards. This is offering no solutions. It’s terrible and we will not be supporting this.
STEVE ABEL (Green): Thank you, Mr Speaker. It is the night of climate change denial in the House tonight. We have gone from the biggest emitting sector, agriculture, and here we come to this next biggest emitting sector, energy. Energy is an interesting one in New Zealand, because we have this phenomenal renewable energy generation in our country: electricity. Electricity accounts for only a fraction of our emissions. Most of our emissions in the energy sector are actually from burning coal and gas, from heat generation, and from transport. We are unique in the world because we have such a phenomenal renewable electricity capability, and our big emissions are coming from our dependence on fossil: on oil for moving vehicles around, on burning coal for dehydrating milk powder, and on burning coal for producing steel.
David MacLeod: Electricity?
STEVE ABEL: But the opportunity—electricity is a fraction—
David MacLeod: Coal?
STEVE ABEL: —of our greenhouse gas emissions, and some of it comes from coal and some of it comes from gas.
Now, the Green Party, you’ll be surprised to hear across the House, supports that nuclear energy, that massive hydrogen nuclear energy super generator in the sky called the sun. It’s amazing that that produces trillions of gigawatts of electricity—of energy, I should say—every instant it hits the Earth. If only we had a way to capture that energy! If only we had a way to capture that energy—we do have a way to capture that energy!
Instead of looking to the sky, where this magnificent orb of energy is offering us a free source of fuel for future generations and for present generations, these “fossils” are digging in the ground. They’re looking down in the ground for the gas and the coal and the oil, those old dirty fuels that we know we need to get off our dependency on if we are to have a livable planet. They are not looking to the future. They are not looking to the sources of energy that can power our society without causing catastrophic climate change. They are undoing the important steps that were taken by this House to move us away from that dependency on fossil fuels, in the ban on offshore oil and gas exploration. They are undoing that and they’re going to bring back the big fossil fuel explorers, in the hope that they might find some skerrick of gas or oil.
The Minister talks about how gas is a cleaner option than coal, at the same time as the Minister intends to increase extraction of coal. So what’s the point? It turns out, actually, the Minister is incorrect on that. Gas, when you take into account the fugitive emissions, is actually a worse greenhouse gas polluter than coal.
David MacLeod: So you want more coal?
STEVE ABEL: We do not. They want more coal. They want more coal, they want more gas, they want more oil. What is more, that dependency on those fossil fuels costs us, because, as the member alongside me pointed out, gas was in significant decline, actually, before the ban came into place. Gas production peaked in 2001, and it’s been steadily falling since 2014. Gas companies have made strenuous efforts to find new extractable gas, sinking over a billion dollars in development drilling between 2020 and 2024 with scant results—scant results.
This is not the means for us to achieve energy security in this country. The means is for us to massively increase that renewable generation, to get off our dependency on fossil, gas, coal, and oil for transporting our society. It is absolutely specious and spurious and incorrect when they say that somehow the reason we have energy challenges is because of a lack of gas. It is because of a lack of the ability of this Government to imagine a world without those fossil fuel dependencies and to actually invest in those sources of energy that are native, that we control and we own: the wind, the sun.
David MacLeod: They’re on fast track, Steve.
STEVE ABEL: The fast track will open up coalmines. The fast track is going to do seabed mining that’s going to destroy the seabed. The fast track is going to be doing all of the things that increase our emissions. It’s an everything soup. It’s a total mess. It is not a plan for dealing with the challenges of climate change. It’s the coal-ition Government, it’s the oil-and-gas Government, and it is a Government that is in denial of that challenge of climate change.
The reason that we have had such overwhelming submissions on the Economic Development, Science and Innovation Committee, on which I had the pleasure to sit against this legislation, is because it takes us so far backwards. It even goes against the advice of the International Energy Agency that gas production needs to stop from 2021. We needed to stop extracting and investing in new oil and gas exploration in 2021.
Suze Redmayne: It’s either gas or nuclear—what do you want?
STEVE ABEL: The hydrogen nuclear reactor in the sky called the sun is what we need, and we need to be doing solar and wind and geothermal and using the existing hydro, and that is the means we do it by.
Once again, this Government is prepared to put the cost of its failure to deal with climate change on future generations, a cost that, in the simplest terms, if we are to import carbon credits for our emissions, could be around $23 billion by 2030—$23 billion. That is the cost of this sort of unimaginative, backwards-thinking legislation. All these guys can do is undo the progress. All they can do is go back and retreat to the old fossil fuels, which have no future. Gas is a finite resource. One of the messages of the fact that the industry hasn’t been able to find any gas is that it’s running out. In the ground, it’s running out. The easy-to-access gas has been accessed, and so why would you go searching for a finite source of fuel to supply as power for your society when there is an infinite source of fuel in the form of sunlight, in the form of wind, in the form of rain falling from the sky? Those are the obvious sources of fuel to power our society.
What is more, if we are to deal with the existential challenge of catastrophic climate change, that is exactly where we need to move our society towards: away from our dependency on fossil fuels. That is the challenge that this Government, in its denial of climate change, is failing to grapple with. Saying you believe in climate change and then doing all the things that make the problem worse has the same effect as denying climate change in the first place. That is what this Government is doing. It is, effectively, denial by inaction—or, in fact, denial by making the problem worse, by opening up oil and gas fields, by digging up coalmines, by failing to actually seize the nettle and do what we on a planetary scale need to do if we’re going to avoid those extreme weather events, avoid those droughts and those worst effects of climate change.
We will not be supporting this. What is more, when there is a change of Government, insofar as it is a Green-influenced Government, we will be bringing back the ban on oil and gas exploration. We will be bringing it back, and I just want to put the industry on notice—as we did at the earlier reading—there will be no compensation for the loss of the permits that are issued by this Luxon Government, under a Green Government. We’re telling the industry now.
David MacLeod: Terrible.
STEVE ABEL: And you know why there’ll be no compensation, the gentleman from New Plymouth? Because of the consequences of climate change. Climate change is the biggest threat to human life and human wellbeing on this planet this century, and what is the compensation for the people who get washed away in those extreme weather events? What is the compensation? We will not be compensating those industries that are driving our planet to catastrophe. Thank you.
Dr PARMJEET PARMAR (ACT): Thank you, Mr Speaker, for the opportunity. I’m taking this call on behalf of ACT, and we are supporting this bill, the Crown Minerals Amendment Bill, in the second reading. We are actually quite proud to see that we are delivering on our commitment—an election promise that we made. This is part of the ACT-National coalition agreement that is being fulfilled through this legislation, and I want to acknowledge the Minister in charge, the Hon Shane Jones, for his work on the bill.
As this is the second reading, before I talk about the select committee process, I would like to just say that the Green member Steve Abel, as he concluded his speech, the way he said that they are quite determined to bring the ban back if they ever come back in Government, that just shows they don’t understand how to support the economy. They don’t understand how to give that confidence to investors.
There are several reasons why we should be actually supporting this bill, and there is still opportunity for those members to reconsider their position. What I understand is that, yes, they want to stick to their impractical, ideological agenda—because it will be really embarrassing now for them to change their position—but there is still opportunity, because, if they decide to support this bill, they might get more thumbs up than they would if they stick to their impractical, ideological agenda. That’s something for those members to consider.
I was actually quite amused to see the way members said that they actually support sun. Thank God they support sun. Thank God they didn’t oppose sun. What would have happened if they opposed sun? I would like to say to that member that oil and gas is also formed through natural geological processes. If those members support nature, oil and gas is also natural, so we need to support that.
In the Economic Development, Science and Innovation Committee, I must say that I want to thank all the members, those who are regular members; and also all the members, those who subbed on the committee. I especially want to thank the select committee staff because we heard from 104 submitters and the select committee staff did an amazing job of supporting the select committee members to do what we are required to do.
As it happens in all select committee processes, we do get form submissions, and in this case also we did get some form submissions: 11.6 percent of submissions were form submissions—there were a few variants of form submissions—and this percentage excludes those form submissions which look like form submissions but there was a bit of doubt. The select committee also took the initiative of inviting key stakeholders. So the process was quite thorough and I’m really proud of the select committee process.
This bill must pass. It’s very important because we cannot continue to see our young ones and our bright ones leaving New Zealand looking for better opportunities. It started happening because of poor decisions made by the previous Labour Government. This bill is not just about oil and gas exploration per se. Yes, it is, but it is also about the creation of more jobs, higher-paying jobs. This is also about making sure that the energy supply is secure and affordable.
On one side, it is to support the economy; on the other side, it is to reduce the cost of living, because if the energy cost goes up, obviously the overall cost of living for people will go up. Making big announcements to grab international headlines doesn’t feed families. Those headlines, which the previous Labour Government made—and, actually, announcements were made to grab those international headlines—don’t feed families, they don’t warm people’s cold houses, and they don’t give any assurance to businesses that they will not have to stop their processes because of lack of energy.
On this side, we are quite committed to ensuring we have a balanced approach. We have a long-term vision, not short-sighted like them that stifled our economy. We are really proud of this and we want to see that this bill goes through the House as soon as possible. I am very happy to support this bill and commend this bill to the House. Thank you.
Dr VANESSA WEENINK (National—Banks Peninsula): Thank you, Mr Speaker. It’s an honour to speak at the second reading of the Crown Minerals Amendment Bill. During the select committee, there was quite a bit of really interesting information from officials and from those who submitted on this bill. One piece of information that I found very fascinating—and I had to ask again, was this really true?—was that one of the assumptions that was made when the ban happened was that the area that was under consent would stay around the same and the rate of exploration, which had been trending down, as others have mentioned, would continue at that same rate. Imagine if the graph looked kind of like that at the time. They expected that to continue down, and that was one of the assumptions: that supply and demand would keep up. However, what happened was that it went like that, and supply dropped off a cliff and we saw demand stay the same. So that gap between supply and demand went through the roof.
That was why we saw the peak pricing go up over the past winter, when we had the driest hydrological year that we’ve had on record. We’ve had not as many sunshine hours and quite low wind speeds. That meant that our renewable energy wasn’t working so well, so the peaking prices had to be up. We did end up burning more coal, which was one of the unfortunate side effects. The International Energy Agency recommends that you switch from burning coal—as one of their recommendations for how we reduce our carbon footprint. They recommend going to gas—and they also recommend using nuclear. Nuclear is their biggest option, and nuclear power will be generating a record amount across the world in 2025. It’s not something that we can do here; however, we can have lots of options for renewable energy. In helping that transition, gas will be part of it. I commend this bill to the House.
DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Tēnā koe, te Pīka. I stand on behalf of Te Pāti Māori to speak against this bill. Look, I think there’s not too many in the House equipped to be able to talk about this from the perspective of those who it actually affects the most, which is Taranaki. The amendments that are being proposed—and I need to preface my kōrero by saying there was a ban put in, and while Taranaki iwi supported that, there was always concerns that there wasn’t the follow-up with the degree of transition and investment that was needed to achieve that. I don’t want to stand here looking like I’m on either side. Actually, I’m speaking on behalf of the concerns of Taranaki. I substantiate that by looking at the concerns that they raised.
I think, first of all, what we need to remember is that we all seem to agree that we need to move away from what it is that we have now. Some think that we’ve got more time to milk mother Earth, and some think that a ban without sort of a great big futuristic plan is going to be enough. Last year, we got a little bit of hope when there was consultation and discussion with a cluster of energy people and interests within Taranaki. And we were hoping that that would be the phase B of the ban, that we would start looking at what could be a future-focused energy solution for Taranaki. The feedback that Ngā Iwi o Taranaki provided is that they were strongly opposed to the removal of the oil and gas ban. They strongly opposed the proposal to repeal section 58 of the Crown Minerals Act. They strongly opposed proposed changes enabling the prospective permit-holders to apply for permits outside of the block offer process, and the notion that consultation was not required, particularly for hobby mineral mining permits, and the interpretation that the Crown was now going to be applying to adequate engagement with iwi and hapū.
We can talk academically all we want, but the reality is there is only one area and one group of people most impacted by the decisions that the Government makes in Taranaki. When the iwi and the hapū who have more experience than anyone else in this room with this particular sector say that they have concerns, one would hope that these Governments would listen. What they’ve said is that we have absolutely nothing coming out providing a solution of what happens next in Taranaki when the finite source runs out, and that’s really concerning. What is the degree of investment that’s going to be followed through? When we look at some of the things that have changed, why is it that we have had iwi who were responsible for some of the best-practice engagement with these companies whom we’ve now relegated to absolutely no consultation, or the sense of inadequate consultation processes, or consultation processes as demonstrated by the Crown? There has been some real absolute advancement from Taranaki based on its misfortune of having more experience than anyone else.
I think some of the things that we sort of saw were the work that was undertaken for the energy strategy for Aotearoa, the gas transition plan, the critical minerals list—there was a clear difference between Crown-owned minerals being open for business and the risk of the appetite of the oil and gas sector, and therein lies the reconciliation that Taranaki is appealing for. It wasn’t to sit there and say, “Absolutely no.” It was to sit there and say that if we forced a ban, the proposition would have been that Governments would have been forced to have themselves and their agencies look at plan B. Sadly, as much as we talk about just transition, it wasn’t funded, it wasn’t resourced, and today Taranaki are expected to wear the flipflop of another Government. The decommissioning issues, the funding issues we have when companies don’t fund themselves to remove out of our backyard, and the absolute catastrophe that the opportunities that could be going on around our area are being ignored for same old status quo.
I want to make known that I’m disappointed in this particular Government, because there are some progressive people who should have experience and should know better. I’m hoping that, while this is going to go through, no doubt, there is a better approach to what the energy solution for Taranaki should be that includes iwi and hapū and the knowledge and experience that they have. Kia ora rā.
LAN PHAM (Green): I’m truly astounded by the contents of this bill tonight, and I’m astounded by the crystal clear short-sightedness of it all. Because I ultimately believe that people are good, it makes me feel like this Government simply must not know. They must not understand the implications of actions like this, that actually are against and take us further away from a livable planet which we so desperately need. If this Government understood the science, if they understood the overwhelming, indisputable evidence that developing new oil and gas fields has repeatedly been found to be inconsistent with our 1.5 degree goals under the Paris Agreement, they would not be passing this bill. If they really knew and really grasped that we are the last remaining generation who can actually take action and have a chance at stemming the worst of climate disaster, they would not pass this bill.
Tonight, I invite this Government to step into the world, to really be present, because we are seeing in our face, day after day, climate disaster after climate disaster. I want to acknowledge particularly the harrowing climate impacts that we’ve seen in Valencia, Spain, where we’ve just seen the deadliest flash floods that they’ve had in Spain’s modern history. It’s killed at least 214 people, and, actually, dozens of people are still unaccounted for. Now, we saw the images of cars just floating their way down the street, and this was torrential rain that was the amount of an annual rainfall for Valencia, Spain, that fell in eight hours. This is happening around the world, it’s real, and we actually need to take action to change the fate of this planet, to change the physics and the atmospheric settings that are increasing these climate disasters.
I recall, in my time as a councillor on Environment Canterbury, the council went from not believing that it had a role in opposing oil and gas drilling off the Waitaha Canterbury coast—we went from that to actually outright opposing oil and gas drilling off the Waitaha Canterbury coast, and I’ll tell you why we did that. We did that because we actually listened to the community, we listened to the evidence, we listened to academics, to iwi Māori, who actually came in and talked us through the very real implications. Now, our whole council changed their position to actually support that.
Yet here we are with this bill, where the Government have all the evidence available to them and they’re simply not listening, not understanding, and not knowing. They’re passing a bill like this which is so damaging and so destructive when it comes to the public having such a limited say—the five days that they had—for such a significant bill that can have such significant impacts for Aotearoa. It doesn’t make environmental sense, it doesn’t make economic sense, and it’s actually really dangerous if this Government, as they claim, are serious about emissions reduction and they actually do want to honour our international climate commitment and play our part in creating a livable future.
I did want to point out one of the most extraordinary parts of this bill, and that’s the purported aim that this bill will increase investor confidence. Te Pāti Kākāriki really want to point out that we don’t want such damaging and risky activities happening here in Aotearoa, that no investors should have confidence when it’s companies and investments whose businesses will directly threaten not only our fragile ecosystems but a livable planet. We cannot have thriving economies if we don’t take serious climate action now. This bill goes against that, and Te Pāti Kākāriki oppose it outright. Thank you.
DAN BIDOIS (National—Northcote): Tēnā koe, Mr Speaker. It’s a pleasure to contribute to the second reading of the Crown Minerals Amendment Bill. This bill is about energy security, it’s about jobs and incomes, and it’s about ensuring our transition to a low-carbon future. As a member of the fantastic, hard-working select committee that considered this bill—
James Meager: What’s that one?
DAN BIDOIS: That’s the Economic Development, Science and Innovation Committee—a hard-working committee. I just wish to echo for the House today some of the key themes that we heard in select committee.
We heard that gas is an important part of our energy transition to a low-carbon future. In fact, I want to commend the submission from Genesis Energy, who submitted a really robust and thoughtful submission around this point in particular. We heard about the unintended consequences of the 2018 ban—that New Zealand became closed for business. I commend the Energy Resources Aotearoa submission, in particular from John Carnegie, who backed this point up quite steadfastly. We heard about the negative impact of this ban in 2018 on our emissions, and submission after submission that we heard actually proved the point that, because of the oil and gas ban, we actually imported more Indonesian coal. Because of that, this increased our emissions profile.
Now, I do just want to say a very special thankyou to the select committee and to the officials, because, as was pointed out, we didn’t have a lot of time to hear from submitters. Actually, we had five days. When this ban came into place, the Government at the time actually gave only 10 days, or two weeks, and we actually heard more submissions on this bill than the previous bill had in 2018. I must say, I was reading the report from 2018, which does inform us for this, and they raised a lot of the same concerns—that iwi weren’t consulted back in 2018. I actually just want to commend all those in the select committee for doing their due diligence and making sure that this bill was scrutinised in less time than the 2018 bill. We had actually more than double the submissions as a result.
