Thursday, 7 November 2024

THURSDAY, 7 NOVEMBER 2024

THURSDAY, 7 NOVEMBER 2024

The Speaker took the Chair at 2 p.m.

Karakia/Prayers

Karakia/Prayers

BARBARA KURIGER (Deputy 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.

Visitors

Australia—New South Wales Legislative Assembly

SPEAKER: I’m sure members would wish to welcome Janelle Saffin, member of the New South Wales Legislative Assembly, who is present in the gallery.

Business Statement

Business Statement

Hon SIMEON BROWN (Deputy Leader of the House): Next week in the House, we will consider further stages of the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill and the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill.

On Tuesday, the House will sit at 11.30 a.m. for the delivery of the Crown apology to survivors of abuse in care, and at 2 p.m. we will have the first reading of the Responding to Abuse in Care Legislation Amendment Bill. Following that, the House will adjourn for the rest of the day. On Thursday, we will have the first reading of the Principles of the Treaty of Waitangi Bill.

Hon KIERAN McANULTY (Labour): Thank you very much, Mr Speaker. I thank the Deputy Leader of the House for that statement. Will the Government consider moving an instruction to the committee to report the Treaty principles bill back to Parliament immediately, given there is no requirement in the coalition agreement for a full select committee process, and, if not, why not?

Hon SIMEON BROWN (Deputy Leader of the House): That question was put, I think, to the Prime Minister yesterday, and, as the Prime Minister said, the bill will have a full select committee.

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

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

SPEAKER: No petitions have been delivered to the Clerk. Ministers have delivered four papers for presentation.

CLERK:

2023-24 annual reports for the:

New Zealand Symphony Orchestra, and

Auckland Light Rail Ltd

statement of performance expectations and statement of intent for New Zealand Symphony Orchestra

Climate Change Commission, Report on the potential domestic contribution to Aotearoa New Zealand’s second nationally determined contribution.

SPEAKER: I present the report of the Controller and Auditor-General entitled Assessing New Zealand’s climate change response with ClimateScanner. Those papers are published under the authority of the House. Select committee reports have been delivered for presentation.

CLERK: Report of the Social Services and Community Committee on the Residential Tenancies Amendment Bill.

SPEAKER: The bill is set down for second reading. The Clerk has been informed of the introduction of three bills.

CLERK:

Principles of the Treaty of Waitangi Bill, introduction

Employment Relations (Termination of Employment by Agreement) Amendment Bill, introduction

Copyright (Parody and Satire) Amendment Bill, introduction.

SPEAKER: Those bills are set down—

RAWIRI WAITITI (Co-Leader—Te Pāti Māori): Point of order, Mr Speaker. I seek leave to move a motion without notice and without debate that this House honours Te Tiriti o Waitangi and withdraws the Treaty principles bill.

SPEAKER: Sorry could you—I didn’t hear what you said. You need to say it just slightly slowly, and just bear in mind that until I call it, no bills are tabled at this point.

RAWIRI WAITITI: Can I continue?

SPEAKER: Yeah.

RAWIRI WAITITI: I seek leave to move a motion without notice and without debate that this House honours Te Tiriti o Waitangi and withdraws the Treaty principles bill.

SPEAKER: Leave is sought. Is there any objection? There appears to be objection. Those bills are set down for first reading. We come now to—

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Point of order, Mr Speaker. According to Standing Order 116, the House must take into account the constitutional relationship between the legislative and judicial branches of Government. The Treaty principles bill being proposed violates this constitutional relationship by overriding decades of judicial decisions.

SPEAKER: Well, there’s two points here. Firstly, there is, obviously, a longstanding convention around that particular provision, but the position that you’re putting to me today is very much an opinion and not something that the House can act on or that I can act on. We come now to oral questions. The first—

RAWIRI WAITITI (Co-Leader—Te Pāti Māori): Speaking to the point of order, the Treaty principles bill also violates the constitutional relationship between the Crown and Māori and undermines the legitimacy of this House.

SPEAKER: Well, that might be—[Disturbance in public gallery] I’ll tell you what, the next person who calls out like that will be asked to leave. This is obviously an important matter, and it’s fair that you raise as many points as you want to. But the reality is that this is a bill that is set down for first reading and is not in contravention of what the House may do.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Point of order, Mr Speaker. The introduction of the Treaty principles bill without consulting the Governor-General is a violation of Standing Order 119, as it disrespectful to the King’s representative.

SPEAKER: Well, the member who is raising that clearly forgets what was in the Speech from the Throne at the start of the Government’s term late last year. Now, I would suggest that these points of order need to come to a conclusion fairly swiftly.

DEBBIE NGAREWA-PACKER: Speaking to the point of order—

SPEAKER: No, you’re not speaking to it—I’ve ruled on it.

DEBBIE NGAREWA-PACKER: Point of order, Mr Speaker—a new point of order.

SPEAKER: All right.

DEBBIE NGAREWA-PACKER: The introduction of the Treaty principles bill without consulting King Charles is a sign of disrespect and it brings the House into disrepute.

SPEAKER: Now, with respect, you’re now trifling with the Chair because, as I’ve said, when a Government reads its Speech from the Throne at the beginning of the Parliament and mentions its intentions, that is considered to be the consultation, particularly when the Speaker takes the reply to that Address down to the Governor-General so that the Sovereign is fully aware of what’s going on.

RAWIRI WAITITI (Co-Leader—Te Pāti Māori): Point of order, Mr Speaker.

SPEAKER: This had better be on an unrelated topic.

RAWIRI WAITITI: This is a new point of order, Mr Speaker.

SPEAKER: It might be a new point of order, but is it a related topic?

RAWIRI WAITITI: This bill contains an example of false and misleading information. That is forbidden under Standing Order 418. The articles are a complete fabrication and a bastardisation of Te Tiriti o Waitangi.

SPEAKER: You cannot use the point of order process in the House to introduce debating material, and that’s what that is. That is the end of this matter—that’s the end of this matter. No more points of order will be taken on this.

Oral Questions

Questions to Ministers

Question No. 1—Foreign Affairs

1. JENNY MARCROFT (NZ First) to the Minister of Foreign Affairs: How does the result of the recent US election affect New Zealand?

Rt Hon WINSTON PETERS (Minister of Foreign Affairs): The result of every US presidential election, as in the last 100 years, has had and will have a significant impact on New Zealand, our region, and indeed, the world. Donald Trump’s election as the United States’ 47th President will be no exception. We congratulate President Trump and J D Vance on their election victory, and we look forward to working with them and their incoming administration. But also, we acknowledge the contribution of outgoing President Joe Biden and his administration towards relations between New Zealand and the United States. The United States is one of New Zealand’s closest and most important partners, and we plan to further enhance our relationship with the US and the American people over the next four years.

Jenny Marcroft: How does New Zealand intend to engage with the second Trump administration?

Rt Hon WINSTON PETERS: We are ready and have hit the ground running with the incoming Trump administration. This was a decision for the American people, not for us. But we have prepared for President Trump’s re-election. That preparation has included ensuring we have the right people working on the New Zealand - US relationship in Washington, DC; around the United States; and back here in New Zealand.

Jenny Marcroft: How does New Zealand think the world will change in policy terms under a new administration?

Rt Hon WINSTON PETERS: As happens after any change of leadership, President Trump will no doubt pursue his own policy agenda. But it’s important to note that President Trump will not take effect—in terms of the office, being sworn in—until 20 January 2025. Over the next 2½ months until President Trump’s inauguration, the New Zealand Government will be working hard to better understand the incoming administration’s policy agenda. We’ll also be working on how we can best engage with the new administration on policy cooperation for the mutual benefit of both of our countries and our peoples.

Hon David Parker: Thank you, Mr Speaker. Acknowledging the successful outcome for President Trump in the USA, does the Minister see any risk to Kiwi workers and our economy from the prospect of substantial tariffs in addition to those the last Trump administration imposed on New Zealand’s steel and aluminium exports; or from being, to use the Prime Minister’s words, a “force multiplier” for the USA under pillar 2 of AUKUS, which aims to contain China, our largest trading partner, which doesn’t impose tariffs on New Zealand exporters; or from the increasing global temperatures, droughts, and storm damage which will result if the USA withdraws from climate action?

SPEAKER: Yeah, two legs to a question.

Rt Hon WINSTON PETERS: As that member will know, we’re about to re-engage with an administration where we got right on the cusp of a free-trade agreement; where he turned in front of the then Prime Minister—because of the work we’d done—and said to his team, “Well, why not?” We missed a chance then; we don’t intend to miss that chance this time.

Teanau Tuiono: Given President-Elect Trump’s position on foreign policy and human rights, will he commit to not joining AUKUS, and, if not, why not?

Rt Hon WINSTON PETERS: The reality is that AUKUS is a work in progress with respect to pillar 2, and that member’s party was part and parcel of that arrangement—begun with a commissioned paper in September of 2021 under the then Labour Government; a report in October 2021—on which we have worked in the same way ever since, with no changes at all; so much so that the former defence Minister Andrew Little says that we have got it about right.

Ricardo Menéndez March: You’re not paying attention.

Rt Hon WINSTON PETERS: What’s that—what’s that?

SPEAKER: No, no—no response.

Rt Hon WINSTON PETERS: Adios amigos. [Interruption]

SPEAKER: Sorry, I didn’t hear that. What did you say?

Ricardo Menéndez March: Point of order.

SPEAKER: Just hang on. Points of order are heard in silence.

Ricardo Menéndez March: This is not the first time that I am subject to this kind of pretty overt type of behaviour, and I take personal offence to what has just occurred and note that it is incredibly unstatesmanlike from the Acting Prime Minister.

Rt Hon WINSTON PETERS: Can I speak to that, Mr Speaker?

SPEAKER: Speaking to the point of order—hang on, wait on, wait on, wait on. We’ll just keep everything quiet. Everyone hears points of order in silence.

Rt Hon WINSTON PETERS: We cannot have these members so sensitive. All I said in Spanish was “Goodbye, my friend.”, but he’s offended by that. Now, for goodness’ sake, we have a very diverse Parliament.

Steve Abel: Speaking to the point of order.

SPEAKER: When the House goes quiet—and let me assure people that although it’s been 12 months that I’ve been in the Chair, nearly, and no one’s been asked to leave the House, it’s very close. Do not make interjections or other reactions to points of order.

Steve Abel: In the context of the election result in the United States, which was heavily predicated on extreme actions against the Mexican people on the southern border of the United States, I think the comment by the Deputy Prime Minister is particularly pernicious.

Rt Hon WINSTON PETERS: Mr Speaker, could I just reply and say nothing of the sort was intended, nor, as the member would have found out if he had studied very closely the closing polls in the United States, did the Latino vote change—rather, it went the other way; it went towards Trump.

SPEAKER: I think we’ll just let that matter lie, but those sort of comments generally should be resisted.

Debbie Ngarewa-Packer: Kia ora, e te Pīka. How can the Government go into a relationship with a President who has actively promoted and deliberately supported the genocide of a people in Palestine?

SPEAKER: Look, I—

Rt Hon WINSTON PETERS: Mr Speaker, could I say I have no intention—

SPEAKER: Hang on a minute, I haven’t called the member—

Rt Hon WINSTON PETERS: I have no intention of answering a question made so malignantly as that without any shred of evidence whatsoever. This country’s foreign policy and our future economic wellbeing and Pacific wellbeing depends on better thinking than that.

SPEAKER: Members need to be aware that just as it is inappropriate for Ministers to make accusations in answers, it is also inappropriate to make accusations in questions.

Question No. 2—Finance

2. Hon JULIE ANNE GENTER (Green—Rongotai) to the Minister of Finance: What advice, if any, did she receive on the potential impacts on the cost of moving freight by rail between the North Island and South Island before announcing the cancellation of the order for rail-enabled ferries?

Hon NICOLA WILLIS (Minister of Finance): The question reflects some misunderstanding on the part of the member. Ministers received several pieces of advice about various aspects of Project iReX before Cabinet decided in December last year to not meet KiwiRail’s request for further funding for the project. The advice we received has been proactively released and is on the Treasury website. The advice focuses on the efficiency of the transport system as opposed to the specific cost of freight. Ministers’ assessments was that Project iReX was inherently flawed, with large cost blowouts for landside infrastructure, and the project needed to be reset.

Hon Julie Anne Genter: Did she receive any advice on the fiscal impacts of adding thousands of trucks to the road as a result of not having rail-enabled ferries, as has been indicated by the managing director of Mainfreight—will be the result of not having rail-enabled ferries—before announcing the cancellation of the order?

Hon NICOLA WILLIS: Well, that question is littered with assumptions, many of which are completely wrong.

Hon Julie Anne Genter: Could the Minister please tell me which of the statements that were made in the previous question are erroneous assumptions, as she claims?

Hon NICOLA WILLIS: Well, I’ll start with the assumption that there would be more freight going on trucks—that’s a big assumption.

Hon Julie Anne Genter: Does the Minister, therefore, think that the managing director of Mainfreight, our largest freight operator in the country, is wrong or is lying when he says that his company will put at least 5,000 additional truck and trailer movements on the roads as a result of the loss of rail-enabled ferries?

Hon NICOLA WILLIS: Well, I’ve had many conversations with a range of people involved in getting freight across the country, including Don Braid from Mainfreight. What he would reflect to the member is that decisions have not been made by Cabinet on what kind of ferries there will be or what the arrangements for freight would be, so it’s very premature to be making those sorts of assessments.

Hon Shane Jones: Point of order. Sir, I want us to return to a point I made yesterday, Speakers’ Ruling 192. We’ve got further evidence of these wild and indiscriminate claims being attributed without decent evidence that the said person actually made those statements in that context.

SPEAKER: That’s worthwhile—

Hon Julie Anne Genter: Point of order. Speaking to the point of order.

SPEAKER: Oh—a point of order, or are you speaking to the point of order?

Hon Julie Anne Genter: Well, speaking to the point of order. Would I be able to table the quote from Don Braid where he literally says what I just said, in response to the Minister’s accusation that it’s an unfounded misquote?

SPEAKER: You can seek leave for that after I’ve dealt with the point of order. Firstly, members should be aware of those two provisions that were discussed yesterday in relation to questions. Those provisions also apply to answers. Do you now wish to seek leave of the House?

Hon Julie Anne Genter: Point of order. I seek leave of the House to table an article which quotes Don Braid saying that there will be 5,000 additional truck and trailer movements, at least from his company, if there are not rail-enabled ferries.

SPEAKER: And where was the article published?

Hon Julie Anne Genter: On Radio New Zealand.

SPEAKER: I think that’s publicly available.

Hon Julie Anne Genter: Point of order, Mr Speaker. In the Minister’s last few responses, she said no decisions have been taken. However, my question was: had she asked for or received advice on these issues before taking a decision that led to the announcement of the cancellation of the ferries?

SPEAKER: Well, the point is that you’ve asked the question in two different ways. I’d ask the member to think carefully about the way the question is structured, because the way the Minister has answered is appropriate to the way the question was asked. You’re welcome to look at the Hansard to work out what I’m saying. Please, if you’ve got another supplementary, ask it now.

Hon Julie Anne Genter: Does she think Government should review all the evidence about the costs, benefits, and impacts of infrastructure decisions before cancelling or announcing projects?

Hon NICOLA WILLIS: When an infrastructure project changes from being an investment in ships that is expected to cost less than a billion dollars into an investment that is expected to cost at least $3 billion dollars—80 percent of which are costs for port-side infrastructure and not ships—when a project has consistent blowouts, and when a previous Government chooses to ignore those, then, yes. When a new Government is elected, it needs to take action.

Hon Julie Anne Genter: Why has she considered that $3 billion for this iReX project, which had a business case and clear strategic value of retaining a rail connection between the North and South Islands, was unaffordable but, yesterday, has committed to at least $3 billion to add less than 2 kilometres of one-car lane in each direction in central Wellington before an investment case has even begun?

Hon NICOLA WILLIS: Well, if the member for Rongotai wishes to tell the people of Miramar that they don’t deserve a duplicate Mount Victoria tunnel, that they should sit in traffic, that their buses should go slowly, and that they should have inadequate ability to cycle through the tunnel to get to work, then she is welcome to go and campaign on her commitment to get rid of the second tunnel. Good luck.

SPEAKER: I should have ruled that—[Interruption] The House will go into silence. I should have ruled that question out—

Hon Julie Anne Genter: Why?

SPEAKER: Excuse me. Because it doesn’t relate to the primary question—quite simple. I’m not going to have an argument with you, and I’d suggest you don’t have an argument with me.

Question No. 3—Finance

3. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Does she stand by all her statements and actions?

Hon NICOLA WILLIS (Minister of Finance): Yes. In particular, I stand by the statement I made yesterday, which was that “today’s unemployment statistic is yet another reminder of how letting inflation get a grip on the economy was so damaging.” I wonder if the member agrees with that statement.

Hon Barbara Edmonds: Is it a good use of taxpayer funds to support a piece of proposed legislation that will not proceed past the select committee stage but will cost the country more in racial disharmony?

Hon NICOLA WILLIS: Legislation progresses to the House in a number of ways. There are, for example, a number of members’ bills that I would not wish to progress, but it is important for democracy that legislation can come to the House.