This is an important bill to secure our future, to help secure our low-carbon future, and it is about jobs and incomes. I commend this bill to the House.
HELEN WHITE (Labour—Mt Albert): Mr Speaker, thank you. It is occasionally a good idea for us to actually debate bills like this, because it’s very important that I correct the last speaker. I’m on the Economic Development, Science and Innovation Committee, and while I do think we’re a hard-working committee, when I was on that committee, we had a lot of submissions that we didn’t get to hear—a lot more than I was comfortable with. We didn’t get to hear them because this bill was absolutely rushed through, and we couldn’t get the clerks, even in the time that we did have, to be available to listen to people and to listen to their submissions.
Now, that really worries me. We rushed through a bill. We gave people some time—about 12 hours’ notice—that they were going to have to speak. They were rung and were told that we would be hearing them in the next few hours, and the submitters were upset about it. A lot of them cried. It was quite a hard process to listen to. They were overwhelmingly concerned that the Government was burying its head in the sand about climate change, and I share that concern tonight.
I’d like to start by talking about one of the little practical things that concerned me. I was very proud in the last Government that we dealt with the situation that had arisen in the case of the Tūī oil field. Tūī was a situation where the taxpayers, those hard-working New Zealanders, who we’re supposed to be so proud of giving and caring about their money and wasteful spending—well, those taxpayers forked out for a company that had, basically, taken all of the resource of the country and then left us high and dry, as taxpayers, with disintegrating pipes, and we had to make them right. Now, we had put in place a regime that meant that there would be security in that sort of situation so that it wouldn’t happen again. We’re taking that away tonight, and I’m extremely concerned that we’re doing that.
David MacLeod: What?
HELEN WHITE: Yes, sir, if you read the bill, you will find out that we are taking away the level of security that we had, because we made people pay money upfront and we made them responsible. There will be hard-working New Zealanders tonight who work really, really hard and who don’t earn that much who may well be responsible for and liable in the future for the make-do of the pipes that are at the present time already available but will actually be left in a state of disintegration because we have a very changing situation there, and I am extremely concerned about that.
Now, that’s one little thing. There’s a much bigger picture here, and it involves what we stand for in New Zealand and it involves what we have as a real peril in terms of our planet. There’s something called a carbon bomb, and if people want to look it up, just google it, and they will see that this is not an extremist position. It’s a worry that there is so much oil and gas out there at the moment that has already been discovered that if we exploit those fields, and if we don’t stop and we don’t actually limit it, we will produce so much carbon that we will double-impact the amount that we can possibly put out as a planet—just now, without exploring any more; just what we’ve got. If you look at it, there’s a really good article by The Guardian on it, and there are lots of other people talking about it. We have enough.
Yes, we have a transition issue, and I appreciate that that’s a really tough thing for us all, but it’s also tough if we actually end up in a situation where we heat the planet up and we end up with lots of things that we don’t even think about. Yes, we think about floods. We think about the deaths that result in flash floods, but do we think about things like the instability that this causes, the wars that it will cause, or the people who will have to move? Do we think about the starvation? Do we think about the real inhumanity of these choices?
It is not possible any more to just bury our heads in the sand. We are going to have to face this problem. Now, the good news is—and I’d like to talk about the good news because I was talking to a lot of very depressed submitters, actually—New Zealand can make an extremely good contribution, but it has to look forwards, not backwards. We have an incredible country, and we have incredible capacity. We have electricity. We are able to create the absolutely best source of electricity. We have wind, we have solar, and, not only that, we have geothermal—we have geothermal. We have untapped sources in geothermal. These are all good, sound sources.
Yes, if the fast track was directed in the right way—and it was: we had actually done that in the Government prior to this Government coming in; we had tried to target a fast track to those things—I would, yes, accept that there is an argument for fast track. But there isn’t an argument for allowing those very interests that have built up over time, because they’ve got these carbon bonds, they’ve got these ways of being, and letting them actually exploit situations and basically leaving it to the free market and letting these people do these things when we will all end up paying the price.
That’s the difference between this side of the House and your own, sir, because what is going on here?
ASSISTANT SPEAKER (Teanau Tuiono): Please don’t refer to the Speaker.
HELEN WHITE: Sorry, sorry, sir. That is the difference between this side of the House and the current Government coalition. This side of the House understands that we need to build a future and that part of our role as government is to nurture that and to lead it. It’s called leadership. Actually, what is happening at the present time with the Government is not leadership. It is not leadership to suggest that multinationals who have got a vested interest in doing what they’ve always done, because they’re going to be dead by the time they do the damage. By the time that the chickens come home to roost, their generation will have amassed the wealth and will probably be able to protect their own families. That’s what is actually being allowed to happen. That is not leadership. That is not government in this country.
The Government has a duty to do a lot better than that, and the first thing it requires is taking away from the slogans, taking heads out of sand, away from slogans, doing a bit of research, and actually committing to a very different strategy for this country. That’s what we need. We need a much brighter and, I mean, a smarter future. We need a future where we are manufacturing onshore and using some renewable sources of electricity. We need a future that involves exploring our geothermal. What will happen as a result if we do that is we will be at the edge. We will be at the cutting edge because we have a whole lot of companies, a whole lot of new developing industries, that are looking for a place that has exactly that profile.
We heard the other day, when we had a cross-party session on AI—some of our biggest companies say they were attracted to coming to New Zealand because we are a country that is seen as having pure sources of electricity and energy, and there is no problem with industry if it is based on greener fuels. That’s what we need.
So what is going on? What happened in the select committee was I repeatedly asked about brand. I repeatedly asked for advice on whether there had been any analysis of the cost of this piece of legislation to the New Zealand brand, because there will be. There will be a cost. It is all very well doing a cost-benefit analysis and talking about that stuff, but do it well—do it well. Go out there and find out what the value of the pure brand of New Zealand is, because, next election, we’re coming at you with a much, much better version.
ASSISTANT SPEAKER (Teanau Tuiono): Please don’t include the Speaker in your observation.
HELEN WHITE: Sorry, sir. Next election we’re coming at the coalition Government with a strategy and an approach and a vision for New Zealand. And, actually, it is a vision that’s based on a sustainable future, sustainable electricity. In fact, it’s very interesting that the National Party want to go on continually about looking forwards when in fact they’re taking the country backwards. Often people will say—
Carl Bates: Back on track.
HELEN WHITE: Well, yes, it’s an interesting irony, isn’t it? I would ask, if I was a New Zealander, tonight: who is actually going to get New Zealand back on track? Who is going to bring them into the future? Do you know who it’s going to be? It’s not going to be a Government that passes this law.
MIKE BUTTERICK (National—Wairarapa): Thank you, Mr Speaker. I rise in support of this bill, the Crown Minerals Amendment Bill. It was interesting listening to the previous speaker, Helen White, talking about security, because if there’s one thing we actually learnt when the world supply chain was, effectively, shut down during the global COVID disruption, it was that, as a country, we were incredibly exposed and vulnerable in regard to our supply chain. What we need most is security of supply of the things that we actually need. The grand announcement made by the previous administration ceasing the oil and gas exploration—all in a hurry to get a medal around their neck on the world stage—has led us to where we are now.
The previous speaker talked about the chickens coming home to roost. Well, the pigeons have come home to roost. Thanks to the previous administration, we now have an energy supply crisis. It wasn’t that long ago that we were actually struggling to keep the lights on, exposing our businesses and their ability to operate and to remain viable. We’ve seen the impacts recently around the country and I’ve heard from some businesses in my electorate, the Wairarapa electorate, of the impacts that it had on their viability. We’ve also exposed our most vulnerable and our elderly to high prices and supply shortages.
Why on earth didn’t the previous administration sit down with the energy sector, come up with a plan to transition to renewable energy at the same time as making sure that New Zealanders had a reliable, on-tap supply of energy at all times? It beggars belief. We now find ourselves in a position of vulnerability, a position where those that we need to invest in exploration have lost the confidence to invest. I would point out the demand’s not going down. Without gas, we’ll need to rely on higher-emitting sources of energy such as coal.
This bill will provide confidence. It will provide the ability to plan our transition to renewable energy. Natural gas is critical to our energy security, and it’s a viable and cost-effective source of energy until we become more renewable energy supply available while still remaining committed to net-zero 2050. I commend this bill to the House.
Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Speaker. I’m going to take a very short call on this, because my colleagues on this side of the House, I think, have laid out very well how this is a regressive bill. It takes us backwards as a nation. I mean, there was legal advice from the Ministry of Foreign Affairs and Trade to the Minister for Resources to say that this move to repeal the ban that was put in place in 2018 on new offshore oil and gas explorations is likely to breach New Zealand’s obligations when it comes to free-trade agreements, particularly those with the EU and the UK, because those deals prohibit New Zealand from reducing environmental protections to encourage trade or investment, and that’s pretty much what this bill does.
In addition to that, as my colleague Helen White pointed out, this legislation will weaken the decommissioning regulations and rules that were put in place, again, as she mentioned, to prevent the Crown or the taxpayer from having to foot the bill for things like, for example, the Tūī oilfield clean-up, which was, from memory, about $440 million—that is being weakened. While they talk big on the other side about reducing costs for taxpayers, apparently this is quite all right in their books, even though new figures in the advice that was received by relevant Ministers indicate that the total decommissioning cost is approximately $2.5 billion. That’s about $2 billion of that going just to clean up four offshore oilfields and nearly $500 million for 21 onshore fields.
This is incredibly regressive. It’s a backwards step. It risks our international reputation for being clean and green, and, in addition to that, it basically locks us in to prolonged fossil fuel dependence and has severe implications when it comes to New Zealand’s emissions. Instead of this regressive step, what the Government really should be doing, which was pointed out by the majority of submitters on this bill, is being future-focused, looking at investment in development of renewables, looking at the storage of renewables, and we agree with those submitters.
The final point that I want to make is to members opposite who have pointed out that this is about energy security. We know, though, that the average time from exploration permits being given out right through to first production—the average time is 16 years; the shortest is 10 years. The argument that this repeal is a short- or even a medium-term solution for increasing New Zealand’s energy security is absolute humbug, and we don’t support it.
ASSISTANT SPEAKER (Teanau Tuiono): Members, the House is suspended, and I will resume the Chair at 9 a.m. tomorrow for the extended sitting.
Debate interrupted.
Sitting suspended from 9.57 p.m. to 9 a.m. (Wednesday)
TUESDAY, 5 NOVEMBER 2024
(continued on Wednesday, 6 November 2024)
Bills
Crown Minerals Amendment Bill
Second Reading
Debate resumed.
ASSISTANT SPEAKER (Teanau Tuiono): The House is resumed for the extended sitting. This is the interrupted debate on the second reading of the Crown Minerals Amendment Bill. I call the next speaker, which is call No. 10, a second split call, Dr Hamish Campbell.
Dr HAMISH CAMPBELL (National—Ilam): I rise to speak in support of the Crown Minerals Amendment Bill. This bill represents a crucial step towards securing our energy future as we head to net zero 2050. Let’s be clear. The 2018 ban on oil and gas exploration was short-sighted policy that has hampered our nation’s progress. It not only stopped exploration needed to identify new energy sources but it also discouraged investment in further development of our existing gas fields, and the result is that our annual natural gas production has peaked and has been lower than we ever predicted, putting our energy security at risk.
Also, let’s be clear: if we don’t use gas until we have renewable energy, we will have to rely on coal. The other side of the House seems to be happy with this, or maybe they’re trying to mask it with their virtual signalling, but the reality is we need thermal generation until we can get our renewable energy on track. When we’re looking at emissions—and we’ve heard cries of flooding in Spain and the effects of climate change—when we burn coal, it emits up to 75 percent more carbon dioxide than if we do gas. That means, if we look at it, 93 to 103 kilograms of carbon dioxide per thermal unit if we use coal and 53 kilograms if we use gas. Some might argue that this bill is a step backwards in our climate change efforts, but let me reiterate: if we burn coal, we are producing 75 percent more carbon dioxide per unit of energy produced. Natural gas does produce carbon dioxide, but it’s a vital transition fuel that will help us achieve our ambitious goal of net zero emissions by 2050.
We need to work to double our renewable energy, and I think nobody is disagreeing with that, but that is why we need the fast-track legislation. We’ve seen this winter, when the lake levels are low, the sun isn’t shining, the wind isn’t blowing, that we actually need a back-up source. Gas provides a reliable source of energy to supplement those renewable energies. Without gas, we risk the increased reliance on coal, which is a more polluting fossil fuel, or we face switching off our power altogether.
REUBEN DAVIDSON (Labour—Christchurch East): It’s not a pleasure to stand to take a call on the Crown Minerals Amendment Bill, and I think there’s some irony in the fact that it says on the wall that the date is 5 November 2024 when the rest of the country is ahead of us as it is 6 November 2024. It is very, very appropriate because this is absolutely an Act from the past. This is literally time-travelling back in time. This is a giant backward step for New Zealand, for the environment, and, through the process taken in this bill, a giant step backwards for good governance. The fact that the other side of the House are comfortable with that isn’t lost on anyone.
Let’s start by looking at the process taken by the Economic Development, Science and Innovation Committee in considering the Crown Minerals Amendment Bill. Two words: “rushed” and “rammed”, because that was the way it was put through that select committee. It was rushed and it was rammed. The select committee had the opportunity to extend the submission window to allow people to have adequate time—people who live in the areas most affected by this legislation—and the select committee said no. They had the opportunity to form subcommittees to be able to hear more submissions, but the select committee said no. That is not an open-minded select committee. That is not a select committee decision that respects democracy.
However, there are great people who, given the four days, the four very limited days, available to make submissions, made submissions in the thousands. I think it’s really important that, as this legislation is rammed through the House, we take the time to actually revisit some of those submissions here, and, as we get into those submissions, let’s not lose sight of the fact that 96 percent of those submissions were opposed.
I will share extracts of a submission from Te Kotahitanga Marae that expressed full and unwavering opposition. It talked of the “duty of care to protect and advocate for our marae and rural coastal communities which face the direct impact of climate change, including rapidly rising seas that threatens the very land we live on and the future of our people”, and said that “the exploitation of Papatūānuku cannot be allowed to continue. By allowing further fossil fuel extraction, this bill directly undermines our role as kaitiaki and threatens the sacred connection we maintain with our environment.”
The submitter from Te Kotahitanga Marae called on the Economic Development, Science and Innovation Committee and on members in this House to listen to the voices of our environment, of our community, and of our tūpuna. We were listening—
Katie Nimon: He’s reading a speech.
REUBEN DAVIDSON: I’m reading a submission, because so many of these submissions were not heard. I’m pleased to hear there is a member listening this time, and I will read a whakataukī because I think it’s incredibly appropriate in the context of the submission. Mā te rongo ka mōhio; mā te mōhio ka mārama; mā te mārama ka mātau; mā te mātau ka ora—listening equals knowledge; knowledge equals understanding; understanding equals wisdom; wisdom equals wellbeing. I am reading that and you are listening, and it’s an important message that you should hear.
There is another submission from the World Wide Fund for Nature New Zealand that states very clearly that international scientific consensus is that the use of fossil fuels for energy consumption is the leading cause of climate change, responsible for more than three-quarters of greenhouse gas emissions. A 2023 report from the United Nations Intergovernmental Panel on Climate Change (IPCC) makes it plain that the world is unlikely to meet global targets unless urgent action is taken, with both the UN Secretary-General and the IPCC calling for the world to phase out coal, oil, and gas—phase it out, not start promoting the exploration for it again.
I will finish on a submission that was light when it was submitted but had high impact when it was delivered to the select committee. This was a submission from Benjamin Neville from Dunedin. He said, “I can accept that different people can hold different views on what is best for the country, but to ignore the wealth of scientific evidence about the huge risk to all of us that further fossil fuel extraction and carbon dioxide emissions will cause is just negligent.”
This was a succinct submission from Benjamin Neville, but it was delivered in a powerful context. He was knee-deep in flood water in a Dunedin street as he delivered his submission to the select committee, and the fact that events like those recent floods in Dunedin are a direct result of the climate change that scientific evidence is telling us is because of the exploration activities that this Government is ramming through should not be lost on members. If you want to have his message reiterated, I suggest that you tune into the song he chose to play at the end of his submission, and it was a very appropriate piece of music to round off an excellent submission from Benjamin.
There are three things that I want to finish by focusing on, three very, very good reasons to object to this giant step backwards. Firstly, starting the re-exploration and the promotion of exploration will slow down our transition to renewable energy. Whilst this may be refuted by members on the other side of the House, it should not be lost on anybody that BlueFloat Energy, upon news of this exploration being back on the table, removed their wind generation development plans from New Zealand shores, and they stated it was because of the allocation of seabed. So offshore wind power generation is off the table because of the actions of this Government.
Secondly, trade agreements and our international reputation are at risk. This giant step backwards is damaging our brand internationally, damaging our environment, and undoing the excellent work that Labour in Government did with international trade agreements. Why would you put all of that at risk for this bill? It is hard to understand.
The other thing that I think should not be lost on anybody is the huge burden of clean-up costs on taxpayers. This bill weakens the mechanisms to hold the large companies liable for the damage they could cause and for the huge collateral damage that could be caused to our environment as a result. The trailing liability removal and the changes to those clauses make it very, very easy for big business to step away from their obligations to responsibly manage environmental impacts and damage from this very, very risky practice that the rest of the world is rightly walking away from.
I’ll finish off by expressing the strongest possible opposition because the Crown Minerals Amendment Bill disrespects—it disrespects proper process, it disrespects mana whenua, it disrespects those who submitted to the select committee, 96 percent of whom were opposed. It disrespects our environment to take such a backward step, to be so reckless, to be short-sighted, and to not have the future of New Zealand as your focus.
KATIE NIMON (National—Napier): Let me tell you a couple of things I think are really important to not leave out in this argument. We, as a Government, are very ambitious about a couple of things, and I’m going to share those two things with you today. One of them is doubling renewable energy sources, and the other one is doubling the value of our export market in the next 10 years. Now, we can’t achieve the second one without doing a few things. The first aspect is making our economy more productive. We’re working on that. We’re building roads and it’s all very exciting. We’re going to get people places faster. The other thing we can do is reduce the cost of producing. A big impact on the cost of producing is energy sources for manufacturing.
Now, in my electorate, we have Pan Pac. We know that, when the energy prices were at their peak, it was about $400 a megawatt. Then a couple of weeks later, it was down to $9.38. Businesses can’t cope with that, and, in fact, they can’t, because that’s why Winstone Pulp International closed. If we want to have high-value incomes for our people, we need to have sustainable energy to do it. The member opposite said the international advice is that we phase out. Well, the former Government did not phase out; they just stopped. Now we are dealing with the preserve outcomes. We have to make sure we are making smart decisions, and we cannot double our renewable energy sources overnight. We have got to work with what we’ve got so we don’t have the perverse outcomes. It is very, very important that we work with what we’ve got and we make sure that we have a productive economy and we can contribute to the global economy and grow our GDP, and this is all part of the sustainable plan. Thank you.
A party vote was called for on the question, That the Crown Minerals Amendment Bill be now read a second time.
Ayes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Motion agreed to.
Bill read a second time.
ASSISTANT SPEAKER (Teanau Tuiono): I declare the House in committee for further consideration of the Contracts of Insurance Bill.
Bills
Contracts of Insurance Bill
In Committee
Debate resumed from 23 October.
Part 2 Disclosure duties (continued)
CHAIRPERSON (Barbara Kuriger): Good morning, members. The House is in committee for further consideration of the Contracts of Insurance Bill. When we were last considering the bill, we were debating Part 2. This is the debate on clauses 10 to 69, “Disclosure duties”; and Schedule 2. Once again, the question is that Part 2 stand part.
ARENA WILLIAMS (Labour—Manurewa): Good morning, Madam Chair, and thank you for the opportunity to take a call in this debate. Since last the committee was debating this part, Part 2—and my questions will be particularly around clauses 7 and 11, on which there are still some unanswered questions still remaining. The Labour members of the Finance and Expenditure Committee had been supporting this piece of legislation because we believe in a consolidated piece of insurance law in New Zealand. It’s well overdue, and it’s something that is much needed in this area, but there were some major issues which we felt needed to be addressed at this stage and haven’t been amended. That is why we now will go part by part to consider the meaning of particularly those things which were changed not only by the select committee’s consideration, in response to submitters, but also by the Minister and his changes from the previous Government’s work on a prior iteration of the bill.
Now, I bring the Minister first to the unanswered questions around the conflict of laws point. Before the House rose, we were in consideration of the impact of clause 7’s changes on small businesses, particularly the meaning of the change to clause 7(2)—
CHAIRPERSON (Barbara Kuriger): Can the member explain—clause 7 is in Part 1.
ARENA WILLIAMS: I am sorry, Madam Chair. I was intending to speak to clause 11, and I will do so now. Thank you for your indulgence, Madam Chair.
Clause 11 has been deleted, which walks back an important provision in this bill, which was a consumer protection, and it related to setting out what the meaning of consumer insurance contracts are here. The reason I was mistakenly bringing the Minister back to our discussions previously in the committee about that clause is that it has an impact not only on consumers but also on small businesses and anyone who’s not included in the definition of the contracts of insurance as they are now.
The Minister needs to give the committee a better understanding of how this will impact not only on consumers but on small businesses, particularly now, under the new definition of what a consumer insurance contract is. If we’re not then carving out the way that these contracts will impact on businesses—and also those businesses that rely on insurance contracts—to then pass on the benefit of an indemnity to their customers or clients, say, if they’re a lawyer or an accountant, how that will impact on consumers downstream? The effect of removing that clause 11—though there are other provisions in the bill, it never takes it back up to that protection that was allowed by clause 11, in Part 2. We’ll start there.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair. It’s good to be here again. I note just for the committee that Robert Merton KC, an eminent scholar from the UK, is following this debate very closely, Minister. He expresses some disappointment in some of your decisions but is gratified that some of the suggestions that he made—and I understand he’s been in touch with the Ministry of Business, Innovation and Employment—have been adopted, but he has been in touch and is very interested in the progress of the debate. I did have to explain to him that the Minister hasn’t yet adopted any of the Amendment Papers on the Table, but there is still time.
I did want to talk to clause 30, which has an amendment in respect of it, and that is the clause relating to burden of proof. It notes there in the bill itself that the insurer has the burden of proof that a qualifying misrepresentation was deliberate or reckless—and that’s normal, that’s actually just the civil standard of proof. Anyone who wants to assert something naturally has the job of showing that that is the case. It’s not for an insured policyholder simply in response to “You told fibs.” to prove that they didn’t. That’s well and good, but my Amendment Paper just goes and really reflects what is in some of the common law, and that is that the standard of proof takes into account the seriousness of the allegations and, essentially, the likelihood of it occurring.
My amendment suggests that an additional subclause (3) is inserted, which would state that “Where the insurer claims there is a deliberate or reckless misrepresentation the standard of proof is that the court must be satisfied on the balance of probabilities taking into account the seriousness of the allegation and the gravity of the consequences.”
Essentially, if what’s being asserted is a fraudulent lie, then that’s a very serious allegation and there’s a strong presumption against that happening. It’s not a criminal presumption. It’s really important to note that this isn’t kind of beyond reasonable doubt, but it’s saying that it’s on the balance of probabilities, but in determining how likely it is that that would happen, you have to kind of take cognisance of the fact that people don’t lie in their insurance policies as a matter of course. The reason for that is there are very serious consequences. When balancing the scales of evidence, you need to recognise that tipping on the scales against that being the case—the fact that people don’t lie—and then look at the evidence presented by the insurer that there may have been a lie and weigh it accordingly.
Now, burden of proof and onus are always a little tricky. It’s also important because it’s not some kind of sliding scale; it is still just balance of probabilities, but it’s really clear in the cases that you need to be alert to the fact that this is an unlikely thing to happen. My concern is this: if you’re going to codify burden of proof by putting it in the legislation here, then you need to also codify the kind of common law gloss on that, because it’s going to look like that’s it, and there is no more. It’s clearly not the case, and there have been plenty of decisions both overseas and in New Zealand that do that.
I won’t go on. I got told off by one of the former Chairs for just trying to fill five minutes and I’ll wait—
CHAIRPERSON (Barbara Kuriger): Short, sharp questions are really good. Thank you.
Hon Dr DUNCAN WEBB: —for the Minister to respond.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. Just first of all, just responding to Ms Williams’ question, she was a very active participant in our last round, but I think without trying to highlight it, she wasn’t here for the discussion around clause 11. We traversed that—
CHAIRPERSON (Barbara Kuriger): It might be better to say that she may not have—
Hon ANDREW BAYLY: She may not have been available to hear it—
CHAIRPERSON (Barbara Kuriger): Thank you.
Hon ANDREW BAYLY: —but I know she was a very active participant. With regard to that new clause raised by the Hon Dr Duncan Webb, I think the first driving clause is clause 30(1), “The insurer has the burden of proving that a qualifying misrepresentation was deliberate or reckless.” That’s a pretty important statement. That’s one of the clear things that this bill seeks to do—is to be clear about the obligation of the insurer not only to make sure that documentation is clear but that the insurer has to ask the right question. It’s not up to the policyholder to determine what was right or wrong. That’s a key part of the change, and this is sort of the third leg to that. Quite simply, in response to your amendment, it’s simply not needed.
I note that the member has proposed in a number of his amendments that he seeks to define the role of how the courts should approach the different pieces of litigation, should it get to that. We are not proposing to do that. It’s very clear what the principles are and it’s common practice, and the approach of the bill is to leave it to the courts to decide. There is a normal civil burden of proof. That’s why the bill has operated at that level and it’s consistent throughout in adopting that. Leave the courts to make their own decision. The framework is there to be very clear about what the operating framework is for that decision making, but that’s been the approach of the bill.
LAN PHAM (Green): Thank you, Madam Chair. Good morning. I really take the Minister’s comments about wanting clarity with this bill, and I would love to hear from the Minister whether he would consider the adoption of this amendment to clause 14. This is clause 14(2A), which seeks to replace the word “dishonestly” from (2A). This is “A misrepresentation made dishonestly must always be taken as showing lack of reasonable care.” Now, the Green Party proposed to replace this word with “fraudulently”. We’re doing this because the word “fraudulently” sets a more appropriate, clear, and specific standard for policyholders to actually show reasonable care.
Now, we know that these policyholders have this duty of reasonable care not to make a misrepresentation when actually entering into these insurance contracts. An honest mistake, really, I don’t think, should be grounds to deny insurance cover. The bill actually previously stated that misrepresentation made fraudulently must be taken as a lack of reasonable care. However, we really disagree with the Finance and Expenditure Committee’s change to this to replace “fraudulently” with the weaker and vaguer term of “dishonestly”.
What we’re really clear about, when it came to submissions that came before select committee, was the submission from the Insurance Council of New Zealand, and they argued that fraud and dishonesty are really different concepts. They stated that—and this is a quote from their submission—“Dishonesty and fraud are related but distinct concepts. Dishonesty is a broad term that refers to actions that are not honest or lack integrity and can manifest in many ways, including lying, omitting important information, or otherwise misleading someone.”, whereas they say, “Dishonesty does not necessarily involve a deliberate attempt to deceive for personal gain.” Now, this is really serious definition content, and I think it’s really important that we take the advice of the experts in this field and actually clarify these definitions.
I’d love to hear from the Minister whether he would consider the adoption of this amendment to improve the clarity.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you. Again, we’ve actually traversed this statement. I’ve discussed it before, but just to reiterate what I covered previously: it is an important definition, and the member’s right to raise it, but there are different tests and they’re quite distinct, and one has a criminal implication; one has a civil implication. Fraud is used in civil compared to criminal cases, so the meaning is much less clear. The criminal standard of fraud describes crimes for personal gain or depriving someone of something by deceit. This implies criminal behaviour proved to a criminal standard of proof—which is different from civil, by the way—and which would not be appropriate here.
The civil law standard of fraud, which we have focused on—why it is in civil law. It’s been quite deliberate why we’ve used this definition. The test is different, and it’s actually much, much more appropriate, because we’re not talking about criminal stuff; we’re talking about a civil thing. Actually, like the bill, the UK legislation uses “dishonestly” to discourage deliberate wrongdoing. So, again, I’ll just reiterate: we have covered it, but it is quite a deliberate approach.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Madam Chair. I want to take the Minister to Schedule 2. The empowering provisions in the underlying Act are sections 27 and 52 for Schedule 2. It is in this Part 2 that we would be debating Schedule 2.
In Schedule 2, the first part that I want to ask him about is clause 2. It does relate to the question that Lan Pham has posed and one of the amendments that Labour members indicated was a priority amendment for us, which is the question of “fraudulent” or “dishonesty” and what is the appropriate standards. We disagree with the Minister very strongly that “dishonesty” is the appropriate standard, when, in fact, “fraudulently” was used in a prior iteration of the legislation. The question I want to ask him is about, now, if we’re speaking about insurer’s remedies for qualifying misrepresentations or breach, how the change from “fraudulent” or that standard to one of “dishonesty” then plays into what the appropriate remedies are, as described in clause 2.
Clause 2(a) gives the insurer the ability to avoid the contract and refuse all claims, but the question that I want to pose to the Minister is the original standard for what is a qualifying breach required a standard of fraud. In a fraudulent situation, you have a consumer, say, or someone making a claim under a contract for insurance using a document to deceive another party in order to gain something of benefit to them. That is the fraud standard. Then that standard that’s described for insurer’s remedies at clause 2(a) in Schedule 2 would have meant that a refusal of claims and the avoidance of the contract would have been related to that fraud in some way.
The example that I’ll pose for the Minister to engage with is—and I’m interested in his views on this: if someone like me, who has a contract for insurance for my car, my home and contents, and my home’s value with one particular insurer, was to make a mistake on one of, say, my disclosures to do with my car, would the “dishonesty” standard apply to my other contracts of insurance—whether that would apply to, say, a claim for the roof of my home in a weather and storm event?
In the case where the primary legislation sets out a “fraudulent” standard, in that situation, I have committed absolutely no fraud, because I have not intended to deceive an insurer and get a benefit for myself by making a mistake with my car insurance, on a benefit to me related to my home insurance. But, in the context of now a standard of “dishonesty” on both counts of the disclosure—and then, in Schedule 2, a “dishonesty” standard related to the insurer’s remedies—do we now have a situation where any dishonesty in an insurance relationship voids the entire relationship? The initial legislation surely was not drafted, when the intention of the legislation as it was drafted was to protect consumers, to create a situation where disclosures in one kind of insurance or disclosures on a particular thing might impact your entire cover.
This might happen not just in that context of cover in one situation for another kind of contract with the same insurer; it might be that you’ve made a disclosure even in your health insurance about your health that had no intention to get cover for yourself in some way. It might be, say, a health insurance contract between me and my husband, where my husband is the insurance holder—this is a real situation for me, because he is the primary insurance holder and I tried to claim on it the other day and the insurance company only wanted to deal with him. What’s that about?
In the situation where the person who has made the disclosures is giving the most honest and most factual information that they possibly can, but they are under the wrong impression or there is some dishonesty there because they have come to the situation with clean hands but they have given the wrong information with absolutely no intention to receive a benefit that they were not entitled to, can it possibly be the case that this Part 2 in Schedule 2 creates the wrong standard?
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair, and it’s just good to move on. Can I say this is a very complex piece of legislation and the Minister’s done a great job in picking up my good work and coming up with many hundreds of clauses which deserve careful examination, given the importance to the commercial sector and everyday New Zealanders. I’m very glad to be here and to talk to clause 35, “What must be disclosed”.
Now, most of that clause is pretty straightforward, but there’s one which I think deserves further elucidation, and that’s in clause 35(2)(c). My amendment identifies that—and that’s that the insurer—sorry, let me go back a step to clause 35(1)(a), to what the insured ought to know. There’s a real question in these “ought to know” propositions, because the question is this: is it what that policyholder—to use the modern word—ought to know, or is it what a reasonable and objective policyholder ought to know? That’s two quite different standards. If you think of your reasonable objective policyholder or reasonable person test—or if you want to take the Fair Trading Act framing, the slightly dim consumer—the fact of the matter is that there are some policyholders who the insurer should know are less adept than others. They may be people with English as a second language or who have very modest educational achievement and present in a quite different manner.
My proposal is, rather than just saying that the policyholder “ought to know”, to replace that to reflect the fact that it’s not an objective reasonable policyholder test, which is, essentially, a gendered and race-based test, because you’re like “OK, let’s take a white bloke and what they ought to know.” That’s actually where the common law has come from in that. The man on the Clapham omnibus is the reasonable test.
Arena Williams: The wife should have known everything.
Hon Dr DUNCAN WEBB: I think that’s right, Arena Williams. So replace it, to recognise that it’s what that policyholder “ought to know” and introduce a subjective element. My proposed amendment is to change “or ought to know” and insert “or that a policyholder of the kind and in the position of the policyholder would reasonably be expected to know”.
That’s actually a much fairer test, because it then means that, if someone makes a mistake and they don’t know it, but a reasonable policyholder would—a reasonable policyholder would know that you’re expected to provide this information or that a car of that kind has this defect, or whatever it might be—then the question isn’t whether I, as a reasonable policyholder; it’s whether that particular person, in those instances. And it cuts the other way. This is the problem with sophisticated people taking advantage of consumer law. If you’re a very clever business person and you know all about insurance—
Hon Andrew Bayly: What about a clever lawyer?
Hon Dr DUNCAN WEBB: —thank you—you’re expected to know more. It’s a much fairer test and, actually, it doesn’t anti-insure in any way. It simply says it’s contextual and that’s a much more modern and appropriate approach to take to that question. Kia ora.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. Just to deal with perhaps that one, which is an amendment from Reuben Davidson—I think that’s the one you were referring to. Look, this has had a lot of consideration about whether the use of the term “ought to know”—and there’s obviously a proposal in the amendment. Look, “ought to know” is an important term that is actually defined in clause 44, as, no doubt, the member knows. This requires policyholders to conduct a reasonable search of available information, which is a key element of fair presentation duty. Now, that’s a really important part, and what we’ve adopted here is in line with the UK model. I think we’re in good space, adopting both the UK approach but also making sure that we’ve got a clear definition in clause 44.
I just want to return to Ms Williams’ question, which, again, I’ve actually dealt with on a number of occasions. Just briefly, to deal with this, a civil law standard of fraud is wide. In civil law, fraud is knowing a statement is false or recklessly not caring whether it’s correct or not. Obviously, the “dishonest” approach is a high threshold. It would require intent and not capture consumers simply being careless or making an honest mistake.
I think, just moving right back up, what we’ve sought to do in this bill is to be very clear that the obligation on the insurers, first of all, is to present policies in an easy-to-understand presentation so you don’t have to look through lots of terms and conditions. The second key issue is it is up to the insurer to ask the right questions. It’s not for the policyholder, whether it’s you or a husband, to determine what is the right answer—“Did I have my tonsils out, do I have to disclose that in a health application, is it relevant or not?” That’s not the obligation of the consumer or policyholder. This is the most important shift of this bill: to move the obligation to the insurer.