SPEAKER: OK, that’s enough of the loud barracking. Rare and reasonable interjection is fair enough, but not that.

Hon Barbara Edmonds: Is it important to democracy to support a piece of proposed legislation that will have a cost to racial disharmony and will not proceed anywhere past the second reading?

Hon NICOLA WILLIS: I am struggling to see what responsibility I have for that question as the Minister of Finance.

Hon Barbara Edmonds: Does she stand by her statement regarding the Interislander ferries from six weeks ago that “We will ensure that we will make an announcement shortly.”; if so, when is shortly?

Hon NICOLA WILLIS: Yes; it’ll be this year.

Hon Barbara Edmonds: Isn’t it the case that regardless of what option is progressed, the Picton Wharf and terminal will be required to be rebuilt?

Hon NICOLA WILLIS: Yes.

Hon Barbara Edmonds: Why did she prematurely decide to cancel the Hyundai ferry contract when what she should have done is sought options for the port-side infrastructure instead?

Hon NICOLA WILLIS: There are a couple of things going on here. The first thing is the member is making some presumptions around the Cook Strait solution that the Government will come to. What she is right to assume is that that would require some port-side infrastructure. There are a couple of relevant facts. One is that the infrastructure at CentrePort and the infrastructure in Picton may require upgrades in the future. There are of course a number of options available to the Government. There are a number of people who use port infrastructure. There are a number of ways in which Cook Strait ferries can be arranged. It is not helpful for me to address hypotheticals such as those that the member is presenting.

Question No. 4—Finance

4. Dr HAMISH CAMPBELL (National—Ilam) to the Minister of Finance: What recent reports has she seen on the Government’s fiscal position?

Hon NICOLA WILLIS (Minister of Finance): Well, I have released today the financial statements of the Government for the first quarter of the financial year. In fact, they were released by Treasury. The statements detail Crown revenue and expenditure for the three months to 30 September and update the operating balance before gains and losses (OBEGAL) and the Crown’s debt position.

Dr Hamish Campbell: What did the financial statements show?

Hon NICOLA WILLIS: The statements show core Crown revenue in the first three months of the year totalled $32.3 billion and core Crown expenses totalled $34.9 billion. Those numbers are broadly in line with Treasury’s last set of forecasts made for the Budget in May. However, the OBEGAL deficit was $700 million larger than forecast, at $4.2 billion for the quarter, and net core Crown debt was also $700 million larger than forecast, at $177.6 billion.

Dr Hamish Campbell: Why was the OBEGAL deficit larger than forecast?

Hon NICOLA WILLIS: The increase is mostly attributable to the performance of Crown entities. The results do show that the Government has slowed the growth of Government expenditure; however, they also show that it is going to take time to deal with the additional costs that have been baked into the system by the previous Government. These include the cost of servicing the additional debt incurred between 2017 and 2023. That extra debt amounts to $118 billion, which for the members’ knowledge is the equivalent of $22,000 for every person in New Zealand. In light of this, I note a statement made on Radio New Zealand today from a member who said, “That’s why we’re calling on the Government strongly to get”—

Hon Kieran McAnulty: Point of order.

SPEAKER: A point of order.

Hon NICOLA WILLIS: —“the economy moving through Government spending.”

Hon Kieran McAnulty: The fact that the Minister continued with that quote after you called me for a point of order makes my point, which is that the first part of that comment was marginal; the second part is clearly in breach. This is a question from her own member. It seems like we have to go through this point with this Minister almost every sitting week. These questions should not be used to make a political point at the Opposition’s expense. Facts and opinion are completely different.

SPEAKER: Well, there are parts of your point of order that I would accept. The last part is not quite so easily acceptable. But the answer is far too long for a Government question. We’ll try another one.

Dr Hamish Campbell: How is the Government going to get the books back in balance?

Hon NICOLA WILLIS: Today’s result does reinforce the need to maintain careful spending, get better value for money, and drive economic growth. Driving growth is a really important part of the equation. If we not only want to get the books back in order but lift living standards, we need to grow the economy faster. Unlike our predecessors, the Government understands that it is business—

SPEAKER: That’s enough.

Hon NICOLA WILLIS: —that creates jobs.

SPEAKER: No, that’s enough. No, look, sorry, that probably does illustrate the point that was being made by Mr McAnulty.

Question No. 5—Child Poverty Reduction

5. RICARDO MENÉNDEZ MARCH (Green) to the Minister for Child Poverty Reduction: What policies of this Government, if any, risk increasing material hardship and child poverty?

Hon LOUISE UPSTON (Minister for Child Poverty Reduction): Our Government is focused on reducing material hardship and lifting children out of poverty. That’s why we made significant investments in Budget ’24, with policies that support families experiencing hardship, including tax relief, FamilyBoost, and increasing the in-work tax credit. Treasury modelling shows the investments in Budget 2024 are estimated to lift around 17,000 children out of poverty, on the after-housing-cost measure, by 2026-27. Our Government is focused on practical solutions, including breaking the cycles of welfare dependency; improving educational outcomes to help keep children out of poverty in the long term. We know this approach works because during the last full four years of the previous National-led Government, from the year 2013 to 2017, the number of children in material hardship fell by 56,200.

Ricardo Menéndez March: Is it true she was advised that changes to school lunches and public transport discounts would have a negative progress towards meeting her child poverty targets?

Hon LOUISE UPSTON: I’m really proud of the Government school lunch programme because, in effect, what we are doing is actually providing school lunch to an additional 10,000 children that we know are struggling—their families are struggling with food. So I’m really proud of the changes that our Government has made possible to alleviate the burden for families.

Ricardo Menéndez March: Is she saying that she has received no advice indicating that several of her Government’s policies would lead to negative progress towards meeting her child poverty targets?

Hon LOUISE UPSTON: What I would say is, as I said in answer previously to that member, Ministers receive advice and then further advice, and the further advice and what the Government actually announced around Ka Ora, Ka Ako will absolutely buffer families who are currently experiencing challenges putting food on the table. In fact, our Government has found a way to make it possible to ensure that 10,000 additional children receive the school lunch programme.

Ricardo Menéndez March: Does she accept that this Government’s actions are contributing to the 2028 child poverty reduction targets becoming increasingly unachievable because of their multiple policies locking more children into poverty?

Hon LOUISE UPSTON: I absolutely disagree with that. Our Government has been clearly focused on dealing with the cost of living crisis, growing the economy, and improving things like school attendance and school achievement, which we know contribute to the long-term impacts and effects on children, which is why we’ve got targets in these areas.

Ricardo Menéndez March: How can she disagree with the previous question when she has been advised that several of her Government’s policies would negatively contribute to meeting her child poverty reduction targets?

Hon LOUISE UPSTON: Because, as I said in my primary answer, I’m proud of Budget 2024, which will lift 17,000 children out of poverty. We saw six years of the previous Government; material hardship went up by 4,100 when it was supposedly the priority.

Question No. 6—Health

6. Hon Dr AYESHA VERRALL (Labour) to the Associate Minister of Health: Does she stand by her statement that “Once my office was fully staffed, operational issues regarding management of information was remedied”; and, if so, how was she unaware until yesterday that she never released an unredacted version of the document to the requestor?

Hon CASEY COSTELLO (Associate Minister of Health): Yes. I reject the member’s assertion that I was unaware an unredacted version had not been released, because she has mischaracterised my personal explanation from yesterday. And I would point out that while the member continues to fixate on old news and trying to find links where there aren’t any, this Government is getting on with actually supporting smokers to quit cigarettes through practical tools and approaches. Contrary to the previous Government’s approach, I am interested in the views of front-line quit-smoking providers—who understand the challenges for long-term addicted smokers—rather than implementing headline-catching, misdirected slogans.

Hon Dr Ayesha Verrall: Does she stand by the decision she made to redact the phrases “nicotine is as harmful as caffeine” and that tobacco control measures amount to “nanny state nonsense”?

Hon CASEY COSTELLO: The Official Information Act provides for withholding information to maintain the effective conduct of public affairs through the free and frank expression of opinions. I have been clear in this House that the document in question refers to statements, policies, and positions of the New Zealand First Party, and when given by a Minister to officials, it is not unreasonable to think that there are free and frank statements within it, as well as public policy positions that are under active consideration.

Hon Dr Ayesha Verrall: Does she understand now that she withheld that information under a section of the Act that only applies to information tendered by officials, and, if so, she should be able to say who wrote it or who gave her that document?

Hon CASEY COSTELLO: I have not received any notice about a complaint being made about information released. The member could speculate about anything, but has no grounds for the assertion. I note that if the member were concerned about redactions, the information was received by her in March this year, and no complaint has been made, as far as I am aware.

Hon Dr Ayesha Verrall: Supplementary.

SPEAKER: One more.

Hon Dr Ayesha Verrall: Why did she claim on Tuesday that her acting contrary to the law was the result of short-term operational issues, when the fact is she continued to inappropriately withhold information while being under investigation by the Ombudsman well into June?

Hon CASEY COSTELLO: Yet again, I have not received a complaint in relation to the document in question. So the member can make the assertion, but, frankly, she is not qualified to make that assessment. There is active consideration, as she’s fully aware, around the Official Information Act management.

Rt Hon Winston Peters: Could the Minister please explain to the original questioner, very slowly, that one requestor already had an unredacted copy, which was leaked to him and, no doubt, her?

Hon CASEY COSTELLO: Yes. This whole issue arose from a leaked document, for which the ministry has offered apologies.

Hon Dr Ayesha Verrall: Does she understand that whether there’s an Ombudsman complaint or not, she needs to be able to explain the decisions she made, according to the Act?

Hon CASEY COSTELLO: Yes. All of the explanations around redaction have been made. There is active consideration around policy positions, which is covered for under the Official Information Act, and that has been fully responded to.

Rt Hon Winston Peters: Can I ask the Minister as to whether or not in this inquiry she expects to get the information from the original questioner that she had already received an unredacted copy, and what is all this nonsense, therefore, about?

Hon CASEY COSTELLO: What I can say is that I apologise to New Zealanders who are trying to give up smoking and are being distracted by an Opposition who have absolutely no ability to understand what important work needs to be undertaken. The previous Government failed to deliver a proper, effective policy position, and we are fixing it.

Hon Dr Ayesha Verrall: So this week are we going to have that sort of theatrics, or are we going to have what we had last week—

SPEAKER: No, no, just ask a question.

Hon Dr Ayesha Verrall: Is she going to continue to blame everyone but herself—officials, the Opposition, the media—or will she fess up and just say how the document ended up in her office?

Hon CASEY COSTELLO: Could I have the question again, because I missed it with the noise?

SPEAKER: I think a fair warning has been given to the House about people making a noise or whatever during a question being asked, so just don’t push it any further. Would Dr Ayesha Verrall please ask that question again.

Hon Dr Ayesha Verrall: Is she going to continue blaming everyone but herself—officials, the Opposition, the media—or will she fess up and just say how the document ended up in her office?

Hon CASEY COSTELLO: This topic has been fully traversed. I have explained repeatedly to this House where the document came from. I’m not sure what the mystery is to the member. She has not made any concerns about the redacted version she’s received.

Rt Hon Winston Peters: Has she or her department, reformed as it now is, been able to work out why on earth you would be trying to seek a redacted copy when you’ve already got an unredacted one?

Hon Kieran McAnulty: There’s no responsibility there.

SPEAKER: Yes, she does.

Hon CASEY COSTELLO: I again would reflect on the fact that this issue is about some advice that was being used to form policy positions. There is a big programme of work going forward, and I hope that when the next legislation comes to the House around vaping controls, we will get support across the House to introduce proper policy positions.

Hon Dr Ayesha Verrall: How has she continued to find herself trapped in the web of her self-contradictions, and how does that reflect on her ability to manage her portfolios in a way that benefits the New Zealand public?

Rt Hon Winston Peters: Point of order. Mr Speaker, you cannot open with a statement like that and expect it to be a satisfactory parliamentary question. I mean, with the greatest respect—and you’re a most experienced person—she should’ve been stopped in her tracks and asked to get some advice about how you conduct yourself in Parliament when it comes to question time.

Hon Kieran McAnulty: Speaking to the point of order—

SPEAKER: OK, you can speak to the point of order.

Hon Kieran McAnulty: Thank you very much, Mr Speaker. The Minister that is being questioned has on at least two occasions had to correct responses to a number of questions that Dr Ayesha Verrall has asked her. They themselves are contradictions, and so it is entirely appropriate, reflecting on the scope of the question and the history leading up to it, to use that phrase in a question.

SPEAKER: There’s nothing wrong with using the phrase about there being contradictions, but there is a problem with the further descriptors that were put around that. Dr Ayesha Verrall might like to ask the question in a way that brings it into order.

Hon Dr Ayesha Verrall: How has she found herself needing to apologise again for her self-contradictions in the House, and how does that reflect on her ability to be a Minister in the New Zealand Government?

Hon CASEY COSTELLO: I reject the assertions in that question. I did not apologise yesterday; I sought leave to make a clarification and correction of what was said.

Question No. 7—Health

7. SUZE REDMAYNE (National—Rangitīkei) to the Minister of Health: What recent announcements has the Government made about improving access to breast cancer screening for New Zealand women?

Hon Dr SHANE RETI (Minister of Health): Last week, the Government announced that free breast-screening is being extended for 70- to 74-year-old women, starting in the Nelson-Marlborough district, ahead of a national roll-out late next year. This is something that has been called for over many years. The aim of breast screening is to find breast cancers early before there are any noticeable signs and symptoms, with early detection improving management options and outcomes. We know that breast cancer is one of the most common cancers in New Zealand with about 3,400 women diagnosed with the disease each year. So, extending screening can save lives. That is why this initiative is a priority for our Government.

Suze Redmayne: What does this age extension mean for New Zealand women?

Hon Dr SHANE RETI: This age extension could potentially save 22 lives per year. That’s not just 22 women but also their families, friends, and loved ones who won’t have to endure the attendant impact of cancer. Data shows that women who participate in the BreastScreen Aotearoa programme are 34 percent less likely to die from breast cancer. Increasing access through this age extension allows us to catch more cancers early, which means better treatment outcomes. We’ll also be looking to improve the outcomes for women such as the more than 60 women who succumbed in this age group in the latest data of 2019.

Suze Redmayne: How will this scheme be deployed across the country?

Hon Dr SHANE RETI: Extending breast screening to an approximately 60,000 additional eligible women per year takes an immense amount of planning, including investment in workforce and the physical infrastructure. I want to thank everyone involved for their efforts to date, and I look forward to seeing this programme rolled out nationwide next year. Early detection will save lives.

Suze Redmayne: What other actions has the Government taken to improve outcomes for New Zealanders with cancer?

Hon Dr SHANE RETI: This extension of breast screening is just one action we’ve taken for better cancer care. We’ve also introduced a target for faster cancer treatment, increased access to CT scanning, expanded access to life-extending cancer medicines through our transformative $604 million investment in Pharmac, and started building a new cancer radiotherapy machine at Whangārei Hospital. We remain committed to improving outcomes for the thousands of Kiwis and their families affected by cancer each year.

Question No. 6 to Minister

Hon Dr AYESHA VERRALL (Labour): Point of order. I didn’t want to interrupt the important matters discussed in the last question, but I have a point of order relating to question No. 6. In the exchange with the last supplementary, the Minister stated that she did not apologise yesterday, but, in fact, I have here the Hansard of her statement, and it includes, “and I apologise for any confusion to the House.”

SPEAKER: OK, thank you for that. Question No. 8.

Question No. 8—Housing

8. Hon KIERAN McANULTY (Labour) to the Associate Minister of Housing: Does he stand by his statement that “I’m not worried that some are now homeless” regarding people who have left emergency housing; if so, why?

Hon TAMA POTAKA (Associate Minister of Housing): This was a similar question asked by the Hon Willie Jackson in August. As I said then and as I will now, the member mischaracterised the context in which the comments were made around the Government’s priority one fast track to get whānau with tamariki who had been staying longer than 12 weeks in emergency housing out of that moral, financial, cultural, and social catastrophe. The question asked: am I not worried that some are now homeless? My answer is that none of the 726 households and 1,452 tamariki living in emergency housing and transitioned through priority one by 30 September 2024 into social housing were homeless when placed. Every single one of those 1,452 children were placed into warm, dry homes.

Hon Kieran McAnulty: When he says he is worried about emergency housing numbers but isn’t worried that “some are now homeless”, isn’t he just saying that all he’s really worried about is reducing costs?

Hon TAMA POTAKA: This Government has a target—target No. 8—to reduce the number of households living in emergency housing by 75 percent by 2030. We are up to 62 percent in nine months. The member may use chicanery and innuendo to try and trap me into an answer, but I’ll repeat that, in this House, we are absolutely dedicated to ensuring that those with genuine need for short-term stays in temporary accommodation in most urban and city centres in New Zealand can access that, but we have been absolutely committed to ensuring that many thousands of tamariki living in that catastrophe move into warm, dry homes.

Hon Kieran McAnulty: How can he credibly claim this policy is a success when his official advice was that these changes to entry criteria for emergency housing would increase homelessness, and when asked why 20 percent of people that have left emergency housing are now homeless, his response was “I’m not worried.”?

Hon TAMA POTAKA: Again, the member uses fuzzy maths to describe the actual situation. The actual situation is when we arrived, we knew where around 50 percent of those leaving and exiting emergency housing were going to. Now, through the dedicated diligence and professionalism of our officials and, of course, the Ministers who are involved with housing, we know where nearly 80 percent of people are going to when they exit. The other 20 percent we may not know, because it’s not required of people leaving emergency housing to actually tell officials where they’re going to.

Hon Kieran McAnulty: How many people have been declined emergency housing since he changed the entry criteria?

Hon TAMA POTAKA: That is a written question that the member can send to my office, but what I can say is that by September, over 2,000 tamariki had left emergency housing in the nine months to date.

Hon Nicola Willis: Can the Minister confirm that in recent years, thousands of New Zealand children have been brought up in motel rooms, often with gang members living next door, in circumstances that were by nature transitory, and today thousands fewer children are living in those circumstances?

SPEAKER: I’ll allow the question but it needs to be succinct.

Hon TAMA POTAKA: I can confirm that. I can also confirm that when we arrived, we were spending around a million dollars a day on emergency housing, and now it’s less than half a million.

Hon Kieran McAnulty: Supplementary.

SPEAKER: Yep—when the House gathers itself.

Hon Kieran McAnulty: How many people have been moved into social or community housing, paid for and built by this Government?

Hon TAMA POTAKA: Again, I can reiterate and respond to the member, who asked a very similar question last week, that social housing has been built by a number of Governments over the years, and those people that have moved into those social houses built by a number of Governments over many years are very, very comfortable. What I can also say is this: there continues to be availability for emergency housing for those with genuine need for a short-term stay in temporary accommodation in most urban centres in this country.

Hon Kieran McAnulty: Point of order. Thank you, Mr Speaker. The Minister responded to a pretty straight question with a statement that referred to past Governments; he did not respond to the straight question about this Government. He should have another go.

SPEAKER: Well, thank you for giving me the direction as to how I should proceed on this, but I think it’s not unreasonable that he makes the point that since 1938, a number of Governments have built social housing for New Zealand.

Hon Nicola Willis: In light of the implication of the questions from the member opposite, is it the Minister’s view that it would be a sign of success if there were more New Zealanders living in emergency motel rooms?

Hon TAMA POTAKA: It will not be a sign of success, and that’s why I’m very proud, along with my ministerial and caucus colleagues, that we have seen thousands of people leave emergency housing in the last nine months.

Hon Kieran McAnulty: Isn’t it actually the case that any people that are now housed are in houses funded and built not by this Government but by the previous Labour Government and that—[Interruption]

SPEAKER: The question is going to be started again because we listen in silence to people’s questions.

Hon Kieran McAnulty: Thank you, sir. Isn’t it actually the case that any people that are now housed are housed in homes built and paid for by the previous Labour Government, and the decrease in emergency housing numbers is—

Rt Hon Winston Peters: Point of order. Mr Speaker, a question that begins “Isn’t it actually the case” is not a question; it’s a statement. And the members are asked here to come to Parliament to ask questions properly, not to make a statement and ask for somebody to confirm it or otherwise. That is not how questions are framed here. And they should know it after all this time they’ve been here.

SPEAKER: Yes, I do recall the Rt Hon Jonathan Hunt sitting in this Chair, making that very point with a Minister who was part of a coalition Government at the time. I think where it ended up was that it depends on the context of where it goes from there. So the Minister’s point is essentially correct, but the judgment is how the question ends up, and that’s why we need to listen carefully to the whole question. But if the member might like to think about the way he asked that question, it would be helpful.

Hon Kieran McAnulty: I’m all for the order of the House, sir, so I’ll have another crack.

SPEAKER: There’s no need for you to make those sorts of, you know, self-aggrandising comments.

Hon Kieran McAnulty: I apologise for taking your lead, sir.

SPEAKER: Yes, are you looking for an early flight or what’s the story?

Hon Kieran McAnulty: No, I’m not. Is it not the case that any people that are now homed from emergency housing are in homes funded and built by the previous Labour Government, and the decrease in emergency housing numbers is because he in his changing criteria is stopping people getting into emergency housing in the first place?

Hon TAMA POTAKA: It is the case that the taxpayers of Aotearoa New Zealand have paid for social housing that has been built by a number of Governments over time. And, just to add this, in the event that the member has ever been involved in building houses before, I think it would be pretty incredible for you to buy the land, plan the house, get the funding support, and go through all the regulatory molasses to build a house within nine months.

Question No. 9—Police

9. TIM VAN DE MOLEN (National—Waikato) to the Minister of Police: What recent reports has he seen on the policing of gangs?

Hon MARK MITCHELL (Minister of Police): Yesterday, police arrested three associates of the Mongols gang in Christchurch, recovering stolen property from the gang’s headquarters. This comes in advance of an event they were organising in Canterbury this week. Police have prepared for this event and have been working to prevent it disrupting members of the public going about their lawful business.

Tim van de Molen: What steps is Police taking to disrupt gang events?

Hon MARK MITCHELL: Police will be working to ensure the maintenance of law during the Mongols’ event this week. They are also working closely with Immigration New Zealand to prevent international members of the gang entering New Zealand to celebrate and glorify their criminal activity.

Tim van de Molen: Why is the Government working to prevent Mongols gang members entering New Zealand?

Hon MARK MITCHELL: By placing border alerts and suspending visa-waiver status on known Mongols members, the Government is sending a clear message that they’re not welcome in New Zealand for a celebration of their criminal behaviour. This Government does not tolerate gangs and the misery that they peddle, and refuses to allow others to come into our country and glorify that misery.

Tim van de Molen: What does he say to recent rhetoric around police operations cracking down on gangs?

Hon MARK MITCHELL: Police have done an outstanding job on a 10-month operation across the North Island, and in particular targeting the Mongrel Mob Barbarians for drug dealing, possession of illegal weapons, and planning hit jobs. We are lucky in this country to have a world-class police service deeply connected to the communities that they serve and who take their responsibility of keeping Kiwis safe seriously.

Question No. 10—Justice

10. LAURA McCLURE (ACT) to the Associate Minister of Justice: What recent reports, if any, has she seen in relation to anti-money laundering and countering terrorism financing regulations?

Hon NICOLE McKEE (Associate Minister of Justice): Business New Zealand recently released a report: Reducing compliance burden on New Zealand small businesses. The report highlights that the current anti - money-laundering law places an unnecessary burden on small businesses. It points to repetitive information requests, too many procedural steps, inconsistent requirements, excessive costs, and a lack of coordination in the system as serious issues weighing heavily on small business productivity.

Laura McClure: What work is currently under way to address the issues raised in that report?

Hon NICOLE McKEE: The first phase of my anti - money-laundering reforms has taken initial steps to address some of the concerns Business New Zealand has raised. This work will consolidate the three current regulators: the Reserve Bank of New Zealand, the Financial Markets Authority, and the Department of Internal Affairs into a single regulatory body under the Department of Internal Affairs. This consolidation will cut red tape, streamline processes, and reduce the high compliance costs that the report identifies as obstacles for small businesses.

Laura McClure: How does the Minister’s three-phase work programme address specific recommendations from the Business New Zealand report on anti - money-laundering?

Hon NICOLE McKEE: My three-phase work programme directly addresses the recommendations to simplify and streamline anti - money-laundering (AML) processes. Through the Statutes Amendment Bill, which is currently before the House, I’m introducing immediate relief that targets the report’s call for straightforward compliance. Moving to a single AML supervisor will also ensure that clear, consistent guidelines are available for small businesses, allowing them to meet compliance standards more efficiently without having to jump through the unnecessary regulatory hoops.

Laura McClure: Will the Minister focus on simplifying customer due diligence to address the report’s specific recommendations?

Hon NICOLE McKEE: Yes. Businesses have highlighted excessive customer due diligence as a primary challenge for small business. I’m addressing this directly through the adoption of a risk-based approach in the first and third phases of my reform programme. By streamlining these due diligence requirements, I am to reduce compliance costs and improve productivity for small businesses, allowing them to operate more freely and contribute to New Zealand’s economic growth.

Question No. 11—Māori Crown Relations: Te Arawhiti

11. Hon PEENI HENARE (Labour) to the Minister for Māori Crown Relations: Te Arawhiti: Does he stand by all the Government’s statements and actions?

Hon TAMA POTAKA (Minister for Māori Crown Relations: Te Arawhiti): Yes, anā, particularly the resolution between three Kurahaupō iwi in the top of the South Island, Te Tau Ihu o Te Waka-a-Māui, who have received $25 million in alternative redress after the Woodbourne airport could not be transferred to them because of PFAs, or chemical poisoning, under the land.

Hon Peeni Henare: Does he stand by the Government’s action to introduce the Treaty principles bill earlier than expected, and if so, what does he say to iwi leaders who have described this as “dishonourable and reckless”, and if not, why not?

Hon TAMA POTAKA: I stand by the Government’s and Cabinet’s decision to introduce the Treaty principles bill, and I recognise and acknowledge the genuine concerns expressed by iwi leaders.

Hon Peeni Henare: Is Rahui Papa correct when he said, “Get rid of the Māori-bashing, racist bills, policies, and procedures of this Government”; if not, why not?

Hon TAMA POTAKA: Kei a Rahui Papa tōna ake piki amokura. [Rahui Papa has his own principles.]

Hon Peeni Henare: Is the Māori-Crown relationship better or worse under his leadership?

Hon TAMA POTAKA: I believe that many, many Māori communities are very enthusiastic about the number of Māori tamariki who have left emergency housing. [Interruption]

SPEAKER: I just ask the House to be quiet. That was ridiculous—the amount of barracking there. The Minister can start his answer again and people will be very restrained.

Hon TAMA POTAKA: My view is that the Māori-Crown relationship has been supported by the number of tamariki Māori who have left emergency housing, by the additional funding that has been given to Te Matatini, and by the absolute focus of the Minister of Education towards structured literacy and structured maths, structured education amongst many kura and schools throughout this country. [Interruption]

SPEAKER: We’re going to hear the answer again, and the House is going to be silent for the whole of the answer.

Hon TAMA POTAKA: My view is that the Māori-Crown relationship has been strengthened by the number of tamariki Māori—[Interruption]

SPEAKER: Sorry, just a moment. If there are noises coming from the gallery, the gallery will be cleared. [Interruption] We’re just going to hear the answer in silence from both the House and the gallery.

Hon TAMA POTAKA: There are a number of matters that I believe have strengthened the Māori-Crown relationship. For example, the recent resolution between three Kurahaupō iwi and the Crown in relation to the Woodbourne airport redress. For example, the additional $50 million that has been given to Te Matatini to further our commitment to culture and language. For example, the structured literacy and structured maths efforts that the Minister of Education, Minister Stanford, has engendered through the education system—[Interruption]

SPEAKER: What was the instruction to the House?

Debbie Ngarewa-Packer: For the gallery to be quiet.

SPEAKER: It was not the gallery at all.

Hon Simeon Brown: Point of order—

SPEAKER: The member may finish his answer first.

Hon TAMA POTAKA: There are a number of matters that have strengthened the Māori-Crown relationship.

Hon Simeon Brown: Point of order, Mr Speaker. You were very clear in your instructions to the House and the gallery in relation to that question, and there were a number of offenders on the other side who continued to speak and interject, and there seems to be no consequences.

SPEAKER: That’s a very sharp observation. There were three people who were speaking during that time. I know who those people are, and that obviously will have some consequence down the track.

Hon Peeni Henare: Why has he prioritised cutting jobs at Te Arawhiti, whose primary role is to help make the Crown a better Treaty partner, when iwi leaders are speaking out against his Government’s anti-Māori agenda?

Hon TAMA POTAKA: As we are all aware, this Government is very focused on delivering better public services. Any matters in relation to jobs and employment are operational matters and will be left at the appropriate operational levels.

Hon Peeni Henare: Will he commit to fronting up on the forecourt of Parliament to listen to the tens of thousands of New Zealanders who will march against his Government’s anti-Māori agenda?

Hon TAMA POTAKA: The hīkoi in question is very important for many, many people. As the Minister for Māori Crown Relations, I have a number of responsibilities that I have to attend to here and in many other places throughout the country, including, for example, resolving some of the issues that were left extant by the previous Government. However, the first step is to get to the weekend.

Question No. 12—Conservation

12. JOSEPH MOONEY (National—Southland) to the Minister of Conservation: What recent announcements has he made about conservation matters?

Hon TAMA POTAKA (Minister of Conservation): Thank you, Mr Speaker. I recently had the pleasure of celebrating the opening of New Zealand’s 11th Great Walk, the Tuatapere Hump Ridge Track and revealing the exemplary waharoa carved by Steve Solomon. The Hump Ridge Track is steeped in cultural and historical significance, and its Great Walk status will make it more of a draw card for both Aotearoa New Zealanders and international manuhiri. This is a great example of Te Papa Atawhai collaborating with iwi, the local Hump Ridge trust, and local government to bring a conservation project to life and bring benefits to local businesses and the economy.

Joseph Mooney: What priorities does the Minister have for conservation?

Hon TAMA POTAKA: I’ve established four clear priorities for conservation: targeting investment into high-value conservation domains; generating revenue and recalibrating costs so we can ensure to focus on delivering better public services with conservation; strengthening relationship with iwi, hapū, and other communities to shared goals; and reducing red and green tape to make it easier for businesses and others to undertake mahi on public conservation lands. We’re getting things done for conservation.

Suze Redmayne: How is the Department of Conservation partnering with iwi to enrich visitor experiences?

Hon TAMA POTAKA: Last week, I had the pleasure of attending the blessing for the outstanding new pouwhenua of Te Ririō, the tupuna of Ngāti Hikairo. I then attended Ohakune, in the great rohe of Ruapehu and Rangitīkei, to support Ngāti Rangi, who led the opening of Te Ara Mangawhero, a new bike and walk track that links in with the New Zealand Cycle Trail aspirations, curated by the Rt Hon John Key. We also have seen the work with the people of Ngāti Hei at Mautohe Cathedral Cove, in the great electorate of Coromandel, to ensure the track is reinstated for the summer.

Joseph Mooney: What challenges are you seeing in conservation?

Hon TAMA POTAKA: A number of challenges: weather, Cyclone Gabrielle and the tens of millions of dollars of damage done to the various assets on the conservation portfolio; pandemics and epidemics, like the avian flu, not here yet but not far away, currently in South America and Antarctica; and of course, generating revenue for the conservation estate. It’s a work-on, but we’ve started with increasing the international visitor levy and are starting to consider other matters.

SPEAKER: I declare the House in committee for the consideration of the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, the Contracts of Insurance Bill, and the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill.

HOUSE IN COMMITTEE

HOUSE IN COMMITTEE

CHAIRPERSON (Barbara Kuriger): Members, the House is in committee on the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, the Contracts of Insurance Bill, and the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill.

Bills

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

In Committee

Part 1 Amendments to Climate Change Response Act 2002 to remove agricultural obligations

CHAIRPERSON (Barbara Kuriger): We begin with the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill. We come first to Part 1. This is the debate on clauses 3 to 34, “Amendments to Climate Change Response Act 2002 to remove agricultural obligations” and Schedules 1 and 2. The question is that Part 1 stand part.

Hon SIMON WATTS (Minister of Climate Change): Thank you very much, Madam Chair, and it is a pleasure to be in the committee of the whole House for this piece of legislation. This is a relatively simplistic piece of legislation. It is a repeal of certain provisions in the Climate Change Response Act 2002, and it has two parts, and I will provide a context in terms of the importance of that.

Firstly, I want to acknowledge that New Zealand’s agricultural sector is one of the most carbon-efficient sectors in the world and is the backbone of the New Zealand economy. This legislation is in regards to ensuring that the emissions related to agriculture do not form part of the emissions trading scheme. It is an acknowledgment that that is not the mechanism which is appropriate to deal with those emissions. However, under this Government, we have signalled our intent that by 2030 we will be putting in place a pricing system in order to price agricultural emissions. I will note that those future aspects in terms of what we do are not part of the scope of the bill, but I am providing that context in the aspects in terms of what will happen once this process is complete and the repeal is complete.

In regards to the overall considerations in regards to emissions in the agricultural sector, it currently reflects around 53 percent of New Zealand’s total emissions. New Zealand has one of the highest proportions of methane from livestock emissions of any country in the world, but our farmers and the primary sector are very focused in terms of the actions required in order to reduce those emissions, and are taking significant steps and investment, particularly through AgriZero, in order to achieve those outcomes. I look forward to questions that will follow.

Hon JO LUXTON (Labour): Thank you, Madam Chair, and thank you to the Minister for his explanation on this piece of legislation. The Minister has mentioned that it’s about removing the backstop whereby the agricultural sector will be moved into the emissions trading scheme (ETS). We understand that and we understand that there is ongoing work which I will raise questions about a little bit later on. When we get out and amongst our farmers and the agricultural sector, the majority of them will say, “We just want certainty. We want to know where we are heading. Certainty is really important for us, and not this to-ing and fro-ing necessarily when we have changes of Government.” My question to the Minister here—

Hon Mark Patterson: Support the bill. That’s what we’re doing—giving them certainty, Jo.