The third major part of this bill is being clear that, in the event that someone has filled out a form and it’s unclear what the position is, we have been clear about the scale of the remedies and how that should be done. If there’s gross negligence on behalf of the policyholder or recklessness or whatever, then the insurer has no obligation to pay the claim. If there was an honest mistake made but it wouldn’t have had any direct bearing on whether the insurer accepted the policy or not, then the policy amount will be paid out in whole. If there was an element that, if the insurer had known about it, it might have resulted in a different premium, then obviously that premium adjustment will be made and deducted from the due amount, but ultimately there will be a payment made. Being absolutely clear about the three areas when the insurer has to pay out and when they do not is a key, third, important part of this bill. I think we’ve struck a good balance with this bill.
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 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Motion agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new clause 11 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new paragraphs (c) and (d) in clause 12(1) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Ricardo Menéndez March’s amendment to clause 14 set out on Amendment Paper 107 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): Arena Williams’ amendment to clause 14 set out on Amendment Paper 109 is ruled out of order as being the same as an amendment previously not agreed to.
The question is that the Hon Dr Duncan Webb’s three tabled amendments inserting new subclauses (4) to (6) in clause 14 be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendments not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new subclause (3) in clause 30 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Reuben Davidson’s tabled amendment to clause 35(1)(a) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Reuben Davidson’s tabled amendment to clause 36(1) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 37 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Reuben Davidson’s tabled amendment to clause 38 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Reuben Davidson’s tabled amendment to clause 40(2)(a) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is Reuben Davidson’s tabled amendment inserting new paragraph (c) in clause 42 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): Helen White’s tabled amendment to clause 43(2)(c) is ruled out of order as not being in the correct form of legislation.
The question is that Helen White’s tabled amendment inserting new subclause (3) in clause 46 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Helen White’s tabled amendment inserting new paragraph (c) in clause 47 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new clause 50A be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment amending clause 52(1)(b) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment amending clause 56 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new subparagraph (iii) in clause 57(a) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new subparagraph (iii) in clause 58(2)(b) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new subparagraph (iii) in clause 59(2)(b) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment replacing clause 60 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Duncan Webb’s tabled amendment to clause 61(1)(a) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 62(1) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new clause 62A be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Arena Williams’ amendments set out on Amendment Paper 110 be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendments not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment deleting clause 63(5) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 68(3) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
A party vote was called for on the question, That Part 2 be agreed to.
Ayes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Part 2 agreed to.
Part 3 Contracts of insurance
CHAIRPERSON (Barbara Kuriger): Members, we now come to Part 3. Part 3 is the debate on clauses 70 to 99, “Contracts of insurance”; and Schedule 3. The question is that Part 3 stand part.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Point of order, Madam Chair. Thank you, Madam Chair. I just would seek your guidance. On this side of the Chamber, we’re a little perplexed as to why the Chair considered the debate to be exhausted on Part 2—in particular, we were meticulous in not repeating, keeping our speeches to the point, and progressing through the part in a very orderly fashion. While the Minister may have repeated some policy principles time and again, the questions put to him—and this is a detailed bill and we consider that it requires considerable scrutiny. As we approach Part 3, we certainly want an opportunity to go through each and every clause that we consider is worthy of debate, and—
CHAIRPERSON (Barbara Kuriger): Thank you for the point of order, Dr Webb. As I was here listening in the Chair, yes, I could see from the Amendment Papers that there was a little bit of a structure, but the questions were becoming very repetitive and a lot of it was deemed to have been answered. And given that we’ve actually had a session on this back in the last—I also had the boxes of things that have been discussed last time, and it seemed to me that we weren’t covering any new material, but if the members are clear in terms of Part 3 and are making it very clear that it’s not repetitive, and you are looking at it clause by clause, then that is a process that we do look at.
RICARDO MENÉNDEZ MARCH (Musterer—Green): Speaking to the point of order—thank you, Madam Chair. Just to get further clarification, because I think there’s a distinction here between the Minister giving repetitive answers and then the questions being repetitive in and of themselves.
CHAIRPERSON (Barbara Kuriger): I actually was finding that some of the questions were overlaying some of the questions that had been previously answered. We have a sheet up here of the previous debate as well, and I also accept that because we’ve had a break in parliamentary process between that and now—I was deeming that we were starting to get repetitive. As we start Part 3, I’m very happy for Dr Duncan Webb’s suggestion of following the process.
RICARDO MENÉNDEZ MARCH (Musterer—Green): May I just clarify: would it be helpful if we continue pointing out which clauses and subparts we speak to?
CHAIRPERSON (Barbara Kuriger): It would be very helpful. Thank you.
RICARDO MENÉNDEZ MARCH: Of course—we can do that.
CHAIRPERSON (Barbara Kuriger): Thank you.
ARENA WILLIAMS (Labour—Manurewa): Madam Chair, thank you for the opportunity to take the first call in this debate on Part 3, which I’m sure will be a lengthy debate as members on this side of the Chamber want to traverse the issues that have been raised.
My question is about clause 70, particularly about subclause (2), but before I ask this question, I need to give some further context, because we’ve had the Minister of Commerce and Consumer Affairs answer time and time and time again about the rationale for a change from the previous standard of “fraudulently” to “dishonestly”, and he’s reiterated that it is the appropriate standard in his mind.
Many of the questions in this part, including my question on this, will relate back to that change—it was in a previous version of the bill—that prior change which has created, in the bill, other parts of the framework. I’m not asking him whether that change was appropriate; he’s answered that it was appropriate over and over again. I’m asking him whether it is still good for consumers, whether this law, in fact, advances the position of consumers under this bill, which is something that he has said to media and that he has said to this House and that he has assured parliamentarians of in other statements.
I’m asking whether the changes to these clauses under Part 3—when they interact with the other changes in the bill which have already been traversed—are now the right changes to make, given that change was made, given that this bill was drafted around fraudulence being required as the standard of mistake on the part of consumers; whether now the protections that are in place for consumers are strong enough; and whether the remedies available to insurers are too generous, given that the standard is now different in other places of the bill.
To clause 70(2)—this is a question that genuinely had different understandings in the Finance and Expenditure Committee room around what the submitters were asking for here. My first question to the Minister is: does he know what submission this change arose from and which stakeholders were calling for this change, and is he satisfied that this is a good change for consumers?
Then, secondly, to actually understand the point and clarify for the committee the different understandings of what this meant, because it is surely a subject of litigation in future: does a reasonable time period for an insurer to settle a claim—a reasonable time that we might expect a homeowner to receive their payments in a situation like the Christchurch earthquakes or a reasonable time for an Aucklander to get their roof fixed in the Auckland floods—as a whole get considered, and then does the time to assess the information get included within that reasonable time frame? Or does this change mean that there is a reasonable time to assess the information and then there is a reasonable time to make the decisions as the insurer?
This is material because what this bill should seek to do, if it is in the interests of consumers and actively advances the position that consumers are in, is make the time frames condensed. It should give every New Zealander some confidence that their insurance claims will be dealt with in a timely manner. He should be able to stand up and give the committee a simple assurance that this reasonable time frame does condense the time frame, and also that the reasonable time frame is to be assessed as a whole and that getting the information doesn’t step that out at all. And it should be included when the court considers what a reasonable time frame for consumers would be.
They should consider the whole time, based on what kind of consumer we’ve got here—are they vulnerable, are they a little old lady, and what would be the appropriate time frame we would expect to have the claim solved in?—and then carve out the time it took them to get the information. It doesn’t matter if she didn’t have her documents in order. It doesn’t matter if it was difficult to contact her on the phone because her power was out—that there is a legitimate responsibility there for the insurers to make sure that they’ve got boots on the ground, that they have got people making the assessments on time, and that they are in there working with consumers no matter what the circumstances are, because that is what consumers should expect in New Zealand.
RICARDO MENÉNDEZ MARCH (Green): Thank you, Mr Chair. Looking at Subpart 1, “Implied term about payment of claims”; and clause 70, “Implied term about payment of claims”, and then subclauses (1) to (4), particularly—
CHAIRPERSON (Teanau Tuiono): Can you repeat those subclauses again?
RICARDO MENÉNDEZ MARCH: Yeah. I’m looking at subclauses (1) to (3) of clause 70 particularly. I wanted to unpack and follow on from Arena Williams’ contribution and also ask what considerations the Minister of Commerce and Consumer Affairs has given around the impact on claimants, in relationship to what may be considered a reasonable time to assess and investigate claims. Obviously, not all claims or types of insurance, when a claim is being investigated, will have such a strong flow-on effect in terms of someone’s ability to, for example, make ends meet. I do note that as it’s written, there seems to be, I guess, a lack of consideration around, for example, equity issues around the impact on the claimant. I wanted to get assurances from the Minister as to whether he thinks that the way that it is written will adequately take that into account.
Then, following on from Arena Williams’ comments, I’m also interested to understand the onus that is placed on those insurance companies to actually be adequately resourced to ensure that those claims can be investigated promptly and do not disadvantage consumers. So far, the way that subclause (3) is written, it takes into account things like type of insurance. I’m interested to know whether that specifically could take into account my earlier question. Then there’s other stuff around the size and complexity of the claim; the compliance with any relevant legislation; factors outside of the insurer’s control; and whether a sum due in respect of a part of the claim that is not in dispute has been paid; and then whether the insurer has reasonable grants for disputing the claim, particularly if there is language that seems to be more on the side of the insurance company rather than the consumer. I guess I’m just concerned about the reality that many consumers could be facing hardship while those claims are being investigated.
If we look at the Auckland floods, that’s a really good example of where people had to dip into the savings and had to get into debt while their claims were being resolved. The way that the language here is written, if I take the Auckland floods as an example, I simply cannot see how consumers’ ability to literally sustain themselves will be factored in in the language here. I would like some clarification to reassure consumers that their ability to make ends meet, preventing people entering hardship, will be factored in here.
So, just to recap, this is very specifically on clause 70, and particularly subclause (3), but I guess subclauses (1) and (2) would also be factored in into my questions.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): I have a very short question, in the spirit of the committee stage, and it relates to clause 70 in “reasonable time”. What is the remedy? If there’s a breach, what’s the remedy? And will the Minister adopt my amendment, which simply states “once a breach has occurred, interest is payable on the insurance payable”? It seems to be a very simple, fair remedy. It applies in life insurance, why should it not apply in every other kind of insurance, particularly when the payment is clearly due? Will the Minister adopt my amendment so that interest is payable on late payment of insurance?
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you. Look, the members have raised very important points. I think everyone in this committee wants to make sure that policyholders get paid out in a timely manner—there is no debate about that. Everyone in this committee will want to make sure that policyholders get paid out in reasonable time.
The definition of “reasonable time” is a commonly understood legal term—that’s why we’ve done it. I see there’s a couple of other amendments that have been put up as well. The issue we’ve tried to deal with is that what is “reasonable time” depends on the circumstance. Just to address Ms Williams’ question specifically: yes, taking into account time to collect information is all part of that, together with the assessment of the claim itself. When a court will be assessing what is “reasonable” or have regard for both those items, it is not a separation between the two of them. Sometimes, claims will be complex and they will require a lot of documentation; others will be simple claims and they will not require a lot of time. That’s why we don’t want to adopt anything like a 12-month period: because, in some cases, that would be manifestly unfair to the policyholder. In other cases where it’s a complex claim, that would be possibly a difficult task for any insurer to actually meet. It’s up to the courts to decide it. We’re very clear about the principle.
Just dealing with the Hon Dr Webb’s question around compensation. There is, under clause 70, policyholders have the right for late payment. They can apply for it. If they deem that there is an issue about delay—unnecessary, undue delay—then there is clearly provided for in clause 70 that people can apply and get interest late payment under the Interest on Money Claims Act 2016, to be specific. This bill does not interfere with that, but it obviously references that and brings it into context. That is the principle. I don’t think there’s any dispute in the committee about making sure this happens promptly. I think we’ve struck a good balance in making sure that insurers do act promptly but policyholders are also recompensed as quickly as possible.
FRANCISCO HERNANDEZ (Green): Thank you, Mr Chair. I’m just seeking a short call just to elicit some, I guess, basic, factual information from the Minister; just to enable this committee to get the information and context to help us judge a “reasonable time”. Can the Minister, please—through the officials or if the Minister himself knows—inform the committee what the shortest time has been to pay a claim, what the longest time has been to pay a claim, and what the average time tends to be? That would be, I guess, very helpful as we sort of explore this question around Part 3, clause 70(1) to (3). Thank you.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): I don’t think we actually have a view on—I’m not sure, because that’s a commercial view on it. Look, the point is that it needs to be reasonable in the context. As the member will see in clause 70(3), there are a whole list of items that will deal with the complexity and, therefore, what is deemed to be reasonable time—and namely: “the type of insurance:”; “the size and complexity of the claim:”; the “compliance with any relevant legislation or guidance:”; “factors outside the insurer’s control:”, because sometimes there are factors outside the insurer’s control that would delay settlement of that claim; and also “whether [in fact] a sum due in respect of a part of the claim that is not in dispute has been paid:”, so maybe there’s been an advanced payment—so, again, there’s another one as well. That is why we want to take a flexible approach. The courts are the best organisations to determine what is “reasonable” in these circumstances.
HELEN WHITE (Labour—Mt Albert): It’s very timely that I speak at this time because of the discussion about remedy. I looked at the clause and I thought the first thing that I can see is that clause 70(1) talks about “an implied term”, and in fact that seems to be a superfluous word because it does look to me like this is a term of every agreement not an implied term. I’m interested in the use of that word because it does seem that what we’re doing—and I’d like the Minister’s opinion on this—is we’re creating a couple of remedies later in the clause, which talks about what you can have, but everything else seems to be up to the parties to decide in the contract itself. I’d be very keen to hear.
The Minister talks about how he would see this play out if, in fact, there is a contract here and this is seen as an implied term. What happens if there are express terms in the contract which go to remedy and say, “You won’t be getting this” or “You will be getting that”. This is your claim, so, yes, there is an issue later in the clause, from what I can see, where you’ve got the right to enforce the payment and you’ve got the right to the interest on the sum. But what happens if, in fact, the rights beyond that are not there?
My understanding is you’ve got people who are still waiting in Christchurch to be paid. If the contract denies other rights, is that as far as we’re willing to go? I’m not sure it’s necessarily up to the courts to decide that if in fact in the contract you have expressed terms which limit the rights of the person beyond what we would consider reasonable in that circumstance. I’m concerned about where we’ve made the line here for your average consumer when the devil will be in the detail of the agreement, and people get creative about what they knock out of the suite of remedies that we would expect to be here. There’s a time when it just becomes simply unreasonable. Is it going to become reasonable because there’s an express term? Is it going to become an unreasonable remedy because it is put outside of the ambit by an express term?
I’d also like your comment, Minister, on the issue about the use to the word “implied” when we’re actually saying it is a term. Thank you.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you, Mr Chair. I’m a little bit surprised because I know the member is a lawyer and she of all people in the committee should know the value of the word “implied”. That means every contract—every insurance contract—has that as an express element of that contract. It’s fundamental to every contract.
Now, obviously there will be examples where there may be contracting out on a specific insurance policy, but remember some of my earlier comments on Part 2. It’s up to the insurer to make sure that those terms are written in an easy-to-understand manner. It’s not the reference to lots of detail and terms and conditions. Part of the fundamental change in this bill is to make sure that policyholders are not surprised by express terms taking them out of that implication. But the implied term cuts across every contract—and by putting that in clause 70(1), it means that policyholders can seek contractual damages for a breach. It’s actually the best way of dealing with it.
HELEN WHITE (Labour—Mt Albert): Thank you—I’d just like to take you up on that. Yes, I’m very familiar with the law around implied terms and the fact that an implied term is usually an unwritten term that’s so obvious it goes without saying. We’re not actually dealing with that here. We’re dealing with something that’s deemed a term in every agreement, and so this seems inappropriate wording to me, and in fact I would ask the Minister to consider an amendment that says it is a deemed term.
Then, the issue I have raised beyond that—which I would dearly love to look at—is what we do about making sure it’s a fair deal for the consumer beyond these terms, because there are couple of things here. Is that a fair enough deal? I would wonder about that, given the calculation of delay, for example. Is it a fair term when somebody has still not paid out a claim in Christchurch that we now actually look at penalties for punitive damages in that situation? And I do get that there is a reference to damages, but it looks like that is a case of whether your contract says it or not, and I’m not sure about that.
In many areas of the law, you’d have this capacity for the judge to say “exemplary damages”, “punitive damages”, or we’d write it into the law that there was a penalty—and I suspect we think there should be a penalty in this situation where you get calculated behaviour. Delay is probably the best friend of many lawyers as you just put it off and wear people down, and they die and they go bankrupt and they commit suicide. We really need to make sure we’re signalling in the law if we’re talking about something that is a deemed term, if we’re saying, “That’s it. You have to have it in. You’re not getting out of this.” That is an important thing to follow up with something that is really us directing the court what to do or giving the court power to do it, not letting one party weasel out of it in its terms and conditions, which can happen.
I’m not suggesting anyone is not acting in good faith, by the way. I’m saying that this is a situation where we are going to have to be careful because we are dealing with a range of vulnerable consumers that may be in a crisis in their life, which is that they’ve lost all their property.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Just responding to the member again, I note that the use of the term “implied term” is very consistent. It is consistent with the UK approach—it’s given rise to no issue. I think it’s pretty commonly understood, as I said before, as to what that means. It means it’s a fundamental tenet of every contract that there needs to be a payment in a reasonable time. By writing that, it gives, as I said before, the policyholder the right to seek damages.
Also, clause 70 does not seek to legislate how the courts approach damages, because, again, I get the intent, and I made this point earlier to the Hon Dr Webb. Members opposite seem to be trying to anticipate how the courts will interpret each occasion and be specific about it. Their fundamental approach to the bill is to be clear about the principles that people need to be paid out in a reasonable time, and it is up to the court to decide what is reasonable in that circumstance. So that’s why I think the approach in this bill is very appropriate.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. I take the Minister’s point that the intention of this legislation is to set out the approach very clearly, so I’m asking him this in in good faith. Clause 71 of Part 3 is the arbitration provision that has been included in this legislation since the Labour Government first drafted it and since the formulation of what is an insurance contract that applies to consumers.