Hon JO LUXTON: Mr Patterson, you might like to listen and perhaps you could take a call. My question to the Minister here is: given that our farmers want certainty, given that there is no plan at all, aside from investing money into research and development—which is great, which is wonderful, and I will ask questions about that in a little while—how can just simply removing agriculture from the ETS with no other plan in place and just simply saying, “We will look to price emissions no later than 2030.”, give farmers certainty? How on earth does that give farmers certainty about what’s next? The Minister mentioned that farmers are very efficient. We know that; we acknowledge that—absolutely we do—and they are doing a lot of work to reduce their emissions, but they ask for certainty. I genuinely—and I’m not being political about this either—want to know how this provides farmers with any certainty or any plan that they can look toward going forward before 2030?

Hon SIMON WATTS (Minister of Climate Change): Thank you very much to the member for her contribution. As I noted in my opening comments, the scope of this bill is really answering one simple question: should agriculture enter the emissions trading scheme (ETS) on 1 January of next year or not? It is a view on this side of the House that it should not.

Interestingly, it was the intention of the previous Government to eventually remove agriculture from the ETS and establish pricing through He Waka Eke Noa. That programme was dead on arrival as we came in as Government, when we took office a year ago. There was no pathway forward in regards to that work. We all agree that pricing for agriculture is not suitable within the ETS. There is no point dangling around the fact, and the sector accepts that and the ETS is not the right tool to do that job. The point of this bill is to make an agreement to remove it from the ETS, and that is the scope of the bill, and that’s what I’m happy to answer questions on.

Hon JO LUXTON (Labour): Thank you, Madam Chair. Thank you to the Minister for his response. However, in the Minister’s opening statement he did raise a number of other subjects and issues with regard to this piece of legislation as well as the specific points of this legislation. I do wonder, then, whether that might open up the opportunity to further speak to some of the issues that the Minister did raise.

Yes, the Minister was right—this was the backstop should He Waka Eke Noa not go forward. We realise it has not gone forward, but at least it was something—there was a plan in place. There is no plan in place. There is money being put into research and development—I get that—to reduce methane emissions. The Minister has said—[Interruption] Take a call, Mr Hoggard. The Minister has said that they will look to price emissions no later than 2030. They’re simply crossing their fingers and hoping that there will be enough research and development in place in regard to methane reduction without an actual concrete plan. If this doesn’t come to fruition, how on earth are farmers going to have the certainty? How on earth is this country going to potentially pay a $24 billion bill if we do not meet our requirements?

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. Following on from my colleague’s comments and this discussion about the backstop, I don’t think anybody here disagrees that the emissions trading scheme (ETS) was a backstop. We note what the Minister was saying—that there was a lot of work to go into He Waka Eke Noa that isn’t being continued—but the point is that everybody knows that this is a difficult subject and that a lot of work is required. There was this backstop date of 2025 to incentivise that discussion. Now we’ve had a change of Government and changes of priorities, but we’re hearing from the Minister that he still anticipates a pricing scheme by 2030. This, then, goes back to the backstop point. Why, then, remove the ETS backstop at 2025 and not move that to 2030 if the Minister is so intent on doing some sort of pricing of methane by 2030? That’s my first question.

My second question is: will the Minister confirm what I just heard him say in his opening address, which was that over 50 percent of New Zealand’s emissions are agricultural? I ask this because during the second reading debate earlier this week, Government support members, at least, seemed to be questioning that. I said in my second reading speech that I thought that this was an agreeable thing to say—that in New Zealand, at least half of our emissions are coming from agriculture. I didn’t think it was controversial, but at the time there was a lot of noise in the House. I’d like the Minister to confirm that as well.

My third question in this contribution again relates to what the Minister said in his opening remarks. It’s about what evidence he’s relying on for this statement that we hear often that New Zealand is, I think the Minister said, one of the most efficient countries in the world in terms of greenhouse gas emissions when producing primary produce. I’ve added in some words there, but I think that’s what the Minister was referring to. We also hear in this House a lot that New Zealand is the most efficient, so I’m interested in what the Minister is basing his statement on—whether his words were carefully selected for being “one of the most” as opposed to “the number one most efficient”. If he could comment on that, it would be useful.

Why it’s relevant to this discussion is that the backstop has been removed. We’re now waiting. We’re pushing everything out to 2030 and that’s just Government policy. There’s no backstop being provided any more, and the rationale for removing that backstop is that we’re already the best or among the best in the world. That is the justification for not having a backstop. The evidence that’s been relied on, that statement, is very important.

STEVE ABEL (Green): Thank you, Madam Chair. I appreciate the opportunity to talk to the Minister regarding this legislation. Further to my colleague’s comments about the removal of the backstop—and I appreciate the Minister acknowledging the substantial problem that emissions from livestock are in our country; a major challenge.

Not only is the removal of the backstop a problem for there being no incentive whatsoever for the industry to actually reduce its emissions but there is also the removal of even the reporting requirements. If, as the Minister acknowledges, greenhouse gas emissions from livestock and agriculture are such a substantive part of our emissions profile, how are we even to understand what the scale of the problem is if reporting requirements are removed as well? When gains are made, how are we to understand where those gains are being made?

I have an amendment to deal with this, which I invite the Minister to support. It amends Part 1 and it retains the reporting requirement for farmers to report on their emissions. It extends the time frame to implement an emissions measurement scheme by six months, meaning that this would be required by 1 July 2025. This will enable a better understanding of the emissions profile of the agricultural sector and will prepare farmers for the claimed certainty that there will be emissions pricing, and for reducing their emissions. This amendment retains the bulk of the legislative regime to enable pricing agricultural emissions at a later date.

I have a second amendment that I invite the Minister to support also. This legislation also removes the requirement of agricultural processes to report. That is another extraordinary step, because those processes have been reporting their emissions since 2011. One of the most vital things we need in understanding any environmental problem is solid data on the pollution, on the emissions, on what is the nature of the problem, and if you take away the requirement for processes or farmers to report, you basically remove the ability of us to understand the scale of the problem and, likewise, the ability to understand the scale of success when we do manage to reduce emissions.

My second amendment to Part 1 retains the reporting requirement for agricultural processes to report on their emissions as they have done since 2011. This will enable a better understanding of the emissions profile of the agriculture sector and the processes. It also retains the bulk of the legislative framework, including references to definitions related to agricultural activity to enable emissions pricing for agriculture at a later date. Surely the Minister—and this is a question I put to you, Minister—wishes to retain the ability of us to understand the scale of the emissions problem. I’d love to hear your response to that. Thank you.

Hon SIMON WATTS (Minister of Climate Change): Thank you very much to members for those questions. I want to reinforce the aspects that I noted in my opening statement that it is the Government’s position that the pricing of agriculture is not suitable within the emissions trading scheme (ETS), and hence the purpose of this legislation is to remove agriculture from the emissions trading scheme. There is a consensus position in regards to industry feedback around that. It was the intent of the prior Government to remove agriculture from the ETS, and this bill is simply doing that. It is not doing anything else in regards to that primary purpose.

In regards to the points made by the member in regards to amendments on visibility and reporting, this bill does not affect the ability to account for agricultural emissions. The processor-level reporting obligations that the bill removes are entirely separate from the national accounting of agricultural emissions. The New Zealand accounting standards around national emissions uses data sets from a wide range of sources, including Statistics New Zealand and other aspects—Beef + Lamb New Zealand, DairyNZ, etc. It does not use ETS data, which was last updated in 2012. We will not be supporting those amendments, because they are not going to be serving any purpose.

The purpose here is to stop the pricing of agriculture in 55 days from today. That is the reality. It is a position that, as I said, is one of consensus support, and I am surprised by those that aren’t supporting it.

CHAIRPERSON (Barbara Kuriger): The Hon Damien O’Connor, and apologies—my peripheral vision didn’t go back to your previous seat.

Hon DAMIEN O’CONNOR (Labour): That’s all right. I’m often invisible around here, Madam Chair!

I have a few key questions for the Minister. At the start of the explanatory note of the bill, it says, “amends the Climate Change Response Act … to remove agriculture activities from the New Zealand Emissions Trading Scheme”, so I’d ask the Minister: did he consider removing the energy component of agricultural activities?

That is, in processing there’s a huge amount of coal; in agriculture, there’s a lot of diesel. Did the Minister or did the Government consider moving that? If it is hell-bent on removing agriculture from the emissions trading scheme (ETS), it’s only part of it, so the bill is actually quite misleading. It doesn’t take agricultural activities at all out of the ETS. It takes or removes what was a backstop obligation for biogenic methane and nitrous oxide. The question of the Minister—and he can answer it—is: how is nitrous oxide going to be considered, given it plays a part in different stages of the agricultural system?

The second one was: did the Minister consider taking out the transport component of agriculture—tractors, a lot of trucks; those travelling around the country will see 53-tonne trucks carting milk backwards and forwards. Did the Government or did the Minister consider taking that out? If the bill says it’s to take agricultural activity from the emissions trading scheme, it’s quite misleading. Perhaps the Minister can say how he considered that.

The other things that I’d like the Minister to answer is that he says it leaves the ability to calculate your emissions, but, of course, it takes away the obligation. It’s kind of a market approach to it, so where does that leave Fonterra and its proposal to “know your numbers”? And should farmers choose not to do that, how will that be followed through? The Minister has probably considered this—maybe he has, maybe he hasn’t—so maybe he can answer that question. I’ll leave it to the Minister.

MARK CAMERON (ACT): Thank you, Madam Chair. Thank you very much, Minister, for joining us this afternoon. I’ve got a quick question, and I know my colleague will as well. Minister, could you enlighten the committee, in your understanding of the primary industries, that the animal ruminant sector has been falling since about 2010, so the overall contribution of methane by virtue of that is diminishing, notwithstanding that we are talking about a short-lived gas that decays back to carbon dioxide.

In terms of the overall contribution of the primary sector, what do you think would have been the counterfactual, Minister? Should farmers have been forced into what were otherwise He Waka Eke Noa, and that’s obviously been now disbanded? And do you want to speak to, kind sir, the 20 percent of wool growers that were potentially going to go out of business should that have been adopted? Going forward, is it your perception that we put pragmatism back in the room to help rural New Zealand adopt the kind of practices, and also allow them to adopt technology, to nullify this problem?

Hon MARK PATTERSON (Associate Minister of Agriculture): I heard a threat to the wool industry there, so I thought I’d better get up and seek some clarity from the Minister. Look, just in follow up to some of the questions from my colleague Mark Cameron, there does seem to be some confusion here I’d like you to illuminate.

As I understand it, what we’re trying to do here is just take the backstop mechanism out that was a carbon dioxide equivalent, which is something that was wholly dismissed; it’s a world-leading approach to have a split gas approach. This mechanism here is carbon dioxide equivalents, which I think everyone—and I think you did allude to that earlier—across the industry and, actually, across the political spectrum has decided is a wholly inappropriate measure by which to deal with the challenge of biogenic methane.

You may not be in a position to fully confirm this yet, but for those that are watching or listening today that may be alarmed at the impact of agricultural emissions on the climate, is the Minister in a position to maybe allay some of those fears by outlining some of the figures that he’s seeing in terms of this? As I understand it, we are in a position, potentially, with New Zealand agriculture, that we are well on track to meet obligations that we have made in this House and internationally. We are actually catastrophising about a problem that actually isn’t existing in real time.

Hon DAVID PARKER (Labour): Thank you, Madam Chair, and I thank the Minister for his answers. Can I ask him a number of questions. Can I first get the Minister to agree that the large amount of risk for the rural industries in respect of methane disappeared the moment the last Government—with New Zealand First at the time, actually—introduced the split gas target, so that the amount of emission reduction expected from short-lived gases like biogenic methane was a lot lower than the reduction in emissions required from carbon dioxide? From my perspective, that was the first big limitation of risk for the rural sector, which was appropriate.

Secondly, in respect of that split gas target, there is still a desire to reduce emissions from methane, and that therefore the—I can’t understand the logic as to why the rest of the economy should face a price-based measure to reward emission reductions when the agricultural sector doesn’t. I don’t understand the economics of that because it seems to me the economic theory that applies to carbon dioxide also applies to nitrous oxide or methane in respect of those issues.

The next point I would ask the Minister to comment upon is the report back on the bill. The general policy statement says that processes may pass the same cost to all farmers regardless of their emissions efficiency. The concern that seemed to be expressed in this explanatory note was that there wouldn’t be a reward for the farmer that goes further. I agree that that is a valid concern. I asked the Minister whether he considered one of the options on the table, which was to effectively run a scheme where the farmers who were ahead of the curve got rewarded by emission reductions that were taken out of the general pool, which would have remedied that particular problem and left an effective price signal rather than a cross-subsidy from the rest of the economy. Volunteers effectively would have been rewarded, and that would have been taken out of the pool in a way that would have encouraged the requisite behaviour.

Can I also ask the Minister to confirm that the backstop included 95 percent free allocation of emissions based on 1990 emissions. There was no great financial risk to those sectors that I’ve heard some other members in this House say the rural industry was exposed to, because there was 95 percent free allocation. There was only exposure for risk for the last 5 percent of emissions.

Can I lastly ask the Minister whether consideration was given to the suggestion by the Parliamentary Commissioner for the Environment, the Rt Hon Simon Upton, who suggested that the way through here was to have a separate pricing scheme for methane with offsets from carbon dioxide sequestration and pine forests being reserved for the rural sector rather than being used by, for example, the energy sector or the industrial sector to offset their emissions. From his point of view, there is a fallacy in taking a 30-year offset in respect of a carbon dioxide emission that lasts 1,000 years, whereas there is good sense in enabling farmers to have the benefit of a forestry offset to offset methane emissions if they couldn’t reduce them otherwise.

Hon SIMON WATTS (Minister of Climate Change): Well, thank you, Madam Chair. I’ll work my way through questions from members. I’ll start by firstly again reinforcing, as I noted in my opening statement, that the Government, this Government, has repeatedly stated that it has commitments in regards to pricing of agriculture. The task now is to get that in place by 2030 and to put the emissions trading scheme (ETS) aspect to bed. It is acknowledged by all that the ETS is not the suitable structure which agricultural emissions pricing should fall part of. The simple purpose of this very narrow bill is to ensure that that is not undertaken. That is the scope in which we are covering.

The point in regards to the split gas approach in terms of a principle is one that is noted. We are committed in regards to a fair and sustainable pricing, but outside of the ETS. It would be simply inefficient of any Government to look to put agricultural into the ETS and then to take it out—that is ridiculous. I’m not sure why members of the Opposition would think that that would be a sensible thing to do. Well, I probably do know, but I’m not going to get into that. The reality is that is what we’re doing here in regards to that.

In regards to some of the comments in regards to emissions, well, let’s be clear: diesel going into a ute or petrol going into a farm bike is covered under the ETS and will continue to be so. That aspect in regards to on-farm considerations is not changing at all because we know when you get fuel from a service station, that is covered under the ETS.

As to the point around nitrous oxide, about 70 percent of that comes from livestock particularly, and that is a key driver in terms of that.

As to the question around Fonterra, they supported this legislation at select committee. They support farm-level systems.

In regards to the methane science point and the target review, we have work under way around that. We’ll look to update that view of the science in due course. Methane targets can only be met by gross reductions in methane. The second emissions reduction plan process that we have under way will take into account those considerations.

FRANCISCO HERNANDEZ (Green): Thank you, Madam Chair, and thank you for answering our questions, Minister. I just wanted to interrogate a little bit into the answers that you gave earlier. You said one of the sorts of policy rationales for, I guess, removing agriculture at a processor level from the emissions trading scheme (ETS) is that there’s an intent to have on-farm emissions pricing by 2030. I think it’s worth looking at the context around this. I mean, we’ve been trying to price agricultural emissions since I think the early 2000s, and you’re absolutely correct that nobody in this House sees putting agriculture at a processor level in the emissions trading scheme as the most optimal solution; that’s why it’s called a backstop. It’s sort of a means of last resort. I guess my question is: if there’s no on-farm emissions pricing by 2030, then what is the backstop? If it’s not done by then, what will we actually do to price emissions in the agricultural sector?

The regulatory impact statement made some particularly good points around the issue of the inter-sectoral equity, in that there are 600,000 enterprises in New Zealand, roughly. They all face—well, other than the agricultural-based ones—some sort of price for their polluting activity in regards to our climate targets, at least their greenhouse gas emissions. That’s why, in the inter-sectoral analysis of the cost-benefit analysis section—the multi-criteria, rather—the Minister’s preferred option was ranked with two minus points, because they’ve correctly identified that this does actually create some inter-sectoral inequity in the sense that the logic here is that the New Zealand agriculture industry is the most efficient in the world. It’s often repeated, and in some measurements and in some studies, it’s shown to be true.