Since that definition has now changed, my question to him is: is he satisfied that clause 71 is the right formation for the arbitration provision, which excludes arbitration provisions being binding on policyholders specifically, now that he has changed clause 6, which is the meaning of a contract of insurance and the conflict of law provisions, particularly 7(2) that now relates to the broader section of non-consumer insurance contracts and not just the highly negotiated and highly commercial contracts of insurance?
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Chair. I just wanted to move to clause 72, which has always been a tricky area of insurance law. That’s those clauses which set out a condition in the insurance policy about how a claim is to be made. Historically, those clauses could be used quite unfairly to deny cover, and the law generally has taken a substance-over-form approach so that even if a contract of insurance—and I know claims-made policies are a little different; we’ll come to those—but contracts of insurance sometimes do say that a claim for motor vehicle damage must be made within 30 days, for example.
The law has, for a long time, taken the approach that insurers can’t rely on those clauses unless the breach of the clause has caused some loss to the insurer over and above the insurance claim. For example, they can no longer find the person who crashed into the car, and, therefore, they can’t recover, and so on and so forth. Therefore, they can reduce the claim by the amount of detriment they’ve suffered, and this seems to be reflected in clause 72. That seems to have roughly captured what I think was one of the Insurance Law Reform Act provisions.
The difficulty I have is that the clause itself needs to be reasonable. You could conceivably have a clause which—this is in one of my tabled amendments; I think it’s in my name. But you could have a clause which says that you must make a claim for damage to your house within seven days and you’ve got a situation where it was damaged by a third party who then absconds, so you meet the test, but the seven-day limit itself is unreasonable. My proposal is a new clause 72(3)(c), which says not only must the insurer be prejudiced and it would be inequitable but also, and the additional words are “And the provision referred to in subsection (1) was in all of the circumstances reasonable given the nature of the insurance and the identity of the policyholder.” It would actually be a bar on unreasonably tight time frames or methods.
This would also cover where it says, “You must make a claim by turning up to the insurance company in a red jumper and making the claim in writing.” Silly rules like that would be ruled out simply because they’re unreasonable. Equally, notification should be able to be made in any way. A telephone call, an email, or an in-person claim should all be legitimate and reasonable. Unreasonable clauses, which unreasonably specify how the claim must be made and when, would be ruled out simply by that small addition. Again, I won’t take up too much more time, but I’d be interested in the Minister’s approach to that.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you. Just in response to Ms Williams’ question around clause 71, look, hey, this is a very longstanding provision that applies only to consumers, not to non-consumers. It maintains a status quo that arbitration clauses in them are not binding. That’s a very common approach. It’s always been that, and so we’re pretty comfortable with that approach.
Just with your clause 72, the Hon Dr Duncan Webb, the first thing is this is a longstanding provision and we actually had no feedback, as I understand, during the select committee. Everyone seemed to be comfortable. Insurers are already prevented from relying on a time limit, unless it can show it’s been prejudiced or this is inequitable. An additional reasonableness test is not required. I must note, I think you must have had an epiphany because, in your original bill, you had this wording but now you’re seeking to change it with a tabled amendment. Obviously, you’ve had some epiphany in more recent times.
ARENA WILLIAMS (Labour—Manurewa): We get ourselves into some trouble in this committee stage, because we do need to refer back to previous changes that have changed I guess what you could call the net between where we are sort of creating consumer protections on one side and then creating surety for insurers to rely upon, in order to arrive at a balance that is appropriate in New Zealand law to codify what we have, and then step out for consumers their protections, which is what the Minister has told media and has told ordinary people in New Zealand is being done by this bill. It’s right to interrogate the entire net and not only the provision.
What I’m asking is not whether clause 71 is the same as what it was before; I’m asking whether clause 71 is now both appropriate, in the Minister’s view, and good for consumers, in the Minister’s view, given his changes to clause 6 and clause 7, because those change who can use a consumer insurance contract. Now, where there were provisions that were designed to only apply to contracts of reinsurance, which are big insurance contracts that are negotiated between insurers of consumers and insurers of insurers—and so there are lots of lawyers in the room, and we can design provisions around those which are really designed for two commercial parties with a meeting of the minds where they’re equally powerful and well represented. And then we’ve designed provisions which should only apply where there is a power imbalance. We’ve changed that net in clauses 6, 7, and 8. Is the old provision at clause 71 appropriate, in his view, and is it good for consumers?
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): I wonder if I might talk now about claims-made policies, which is clause 73. There’s just a little conundrum in there, because it does talk—claims-made policies are generally considered to be broad liability policies; policies that builders, lawyers, architects would have about claims made against them. Claims-made policies are one method to define that the insurance covers the insured for claims made within a defined period of time. One of the difficulties is the interface between those policies and clause 72, which says you’re not bound by when a claim is actually made. Obviously, the whole underlying way a claims-made policy works, the finances of it are that it’s time-limited.
The interface with that is kind of sorted out by clause 73, which gives a grace period. All that’s well and good, but I’m just concerned because many contracts of general insurance have a liability element as well. For example, a home policy, classic general insurance will also cover for liability. If you, I don’t know, have a house fire, that’s general damage and you’re covered, but if it leaps next door and burns the house next door down, well, that next-door house isn’t part of the insured property, but you’re covered under your liability part of that policy, so it actually becomes a policy for liability. There’s a danger in there, if it’s got a clause relating to when a claim must be made, the period of insurance, that it falls within this clause 73, so all of a sudden clause 72 isn’t going to work for the liability part of your general insurance.
My proposal is for the tabled amendment to be adopted which adds to that clause 73 at the end of subsection (2), “And [the] cover for liability is not ancillary to other insurance (such as general insurance over property)”. I’m a bit worried there’s a gap in there, and it would really be good to tidy that up.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): In answer to Ms Williams’ question: yes, it is appropriate. In answer to Dr Duncan Webb’s tabled amendment around clause 73: I’m not keen to accept that and recommend we shouldn’t, because the Law Commission actually proposed the change. The member’s tabled amendment would actually reduce or narrow the scope of it, which actually would be a disadvantage to policyholders, so I think they’re actually going to end up with a perverse outcome. That’s why I don’t think it’s one that we’d like to recommend, because we’d like to have the wider definition that the Law Commission recommended.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Chair. I’ll just take a short call, if I may. It’s actually a real irritant of mine that we get these fantastic consolidation bills, and yet we’re still using terms that are 300 years old. I’m looking at clause 76, and who in the world other than some nobby lawyer would know what a “pro rata condition of average” is—and all of our nobby lawyers are nodding: “Yes, I know what a pro rata condition of average is.” Now, it’s a perfectly simple thing—[Interruption]—and the Chair is not going to know, Mr Bayly.
CHAIRPERSON (Teanau Tuiono): Can you repeat that again?
Hon Dr DUNCAN WEBB: Well, I’ll tell you what it is. A pro rata condition of average is a clause that says that, if you insure half the value of an item, then if it’s damaged not to its full value, you only get that proportion of the insurance proceeds. If you insure your house for $1 million and it’s worth $2 million, and it’s damaged to the extent of $500,000, then a pro rata condition of average says that you share the loss in the proportion that you insured it. You get half of the proceeds, and so you end up being underinsured—and here I am explaining this, and that shouldn’t be the case.
You should be able to read a piece of legislation on a consumer policy and know what it means. Let’s not use the words “pro rata condition of average”—and I’m going to do you a favour. I’ve got two amendments to amend clauses 76 and 77, which use this term. It should say, “a condition under which cover is granted in the proportion that the sum insured bears to the value of the interest insured”. That’s what a condition of average is. They’re prohibited in home insurance—as they should be—but in commercial insurance, they’re quite widely used, which avoids the insurer taking the first bit of the loss, and then the insured getting the benefit when it isn’t the entire loss.
It is absolutely insane that we’re using the Latin “pro rata” and “condition of average”, which is about as technical a term as you could possibly get. Can you tidy it up for us, Minister? Be a sport.
RICARDO MENÉNDEZ MARCH (Green): I’m mindful that we are jumping around on clauses. Before I go to clause 74, I did want to jump back on previous clauses that we’ve contributed to, particularly because it hasn’t been addressed. One of the things that I wanted to touch on—
CHAIRPERSON (Teanau Tuiono): Which clause?
RICARDO MENÉNDEZ MARCH: Issues that have arisen from clause 70, particularly subclauses (3) and (4), and then I’ll go on to clause 74.
The Minister, when addressing some of these issues, talked about how some of the tensions that we tried to unpack around “reasonable time”, if I recall correctly, his words were that “This has been canvased by the courts.” I know that a lot of this relies on case law, like across the legislation, but, I guess, to me, the question was about whether the Minister thinks, particularly when it comes to consumer protection, that the weighing up of relying on case law versus, for example, having more prescribed language in the bill that actually gives certainty to consumers, is actually better for both parties but particularly for consumers.
I think, to me, for a consumer, having to rely on understanding what case law has said, to be able to understand what they should expect seems actually quite unreasonable, particularly when we think about the circumstances in which some of those claims could have been made—say, after a natural disaster or an extreme whether event. It just seems to me that expecting a consumer to then go into case law, to get a sense of understanding of what “reasonable” has been previously determined by the courts just seems like actually quite a high barrier that we’re setting.
I go back to my question around the lack of consumer protections and the language of this bill in relationship to what is considered reasonable. My specific question—I do think it’s a new point—is whether the Minister thinks that case law in relationship to consumer protections and defining “reasonable time” is actually good enough, considering, for example, that we will be seeing likely more insurance claims in relationship to extreme weather events.
Now, if I jump to clause 74, in relationship to “Insurer not liable to pay greater cost”, my concern would be that, again, it seems to that there is little consideration in the context in which, often, consumers will be lodging these claims. It seems to me that clause 74 is there to mostly end up protecting the companies rather than actually giving greater flexibility around the context in which consumers may be making those claims. I wanted to get a sense of understanding around how consumers can have certainty that if they’re facing really strenuous circumstances—again, I’ll use extreme weather events as an example—that clause 74 won’t actually disadvantage them. There could be many reasons, particularly if we look at subclause (1)(b) and subclause (3) that these seem to mostly side with the insurers. I just want some clarity around how he thinks greater flexibility could be, if at all, given to consumers when strenuous circumstances arise.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. I want to make sure that the committee has sufficient time to deal with Subpart 4A, which is a new subpart that comes under Part 3 of this legislation. It is brand new to the committee’s consideration. It was not introduced at the first reading. It is an issue that arose from submissions, and the Finance and Expenditure Committee came to a reasonably bipartisan, cross-party consensus around including it. I want to explain for the Minister, before I ask him a question, why this issue is significant.
There is significant individual public health and scientific benefits associated with the use of genetic testing, whether undertaken for individual health reasons or medical research. However, as submitters made it clear to the select committee, there are individuals in New Zealand who are potentially forgoing lifesaving clinical and relevant genetic testing, or not participating in medical research involving genetic testing, for fear that it will impact on their ability to get insurance, particularly life insurance and health insurance. The reason for the inclusion here is to bring us not only in line with emerging international law on this issue but also to create an opportunity for the Minister to regulate in this area.
This is an issue where Labour members want to see the adoption of law in New Zealand to regulate this. We’re very concerned about this issue and agree with submitters from the community of people who suffer from these genetic conditions that the Government should be regulating in this area and should be allowing sufferers of these conditions to have protection in the law. However, my question to the Minister is that this was a consensus-based position at the time—that the select committee had based on submissions. Things have changed since the select committee heard that evidence. Australia has now decided to impose a five-year ban, with a review provision at the end, since the select committee was able to make those considerations. Has the Minister’s thinking on this changed given the position of Australia now?
RICARDO MENÉNDEZ MARCH (Green): Thank you, Mr Chair. I am going to be jumping around, so I will have to leave the Chamber, but I trust that actually my Green Party colleagues and our Labour counterparts will canvass the stuff between the sandwich. I’m just going to jump to Subpart 4A on genetic testing, acknowledging that there’s many other clauses that are yet to be touched on before that.
CHAIRPERSON (Teanau Tuiono): Can you repeat the subpart?
RICARDO MENÉNDEZ MARCH: New Subpart 4A on genetic testing. This has been a very contentious issue. I know that this will gather quite a lot of debate and there’s other clauses to be debated, but specifically, on new Subpart 4A, I wanted to get the Minister’s views on whether Australia’s recent move to ban genetic testing when it comes to life insurance, and actually have the companies cede ground—and support the recent moves by Australia—has actually played any factors in how he’s laid out new Subpart 4A.
This is an issue where New Zealand is actually falling behind the rest of the world when it comes to how we legislate to protect consumers but actually use the most ethical policy to also protect disabled people. I’ve got an amendment on this issue that would eventually, effectively, prohibit our country, relating to genetic testing—and I think, to me, we had a lot of passionate submitters on this issue, but at the same time, Australia was having a very, very fulsome debate on the matter. Where they have landed is that, actually, a prohibition approach is the best way to move forward. I’m really concerned that the way that new Subpart 4A is laid out won’t keep up with the rest of the world that is now acknowledging that, actually, even having regulations may not be fit for purpose in terms of protecting consumers.
I know that, in the second reading, the Minister interjected and said to not worry, when I talked about the resourcing of those regulations, but I would still like the Minister to none the less actually properly unpack how he sees those regulations being adequately resourced—well, the people who will be in charge of regulating the stuff in new Subpart 4A to do its work adequately and to meet what the legislation prescribes.
I also wanted to ask—so this is, I guess, my big third question—what meetings has he had since taking on the role, particularly, since Australia has moved to prohibit genetic testing, when it comes to life insurance? Like, what meetings he has had on the issue and or with Australian counterparts to ensure that what he has put in new Subpart 4A actually is fit for purpose. To me, it just seems like we’re just kind of steamrolling ahead with this process and not actually considering that other parts of the world are evaluating this type of policy.
So, to recap on new Subpart 4A, I’m interested to know whether the Minister has had any sort of meetings or discussions around Australia’s recent decision, whether he thinks how this regulatory powers will be adequately resourced to ensure that they comply with the legislation, and whether he’s got any reflections about the state of this bill in relation to how consumers will be protected and what consumers would expect if they see other parts of the world actually moving to a more prohibitionist approach to genetic testing.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you. One very brief point coming from Mr Menéndez March’s contribution, and my suggestion, is that regulations are required, because at the moment the legislation as drafted is permissive. There’s a real danger that a Minister might get a little busy—I know, Minister, ha, ha!—or might simply not think it’s a great idea, and therefore kind of thwart the intention of Parliament by not implementing parliamentary intent, which is to have regulations here. I’ve got a proposal there that says, “The Minister must make a recommendation under section 86B within two years of the commencement of this Act.” The time is up for grabs, but it just has to be time-bound. That’s the guts of it. That’s the first thing.
The second is actually really important. It’s about clause 82—so a different change to this. It’s about contracts for the sale of land. There’s always this tricky thing. I remember over the earthquakes when the earthquakes hit, the first thing the law firms had to deal with was what about all of those contracts where someone had agreed to buy a house and now it’s damaged? Now, it’s solved largely by clause 82, which says, “Well, you still have to buy the house, but you get the benefit of the insurance.” You’re put in the same situation. People don’t like it, but at the end of the day you’ve still got to buy the house and you get to be in the shoes of the insured party.
There’s a gap, and it’s actually a really big one, Minister, and it’s one we need to address. That’s that it is silent on Natural Hazards Commission payments. There is absolutely no legal requirement for the Natural Hazards Commission to pay an incoming purchaser of the house. Now, through the earthquakes, the workaround was deeds of assignment of the Earthquake Commission entitlements, but sometimes those were forgotten, sometimes they were defective, and sometimes people would simply say, “Hard luck. I’ve decided not to.” and it became a real problem. We need to cover that off, because, as night follows day, if you’re entitled to the benefit of private insurance, you must be entitled to the benefit of natural hazards insurance. We really need to address that so you don’t have this black hole of law where private insurance is dealt with one way and natural hazards insurance is dealt with another way.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you very much. Look, I’ll just deal with that one quickly. The issue around natural hazards—we’ve quite deliberately kept that separate from this Contracts of Insurance Bill. The natural hazards Act has its own arrangement, and what we haven’t done with this bill is try to take parts of that and put it under here. The natural hazard Act operates under its own framework, and this one operates under its own framework. It’s very clear we haven’t tried to mesh them and merge them and do all that sort of stuff, and that’s quite a deliberate approach to the whole thing. I think it’s wrong to try and complicate it.
I just want to return to this issue around genetic modification. Of course, as members will know, this was an issue that came up during the select committee. It wasn’t something that there has been a lot of consultation on; it just came up during the select committee process, and I’ll just call out Mr Menéndez March’s comments. Australia has announced a policy to ban insurers from using adverse genetic test results, but they haven’t actually passed the legislation. It’s an intent, but the details of that we do not know. The presumption of what Mr Menéndez March was implying—I think we’ve just got to be a little bit careful with the language. Obviously we’re very interested to see what Australia does on this issue. We are also very interested from New Zealand’s perspective. We’d want to make sure that people are not unduly disadvantaged from insurers using this as a way to exclude minorities, unnecessarily so. That is why we’ve adopted a flexible approach, which means we’ll do it through Order in Council.
Mr Menéndez March asked the question a couple of times about resourcing. Look, we all understand this is a very important issue. It’s a new, emerging part of the insurance industry. I’m very mindful of it. There are large resources the Government has to be able to undertake and investigate further, but the reason we’ve gone down this route is there is a procedure laid out as to how we might put in place regulations to deal with this in a more flexible manner rather than predetermining an outcome. At this point, we have to consult with various groups. We’re going to take a measured approach. It is an important area. If the members opposite are suggesting it’s not, it is. The approach we’re taking will mean that we can keep our practice up to date with what’s happening around the world, to make sure that New Zealanders are not disadvantaged by this practice, but it is an emerging trend, and we need to be cognisant of it, and we’re very aware of it.
Hon Dr DEBORAH RUSSELL (Labour): Thank you, Mr Chair. I am particularly concerned with the section on genetic testing as well. It was an issue we tried to deal with in the Finance and Expenditure Committee and, as I’m sure the Minister knows, it was brought to our attention and then dealt with there.
Look, Dr Webb has gone through the issue on clause 86B—that the Minister “may” regulate. What I want to look at is in clause 86C(1)(d). All right, so most of this section on genetic testing is set up to ensure that consumers aren’t adversely affected by being required to take genetic tests and so on, and the Minister is required to develop regulations that are going to sort of have that effect, but 86C is looking at the procedural requirements, and particularly who the Minister needs to consult—the Financial Markets Authority, people who are affected. It has to ensure that the regulations are desirable or necessary, but it’s 86C(1)(d) where the Minister has to be “satisfied that the regulations are not likely to unduly prevent insurers from considering information in relation to genetic tests”.
Now, that’s a little bit curious because the set of rules around the sorts of regulations that the Minister may make seem to have the effect of ruling out genetic testing, but 86C(1)(d) seems to allow it back in again. I wonder if the Minister could explain what sort of information insurers might be able to consider? It has to be highly significant to insurance underwriting, but it’s a little hard to understand what that information might be, given that all the other rules in this section are going to ruling out genetic testing. What sorts of genetic information, or information related to genetic tests, might insurers quite reasonably consider so that it wouldn’t be ruled out by the Minister’s regulations?
It’s a little bit complicated, but I am trying to see if that’s kind of a little bit of a back-door entry in for genetic testing, and to make sure that we aren’t—in the process of setting up these regulations—then allowing a back door, which would have the effect of nullifying them.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. I appreciate the opportunity to ask a question of the Minister of Commerce and Consumer Affairs in relation to his answer on genetic testing. I think his answer was really, really helpful, especially given the context of a number of patient groups of people in a community of sufferers of genetic conditions, who will be following along with this debate very closely because it deeply and personally affects them and their families, particularly their children.
I want to ask the Minister: when he says he will run a full consultation process when he is using the Order in Council powers, what will the consultation process look like and will those patient groups be consulted with? A number of submitters noted for the Finance and Expenditure Committee that it was the first time that they were able to engage with the issue when this bill was before the select committee. They were, essentially, really making the case for regulation at all. They weren’t able to put their arguments about what good regulation would look like; they weren’t able to put their arguments about where they would see genetic testing as a low risk and where they would see it as a high risk for certain patient groups and for certain conditions. They made the point very strongly, I guess, that the kinds of tests on one side and the kinds of conditions on the other have a material impact, and what’s in and what’s out in a regime is something that they really want to be consulted on.
I’m asking him to elaborate for people who are watching along with this at home, and I know there are people watching this now. Can he just give an assurance about what the sort of consultation process would look like, who would run that, how long people might expect it to be open for, and how they might engage?
RYAN HAMILTON (National—Hamilton East): I move, That debate on this question now close.
Hon Dr DEBORAH RUSSELL (Labour): Look, I’m sorry to stand up and take the call again, but I really am hoping that the Minister will answer those questions. I think they’re quite important. Thank you, Minister.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you. Very good comments. With clause 86C(1)(d), which the member raises, the reality is that genetic testing is happening and will continue to occur, and it’s likely it will continue to escalate. What this is referring to is that there are some conditions where, if you have the gene, it is so significant in terms of an insurance event that it would have a material bearing on whether, in fact, you could get insurance. For instance, I had a good friend who had Huntington’s disease. He was a good friend of mine. He planned his life, never had children—he adopted children—and made sure that, when that disease occurred, his family was provided for. Unfortunately, he died at a very young age, at 40—a very successful person in his career.
Now, that was a situation that he planned for, and if an insurance company knew that he had that disease—because it was inevitable that he was going to suffer from that disease; it’s not one like, for instance, the BRCA gene, where a person may or may not get it. In that situation, it is a significant piece of insurance information, and it’s only fair in those situations that you should be able to get insurance for certain aspects but certainly, I think, it would be pretty unlikely to be able to do life insurance, because the likelihood of what is going to happen is almost inevitable. This is what this is taking into account. It’s obviously a very subtle issue and a difficult one. It’s not presupposing an outcome, but it’s just trying to recognise that there are some conditions that are, unfortunately, terminal or have significant consequences. That’s why that subsection (d) is included in this area.
ARENA WILLIAMS (Labour—Manurewa): Given the Minister’s answers—and I really appreciate his answers and I didn’t necessarily anticipate that answer—how does the subsection that Dr Russell has raised interact with new clause 86C(3)(c), which is an important protection, which was really essential to the committee’s buy-in to the cross-partisan support for these regulations, which is that it’s a protection which, essentially, requires the Minister, before making an Order in Council to regulate the use of genetic testing by insurers, to satisfy himself and have—no, sorry. It’s not a standard of satisfaction; it’s a standard of having a particular regard to the kind of genetic test, and that is an important distinction—about whether the regulations are likely to avoid significant disadvantages for policyholders. That’s all policyholders, including those policyholders who are expected to ultimately have their lives shortened by the genetic conditions they suffer as a group.
The examples there are important and should be read in the meaning of that part and not simply as examples alone for the purpose of illustrating the meaning of that. It’s the word “significant”, the less favourable terms which the Minister is, I guess, being asked to consider. Can he compare the meaning of new clause 86C(3)(c) with the provision which then protects insurers that Dr Russell has asked him about?
Hon Dr DEBORAH RUSSELL (Labour): Thank you, Mr Chair. I’d just like to thank the Minister for sharing that example and to offer my sympathies for the loss of his friend, because it does bring home the nature of some of those genetic diseases.
I just want to follow up on what the Minister told us a little about. Huntington’s disease is, as I say, very distressing and has only one outcome. But the BRCA gene is interesting, because it is so highly associated with a pretty—what’s the word I was going to say—aggressive form of breast cancer. I guess this becomes the point at which something is a certainty versus a very high possibility. There’s a little bit of a line-drawing exercise to go on in there. For example, until recently, we would have said that cystic fibrosis was pretty much a certainty of an early death, but with the advent of some drugs—if people have access to Trikafta, then a fairly standard lifespan is expected. There’s a little bit of a judgment exercise involved in there.
I’d just invite the Minister if he could speak a little bit more about the sorts of advice he is likely to take, or the things that the Minister who is handling it at the time ought to take, around trying to distinguish what really is a terminal condition, what is a likely condition, and how that might affect how that particular clause might operate.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Look, it’s obviously a very delicate issue. Probably the easiest way to explain it is there are some conditions that there is no possibility of a different outcome. They’re terminal or maybe of terminal nature, and that’s what new clause 86C(1)(d) deals with, right?
The example that the member just raised—obviously, there are many forms of cancer; not all of them are terminal. I’d be very concerned and certainly wouldn’t be wanting to make changes through Orders in Council to allow insurers to say anyone who had cancer wouldn’t be able to get a life insurance policy, because that clearly is unfair. New clause 86C that was put in by the committee is, I think, a good clause.
There is a distinction, right? Of course, what we’re talking about—and there are multiple insurance products, of course. Even my friend with Huntington’s disease still wanted to insure his house. He still wanted to insure his car, he wanted to do other insurance, but the likelihood of him getting life insurance against an event that was inevitable—that’s the distinction. We certainly don’t want the insurance companies saying: as a big band, we’re going to exclude you or charge a higher premium. I’m very clear on that point.
CHAIRPERSON (Greg O’Connor): Look, I’ll just indicate that at this stage we’ll be looking for new material.
ARENA WILLIAMS (Labour—Manurewa): In the spirit of the committee stage, my question is a straight question. Given Australia’s changing position, should New Zealand be seeking to align itself with Australia, and will the Minister exercise his powers under the new regulation-making powers in this legislation with a view to aligning New Zealand’s insurance industry up with Australia’s?
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Look, as I’ve said before, Australia is announcing an intention. It has not passed legislation, and local parliaments—and we’re the same—will go through a select committee process. It will be interesting to see where they end up. Of course we will have regard to Australia’s outcome, as we would have regard to other jurisdictions around the world. What we’ll make sure of is that we’ll do best in class around the world to make sure that we deal with this, and it will be evolving. Even if we make it a change in a year’s time, or whenever the Parliament in Australia passes its legislation, there will be further developments. That’s why adopting an Order in Council procedure, with the very clear procedural approach that has to be followed under clause 86C, gives us the flexibility to make sure we keep up to date and abreast of developments.
CELIA WADE-BROWN (Green): Thank you, Mr Chair. I’ve got some questions around clause 86C(3) and the paragraphs within that. I’m particularly interested, if the Minister could tell me, what another source of information might be. I mean, how do we stop insurers from, for example, requesting information from the heritage sites where people have voluntarily given DNA information to, which can be very useful. I mean that’s how I confirmed my Jewish heritage through that site. Can we prevent them from requiring us to disclose information? Looking at paragraph (c) “when viewed as a group”, does that mean an ethnic group, potentially?
I mean, presumably, people of African heritage living in New Zealand are far more likely to have sickle-cell anaemia than the Minister or myself. At what stage does that constitute some sort of ethnic bias? Are there some genes that Māori or Pasifika hold that make them more vulnerable to particular illnesses or shorter life? There certainly is a far shorter life expectancy for a number of reasons—potentially some of them genetic, mostly socio-economic—for Māori and Pasifika. How does that fit into us trying to make insurance fair in this country?
I just want to also reflect on a personal experience. I’ve just visited my sister who’s got terminal bile duct cancer. Would I have to declare my relatives and their particular diseases in order to get insurance, and do I need to have a genetic test to see if we’ve got the same vulnerability, or would they just look at some medical likelihoods? It’d just be interesting. I mean these are very complex questions. It’s difficult to answer in here, but this is a point at which we should be asking these questions. Thank you, Mr Chair.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): I’m sorry to hear about your sister. Look, the examples you use are exactly what we don’t want to happen. We don’t want insurers to blankly classify people, ethnic groups, people with certain conditions—and it might be a familial relationship or whatever—we don’t want them doing that. That’s the bit about this whole thing. Of course, it’s an evolving thing. That’s the general principle. I’m very keen, and I’m sure all parties in this committee want to make sure, that people should be able to get insurance—that’s the general principle of it, right? We need to deal with it delicately, but that is the general principle. We do not want that sort of classification that you’re talking about.
RYAN HAMILTON (National—Hamilton East): I move, That debate on this question now close.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. My question is about clause 90, and it is about the insurer standing in the policyholder’s place for those claims that are made under this subpart, which is a new subpart that we have not yet debated. It’s relating to an amendment on the Table for the Minister’s consideration. There is a lack of clarity here about what documents the insurer, when standing in, should receive. An amendment here seems to be needed, via a new subclause (3), where whoever the claimant is in this kind of scenario would be able to seek—and the insurer must provide—all information in the documents relevant to the claim, whether or not there had been proceedings.
In a situation where there were proceedings—where there were court proceedings or, in a provision where arbitration was allowed, arbitration proceedings; or in a negotiated scenario, which is a scenario that we envision in this bill anyway for consumer insurance contracts—what’s not clear here is, prior to that, whether it would be possible for the claimant to get those documents. It would also be helpful, if the Minister is not going to accept the amendment that’s being proposed here, if he would enunciate his view on whether those documents should be provided to the claimants in this situation.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): I know the member is talking on behalf of a clause put forward by the Hon Dr Webb. Look, it’s already addressed—if Dr Webb looked seven clauses on, he would have seen that it’s addressed in clause 97 and also Schedule 3 of the bill. It’s already provided for in the bill that a claimant can obtain information documents relevant to the claim from the insurer.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. Moving to clause 91, which is the defences which apply to this subpart, has the Minister considered the need for a new subclause (2)(d) here, which would allow for the defences which are being relied on to be for the status of the policyholder and making them specific to that policyholder. In this subpart, there’s the policyholder and there’s the claimant. It’s helpful, because there is a lack of clarity here, for the Minister to give Parliament some clarity about whether an amendment is needed here or whether it’s his intention to ensure that the term saying the insurance is voided on insolvency, or anything like that, would not deprive third parties who are making a claim.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Look, clause 91(2) already prevents insurers from relying on certain technical defences that it would only have because the policyholder has become insolvent, so it’s already provided for. I suppose a more general principle is that it’s better to clearly identify the specific defences that insurers cannot use, to avoid uncertainty.
RYAN HAMILTON (National—Hamilton East): I move, That debate on this question now close.
FRANCISCO HERNANDEZ (Green): Thank you, Mr Chair. I just had a quick question—and I know we’ve been jumping around a lot, but I’ve got to go—on Subpart 6, and I think it’s clause 99, “Application for shares in company not to be contained in proposal for insurance”. I was wondering: is that quite a common phenomenon in the insurance industry? Is it a kind of common thing? When you’re taking a call for insurance, is it quite common that they’re, essentially, asking you to, like, buy shares in the company? I’m just wondering whether you can kind of quantify the extent of the problem as it exists today: like, how often is it occurring—what, I guess, that current kind of scale for penalty is. Thank you.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. I apologise for coming back to the Subpart 4A on genetic testing, but I want to ask a specific question which I don’t believe has been answered and that there is significant public interest in—that is, how long interested groups in this, particularly patient groups, can expect consultation with them to occur for. The reason I would ask this is because, before the Minister can exercise his powers, which he’s required to do in two years—so there is a time frame on the requirement for the Minister to make regulations in this area—is it his expectation that the consultation period would, basically, be the entire two years, or would that be a smaller part of the two years? The patient groups for this are already engaged in it because of this bill’s process, and they want to know how they can prepare because they want to make the best case possible for their access to continued life insurance. This is not a question which affects a large number of people, but it is a question which affects a small number of people very deeply, and it’s one that would be very helpful for the Minister to give some clarity on.
STUART SMITH (National—Kaikōura): 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 the Minister’s amendments to Part 3 set out on Amendment Paper 125 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.
CHAIRPERSON (Greg O’Connor): The question is that the Hon Duncan Webb’s tabled amendment to insert new subclause (5) in clause 70 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 the Hon Dr Duncan Webb’s tabled amendment to insert new subclause (6) in clause 70 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 the Hon Dr Duncan Webb’s tabled amendment to insert new paragraph (c) in clause 72(3) 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 the Hon Dr Duncan Webb’s tabled amendment to clause 73(2) 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 the Hon Dr Duncan Webb’s tabled amendment to insert new subclause (5) in clause 74 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 the Hon Dr Duncan Webb’s tabled amendment to delete clause 75(3)(b) 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 the Hon Dr Duncan Webb’s tabled amendment to clause 76(1) 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 the Hon Dr Duncan Webb’s tabled amendment to clause 77(2) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment deleting clause 80 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment to insert a definition of “land” in clause 81 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment to insert new subclause (4) in clause 82 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Greg O’Connor): The question is that Ricardo Menéndez March’s amendment to replace Subpart 4A of Part 3, set out on Amendment Paper 108, be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 86C(1) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment to insert new paragraph (i) in clause 87(2) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Greg O’Connor): The Hon Dr Duncan Webb’s tabled amendment to delete clause 89 is ruled out of order as being inconsistent with a previous decision of the committee.
The question is that the Hon Dr Duncan Webb’s tabled amendment to insert new subclause (3) in clause 90 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment to insert new paragraph (d) in clause 91(2) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting clause 93A be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
A party vote was called for on the question, That Part 3 as amended be agreed to.
Ayes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Part 3 as amended agreed to.
Part 4 Intermediaries
CHAIRPERSON (Greg O’Connor): Members, we come now to Part 4. This is the debate on clauses 100 to 121, “Intermediaries”. The question is that Part 4 stand part.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Chair. I have a number of suggestions as to how this part of the bill can be improved. This is an important—was that Part 5 you said, Mr Chair?
CHAIRPERSON (Greg O’Connor): Part 4.
Hon Dr DUNCAN WEBB: Oh! Look, I’ll let my colleague take a call because I’ve actually prepared something on Part 5.
ARENA WILLIAMS (Labour—Manurewa): Speaking to Part 4 of the bill, I want to ask the Minister some questions about the role of intermediaries and brokers, particularly given the changes to the definition of “brokers” that was made at the Finance and Expenditure Committee. Is there anything in this part which has been drafted—given the old meaning of “brokers” under the previous definition that Cabinet has considered and that the previous Labour Government was working on, which is, essentially, what’s being proposed here by Part 4—that is materially affected by the change in the specified persons definition, which applies to brokers and intermediaries in this part?
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): We apologise for the earlier confusion, but I just really wanted to challenge the Minister on the inclusion of clauses 104 and 105, which provide default provisions for when—and I’ve never understood why we trouble the legislature with these clauses, which provide, essentially, a default provision. I think it’s something like 50 days that a broker has to pay money received from an insured as premiums to the insurance company. The irony is it isn’t even a rule of law; it’s just a default contractual provision, which they’re free to contract out on. It does seem to be an absolute waste of legislative paper to even print this clause, and the parties should just negotiate it between themselves as they do.
Now, I know that brokers make a lot of money because they sit on premiums and put it in investment accounts, and half of this blimmin’ section of the bill deals with how they can invest it and how they can retain the profits on investment, which all seems entirely superfluous because it’s a private relationship. Why are we even including, essentially, giving brokers a favour by including a default position?