Why wouldn’t that logic apply for other enterprises in the non-farming world? For example, the video game industry is, I would assume, quite efficient in terms of producing economic activity relative to the amount of carbon it uses, because the New Zealand energy system is mostly renewable. If the kind of logic for exempting agriculture from paying for emissions is because it’s efficient, should we not apply that logic wider to the rest of the economy? That is correctly what the inter-sectoral analysis is revealing here, because it’s actually not very fair.

The other repeated claim is that it’s a short-lived gas. I mean, absolutely, it is a short-lived gas. There is a biochemical difference, but there’s also another sector that has a short-lived gas, methane, which is in the emissions trading scheme, and that’s the waste sector. Now, the waste sector still has to reduce their methane; it’s still in the emissions trading scheme. If the logic is “because it’s a methane”, “because it’s a short-lived gas”—well, most of the emissions from waste is also a short-lived gas—would we, on that basis, also seek to exclude waste from the emissions trading scheme?

I heard the members here—I can’t remember whether it’s on the left or the right; I’m directionally challenged today—say biogenic methane. Yes, absolutely, we do need to take the challenge of biogenic methane head-on, which is why, I guess, to be consistent with the philosophy of the parties on the right—well, on the left here, which is on the right philosophically and on the left, I guess, geographically to me—pricing is a powerful mechanism. Why move away from this market-driven approach, which is to actually price things? And why move to, I guess, a sort of vague system where there’s no kind of guarantee that emissions will actually reduce? We have been working at the challenge of reducing biogenic methane emissions in agriculture for at least 20 years now, and we’ve not got closer.

CHAIRPERSON (Barbara Kuriger): I’m going to take a call from the Hon Damien O’Connor. I just want to say that we’ve been waiting for some Amendment Papers to be sorted and a new sheet to come through. While the questions have been relevant to this point about having agriculture in the ETS or not—that is important—what I would like now is to narrow people down to the clauses in the bill and specific questions to the Minister around the clauses, or the Amendment Papers that people have put up.

Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Chair, and clause 33 is the operative provision that removes agricultural activities. I’m asking the question again of the Minister around consideration that he or officials may have made as to the impact of this legislation. The question of whether nitrous oxide or diesel, all that, should be taken out of agricultural activities, given that’s what is said in the bill, he clarified before. There are two other areas. Trees grown on farms are part of normal agricultural management systems, for shelter, for shade. Maybe the Minister can clarify whether he is proposing to take trees planted on agricultural land out of the emissions trading scheme (ETS), because farmers asked for—and, in fact, under our proposals, the provisions included them. The farmers wanted trees grown on farms in the ETS but not other agricultural activities. It’s a bit of “Have your cake and eat it too”. That’s a question for the Minister: is he going to take trees that are grown on agricultural land out of the ETS?

The second one is about processors. Now, what this does is take away the potential obligation for processors to report their emissions or surrender their emissions. One of the options was, of course, a levy from agriculture from biogenic methane based on a calculations for efficiencies of farming systems—one that would have, and currently does for some processing companies, acknowledged good practice. That is, farmers that supply animals to the processors from good farm systems that have emitted less methane get a reward acknowledged—usually in a bonus payment—from those processors; maybe Fonterra, maybe for the meat companies.

There’s already processor obligations to report their emissions through the ETS, so if you were to roll that forward, as was a proposal, and thereby achieve the inclusion of biogenic methane in an emissions trading scheme, which was acknowledged internationally in my travels, acknowledged consistently as being leading edge, being at the forefront of the pack—and farmers said, “Why should we be at the forefront?” The question to the Minister: was there an assessment done of the potential lost opportunity for New Zealand’s food and fibre produce being at the forefront of global emissions reduction and thereby receiving bonus payments? The reality is that some of our customers—that is, some of the big players; Nestlé in particular—are prepared to pay bonuses for lower carbon ingredients. The lost opportunity from this piece of legislation, in my view and in my experience, is huge. Was this calculated when the Minister and his Government proposed to just take it out?

While we acknowledge that including biogenic methane and on-farm emissions was not ideal in the ETS, and we proposed He Waka Eke Noa, that was rejected, so the backstop is what we are adjusting here. If you go back to processor-level obligations and you have a calculation that acknowledges emissions from farm—and it’s 95 percent discount, remember—it’s not full payment. This is bringing all agricultural emissions, including biogenic methane, into a payment system that was acknowledged internationally, time and time again when I was in the marketplace and talking to trade partners, as being at the forefront of our efforts to reduce international agricultural emissions. There is still a determination to do that. If New Zealand had been at the forefront of that, the opportunity for bonus payments, for premiums, was huge; was and still is huge.

The Minister and his Government is bringing in this legislation and removing what could have been a simple proposal through processor-level obligations to put us at the forefront of that. My question is: how much is it costing us?

Hon SIMON WATTS (Minister of Climate Change): Thank you for those questions. In regards to the points raised by the Hon Damien O’Connor, in regards to any policy positions around removing forestry from within the emissions trading scheme (ETS), the categoric answer to that is no. We have no intention of doing that. What we did inherit from prior administrations was significant volatility and lack of certainty in the ETS because of positions around what was in or out of the ETS in regards to forestry. We have worked very hard to restore credibility in the ETS, and one of the key aspects is in regards to the role of removals, which we see as a fundamental part of a net-based strategy.

In regards to the point from the member Hernandez, in regards to the options being considered, if I refer, and if you refer, to the regulatory impact statement—I’m sure you’ve read it, but maybe if you do—then there are three options that were considered as part of this work: a full repeal, which we are talking about and discussing as part of this bill; delayed backstop; and retained reporting. The full-repeal scenario, which this bill is executing, delivers upon the Government’s commitments in regards to keeping agriculture out of the ETS. The assessment of options was undertaken, a decision was made, and that is what we are referring to today.

I also want to give regard to where we stand today, and it’s outlined in the draft emissions reduction plan that we published in May. That plan signalled and indicated that we are broadly on track to meet the 2030 methane reduction targets, today, where we stand—no pricing, no other aspects. We are on track, where we are today, in terms of meeting that target.

The conversation in regards to the need to bring this in place right now, when farmers do not have all the tools which they can utilise in order to deploy, to take action to do that, is unreasonable and not practical and will bring potentially 100,000 farmers into the ETS on 1 January, which will have significant costs on that sector, significant appliance complications, significant bureaucracy. I will reiterate that, on this side of the House, that is not the way in which we do business. I can tell you, from conversations with the farming community, that is not the way in which they do business either. We are working with the sector, not against them.

We all understand the obligations we need to do around emissions reduction. The agricultural sector is doing a lot in this regard already, and there is more to be done, but what we are discussing here is removing pricing of agriculture from the ETS, starting in 55 days’ time. We are very clear, across the board, actually, that agriculture pricing should not be part of the ETS. I think we get back to basics and do what the bill says and get on with the process of repealing it out of the ETS.

STEVE ABEL (Green): Thank you, Madam Chair. I appreciate the opportunity to speak again. Minister, further to the points you’ve just made, acknowledging that emissions have reduced somewhat, how have you accounted for the cause of that?

Surely having in place an inevitable pricing that’s going to come into effect and having in place a backstop—explicitly, incentives for the agricultural sector to deal with its emissions. Is it not correct to assert that it’s because of the very certainty that an emissions pricing scheme is going to come into effect that the sector is investing in finding ways to reduce emissions, looking at means of reducing its emissions—that farmers are taking actions to do it? Furthermore, when the He Waka Eke Noa process was undertaken, there were strong arguments made by the agricultural sector that the water regulations that were being put in place would have a similar effect to any specific climate emissions regulations.

What assessments have you made, Minister, on the impact of your Government in relation to climate emissions—because these things were linked by the sector? I remember very distinctly being told by Federated Farmers, “Oh, the water reg is going to have an effect on climate emissions, so you don’t need to specifically take action on climate emissions.” What analysis have you done on the impact of removal, also by this Government, of water regulations on opening the door to increased emissions in the future? Where are the disincentives for the sector to now increase its emissions, to now expand its activities in a way that takes no account of greenhouse gas emissions?

Speaking to the specifics of the potency of the gases we’re talking about, Minister, I want to pick up on the comment of the short-lived nature of methane that my colleague acknowledged. What about the long-lived nature of nitrous oxide, which is a 300 times more potent greenhouse gas than carbon dioxide and is a long-lived gas? You rightly acknowledge that it is largely attributable to the urine and the dung, the manure, from animals, but that is driven by the agricultural intensity that is facilitated by a lack of processor pricing on things like fertiliser, which, of course, is the other contributor to nitrous oxide. What consideration was given to the impact on what you have claimed are the successes that are coming in the sector, on those successes continuing? It seems obvious, it seems axiomatic, that if you remove any of the incentives, any promise of a forthcoming pricing regime, any sort of backstop, those emissions are going to start increasing again.

There’s a clause, an amendment specifically, that I proposed regarding ensuring that at the farm level and at the processor level, there’s a requirement that retains farmers to surrender emissions credits up until 1 January 2030, extends the time frame to implement a fair on-farm emissions pricing scheme to 1 January 2030, and retains agricultural processor obligations. Retaining emissions pricing for agricultural processors will enable the 2030 methane emissions target to be met. This is the assumption of this amendment, which is an amendment to clause 4, with section 2A amended. This is the sort of amendment that takes into account what you are apparently trying to achieve but doesn’t throw the baby out with the bathwater. I’d appreciate a response to those questions, Minister.

Hon ANDREW HOGGARD (Minister for Biosecurity): Thank you, Madam Chair. I have just two quick questions for the Minister. As has been mentioned, there has been talk of how we’re getting 95 percent free allocation. Can the Minister confirm whether or not reports by the previous Government showed that the He Waka Eke Noa scheme would have cost 20 percent of sheep and beef production in this country and that, actually, the emissions trading scheme backstop was even worse—

Hon Damien O’Connor: Profitability—it said profitability.

Hon ANDREW HOGGARD: Well, profitability and quantity. Profitability is quite important. You know, I do like to make a profit—obviously, you’re not too interested in farmers making money.

The other question is: what, if anything, in this bill will stop companies listening to the market? They’re taking on board market signals and transferring them to farmers, and in terms of what’s happening right now on-farm, I record all the emissions that are happening on-farm. I have an insights report by Fonterra that gives me ideas on how to improve my efficiency on-farm and improve the greenhouse gas emissions from my farm. I do not see anything in this bill that will stop that from carrying on. Can the Minister please confirm that that is the case?

Hon SIMON WATTS (Minister of Climate Change): Thank you very much, Madam Chair. As I said in my opening statement, He Waka Eke Noa was dead on arrival when we came into Government. It had no ability in order to do anything. The consensus was lost, and hence we did not proceed with that.

In regards to the other aspect that has been noted by the member in terms of the broader work that’s under way, it is clear from our perspective that this bill, again, is a very simple bill. The mechanisms by which this will achieve, in terms of reporting for agricultural emissions, are already in place and available out there across the market. It is important to work a market-led approach, and as I’ve stated, as outlined in our draft emissions reduction plan, the market is already, in conjunction with the industry, on track to meet targets in regards to emissions reduction by 2030.

Hon JO LUXTON (Labour): Thank you, Madam Chair. Given that the Minister has just raised the point around being on target to reach our reductions, there’s a couple of things that I wanted to ask the Minister about, but I also want to come back to the point that my colleague the Hon Rachel Brooking brought up with regard to extending the backstop—rather than getting rid of it, extending it—which the Minister didn’t seem to answer at the time. I think that’s a really genuine question that should be responded to because as the Minister himself—or others, perhaps—has mentioned, it has driven really good behaviour and the type of behaviours that we want to see from our agricultural sector.

If he was to consider extending it out further while the current technologies that the Government is investing in and talking about come to fruition and then they can price by 2030, what harm is there in extending this backstop plan out to just beyond 2030—or 2030, for that matter? Simply because of the fact the Minister has raised—that currently we’re on track to meet our reductions. Again, what happens if this all falls apart, if we don’t bring to fruition the technologies that they’re heavily investing in and it puts us at risk of not meeting our methane reduction targets? Therefore, why is it not then OK or worth thinking about moving the backstop of bringing agriculture into the emissions trading scheme to further beyond or to 2030?

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. I do note that my colleague who also resides in the fine city of Dunedin has more questions to ask as well. Now, I just want to comment, really, now that my colleague’s just re-asked a question that I asked. I won’t go over that, but I would like to ask the Minister to respond to a couple of comments that have been made by his coalition partners and both members of the executive. Then I have a third question about the emissions trading scheme (ETS) in general.

The first comment was from the Hon Mark Patterson, who seemed to be suggesting that, because some emissions reductions have happened, everything is on track and there is nothing more to do. I would like him to comment on that, in the context of what I see on the Climate Change Commission’s website that “there are significant risks to meeting the second and third emissions budgets and the 2030 biogenic methane target. The agriculture and transport sectors show the largest risks, and insufficient action to reduce emissions in these sectors will put the second and third emissions budgets at risk.” And they go on. I know the Minister knows this well. There’s very clear advice from the Climate Change Commission about risks to those second and third budgets—not looking at the first. Can he respond to the Hon Mark Patterson’s comments and how they relate to the second and third emissions budgets? That’s my first question.

My second one is in relation to Minister Hoggard’s comments just now about whether the market-led approach can still happen if there’s not this backstop of the ETS. Of course, the market is always there, but what I’m interested in, if you take the logic of that argument, is that nothing would ever be in the ETS. I wonder what the Minister’s feelings are about the total abandonment of the “polluter pays” principle, because that is where all these conversations are about climate emissions. They are pollution and we have a “polluter pays” principle. Where does he stand on that, particularly in regard to his colleague from his coalition partner raising that issue?

My third new question is: can the Minister give any explanation about why most of his Government’s climate change documents and policy documents say that everything is coming back to the ETS? We saw in the Budget the $3 billion of reductions in policies and complementary policies for cutting climate emissions and this heavy reliance on the ETS. Why, then, is the backstop removed for agriculture, and why does it go further than methane emissions? We’ve heard contributions from the Green Party, so I won’t go further into that, and the Hon David Parker and the Hon Damien O’Connor have all touched on that aspect—that there are, actually, a whole lot of different elements that are being removed from the ETS backstop here. It is not simply the methane that cows burp. I think that is what most people think about when they’re thinking about agricultural emissions. Of course, other ruminants do as well, but this is also into fertiliser and nitric oxide as well. If the Minister could explain those three questions, that would be useful.

Again, if he can go back to my original questions, which were: is he confirming that he agrees, and it’s Government policy, that at least 50 percent of New Zealand’s emissions are from agriculture? Some of his colleagues in his own party seemed to dispute that the other night. What is he doing for that, to get this 2030 pricing scheme in place? And what is his evidence that New Zealand is the most or one of the most efficient primary producers in the world?

FRANCISCO HERNANDEZ (Green): Thank you, Mr Chair. I’ll go on now to the actual legislation because I have a couple of questions around clause 5 in Part 1, about the repeal of some of the Treaty of Waitangi clauses in the legislation. I am asking genuine questions here, because if my colleague Lawrence Xu-Nan was here, he would look at this legislation and understand what it meant straightaway. I’m asking genuine, good-faith questions about how to interpret this legislation, and I’m asking because the Greens are a political party with Te Tiriti at the heart of our constitution. I’m also asking because, in my electorate of Dunedin, which I am a list MP based in—

Hon Rachel Brooking: Whose electorate?

FRANCISCO HERNANDEZ: I am a list MP based in Dunedin—I actually received a higher share of the party vote from Te Pāti Māori voters than I did Green voters, so I feel some obligation to our colleagues here in Te Pāti Māori to try and ask questions about Te Tiriti.

My question is about section 3A(b)(i) of the Climate Change Response Act. Why is that section being repealed? That section is around—[Interruption]

CHAIRPERSON (Teanau Tuiono): Can I invite the members, if they want to have a conversation—those two doors—to have it in the hallway?

FRANCISCO HERNANDEZ: Thank you, Mr Chair. The parent legislation is section 3A(b), and it refers to “with respect to the following provisions (with relate to powers to make secondary legislation), before recommending the making of secondary legislation, under those provisions, the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the secondary legislation:”. Now, I understand and appreciate that huge chunks of the secondary legislation from this is kind of being wiped out anyway, so that could be the reason for it, but some of these clauses are pretty benign. For example, in section 3A(b)(xi), it refers to section 161G, which says, “The Governor-General may, by Order”—it’s just talking about how to calculate the methodology for methane and nitrous oxide reductions from agricultural activity.

I mean, surely, even if you’re not intending to price agricultural emissions through the emissions trading scheme at the processor level—and I can see that that’s a policy choice that the Government is making. Surely, it would be good to still have the input of tangata whenua in that when you’re making legislation and when you’re making regulations. Not only do Māori have huge interests in the agribusiness sector—and I think one of the speeches from the colleagues in Te Pāti Māori actually pointed this out—Māori were the original farmers of this country, and they’ve still got a huge stake in what’s happening here. I guess my question is: why are these kinds of provisions being scrapped, and what do they do?