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. I want to bring the Minister to the changes made to new subclause (2A) in clause 104 and the deletion of subclause (4). The question that I have is similar to my questions in previous parts which have not been answered by the Minister: which submitters asked for the change which is being made here, and is he satisfied that the change in legislation, which he is overseeing and which has only been submitted on by—I think it’s one in this case—one stakeholder who had an interest here, is a fair representation of a piece of legislation that should step forward the interests of consumers, where, in fact, very well-organised parties, who are able to contract for themselves and go into contractual negotiations very well represented, have come along to the Finance and Expenditure Committee and asked for a change which has then been accepted by officials as a change which was suggested to the committee? Is he satisfied with that as a legislative process in this instance? And the others I have asked him about, which he has not answered.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you, Mr Chair. I did discuss this with the insurers and also with the brokers, so I don’t think anyone suggested to me that we should delete clause 104, which the Hon Dr Duncan Webb has proposed for both clause 104 and, consequently, clause 105.
First of all, the importance of this clause is that it sets a statutory backstop, and that is important. That’s the main reason for retaining this clause, and I think it’s wrong for the member to propose that we actually delete it in its entirety. Unless there’s a duty for the broker to hand over money, the insurer could be left with no one being required to pay them, and this is because clause 101 provides that a policyholder paying the intermediary discharges their liability when they do so. There’s a sort of flow-on effect to this, so we think it’s important that there is a regulatory backstop.
Of course, as the member suggested, insurers and their brokers can come to a different arrangement, but that is the main reason why these two clauses are important.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): There is a further point I wanted to ask. I know that the Minister holds some other portfolios which relate to small business, and this relates to clause 108, “Duties of broker in relation to payments due to policyholder”.
Brokers often will, in fact, receive payments. Say you might have a small business, for example. There is a big flood and you can’t get to your premises, so you get business interruption insurance, and the question is when does the broker have to pay the policyholder—the person who has suffered the loss or damage? Now, there’s this really weird division here, because if you’re a consumer, it’s “7 days”—boom! They pay it out. If you’re a business, it’s “as soon as is reasonably practicable after the broker receives the money, in the case of a payment in connection with a non-consumer insurance contract.” There’s absolutely no sense in that division. There is no reason why a small business should be out of their money for longer, unless the Minister thinks that “as soon as is reasonably practicable” is less than seven days.
The fact of the matter is that, if you are holding money under a business contract, it could be many millions of dollars. I have seen payouts of hundreds of millions of dollars. Holding that for two days is a good little earner. Why should a broker be able to hold insurance moneys on behalf of a small business, or, indeed, any business, for longer than they can for a consumer? Can you answer that for me, please, Mr Bayly?
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Yeah. Thank you, Mr Chair, and I was just checking there. Obviously, in this bill, we’ve made a clear differentiation between consumer insurance, which is for individuals primarily, and commercial contracts, because they’re quite different types of products, and, in many cases, they’re much more complex. In light of that—and that theme carries right through the bill—we’ve made it very explicit that, for personal consumer products, they have to be paid out in seven days, as set out under clause 108(a). That’s important, but in the main they’re very simple insurance products.
With regard to clause 108, there is still a requirement—and I’d just draw the member’s attention to clause 108(b). It states right at the start of it that “as soon as is reasonably practicable”, the money must be paid from the broker. That is the key tenet of it, and, obviously, there can be agreements between brokers and insurers if they want to, but that reasonableness test is a crucial test. Again, we’ve talked about that and traversed that earlier in the discussions around the bill. That’s a commonly understood term.
ARENA WILLIAMS (Labour—Manurewa): Just for clarity: does the Minister expect that “reasonably practicable” to mean less than seven days or more than seven days? That’s the relevant question here.
When the Minister says that the bill is drafted in a way so as to create consumer contracts for insurance and other contracts for insurance, that’s not the case. For most of this legislation’s life, the legislation was drafted in a way in which the big delineations were between contracts for insurance for policyholders who were not in a position to negotiate contract terms with an insurer because the insurer had an outsized sort of corporate interest and corporate power to negotiate, and contracts for reinsurance, which were large, commercial arrangements between two large corporate entities that had sort of relative power. That was the distinction. These new distinctions which are created here around non-consumer insurance contracts are new and they have a different kind of impact than they did before because of the previous changes to the definitions and to the way the contracts for insurance are defined.
My question about these non-consumer insurance contracts that are created under clause 108 is new and different from the Hon Dr Duncan Webb’s and needs to be addressed. In the situation for contracts for insurance for businesses like accountants and lawyers for indemnities, where they pay on to consumers, and so, essentially, you claim against your accountant because they have given you negligent advice and that has caused you real loss, which does insure a consumer—that insures the exact kind of vulnerable person here, whom Mr Bayly is talking about needing to insure in this law. Does it apply to those, or not?
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Look, I beg to differ. There has been a distinction between consumer and non-consumer throughout the bill, so that’s the fundamental sort of difference in approach. As we traverse, I think, in Part 2 extensively around the complexity, often, of commercial arrangements, insurance arrangements dictate that they have different arrangements. Clause 108 takes that and recognises that point.
To your specific question about what is reasonable and whether it is less than seven days for a commercial contract, it is reasonable in the circumstances. In some cases, it might be an earlier payment, as might occur within seven days for a commercial insurance policy, but, for other occasions, it might not be. Again, we’re just making sure that we recognise that there are different types of products that are more complicated and, therefore, in some cases, there might be an earlier payment required and, in other cases, there might not.
HELEN WHITE (Labour—Mt Albert): Thank you, Mr Chair. I just want to add to the issue with regard to the holding of the money for 50 days as a default because we’ve had some really interesting research in terms of the withholding of money owed to small businesses. The latest research from Xero says that we have had an increase in the amount that that’s costing our small businesses and our firms to $827 million a year, compared to $456 million in 2021. This is exponential growth. We’ve got a growing problem, it seems, of people who are in the middle of these transactions calculating to hold on to money for as long as they possibly can because they’re receiving the interest on it. They’re using our small businesses as banks.
It seems to me that this particular scenario is one where that is almost being sanctioned by us because we’re saying that 50 days is the default and we’re saying “in a reasonable time” and it becomes the practice. I was talking this week to someone senior in the business representation committee. They said that people are only being paid in 120 days. That’s becoming a calculated decision—120 days to pay a small business. That’s a very long time. While the average late payment might be about eight days—which is, by the way, way more than it is in Australia or the UK, which is taking this issue very seriously and publishing the results of people who pay late and how that’s calculated—those kinds of issues are really of a concern here.
I’d like the Minister to address whether he is concerned that, by putting in a payment term like 50 days, we are almost creating a calculation of, “We will keep this money for this long. We will make this amount in interest because we’re gathering up all these amounts.”, and that will become part of the business model. We’re almost saying in this legislation that that’s OK, and the term “reasonable” will become dictated by those outliers at 120 days or 90 days, which has become a habit in New Zealand and that will be seen as reasonable when, in fact, it’s really hurting our small businesses. Thank you.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): I’m not quite sure whether the numbers the member is quoting there are general credit or whether she’s specifically talking about money held for insurances policies, so I suspect—
Helen White: No. Just generally.
Hon ANDREW BAYLY: Generally—yeah, that’s a different issue. You’ll be aware that we made an announcement about that yesterday. In terms of the 50 days, when I met with brokers and insurers my recollection is that 50 is now the current normal. We’re not changing there. Some people wanted it to be brought forward, some people didn’t—so we reflect the current practice of 50 days. Obviously, there’s ability for insurers and brokers to negotiate a different and quicker payment time, but I just want to be very clear that the 50-day test relates to money that the broker passes on to the insurer. It’s not what, I think, the member was alluding to. It does not affect payment to small business policyholder. That’s a clear differentiation, because we want to make sure that small businesses get paid in a timely manner. This is merely relating to the arrangement between the insurance company and the broker.
HELEN WHITE (Labour—Mt Albert): Thank you, Mr Chair. I just want to make sure that I am speaking clearly about this. Yes, the Minister is right. It’s a general reflection of payments not made to businesses—it’s research from Xero—which is a real concern. It’s not about what the Government sets; it’s about business to business, etc., so it’s being withheld.
I’m kind of concerned even more about what was said, because we’re talking about two different things. One is premiums held. There is very little reason not to pass on a premium as soon as possible. That’s just taking money from people and using it for insurance. The other is holding money that you’re supposed to pass on to somebody who’s actually been injured. They have had some event, which means that that money is really vital, and in terms of holding that for a long time, there are two things going on. One is that we have prescribed a time of 50 days because it’s the norm. Well, actually, it sounds like a worrying norm to me. Did we investigate whether that was, in fact, a sensible time; whether there was any reason to hold that money; or whether we’re building it into a business model whereby those brokers, those third parties, will hold that money for that long and just simply claim they’re investing it and claiming the interest, and whether the other is of concern too.
Surely we need things to go through swiftly, and I’m concerned that if we’ve got that growing issue with an increased amount of time, we’re actually sending a signal, again, that, “It’s too bad for the little guy and it will take as long as it takes. We’ll decide if it’s reasonable.” And if you’ve got judges who, with respect, earn a lot of money and are not under the pump the way small businesses are, they wouldn’t necessarily see that that sinks a business.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Obviously I did a poor job of explaining it. There is a requirement for insurers to pay policyholders—commercial and non-commercial—promptly. We’ve traversed that in the previous part. That is an absolute requirement. What we’re talking about here is something quite distinct from that. All we’re talking about in this clause is the arrangement between the broker and the insurer. That’s the big differentiation. There’s always been a norm, from my recollection, that brokers would have up to 50 days to pay the insurer.
If you’re concerned about the brokerage industry going broke or the insurance industry going broke, let’s have that discussion, but that’s quite separate from what I think the member’s trying to allege—that there’s going to be a subsequent and consequential delay in making the payment between the insurer and the policyholder, and that’s not the case. You need to put a knife between those two connections.
ARENA WILLIAMS (Labour—Manurewa): Just a brief question: how many submitters asked for this change to clauses 104 and 108, and is it a good enough legislative process that the change has been made with a minimal number of submissions and no submissions from consumers about it?
CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 101(1)(b) 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 the Hon Dr Duncan Webb’s tabled amendment to delete clause 104 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 the Hon Dr Duncan Webb’s tabled amendment to delete clause 105 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 the Hon Dr Duncan Webb’s tabled amendment to clause 108 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 Part 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.
Part 4 agreed to.
Part 5 Contracts of life insurance
CHAIRPERSON (Greg O’Connor): Members, we come now to Part 5. This is the debate on clauses 123 to 164, “Contracts of life insurance”. The question is that Part 5 stand part.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Oh, goody, I’ve been looking forward to this bit. Now, obviously, contracts of life insurance are of critical importance and actually are really significant financial instruments. I was just a little bit concerned, firstly, in terms of clause 125—look, this is good. Interest rates must be paid on life insurance—pity about other insurance, but life insurance—“at the rate and calculated in the manner specified in the life policy”. OK, that’s the default rate of “at the greater of the following”. Or “(b) … calculated in the manner prescribed in the regulations.”
Now, my concern is that neither will exist. What happens when neither exist? At the moment, the regulations aren’t there and the regulation-making powers are all discretionary. My proposal is to insert, after clause 125(b), “provided that where there are no regulations under subclause (b), the interest rate under that clause is deemed to be the official cash rate plus 2 percent.”
There are interest rates that you could choose—the Judicature Act rate and so on—but we just need a placeholder, and it’s probably a placeholder that needs to be a little higher than might otherwise be the case to incentivise regulations being made, because there is a real risk that it’s just a lacuna, a gap, a void, in respect of interest rates. I’d be very interested in the Minister’s view on how we address the issue there.
I’ll go straight to a second point, because I can see the Minister’s just wrestling with that issue. The other one, and this is one that really bugs me, then, is clause 131, “Life insurer may require reasonable evidence of matters affecting validity”. That’s OK. “A life insurer may, before it registers an instrument under this Part, require any reasonable evidence that it thinks fit about any matter that might, in its opinion”—now, “insurer’s opinion” has no place in the law. And, in fact, they’re nasty little things which give an outrageous degree of discretion to insurers, because if something affects the validity of the instrument, it’s a yes/no question. Either it’s relevant or it’s not relevant. The opinion of the insurer is not an appropriate consideration. If the insurer has an entirely misplaced opinion that some document is relevant—the birth certificate, whatever it might be—they can then ask for it; that’s just putting unnecessary hurdles in the way.
There’s a tabled amendment there ready to go, so let’s just strike out “in its opinion”. That clause should never be found in the law of insurance in relation to “the opinion of insurers” anywhere. Don’t you agree, Minister?
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. A general question about Part 5 and then a specific question. Is there anything in Part 5, which is the life insurance provisions in this bill, that would give the Minister concern if they are in primary legislation, given that he has new powers to set regulations about the use of genetic testing in a life insurance context? Those will be secondary legislation and subordinate to the primary legislation. I ask that because Part 5 was drafted in the context of nothing being off the table in a life insurance context, but the Minister is expected to make regulations which are very likely to place a number of questions for insurers’ purposes off the table.
Then a specific question around clause 131. This is also particularly problematic given the Minister’s new powers in setting regulations. Is it his intention to formulate the regulations in some way to get around clause 131 or will he need to be back in this Chamber to amend clause 131 at the stage he’s creating the regulations? It doesn’t seem to me to be possible, unless there’s a very wide interpretation of “reasonable evidence” there, for clause 131 and new regulatory-making powers to exist if they were to limit the insurer’s ability to use genetic testing information, which is entirely the point of the regulations in the first place. Those regulations were introduced by the select committee to limit the ability of insurers to use them.
The Minister has also agreed with limitations on use of those tests. So, if an insurer was to continue to ask for evidence before registering the instrument about matters pertaining to the use of testing, then that would be allowed at the primary level but, perhaps, prohibited it at a secondary legislative level, which would create some problems for us.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you. Look, just in reference to your first question, Ms Williams, I don’t have particular concerns—and I know you’ve asked that in a previous part. We’re cognisant and mindful of that, but, at this stage, I don’t have any concerns.
Just dealing with the specific questions around—well, let’s deal with clause 131, which both you and the Hon Dr Webb have raised, and the proposal is to delete the words “in its opinion”. Look, the first thing I’d say to you is that the bill carries over a longstanding provision which has operated without issue. I think that raising this as a significant issue at this point sort of goes against the grain of what’s been in place for a long time.
Secondly, I’d make the point to the Hon Dr Webb that it’s a strange argument he’s putting forward, because the provision inherently turns on life insurers’ own assessments of what evidence to request. The deletion probably wouldn’t make any practical difference at all. The existing requirement for the required evidence to be reasonable already exists as a safeguard, so there is a reasonable test around that. The bill’s approach has been well consulted on, and no other person or group has raised concern. I do note, again, that you must have had an epiphany, because your original bill didn’t have it changed.
Again, coming back to clause 125, I’d just draw your attention to the preamble to clause 125: “The interest payable under section 123 or 124 must be paid at the greater of the following: (a) [which is the life insurance policy rate] … [or] (b) interest at the rate … calculated”. There is a backstop, which is the life insurance policy rate, and that’s why it’s been done. I know the member’s been very helpful in proposing the official cash rate plus 2 percent, but that’s been plucked out of the air, I might suggest to the member, because already we’ve dealt with the issue in paragraph (a).
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): I just want to talk to assignments of life policies, because that is an important question. It recognises that life policies are, essentially, a kind of intangible personal property—
Hon Andrew Bayly: What clause?
Hon Dr DUNCAN WEBB: —and that the rights attached to them can be—
CHAIRPERSON (Teanau Tuiono): Which clause are you focusing on?
Hon Dr DUNCAN WEBB: Sorry—clause 126, “Assignment of life policy by way of ordinary transfer”. And just recognising that it’s, essentially, a financial instrument—intangible personal property—which is a valuable bundle of rights.
My concern with clause 126 is that it’s set out as exhaustive, whereas there may be other dealings in life policies, which, to use a kind of slightly arcane approach, are transfers at equity—for example, if money was to be lent and it was agreed that the life policy would be assigned as security; so if I don’t repay it, you can have my life policy. If that’s a promise of something that will happen in the future, it’s an incomplete transaction. It isn’t an assignment at law, it’s not by way of ordinary transfer, but there is an interest that passes, sort of by way of mortgage or perhaps by way of equitable charge.
Now, those kinds of transactions are actually quite important, and they’re part of the oil that keeps the wheels of commerce going. Those not fully formalised transfers, which are transfers at equity, need to be recognised, because, at the moment, with clause 126, which looks like it has codified how you transfer a policy, it actually leaves a gap in terms of transfers at equity. These kinds of transfers, which are a little akin to a trust in land law, you’d recognise them by way of caveat. In terms of where they sit in terms of priority, clearly a legal transfer by way of documentation, which is done without notice—honestly without notice—will gazump, will prevail over, an equitable transfer, which might be a far less formal thing. However, if there are no other competing transfers, an equitable transfer should absolutely be recognised because it’s, essentially, a slightly inchoate transfer.
My suggestion in the tabled amendment is to add new subclause (3), to clause 126, which says, “For the avoidance of doubt, nothing in this section prevents the transfer of an interest in a life policy at equity.” That’s very much a catch-all phrase just to say the common law and the law of equity still stand, and transfers of life policies or interests or part interests—whatever. I haven’t sat down yet, Mr Bayly, ha, ha, ha, ha!
CHAIRPERSON (Teanau Tuiono): I love the enthusiasm.
Hon Dr DUNCAN WEBB: But I will now. I think you have gist. I’ll be interested in your answer.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Thank you very much. I know the member is very diligent, but I suspect he’s been in Parliament too long. I say that with all due respect, because we understand from industry that equity transfers, which he was talking about, are no longer the normal practice. We did actually discuss that with industry. Transfers are done by way of—ordinary transfers no longer occur. So the concept of what he was proposing—if you were seeking to provide security by way of some form of vested interest in another interest, then that would be captured by the contractual relationship. We think that this piece of legislation captures the current thinking on how that happens in this area.