I want to refer back to the answers that the Minister responded with—and I thank you graciously for your answers, Minister. You mentioned the cost-benefit analysis (CBA) in the regulatory impact statement, and I noticed that the status quo has had that cost-benefit analysis done and it was shown to be positive. I also noticed that none of the alternatives have had cost-benefit analyses done to them. My question to the Minister around that is: has there actually been a cost-benefit analysis done on the alternative proposals—or have I just misread the paper and they are somewhere else—and, if so, do they show a similarly positive CBA compared to the status quo? I think that’s important to the legislation—to what we’re proposing.

The second part is that the Minister alluded to the fact that we were already on track, according to the projections of the second emissions reduction plan. Now, I checked back to that document, and it said that that was with the assumption that a methane inhibitor was developed. I’m sure that the Minister is already aware that, although the development of technology is necessary, it’s only one component of the adoption of public policy, and I guess the previous emissions reduction plan made a reference to methane inhibitors as well, but they viewed that as being complementary to a pricing scheme, because if there’s a pricing scheme, you actually incentivise the uptake of these technological measures. Can you please confirm my understanding? Thank you.

Hon SIMON WATTS (Minister of Climate Change): Thank you to the member for those questions. To be clear, this bill does not repeal the requirement for Government to engage on secondary legislation, including with iwi Māori. It only repeals the sections requiring consultation about secondary legislation related to agricultural New Zealand emissions trading scheme obligations, as these provisions will no longer be required as agricultural activities and will be removed from the bill. That aspect that you’ve noted is clarified, in that regard.

There’s been a number of questions throughout in regards to nitrous oxide. It is a common misconception that nitrous oxide is a significant contributor to ag emissions. Fertiliser accounts for around 18 percent of ag emissions—nitrous oxide—and the total contribution from fertiliser is around 3.8 percent. Nitrous oxide is around 9 percent of total emissions, and it is sensible to think that if the majority of nitrous oxide—as was noted by a prior member and many farmers here will be aware—comes from urine and dung from animals, then it would be sensible for it to be considered alongside methane, versus being treated within the components that we’ve discussed already. I think that is a little bit of background in regards to a number of questions in that space.

CHAIRPERSON (Teanau Tuiono): Before I take the next contributions, it would it be helpful for the committee if people could refer to the specific clauses that they’re debating or that they’re providing contributions on. I’ll take the next call—the Hon Priyanca Radhakrishnan.

Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Chair; I will, as you’ve mentioned, relate my specific questions to clauses in the bill. I think, from memory, clause 33 removes agriculture from the emissions trading scheme (ETS), and I just wanted to traverse, I guess, some of the questions that I don’t think the Minister of Climate Change has really clarified. He did clarify why this Government had made the decision, ultimately, to remove agriculture from the ETS, and that is laid out, of course, in the regulatory impact statement (RIS), as well, quite clearly. It talks about the increasing number of participants; the Minister mentioned a number—that was 100,000—and I did hear colleagues on this side of the Chamber query that number. I don’t see an explanation within the RIS, as far as I can tell, that tells us how that number was arrived at. I would appreciate some clarification from the Minister around that.

To the point that my colleague Rachel Brooking made earlier, there’s been some conversation, some discussion in the Chamber from both sides, around whether market incentives alone will take us to a point that the Minister mentioned, which is meeting our emissions reductions targets, or whether it was in fact this backstop. Everyone agrees that it’s not the ideal response, but, as has been traversed before, it is a backstop. If there’s nothing better that the sector can look forward to currently, wouldn’t delaying—one of the options that’s laid out in the RIS—the backstop at least give the sector some certainty that something was going to be put in place, as opposed to what’s currently laid out in the RIS, which I’ll get to in a minute? I don’t believe the Minister’s clarified that point around the incentive, and that was the point of this backstop.

It says in the RIS that pricing ag emissions through the ETS was set up—there’s a whole point, paragraph 10, around that. Part of it was that “It provided a clear signal of intention and helped act as an incentive to drive uptake of emissions”. We’ve seen examples, whether it’s DairyNZ or Fonterra, who have been pushing that agenda in terms of more sustainable agriculture as well, but whether that is actually because they know that if they don’t do something about it, they will be priced in 2030, or whether it was the market incentives is unclear. What was the Minister’s thinking around that in picking the particular option that the Government has landed with?

The other question that I have is around the technologies and tools that the Minister mentioned as well. I totally get and accept the point that the Government wants to ensure that the sector has access to those technology and tools. I note that the Minister has announced previously—I think it was—a $400 million investment in tech and tools there, and that the Government has signalled intention to equip farmers, but what I’ve been hearing is that that’s still quite a way off and does not necessarily mean that the tools and technologies will be available in order for pricing to be put in place by 2030. What guarantees or what assurances can the Minister give? Can he provide some clarity around the thinking there: what are those; what is the time frame for that?

My final question that I wanted to ask was just around paragraph 17 of the RIS, which kind of makes mention, and the Minister alluded to this in his opening remarks as well, that there is a plan. I know that my colleagues on this side of the Chamber have pointed to the fact that removing a backstop, which was, you know—well, a backstop, if there was nothing else in place. Yeah, it was an incentive, it played a role, but also it meant that, if the sector couldn’t come up with a pricing regime, this would at least ensure that we reduce our emissions. Taking away that backstop with no plan leaves, actually, the sector with less certainty. There is a work plan that is alluded to here—it’s very “high level”—and I wondered if the Minister would be able to give us a little bit more around the thinking of that plan and what certainty the sector can have that this plan will actually get us to where we want to be in 2030.

TOM RUTHERFORD (National—Bay of Plenty): I move, That debate on this question now close.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. It would be great to get answers to the questions just asked, and I’ll remind the Minister again: I am still interested in whether he agrees with his coalition partners about the rejection of “polluter pays” and that we’re well on track for the second and third emissions budgets.

Going back to the Minister’s last answer, he was talking about nitrous oxide from fertiliser being 3.8 percent of emissions and that, in fact, most of the nitrous oxide emissions come from animals themselves; therefore, the logic is because the animals are also making the biogenic methane, we’ll stick the two together and not separate them out. How does that logic flow from the points made by my colleague, who also lives in Dunedin—not the member for Dunedin, I’d like to say. How does that link with the very good point that he was making about methane applying for waste and how it is now treated differently from the methane related to the animals?\

The logic doesn’t seem to flow that, just because something is related to an animal—that one gas is sometimes related to an animal, but sometimes it is not; sometimes it is related to fertiliser. That seems like a very good reason to treat that nitrous oxide that’s coming from the fertiliser differently from the nitrous oxide that is coming from the animals. And the logic that he has applied, he’s not applying to other examples of where gases come from different uses. If you could comment on that, please.

LAN PHAM (Green): Thank you, Mr Chair. I’m really pleased to be able to speak to this very significant bill with such significant implications for our climate future, especially at a time in the world where we’ve just had this significant election result in the US. The implications for climate and, therefore, our own actions alongside the rest of the world in actually raising the bar and how we actually apply our policies and apply our actions in urgently reducing emissions has arguably come into much, much more focus. I would really like the Minister to consider the Green Party’s proposed amendment. This is to clause 14 of the bill, and it proposes to delete clause 14.

Now, the mechanics of it is that the bill proposes to delete “and agriculture” from the cross-heading in section 80 of the Act, “Allocation of New Zealand units in relation to industry and agriculture”, but this amendment seeks to actually retain the reference to “and agriculture” in that cross-heading. Really, this is just about retaining the opportunity to actually put in a legislative framework and enable the pricing of agricultural emissions at a later date. I think this is really important, because the Government has been so clear in their comments that they are committed to meeting emissions reductions, and we’ve heard that over and over. They’ve got this pastoral sector working group, who’s going to be looking at this. I’m really interested to hear as well if this is actually a funded group at this stage, because I think, at scrutiny week, it was unfunded at that stage.

I think what we’re seeing with climate, not only with the significance of the election that we’ve just seen, is we are seeing significantly concerning impacts on climate around the world. It feels like no matter where we are in the political spectrum, we’re going to have this “Oh, dear” moment where we realise that, actually, voluntary mechanisms and taking our time to take action is actually not going to cut it. We will not only need to put in legislative mechanisms and pricing mechanisms; we’re also really going to have to have that whole carrot and stick approach. I would really like to hear from the Minister whether he would consider that and consider retaining the option of actually putting in this legislative change in the future.

Hon DAVID PARKER (Labour): We had a request from a number of questioners of the Minister for why he had rejected the idea of delaying the date of the backstop, rather than removing it. I haven’t heard that addressed. It’s an important point. In respect of the issue as to why the Minister perhaps should have adopted that option, I’m not someone who has ever favoured at this stage farm-level reporting of emissions for everybody. It’s ironic to me that the industry called for that and then, having got it, said it was too complex, complained about the administrative burden, and therefore advocated against their farm leaders who were proposing that as a solution.

I’ve always thought the better solution is to have a processor-level obligation which is very simple, because instead of having thousands of participants in the emissions trading scheme (ETS), you have a dozen or so major ones—maybe a few others—and then allow volunteers who are doing better than the average to actually receive the benefit as a volunteer, because there are farm leaders who should be rewarded for doing better than the average and taking that difference out of the pool. That way you would have a very administratively efficient way of rewarding those who are progressing faster than the average in their emissions reduction without the burden of farm-level emission reductions for everyone.

I hope that the Minister, when he is considering alternatives to this, will keep that in mind. I see no benefit to putting the regulatory burden on all farmers to no great ends. If farmers are just going to meet the average, let them meet the average through the processor. Let those that are leading and doing better be rewarded for that, and they will lead and create opportunities for others to follow for the benefit of the farming sector, of our economy, and for the environment, but without the administrative burden of everyone being in at the farm level. I would invite the Minister to respond to that, because it is related to the issue as to why, perhaps, it would be better just to extend the backstop date so that that could worked through.

I have never been convinced of the farm-level obligation. The ETS, as originally designed—and I did it way back when, in about 2007—was designed to be at the processor level. It always had the pretention of 90 percent free allocation, taken further to 95 percent free allocation. I still think that that is the practical way through that could have been enabled now by an extension to the date.

FRANCISCO HERNANDEZ (Green): I raise a point of order, Mr Chair. I’m taking this point of order to seek guidance from you on which part we were to discuss Schedule 1 and Schedule 2 of the bill in; I would just like some clarification.

CHAIRPERSON (Teanau Tuiono): Some clarification? I’ll just take some advice on that. That’s in this debate.

FRANCISCO HERNANDEZ: So Part 1?

CHAIRPERSON (Teanau Tuiono): Yes.

FRANCISCO HERNANDEZ: Thank you.

Hon SIMON WATTS (Minister of Climate Change): Thank you very much, Mr Chair. I’ll work my way through some of those questions. The Hon Rachel Brooking’s point in regards to agricultural emissions, the 53 percent: the source for that is part of the 2022 New Zealand greenhouse gas inventory, which can be found on the Ministry for the Environment’s website.

In regards to the question around where did the 100,000 farmers come from, I had a chat with the Minister of Revenue and there are 50,000 GST-registered farmers, and, in addition to that, there are 56,000 “others”, including small-block holders—so 106,000; we’re in that ballpark.

In regards to the questions raised by the Hon David Parker, the points in regards to the future models that the Government may be considering in regards to policy of the pricing mechanisms of which we have committed to by 2030 are not part of the scope of this bill, but we will be taking into account all considerations as part of that process.

FRANCISCO HERNANDEZ (Green): Sorry, what name did you just—

CHAIRPERSON (Teanau Tuiono): Francisco Hernandez.

FRANCISCO HERNANDEZ: Thank you, Mr Chair. I thought you called me Steve Abel, but that’s not a confusion that’s happened quite yet.

Tom Rutherford: It’s not an insult.

FRANCISCO HERNANDEZ: Ha, ha! No, he’s a better-looking man than me, so compliments. Thank you for allowing me to take this call, Mr Chair, and thank you for your guidance earlier. As you’ll see, there’s still quite a lot of ground to cover in both Schedule 1 and Schedule 2, so I hope you’ll resist efforts by the Government benches to prematurely close this debate.

I’ll turn now to the question to the Minister, which is around Part 1, clause 8, around the repeal of some functions of the Climate Change Commission. That’s clause 8 and it repeals section 5J around the Climate Change Commission’s function, specifically section 5J(ha). I appreciate that I’ve already anticipated the Minister’s answers—that, because it repeals the secondary legislation, it’s fair enough to repeal one aspect of the legislation that established the Climate Change Commission—but I think we need to be very careful about unilaterally imposing the changes on the powers of the Climate Change Commission without a cross-party consensus, because it’s one of the watchdog agencies that the Crown does have. It’s one of the independent monitoring functions that the Crown has set up to make sure that it’s independently accountable. Particularly in regard to climate change, that’s really important because the Government of the day essentially controls the greenhouse gas inventory process. I’ve been a participant in that process. I was one of the expert reviewers in the waste sector for, I think, the 2022 or 2021 inventory. It feels like a long time ago, but it’s very important to understand it.

Look, the Minister will say that it’s because they’re repealing the parent legislation, which is to make sure that it’s kind of progressing the primary sector commitments, but my view is that instead of repealing that section altogether—and I accept the Minister’s word in good faith that they’re intending to progress the move to progress on-farm agricultural emissions by 2030—why not change it so that the Climate Change Commission has a role in monitoring and reporting on the progress of the Government’s initiatives to price on-farm emissions by 2030? If the Government is truly serious about their commitments to actually price on-farm emissions by 2030, then surely having an independent monitor will actually be better for that. If you look at the other aspects of the commission’s function, they’re consistent with that. Section 5J(a) is about reviewing the 2050 targets and, if necessary, recommending changes. Section 5J(b) is about providing advice that will enable the Minister to prepare emissions budgets.

The subsequent powers also provide the Minister with powers to either change the emissions budgets or to report progress on the emissions reduction plan or to monitor progress or also to take action on national adaptation risk assessments or climate change frameworks. To my mind, yes, we may be repealing the parent legislation which section 5J(ha) is currently looking after. My question to the Minister is: would he consider a Green Party amendment that changes that so that it instead looks after the progress of monitoring the Government’s progress to price on-farm emissions by 2030? If that is the policy mix that the Government feels is right, I’m sure I’ll be able to get my colleagues to support that, and we can have a blue-green deal across this House. None of the other parties need to vote for it. I hope they’d vote for it, of course, but I’m very interested in the Minister’s views on that particular section. Thank you.

Hon SIMON WATTS (Minister of Climate Change): Thank you very much, Mr Chair. I appreciate the member’s sales pitch in regards to section 5J(ha). I don’t know how to say this, but I’ll get straight to the point. The answer will be no. I will not be supporting that amendment. I appreciate that it’s late on a Thursday, but that’s not going to happen. The reason is that the Climate Change Commission has actually delivered that advice and, therefore, the function is no longer required as part of that law. Therefore, the clause is coming out. It’s a reasonably simple answer in regards to that point.

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

STEVE ABEL (Green): Thank you, Mr Chair—that was nerve-wracking. I want to pick up on something that the Minister said earlier. Minister, you alluded to the truth that nitrous oxide emissions are largely associated with manure, and, likewise, we know ruminant methane is a by-product of the natural process of rumination in ruminating animals—cows and sheep and the like. Nevertheless, the agricultural gases designated as agricultural gases are methane and nitrous oxide, and those gases are the big challenge we face in the agricultural sector in our country.

My question is: even though there are processes that are causing those emissions, which are as a consequence of our big clearance of forest and draining of wetland over the course of the last 200 years and populating the lowlands with pasture and dairy cows and sheep and beef and the like, the fact remains that those land uses are contributing to climate change. My question is: is the Minister agnostic about land use?

Hon Rachel Brooking: Ag.

STEVE ABEL: There’s no pun intended; “ag-nostic” about land use. Was it that the Canterbury Plains in the last 30 years hadn’t converted so much of its land to dairying, reduced its arable production—and, likewise, Southland produced a lot more things like barley and oats, in the day.

If these were farm gate - profitable industries that could be utilising that land, that would solve the problem of the emissions of nitrous oxide—to some extent; because, obviously, if they’re still using fertilisers, there will still be nitrous oxide. That would solve the problem of the emissions of methane and still be a profitable means of producing nutrition for human bodies, in the agricultural sector. Surely the point of emissions pricing on those potent greenhouse gases—methane and nitrous oxides; super heating gases, essentially—is to incentivise things like land use change, more arable production or more cropping or more vegetable growing, more plant-based production or agroforestry? There’s a message being sent that the problem of methane and nitrous oxide predominantly from livestock is an issue.

The concern for me, in this question, is that the implication is that this Government is not agnostic about land use—that it is fiercely defending specific forms of farming, specific forms of pastoral farming, that are high-emitting. Where is the pushback from those other sectors of our agricultural industry who do not emit methane, who do not emit high amounts of nitrous oxide, who in fact are being encouraged by a pricing system that makes it clear that those are a problem for us in terms of climate change? To give an example of the challenge: simply because most of nitrate leachate, which is a problem for freshwater contamination and drinking-water contamination—simply because most of it comes from dairy cow urine doesn’t mean we don’t worry about it, because it’s a risk to human health. Of course we still have to deal with the problem of nitrate leachate, even though it is part of a biological process in dairy cows.

That’s my primary question, and it’s an important question of clarification, Minister. Are you agnostic about land use change, or is this simply about fiercely defending a specific kind of land use, i.e., pastoral livestock farming?