ARENA WILLIAMS (Labour—Manurewa): I asked my question about clause 131. I asked about the Minister’s concerns. He said he wasn’t concerned. Let me ask him whether this is good for people who suffer from genetic diseases, who expect him to take powers that restrict insurers from using their genetic testing information to prohibit them from getting insurance—whether clause 131 is good for them. They are expecting him to restrict insurers, to stop insurers, from being able to stop them from getting life insurance policies that would be discriminatory to them and a group of people.
Most jurisdictions around the world think that it is fair for legislatures like ours to make that call and say, “Actually, it’s discriminatory. These people would be facing genetic discrimination if that were the case.” I’m asking him: is it good for those people if clause 131 stated, as it’s written, that an insurer can continue to ask for evidence which is reasonable in its opinion before it registers an instrument? Even if it complies with the secondary legislation that he might introduce, they will still be able to rely on clause 131, as it is written, to continue to ask for information that they deem relevant and reasonable before they register the instrument. I’m asking whether it’s fair and good for patients.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you. I have a couple of short points. The first is very short. It’s clause 132, “High Court may order registration”. That’s kind of a default provision, like the appointment of trustees and so on and so forth. But why the High Court? The High Court’s slow and expensive. Why not the District Court? Those District Court judges know what they’re doing.
This is a real formality too. It’s, essentially, saying where there is an assignment by way of transfer and the insurer hasn’t done their job, the court can simply say, “Do your job.” It’s a really good point, this clause 132. I think there’s a principle that any decision making should be undertaken at the lowest appropriate level in terms of achieving some efficiencies in the judicial system, which, frankly, is overwhelmed. So, in terms of the question there, my question is: why have we defaulted to the High Court? The High Courts have always had a common law and an inherent power as a supervisor of trusts. I understand why the later provisions around appointment of trustees say High Court, but this is a really technical and rather boring provision. I’d be very interested as to why you’ve taken that approach.
The other point—I’ll just turn to clause 141—is around surrender values of policies, and that life policies may have a surrender value. And where there is a surrender value but you haven’t kept up premiums, there is an ability to deduct premiums and interest on those premiums. Then it says, in subclause (3), “This section is subject to—(a) any rules made by the life insurer or that affect the life insurer; and (b) the terms and conditions of the life policy.” It’s all very well, but life policies are, basically, consumer policies almost all of the time. The danger is that the insurer arranges rules which are quite unfair or onerous or change the kind of default settings in this section. That’s why I have suggested that added to that clause is a statement that says, “provided that no rules or terms may leave a consumer policyholder in a worse position than they would be under the terms of this section.” That is to say, insurers can say, “Well, look, we won’t charge you interest on unpaid premiums, or we won’t deduct unpaid premiums.”, but what they can’t do is say that you have to pay double premiums or some other absolutely onerous clause. I’d be very interested in the Minister’s view on that.
DAN BIDOIS (National—Northcote): I move, That debate on this question now close.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): I’ll take one call and, hopefully, it might get us to point. I want to address Ms Williams’ question. She’s drawing a bow between clause 131 and the discussion we had in the previous part around genetic disorders. The provisions in this bill at clause 131 relate only to Part 5, so she’s wrong to try to confuse them and conflate them and reference them back to Part 4. It deals only with issues in Part 5, around transfers, etc.
Just on the question that the Hon Duncan Webb spoke about—with clause 141—he made a comment implying insurers might be putting a whole lot of difficult terms and conditions. Again, as I’ve said, one of the three guiding principles of this bill is to make sure that insurers are not putting in terms and conditions that policyholders cannot understand or that are hidden in the terms and conditions. That’s why it is a requirement on them to present their policies in a way that can be easily understood. That guiding principle will address much of what he is concerned with.
With regard to the specifics around clause 141—this is subclause (3) that he referred to—we specifically consulted on surrender value provisions at the select committee stage. I know the member wasn’t a member of the Finance and Expenditure Committee, but the feedback the select committee heard on that was that there was no change required to this longstanding provision. In practice, insurers no longer issue these policies; they’re legacy policies only. Again, I think he’s obviously had an epiphany because, whilst this is a new change, it wasn’t in his original bill that he proposed.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. I’m confused. Is the Minister saying that nothing in Part 5 “Contracts of life insurance” applies to those—
Hon Andrew Bayly: In Part 5.
ARENA WILLIAMS: Yes—nothing in Part 5, the provisions that relate to contracts for life insurance, applies to contracts of life insurance that will be affected by the new provisions given effect in Subpart 4A of Part 3, so any life insurance policies which are affected by genetic testing would somehow be exempted from contracts of life insurance? I ask this question directly relating to his answer where he said that clause 131 is not affected by the new provisions, which he’s expected to enact within two years of the passing of this bill, to do with genetic question. Look, if so, can he just make that clear for—
Hon Andrew Bayly: I did.
ARENA WILLIAMS: Right. The Minister says, “I did.” It’s now on record that people who are sufferers of genetic conditions, who may be affected by the genetic provision tests, will not be subject to the provisions in Part 5 in total. I guess they can expect that the secondary legislation enacted by the Minister will exempt them from Part 5.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Look, I’m going to deal with this question once and for all. I made my point clear before. I repeat it: clause 131 is about instruments regarding the transfer of life insurance policies. “Instruments”, that is the differentiation. I would suggest to the member that she is confusing the issue in Part 4. This is about the transfer of instruments.
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 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Motion agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 125 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new clause 125A be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new subclause (3) in clause 126 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 131 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 132 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 135 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 141(1) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 146 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 141(3) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 149 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new paragraph (e) in clause 150 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Dr Duncan Webb’s tabled amendment inserting new paragraph (f) in clause 150 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Noes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
A party vote was called for on the question, That Part 5 be agreed to.
Ayes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Part 5 agreed to.
Part 6 Regulations and miscellaneous provisions
CHAIRPERSON (Teanau Tuiono): Members, we now come to Part 6. This is the debate on clauses 165 to 168, “Regulations and miscellaneous provisions”. The question is that Part 6 stand part.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair, for the opportunity to take a call on this part. I’m going to combine the questions into, essentially, one. It’s a question of prioritisation of the regulatory-making functions, under this bill, which the Minister is empowered to make.
The prioritisation exercise for making these provisions would have been entirely different before the new Subpart 4 in Part 4 was introduced, and the timing provisions are different too. Even though the regulatory-making powers under Part 4, which is related to brokers, are really important and we asked the Minister a number of questions about the regulatory-making powers in that part, they don’t have a timing requirement on them. They are required to be made in the future, and there is a real importance for them to be made, but there’s a longer time frame on them, whereas the other regulations in the bill are required to be owned within two years.
Can the Minister give some clarity on how he intends to prioritise his regulatory-making powers and on what kind of time frame we can expect the exercise of those powers of secondary legislation making to be exercised by him in Order in Council?
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Just following on from Arena Williams, one of the questions I have and one of the suggestions I have is that these regulations are absolutely the guts of the bill, if you like, and they impose the real workings of where it hits the ground. I mean, I’m looking in particular at clause 165(4), which talks about the interest, and I’ve raised before that if the Minister doesn’t make these regulations, then there are real problems. Nowhere that I can see, unless I’ve missed it, is there any requirement that the regulations be made. We talked about that in respect of genetic testing, I’ve talked about it in respect of interest rates, and I would very much like to see that.
The other thing I’d say about regulations is that I see that the Minister has obligations to consult under clause 165(3). My concern in this area is always that consultation is undertaken but it’s not balanced, and I’m wondering if he could discuss whether he will be consulting with consumers or consumer organisations or whether perhaps he will be setting up some kind of reference group that can assist him to make sure that the consumer voice is properly and adequately heard when those regulations are made.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): OK, well, we’re really getting into the death knells of this, aren’t we? Look, I’ll just make the general point: clause 166 there is to do with insurance intermediary arrangements. We’ve never used these arrangements before. They’ve just been carried over. I don’t really see a need for regulations to be made in respect of those. There are some very specific things that we will need to set through regulations, such as the interest rate in the event of death. There is some very specific stuff, but it’s actually very limited in nature. This is just giving the regulation-making power, which, obviously, is better than putting it into primary legislation, because of things like interest rates that you may want to change over time. There’s not a great requirement and not a great intent to go out and do a whole lot of regulations on it. Obviously, if we’re going to do that, we will be talking to all relevant parties, and I do meet with the consumer advocacy groups quite regularly, actually. I’ve met them over a number of bills. It will be horses for courses where appropriate, so I don’t think there’s any big deal in this.
SUZE REDMAYNE (Junior Whip—National): I move, That debate on this question now close.
A party vote was called for on the question, That debate on this question now close.
Ayes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Motion agreed to.
A party vote was called for on the question, That Part 6 be agreed to.
Ayes 68
New Zealand National 49; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 6.
Part 6 agreed to.
Part 7 Repeals and amendments to other Acts
CHAIRPERSON (Teanau Tuiono): Members, we now come to Part 7. This is the debate on clauses 169 to 193, “Repeals and amendments to other Acts”; and Schedules 4 to 6. The question is that Part 7 stand part.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): I’m very happy to have an opportunity to speak on this part but very unhappy about what is in this part. In particular, the insurance industry has got a free ride on unfair contracts to date. This was our opportunity to pull that industry into line and bring them into the Fair Trading Act unfair contract terms regime. Now, I don’t know how they do it, but, once again, they’ve managed to persuade the Minister to let them off the hook, because if you look at clause 176, which inserts new section 46KA into the Fair Trading Act, it—in a kind of limp-wristed, half-hearted way—brings the insurance industry into the unfair contracts regime.
That regime, just for those who aren’t aware of it, is a regime where if there is a clause in a standard form contract which is seen as unfair and onerous in a consumer contract, then it can be referred to the Commerce Commission, who can declare it as unfair and, essentially, strike it out. It’s not heavily used, but there’s nevertheless a discipline that sits out there—particularly for large corporates like banks, insurance companies, and so on—except insurers have been not, effectively, caught by it so far. Here we have a clause which is purporting to bring them into it, except it carves out a whole lot of aspects of an insurance contract which don’t go into the regime, and, Minister, I think you should think very carefully about this.
Now, some of them you can kind of understand. The price, or, basically, the premiums—so, in banking contracts, you can’t complain about your interest rate, because that’s, basically, the guts of the contract. It’s the very nature of the contract. Similarly, in an insurance contract, the premiums are the premiums. You either accept them or you don’t, but you can’t really complain that they’re unfair and get that struck out as some kind of unfair clause. But the one that’s deeply offensive is exclusion clauses. In new section 46KA and the new subsection (2)(e), it says that “For the purposes of [this clause], a term of insurance defines the main subject matter of the contract” and, therefore, can’t be subject to the regime if it “excludes or limits the liability of the insurer to indemnify the policyholder on the happening of certain events or on the existence of certain circumstances.”
Let’s just understand what it means. It means an insurer is allowed an unfair exclusion clause. If they had an exclusion clause that says, “You’re not insured if you’re driving a red car.”—totally irrational and unfair—you couldn’t say that it’s unfair, so it becomes really problematic. Now, there are exclusion clauses, and some of them are reasonable, but they shouldn’t worry about that. If it’s like “OK, if you’re not a licensed driver, you’re not insured.”, that’s fine—that makes perfect sense. Or even some of the ones that push it a bit further: “If you’re driving a car on something which isn’t a legal road”—so you’re off-roading—“you’re not insured.”, that’s fine. They make sense; they’re reasonable exclusion clauses. But exclusion clauses which are actually unfair things, which are irrational, and which don’t make sense in the context of insurance can’t be complained about.
You can complain about your bank, you can complain about your electricity company, and you can complain about all of these terms of a contract in every other sphere of commerce and business, but somehow there’s a wee free pass—another free pass—for the insurance industry, and this is a change. Minister, I’d like to hear you speak to this and say, “When I got this bill in its draft form, I listened to”—who?—“and decided to change it.”, and why, because this is not the draft that I saw. Certainly, in terms of unfair contract terms, insurers need to be brought into the regime, because as a matter of practice, insurers do rely on exclusion clauses and they need to be held to account. I think this is the most invidious clause in this entire bill, and I’d be interested in the Minister’s view.
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Well, first of all, I reject the assertion that they’re getting an easy ride. I think the former Minister got lost in this issue. I think it’s fair to say that the member has had an exposure to the industry and he has come to a predetermined view about the reputation of insurance companies and whether they act in the best interests of their consumers, or policyholders, or not. I think that the previous drafting reflected his personal view about insurance companies, which was, basically, a very negative view about that industry.
When I saw this clause, I had quite significant conversations with the insurance sector and asked them to give me good reasons why they would want this part of the bill changed. I listened to those arguments, and I also had officials arguing on the other side, and I’ll tell you what: first of all, I think the former Minister got lost because he lost the big picture. If we were to continue with the provision that that Minister had in the original bill, that ultimately would have meant that every New Zealander would have ended up paying a higher policy premium, and, personally, I thought that was a bad thing.
Hon Dr Duncan Webb: That old shibboleth!
Hon ANDREW BAYLY: And here we are, we’ve got a member from the Labour Party saying that they’re standing for ordinary New Zealanders. Ideally, if he’d slavishly followed his personal objective around this, this would have meant that “ordinary New Zealanders”—to use those words; quote, unquote—would have ended up paying more in their premiums than they ought. That was the first point.
The second point is that I don’t think the member actually considered what the unintended consequences of what he had proposed in his former drafting were. The issue in New Zealand is that we have what’s called an all-risk approach to insurance, which means that when you do take on a policy, in the main, it covers all risks. If we were to adopt the approach that the previous Minister had proposed, it would have pushed us towards the Australian model of being a defined-perils policy. That would have been even worse for New Zealanders, because then we would have had—in the example of, let’s say, a house event—to try to define what would happen and what type of cover you would have in the event of a peril, and requiring the obligation for every policyholder—all “ordinary New Zealanders”—to be able to clearly define what the peril was that they wanted insurance for.
Of course, if they inadvertently missed one out, then they wouldn’t be covered by the type of policies that are currently available in New Zealand. So that’s the second point. That would have been an absolute adverse implication for the New Zealand insurance industry and also—more importantly—for policyholders in New Zealand. I think there is recognition that these contracts are different from banking contracts and the other ones that he referred to. Insurance policies are quite specific and different, and they need to be.
The final point was that he talked about the Fair Trading Act. Actually, insurers will be captured under the conduct of financial institutions regime, which comes into force on 31 March 2025—i.e., in a few months’ time. Therefore, they are subject to making sure they are operating in the best interest of their consumers, and I’ve been very explicit to all industry players that that is one of their primary objectives. It is wrong to assume that they won’t be subject to oversight; they will be. Ultimately, the proposal that the member put forward would have been bad for New Zealanders, and that’s why it’s been changed.
ARENA WILLIAMS (Labour—Manurewa): This is an outrageous position for us to be in, in a committee stage, where we have a Minister in the chair alleging that another member has a personal view which has coloured the way that he has engaged with this legislation, when that Minister will not answer repeated questions from me about which submitters asked for certain changes—when I know that there was only one stakeholder, in some cases, who asked for a certain change—and whether that is an appropriate legislative process for this House to conduct.
Whether it is appropriate, Minister, I ask you very specifically this time: is it appropriate for the Insurance Council of New Zealand to be the only submitter to ask for a change, and for officials under your watch to make exactly the change they have asked for, to the detriment of consumers, and for you then—for the Minister, then—to claim to the media and to this House that he has initiated a legislative reform package which is good for consumers? We know that over and over and over again, in this piece of legislation has gone from a Labour piece of work which tried to balance the interests of consumers and insurers to a piece of legislation which went to Cabinet and was approved and removed many of those protections for consumers but was something that was still a reasonably balanced package of legal reform that was still very much needed, and then to the Finance and Expenditure Committee, where one or two—only one or two—submitters asked for a certain change in certain areas and were then given that change, and then it was introduced into this House.
Is that an appropriate way for legislation to be then signed off in this House? These are the questions. This is why we are asking these questions over and over again, and we have not got an answer to that. Then for the Minister to give a speech that alleges that a member in this committee has a personal, biased view of certain stakeholders is absolutely outrageous. We are owed an answer to the questions about who is asking for these changes, whether they are widely supported, and whether they are still in the interests of consumers, like it is being claimed here and like it is being presented? Inevitably what will be said by the Minister in the third reading is that this is a piece of law which benefits consumers and fairly benefits them in regards to their interests being balanced with those of the insurers, who have much more power in these situations than they do.
My question is about the changes here: which ones were changes which were in response to one or two stakeholders, and which ones were supported more widely? I’m also going to ask him about the prioritisation: which ones were the priority of the insurance industry and which ones were only supported by a few but were seen by him as changes which were worthy of making?
Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): Look, the member may feign enragement about the whole thing, but these changes were included in the draft bill that went before the Finance and Expenditure Committee. There has been no surprise about it; there’s been absolutely no surprise. It’s been through a long select committee process, and, interestingly, the member should be aware—I hope she’s aware—there were actually a lot of submitters on this point, on this issue that has been raised here, and, in general, there were very few opposed. Most of them were strongly in favour of this bill and the proposal around this specific issue.
This is what a parliamentary process is: they go through a select committee process, they have a good hearing, and they have people come submit on it. We’re obviously doing a committee of the whole House today. To be outraged about it and to try and say that some sort of blind-siding event has occurred is wrong. It’s been through a full select committee process.
Progress to be reported.
House resumed.
CHAIRPERSON (Teanau Tuiono): Madam Speaker, the committee has further considered the Contracts of Insurance Bill and reports that it has made progress on the bill. I move, That the report be adopted.
Motion agreed to.
Report adopted.
DEPUTY SPEAKER: The House will adjourn until 2 p.m. this afternoon.
The House adjourned at 12.57 p.m.