Hon SIMON WATTS (Minister of Climate Change): I’ll tell the member that I’ve spent a long time agonising in regards to the question and the points that the member’s raised, but it’s not in the scope of this bill.

Dr CARLOS CHEUNG (National—Mt Roskill): I move, That debate on this question now close.

CHAIRPERSON (Teanau Tuiono): Francisco Hernandez. I really want to hear some new material.

FRANCISCO HERNANDEZ (Green): Thank you, Mr Chair. This will be fresh material that I’m conjuring up right now. I’m asking questions around clause 32, which covers Schedule 2 of the proposed transitional arrangements. My question is that that clause seems to be about the people who have already registered for the scheme and essentially making sure that they can cease to participate under the Act, so the information that I would like from the Minister is how many people does this current schedule actually affect? Has there been a lot of early interest in registering to be part of the scheme, for instance? Does it affect a lot of people?

I would like to, I guess, return to the questions that I’ve already asked and the Minister still hasn’t addressed yet around the cost-benefit analysis. Was there a cost-benefit analysis done on the other proposals? There was a cost-benefit analysis done on the status quo. Was there a cost-benefit analysis done on the other proposals? There were three of them in the legislation. We would be very interested, on this side of the House, to actually find out whether the kind of policy options that the Minister is pursuing are suboptimal to the outcome we’re seeking. The sort of multi-criteria analysis essentially shows that the status quo option is equal to option one, which is the Minister’s preferred option, and option three, which is the deferred processor-level pricing. But option two, which is the ongoing reporting requirements, is the one with two minuses after it.

I’m curious to see if there was cost-benefit analysis done on the other measures, which is option one, the complete removal in option two, the ongoing reporting requirements in option three, or whether there was just analysis done on the status quo, because that seems to be not evidence-based policy if we’re just evaluating the status quo and not comparing the relativity of the options. The cost-benefit analysis shows that it does have a positive cost-benefit ratio—1.24 or 1.13 without the premium for carbon action—so I think this is a really important question.

I would also like to find out about the question around Schedule 2, because I think it’s important if we’re measuring how many people are actually affected by that provision, if it was actually necessary in the first place. Thank you, Mr Chair.

Dr CARLOS CHEUNG (National—Mt Roskill): 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 (Teanau Tuiono): The question is that Steve Abel’s tabled amendment to delete clause 5 be agreed to.

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

Ayes 49

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Teanau Tuiono): The question is that Steve Abel’s tabled amendment to delete clause 7 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 (Teanau Tuiono): The question is that Steve Abel’s tabled amendment to delete clause 14 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 (Teanau Tuiono): The question is that Steve Abel’s tabled amendment to delete clauses 32, 33, and 34 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 (Teanau Tuiono): Steve Abel’s tabled amendment to retain “agricultural component” in the definition of eligible activity is out of order as being inconsistent with the objects and principles of the bill.

Steve Abel’s tabled amendment to retain reporting requirements for farmers to report on their emissions is out of order as being inconsistent with the objects and principles of the bill.

Steve Abel’s tabled amendment to retain reporting requirements for agricultural processors to report on their emissions is out of order as being inconsistent with the objects and principles of the bill.

Steve Abel’s tabled amendment to retain requirements for farmers to surrender emissions units is out of order as being inconsistent with the objects and principles of the bill.

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

Ayes 68

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

Noes 49

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

Part 1 agreed to.

Part 2 Consequential revocations and amendments to other legislation

CHAIRPERSON (Teanau Tuiono): Members, we now come to Part 2. Part 2 is the debate on clauses 35 to 39, “Consequential revocations and amendments to other legislation”. The question is that Part 2 stand part.

Hon SIMON WATTS (Minister of Climate Change): Thank you very much, Mr Chair. Part 2 relates to a narrow aspect in regards to revoking two pieces of secondary legislation that will be made redundant on the commencement date of this bill and they relate to agricultural obligations.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. This goes back to a discussion we’re having on Part 1, but it is of course relevant for Part 2 as well because, as the Minister just set out, this does relate to regulations relating to removing, now, all the references to agriculture that have been taken out of the emissions trading scheme (ETS).

As we were just discussing in Part 1—and this is relevant to Part 2—it’s going beyond the methane emissions of agriculture because, of course, it also includes synthetic fertilisers. We see that at clause 37, where in fact the words “synthetic fertilisers” are looking at me in bold from the bill in front of me. That is, “In clause 3, revoke the definitions of calf, cow, heifer, milk solids, slaughter point,”—which all sound maybe quite related to animals—“synthetic fertilisers containing nitrogen, and vealer.” I probably pronounced that wrong. This point about synthetic fertilisers—that we haven’t had answered by the Minister—is that he said that 3.8 percent of our emissions are from nitrous oxide relating to synthetic fertilisers. Why do they need to be removed from the ETS? The Minister said, “Well, because the other nitrous oxide is related to ruminants and things that come from ruminants”—I’d be quiet about that—“but because that other nitrous oxide relates to ruminants, then that should be bundled together with the methane that comes from ruminants.” However, as my colleague Francisco Hernandez has been saying, that’s not how methane is treated—that you have methane from waste being treated quite separately.

He will know the number off the top of his head. I can’t remember it off the top of my head, but I think it might be around 7 percent; 3.8 percent is still a lot, and if we can get rid of 3.8 percent, then we should, because a lot of time and effort goes into reducing that methane by quite small increments, and every increment counts. I’d again invite the Minister to explain how his logic works for that 3.8 percent relating to fertiliser use of nitrous oxide, whereas it doesn’t relate to other gases that are separated out into other industries, regardless of whether or not they’re related to the same gas. The point being: methane—often related to ruminants but also related to landfills—is treated separately and that the landfills are still in the ETS and they’re not being removed despite the fact that methane is also related to ruminants. The logic just doesn’t seem to be there.

Beyond that point, there’s 3.8 percent relating to synthetic fertilisers, something that we should be aiming to remove from our system and we should be using the “polluter pays” principle for it. That, again, was another question that I asked in the Part 1 debate, which was: does he agree with the logic of his ACT colleagues and members of the executive that, in fact, the market is the only thing that should determine farmer behaviour? That seems to be a total abrogation of the “polluter pays” principle, and I haven’t heard that from the National Party before—that the “polluter pays” principle is something that they want to get rid of. As I’ve mentioned before, we do keep seeing that the ETS is the main instrument that the Government wants to rely on. They’ve got rid of those complementary policies, so it seems an about-face to suddenly say, “Well, the ‘polluter pays’ doesn’t now apply to these emissions.”

I’d also appreciate the Minister confirming the Ministry for the Environment numbers of over 50 percent of emissions being from agriculture. What I would like him to confirm is that is the National Party’s position—and they don’t question that, because members from his party were questioning that the other night.

Hon SIMON WATTS (Minister of Climate Change): Thanks very much to the member for the question. It is correct that 3.8 percent of total agricultural emissions come from nitrous oxide from synthetic fertiliser. This was included in the draft emissions reduction plan: there are already a number of technology innovations in play and already being utilised by farmers in regards to synthetic fertiliser in the reductions of emissions in regards to that, and the uptake in regards to that is progressing already without any incentives by Government in order to achieve that. We do take a market-based approach in regards to that, and as I’ve noted already it is included in the draft emissions reduction plan. The current status quo in terms of the trajectory of emissions reduction for methane in particular is on track in regards to our 2030 target.

SCOTT WILLIS (Green): Thank you, Mr Chair. I rise to speak to Part 2 and I’m particularly interested in hearing from the Minister about the proposed amendment. I’m wondering whether the Minister would consider our amendment related to clause 37, where we propose to delete clause 37. I’m aware that the Minister is placing a lot of faith in the magic bullet approach to agricultural emissions and in unproven technologies, and we are concerned that by shutting the door to ensuring that we can reduce agricultural emissions through the emissions trading scheme, we are not going to be able to meet our commitments. I’m also very aware that I’ve got a sheep at home that needs shearing at the moment, and I don’t want us to spend a whole lot of time when we could be doing more useful things.

The amendment amends the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill to retain references to definitions related to agricultural activity in the Climate Change (General Exemptions Order) 2009, including “calf, cow, heifer, milk solids, slaughter point, synthetic fertilisers containing nitrogen, and vealer.” It supports retaining a legislative framework, including definitions to enable agricultural emissions pricing at a later date. The reason why this is important is that, if we don’t meet our emissions targets, the country is going to be in for a huge bill and a future Government will be responsible and the population will suffer. What we’re asking for is an amendment retaining reference to all those aforementioned terms, definitions, as follows: calf—so, male or female bovine under 12 months of age and weighing less than 40 kilograms at the slaughter point; cow, meaning a female bovine with more than six months permanent teeth; heifer, meaning a female bovine with no more than six permanent teeth, etc.

It seems like a very simple thing we could do to ensure that, while the bill may pass, we are not cutting off options in the future. We’re ensuring that we have an ability to do this at a future point when there’s a need. Is the Minister willing to consider this amendment and to think about what we can do and whether there might be a change of heart at a certain point? Is he willing to consider that there might be a sense of regret as we see the world turning towards conspiracy theories and climate denial? Will he consider an approach that is going to help us reduce agricultural emissions while supporting our farmers to do the right thing, while providing the carrot through Jobs for Nature, the ability to support farmers who have lower intensive practices through ensuring that we support regenerative agriculture? If we come back to the definitions, what would be really helpful is if we retain those—delete clause 37—and that would enable us to ensure that we are not simply stopping here and we’ve got options in the future. I’d appreciate the Minister considering this amendment, and a response would be appreciated.

Hon SIMON WATTS (Minister of Climate Change): Thanks, Mr Chair. To the member, no, we won’t be accepting that amendment. It’s not helpful because agriculture isn’t going to stay within the emissions trading scheme (ETS). Why would you leave clauses in there in that regard when that is not the intent, and, actually, that is a consensus intent by not just the Government but by the Opposition, who were also in that position, regarding taking the agricultural elements out of the ETS?

Hon DAVID PARKER (Labour): Thank you, Mr Chairman. Clause 35(1), in Part 2, revokes the Climate Change (Agriculture Sector) Regulations 2010. Those regulations were put in place by the last National Government, they were amended once, but they were there in order to have the information base for the future, should there be an emissions obligation at the processor level. I’ve previously, in an earlier contribution on Part 1, explained why I have thought that it is silly to require every farmer to report their emissions. It’s an unnecessary administrative burden; it doesn’t change the outcome very much. It’s much better to have a processor-level obligation, which is a lot more efficient administratively, with volunteers being rewarded and the bulk of the price signal flowing through from the processor, based on reporting at the processor level.

Of course, the Climate Change (Agriculture Sector) Regulations 2010 form the basis for that reporting of the emissions at the processor level, and I have those opened on my device here at the moment. Regulation 9 of the Climate Change (Agriculture Sector) Regulations 2010 is that one that says that “A participant who, in a year, carries out [an] activity of dairy processing of milk … must … record the total quantity [of] tonnes of milk solids” and report it. I’m sure that the systems that are in place by the processors at the moment are very simple; it’s not a very onerous task for them to continue doing that for the two years or three years that the Minister of Climate Change has allowed himself to rejig emissions pricing by the date that he’s promised there to be some form of agriculture emissions.

The cost-benefit analysis in the regulatory impact statement makes no reference to the cost, so far as my reading of it, that is being imposed on processors by those regulations that have been there for over a decade. I think it is a logical assumption that one of the possible outcomes of the future system is to actually, for the majority of people, collect things at the processor level rather than requiring expensive and time-consuming reporting which annoys farmers and is unnecessary. It seems to me to be not justified by the Minister to revoke those regulations at this stage. I would like the Minister to inform the committee of what information he has as to the cost that this existing regulation imposes on those processors in the intervening period, in order for the committee to assess whether it’s wise to revoke that regulation. I have an amendment in my name that I’m about to table which moves that clause 35(1) be deleted.

FRANCISCO HERNANDEZ (Green): Thank you, Mr Chair. I would like to thank the member formerly from Dunedin, and also the member from Dunedin, Scott Willis, and the member for Dunedin, Rachel Brooking for their excellent contributions—it’s good to get the “from” and “for” right when that list and electorate MP distinction is in place!

Look, I just wanted to point out that this regulation that David Parker has referred to was actually a regulation that was formed under the Key Government. By the way that this Government is going, it seems like that was the last National Government that actually cared about climate change, at least enough to actually bother measuring their emissions. I mean, as the Hon David Parker has already said, there’s actually no requirement. When this regulation was made, there was no requirement for agriculture to be in the emissions trading scheme (ETS) at a process level or otherwise. These regulations, essentially, just enable measurements of them. If we’re actually serious about meeting our nationally determined contributions, measurement is the first step. If you’re not measuring it, how can you manage it? Also, importantly, it sets a baseline for emissions factors that other emissions inventories potentially rely on. There’s a danger that, if we actually scrap this regulation, it might have implications for climate reporting. If we’re removing an aspect of a regulation that other legislative processes might rely on, the unintended consequence might be to actually in some way delay the progress of reporting or monitoring.

That leads on to a related question which I was hoping to ask the Minister in Part 1, but I didn’t get the chance to.

CHAIRPERSON (Barbara Kuriger): We’ll stick to Part 2, please.

FRANCISCO HERNANDEZ: Yes, but it’s related to Part 2.

CHAIRPERSON (Barbara Kuriger): If it’s related in Part 2, that’s fine.

FRANCISCO HERNANDEZ: It’s related to the way we measure emissions and the sort of accounting targets that we’ve got. Under the nationally determined contribution that we have, which agricultural emissions are a part of, we counted them in the previous nationally determined contribution, and we measured some level of contribution from the agricultural sector to that nationally determined contribution. My question is: with the repeal of the requirement to report—and also with the repeal of the requirement to do anything at all other than rely on, I guess, the technological mitigation and the methane inhibitors which the second emissions reduction plan is counting on—is there a concern that, by repealing all these mechanisms, there’s a further emissions gap that’s been opened in the nationally determined contribution?

Even under all the actions of the previous Government, there was already an emissions gap between the domestic action and the nationally determined contribution, which would have had to be met with, potentially, international credits. Now with the repeal of these regulations to measure and with the repeal of these regulations to take action, has it opened a further emissions gap? Has there been any kind of quantification done to see what the impact of opening up that further emissions gap might be? As you’re well aware, as the Minister of Climate Change, policy proposals are required to undergo a CIPA, a Climate Implications of Policy Assessment. I mean, obviously, this is legislation—there’s also a policy proposal, so maybe we should start doing Climate Implications of Policy Assessments for legislation as well.

Suze Redmayne: Getting repetitive.

FRANCISCO HERNANDEZ: But it’s relevant. It’s all relevant. It’s all connected in some way.

Tim Costley: Conjuring was the word you used—conjuring!

FRANCISCO HERNANDEZ: Yeah, conjuring—it’s everywhere. Yeah, I’m a conjurer. So, yes, my question is: why repeal legislation that was actually set up during a previous National Government, the Key Government, which was just set up to enable participants to actually measure their emissions and report on them? It’s a reporting framework. I understand, fair enough, you’re repealing clause 35(2)—that actually does mandate participants to take part in the ETS. I understand why you’re repealing that, but why repeal secondary legislation that actually creates an emissions reporting framework, and one that’s already working and one that’s already standardised? If we want to create consistency between different administrations, it seems like keeping one of the centrepieces of the Key administration is a really good way that we can do that. Thank you.

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

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

Ayes 68

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

Noes 49

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

Motion agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Steve Abel’s tabled amendment to delete clause 35 be agreed to.

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

Ayes 49

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Hon David Parker’s tabled amendment to delete clause 35(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 (Barbara Kuriger): The question is that Steve Abel’s tabled amendment to delete clause 37 be agreed to.

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

Ayes 49

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): Steve Abel’s tabled amendments to delete Part 2 are out of order as being a direct negation of the question.

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 49

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

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

Ayes 68

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

Noes 49

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

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

Ayes 68

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

Noes 49

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

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

Ayes 68

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

Noes 49

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

Motion agreed to.

Part 2 agreed to.

CHAIRPERSON (Barbara Kuriger): We now come to Schedule 1, with no debate. Steve Abel’s tabled amendments to Schedule 1 are out of order as being inconsistent with the objects and principles of the bill.

Schedule 1 agreed to.

CHAIRPERSON (Barbara Kuriger): We now come to Schedule 2, with no debate. Steve Abel’s tabled amendment to Schedule 2 are out of order as being inconsistent with a previous decision of the committee.

Schedule 2 agreed to.

Clauses 1 and 2

CHAIRPERSON (Barbara Kuriger): Members, we come now to our final debate. This is the debate on clause 1 and 2, title and commencement.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. I would like to focus on clause 1, which is the title clause. As we know, this Act is the Climate Change Response—

Hon Member: No response.

Hon RACHEL BROOKING: —(Emissions Trading Scheme Agricultural Obligations) Amendment Bill 2024. My colleague here is just saying “No response”, and that I think would be a better title. But I want to reflect on the discussions we’ve just had during the debates on Part 1 and Part 2 and going back into the second reading as well that we’ve just had this week. This bill is progressing quickly.

I will be speaking about the title clause, clause 1. Some suggested changes—and I’m focusing here on the brackets, removing the “Emissions Trading Scheme Agricultural Obligations” to some different phrases which I think might be more useful to describe what it is that this bill is doing.

The first one would be the abrogation of the “polluter pays” principle. That is because of the non-response we had from the Minister of Climate Change regarding whether or not he was going to disagree with his ACT coalition partners that in fact it’s fine just to leave everything up to the market.

Another suggestion in that bracketed area might be that this Act is the “Climate Change Response (We’re Totally Relaxed Because the First Emissions Budget Looks Like it’s Going to be OK) Amendment Act 2024”, because, of course, the Minister hasn’t responded to my questions either regarding the second and third budgets, which we know the Climate Change Commission is worried about. They’ve expressed the risk about it and it seems like many members of this House think that everything is on track and it’s totally fine, when of course what this Government is doing is taking us backwards.

Another suggestion is that the brackets could be replaced with “Removing Agriculture Despite Agreeing that this Makes up over 50 Percent of our Emissions”. I referenced that—

Simon Court: Some people say.

Hon RACHEL BROOKING: It’s interesting that Simon Court has just said that some people say—I would remind Simon Court that, of course, the Minister has just stood up and agreed, or he seemed to agree. He could have been more forceful in his statements. I invite him to again give some force to that statement that, whilst the Ministry for the Environment website says something like 53 percent, he is totally committed to agreeing that, yes, agricultural emissions do make up at least or around 50 percent of our emissions.

We’ve just heard the member from ACT interject, and we heard a National member in the second reading, Miles Anderson, say—and I’m quoting from the draft Hansard on the Parliament website here—“I would like to point out 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.” Why I’ve been asking the Minister about that is: does he agree with his colleagues from the National Party that that is based on poor science, and that somehow, we should be thinking about agriculture in a different—

CHAIRPERSON (Barbara Kuriger): Is the member suggesting that should be the title of the bill?

Hon RACHEL BROOKING: I’m suggesting that the title should be the “Climate Change Response (Removing Agriculture Despite Agreeing that it Makes up over 50 Percent of our Emissions) Amendment Act 2024”. Another title could be included in those brackets: “Removal of Incentive of a Backstop”. That could be in the brackets, and “No Plan Yet for Pricing”. We’ve heard from the Minister that there’s an intention for something by 2030, but it provides no certainty. That could be another name for it— “Climate Change Response (No Certainty for Farmers About What is Going to Happen) Amendment Act 2024”—or, as my colleague Damien O’Connor suggested in the second reading debate, “(Kicking the Can Down the Road)”.

STEVE ABEL (Green): Thank you, Madam Chair. When the Luxon Government says it believes in climate change and then does all the things to make climate change worse, it has the same effect as if it did not believe in climate change in the first place, which speaks to what I’m about to propose, which is an amendment to the title—

Simon Court: Climate change is getting better.

STEVE ABEL: Pardon me, Mr Court?

Simon Court: We’re going to meet the emission reduction plan. It’s getting better.

STEVE ABEL: Excuse me. This is—

CHAIRPERSON (Barbara Kuriger): This is about title, Mr Court. And Mr Abel’s going to suggest a title.

STEVE ABEL: I’m going to suggest a title. The gentleman to my left, Simon Court, has just said that this is making the emissions reduction plan better, but explicitly it is not doing that. It is taking out agriculture from the emissions trading scheme.

My amendment is to quite factually describe what the title of the bill should be. The bill is currently called the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, but there will no longer be agricultural obligations. It’s utterly incorrect to call it that, because it’s explicitly taking out agricultural obligations. Therefore, it should be called the “Climate Change Response (Agricultural Emissions Climate Delay) Amendment Act 2024”. It could have just as readily been called “(Climate Delay and Denial)”, because we know that delaying action on climate change has the same effect as denying action on climate change. If you know there is a problem and you do nothing about it, it has the same effect as if you didn’t notice there was a problem.

I put forward any of those titles for consideration, but I do really note, and would like the Minister’s view on it, that the current description of the legislation is actually really quite inaccurate. That is a problem because surely, in the words of the great Grant Robertson, it should say on the tin what it is. It is not this, because it is not the “(Emissions Trading Scheme Agricultural Obligations)”. It is about removing the obligations. Thank you.

FRANCISCO HERNANDEZ (Green): Point of order. Thank you, Madam Chair. I’m just calling a point of order to seek guidance from you about the title clause. It’s always a danger for fresh MPs to just read this straight away and to seek guidance, but Speaker’s ruling 127/3 seems to suggest that “When debating the preliminary clauses at the end, members should have some latitude to summarise, and make concluding remarks about, the issues they have raised during the committee’s consideration of the bill.” Is that right or have I misinterpreted?

CHAIRPERSON (Barbara Kuriger): The latitude is not huge. It’s a small part of the bill, and they may refer back to where it came from, but we don’t want relitigation of Part 1 and Part 2 all over again.

FRANCISCO HERNANDEZ: Thank you for your guidance, Madam Chair.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Chair. It’s good to be able to take a call on the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, the title and commencement. My suggestion for an amendment is to change the title of the bill. It should be read “Climate Change Response (Making New Zealand Exports More Expensive) Amendment Bill”. The reason why I suggest that title change is, whether people in the House or outside of this House believe in climate change or not, there are a number of international obligations which the Minister has clearly set out in responses to different questions, that New Zealand has signed up to. As part of that response to those climate obligations, countries around the world are requiring supply chains, customers, and other businesses to track the emissions and the amount of carbon that is being used to make that product or service, in order to fulfil their climate change obligation reporting requirements.

The Finance and Expenditure Committee didn’t necessarily review this particular bill, but, actually, as part of its banking inquiry, one of the key aspects that members of the select committee—and this is all public—have been asking the banks about is around the climate change obligations that they have to fulfil as part of those reporting obligations.

Yesterday, we had Rabobank in front of the select committee. Rabobank talked about one of the papers that they had drafted as a series of different white papers to help their customers adapt to these climate change obligations. One of their papers which they recently published earlier this year was called Maintaining our emissions edge. As part of that research paper, some of the feedback that they got when they surveyed their customers—a number of them being farmers—was that they saw relief in having a breather from the regulatory changes under the previous Government. They were confident that this new Government was going to give them a chance to have a breath. However, what that report actually said was “Be careful about that breather”, because they referenced a Chapman Tripp report which showed that 80 percent—80 percent—of the exports from New Zealand to international markets require climate change reporting obligations.

A part of the issue that surrounds this particular—why this bill, and why I think that the title, should be changed is because, whether you do it now or you repeal it and you do it later, the fact is it’s going to make it more expensive and actually, in some ways, is potentially a risk for some of our exporters. The big companies overseas, such as the Nestlés, such as the Tescos, are requiring our New Zealand producers of goods and services that are exported to at least be able to trace what their footprint is, and if it fits what they have as part of their requirements, then they’ll, basically, import them from wherever they are in the world. That’s why I believe this climate change response bill title should be changed to the “Climate Change Response (Making New Zealand Exports More Expensive) Bill”. Ultimately, if New Zealand exporters cannot meet those international obligations to help their customers, it’s going to impinge on their ability to export the volumes, or at the value, which New Zealand exporters need and want. Therefore that is my suggestion for this. I haven’t been part of the deliberation on this bill—

Tim Costley: It’s as good as most of your economics.

Hon BARBARA EDMONDS: —however, both with the Reserve Bank this morning—actually, to that member, the Reserve Bank this morning, as part of the Financial Stability Report, also mentioned it as a particular risk. The reason why it’s a particular risk is when they surveyed the banks—

Suze Redmayne: So condescending.

Hon BARBARA EDMONDS: —seven of the 13—condescending! I heard Suze Redmayne saying “Really condescending”—I’m just trying to say what the Reserve Bank was talking about this morning in the Financial Stability Report. Of that, seven of the 13 banks that responded to the survey said geopolitical risk and tensions overseas were of a concern for them. Therefore, I believe this bill title does need to change to reflect that. I appreciate that the Government is going to come in with their new changes at a later date. However, it leaves a vacuum here, in which—

Hon Rachel Brooking: They might not.

Hon BARBARA EDMONDS: You hope they do. For our New Zealand exporters, I hope they do. Whether we like it or not, here in New Zealand, the rest of the world has these climate obligations which they require as part of their corporate reporting standards. There’s further changes that need to be made, but that is my suggestion: to change the title of this bill.

MIKE BUTTERICK (National—Wairarapa): I move—

Hon Members: Madam Chair! Madam Chair!

MIKE BUTTERICK: —that debate on this question now close.

CHAIRPERSON (Barbara Kuriger): Excuse me, I cannot hear what Mr Butterick is saying.

MIKE BUTTERICK: I move, That debate on this question now close.

TANGI UTIKERE (Chief Whip—Labour): Point of order. Thank you, Madam Chair. I just want to refer to Speaker’s ruling 68/1. This relates to when closure motions are currently before the committee. While I certainly accept that it is over to the purview of the Chairperson to rule on that, the ruling by Chairperson Mallard in 2015 does make it very clear around when it is likely foreclosure motions are to be accepted. Referencing the—

CHAIRPERSON (Barbara Kuriger): Can I just point out to the member that I haven’t actually accepted the closure motion at this point?

TANGI UTIKERE: No, I was just going to indicate, Madam Chair, that the Minister has not engaged on this particular issue yet—there have been a number of issues that have been raised—and I know that part of the timing of taking the point of order is if you were minded to accept a closure motion. I was wanting to indicate that the Minister had still not taken any calls.

CHAIRPERSON (Barbara Kuriger): Thank you for that point of order.

TIM COSTLEY (National—Ōtaki): Speaking to the point of order. Madam Chair, I believe that Speaker’s ruling only applies in the case that they are non-political contributions from the other side. I would suggest that they’ve been incredibly political, and so the Minister’s engagement, or lack of, has been entirely appropriate.

CHAIRPERSON (Barbara Kuriger): Well, just on the point of order and the response to the point of order, it is totally up to the Minister whether the Minister makes a response or not.

LAN PHAM (Green): Thank you, Madam Chair. I really appreciate the opportunity to speak to the title cause, and that’s because of the absolute significance of this bill.

Now, I want to pick up, firstly, on the fact that the title claims to be a climate change response. The response that comes to mind when it comes to the actual content of the bill and the fact that it is removing agriculture from the emissions trading scheme (ETS), is there’s this Austin Powers movie where there’s a steamroller from way far away and there’s a henchman who just screams and screams for minutes while the steamroller slowly but surely crushes him. I think why I say that is because I want to propose a title clause for this bill, and it’s the “Climate Change Response (Emissions Trading Scheme Agricultural Obligations) (Global Climate Train Wreck) Amendment Bill”.

I’m picking up the comments from across the committee that, you know, we don’t want anything in this debate to be overly political. The problem when it comes to climate change is that it’s so serious and so severe in terms of us needing to really clearly take actions when it comes to climate change, that it feels that the only way we can actually get some attention on the issue, and traction with people understanding the magnitude and the severity of it, is to draw distinctions to more political things. I wanted to suggest the train wreck part of it because we know trains: they’re really fast and they cause a lot of damage when they crash—but in order for them to actually do that, someone needs to have set the tracks. This is exactly what this bill is doing with the framework in terms of taking out agriculture from the ETS.

What was so clear at the Environment Committee today was we actually had the climate commission come in and they talked about their first monitoring report when it comes to emissions and where New Zealand is at with their emissions. They—positively—gave us the news that we’ve heard before: that emissions have actually dropped in recent years. It was a 4.2 percent drop in 2022, and this was mostly due to changes in energy and industry sectors, but they really stressed the significant risks to the second and third budgets. This is primarily, as they pointed out, with agriculture and transport sectors. These are showing the largest risks. This is in their words, and they said in the absence of pricing mechanisms or any incentives, these provide headwinds to genuine emissions reduction. They stressed how urgent this was. They stressed how we really need to look at every part of every sector if we are really going to meet our emissions obligations and the ones that this Government have so clearly stated that they are committed to.

The “Climate Change Response (Emissions Trading Scheme Agricultural Obligations) (Global Climate Train Wreck) Amendment Bill”—I’d love to hear from the Minister if he would consider that title. Thank you, Madam Chair.

TOM RUTHERFORD (National—Bay of Plenty): I move, That debate on this question now close.

CHAIRPERSON (Barbara Kuriger): The question is that Steve Abel’s tabled amendment to replace “Emissions Trading Scheme Agricultural Obligations” with “Agricultural Emissions Climate Delay” be agreed to.

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

Ayes 49

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that clause 1 stand part.

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

Ayes 68

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

Noes 49

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

Clause 1 agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Steve Abel’s amendment to change the commencement date to 31 December 2029 be agreed to.

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

Ayes 49

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that clause 2 stand part.

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

Ayes 68

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

Noes 49

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

Clause 2 agreed to.

CHAIRPERSON (Barbara Kuriger): I will note that there is no point in looking to the Chair for guidance when one cannot remember which way one is voting, because there won’t be any guidance coming from this Chair.

Bill to be reported without amendment.

Bills

Contracts of Insurance Bill

In Committee

Debate resumed from 5 November.

Part 7 Repeals and amendments to other Acts (continued)

CHAIRPERSON (Barbara Kuriger): Right, members. This feels a little bit like we’ve been here several times.

Tom Rutherford: Déjà vu.

CHAIRPERSON (Barbara Kuriger): Déjà vu—that’s it, Mr Rutherford. Members, we now come to further consideration of the Contracts of Insurance Bill. When we were last considering the bill, we were debating Part 7. Part 7 is the debate on clauses 169 to 193, “Repeals and amendments to other Acts”, and Schedules 1 to 6. Once again, the question is that Part 7 stand part.

The question is that the Minister’s amendments to Part 7 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 (Barbara Kuriger): The question is that Part 7 as amended stand part.

A party vote was called for on the question, That Part 7 as amended 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 7 as amended agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Schedule 1 stand part.

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

Ayes 68

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

Noes 49

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

Schedule 1 agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Schedule 2 stand part.

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

Ayes 68

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

Noes 49

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

Schedule 2 agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Schedule 3 stand part.

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

Ayes 68

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

Noes 49

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

Schedule 3 agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Minister’s amendments to Schedule 4 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 (Barbara Kuriger): The question is that Schedule 4 as amended stand part.

A party vote was called for on the question, That Schedule 4 as amended 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.

Schedule 4 as amended agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Minister’s amendment to Schedule 5 set out on Amendment Paper 125 be agreed to.

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

Amendment agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Schedule 5 as amended stand part.

A party vote was called for on the question, That Schedule 5 as amended 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.

Schedule 5 as amended agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Schedule 6 stand part.

A party vote was called for on the question, That Schedule 6 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.

Schedule 6 agreed to.

Clauses 1 and 2

CHAIRPERSON (Barbara Kuriger): Members, we now come to our final debate: clauses 1 and 2. This is the debate on title and commencement. The question is that clause 1 stand part.

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

Ayes 68

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

Noes 49

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

Clause 1 agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment replacing clause 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 (Barbara Kuriger): The question is that the Hon Dr Duncan Webb’s tabled amendment to subclause (2) of clause 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 (Barbara Kuriger): The question is that clause 2 stand part. [A party vote is called] Yes, could we please start that vote again. The Clerk has some queries, so we’ll—

Hon Kieran McAnulty: No. It’s on the record. ACT voted against it.

CHAIRPERSON (Barbara Kuriger): I haven’t actually declared the vote, but there’s a couple of queries—it wasn’t just one—so we’re going to start again.

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

Ayes 68

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

Noes 49

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

Clause 2 agreed to.

Hon ANDREW BAYLY (Minister of Commerce and Consumer Affairs): I move Amendment Paper 126 dividing the 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 49

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

Motion agreed to.

The bill was divided into the Contracts of Insurance Bill and the Contracts of Insurance (Repeals and Amendments) Bill, as set out on Amendment Paper 126.

Bill to be reported with amendment and so divided.

Hon KIERAN McANULTY (Labour): Point of order. Thank you, Madam Chair. I move, That we report progress.

Motion agreed to.

House resumed.

Report of Committee of the Whole House

Report of Committee of the Whole House

CHAIRPERSON (Barbara Kuriger): Mr Speaker, the committee has considered the Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill and reports it without amendment. The committee has further considered the Contracts of Insurance Bill and reports it with amendment and divided into the following bills: the Contracts of Insurance Bill and the Contracts of Insurance (Repeals and Amendments) Bill. The committee has also considered the Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill and reports it has made no progress on the bill. I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Teanau Tuiono): The Climate Change Response (Emissions Trading Scheme Agricultural Obligations) Amendment Bill, the Contracts of Insurance Bill, and the Contracts of Insurance (Repeals and Amendments) Bill are set down for third reading next sitting day. The Building (Earthquake-prone Building Deadlines and Other Matters) Amendment Bill is set down for further consideration in committee stage. The House stands adjourned until 11.30 a.m. on Tuesday, 12 November.

The House adjourned at 5.56 p.m.