Tuesday, 29 July 2025

TUESDAY, 29 JULY 2025

TUESDAY, 29 JULY 2025

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.

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

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

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

CLERK: Petition of Simon Kemp requesting that the House urge the Government to enter into negotiations with journal publishers to broaden access to academic journals.

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

CLERK:

Government response to the petition of Greenpeace

Report of the Attorney-General under the New Zealand Bill of Rights Act 1990 on the Electoral Amendment Bill

Climate Change Commission Monitoring report: Emissions reduction (2025)

2025-26 statements of performance expectations for:

Callaghan Innovation and

New Zealand Transport Agency.

SPEAKER: Those papers are published under the authority of the House. Nineteen select committee reports have been presented.

CLERK:

Reports of the Foreign Affairs, Defence and Trade Committee on the:

2025-26 Estimates for Appropriations within Vote Business, Science and Innovation related to New Zealand Trade and Enterprise

2025-26 Estimates for Vote Customs, and

2025-26 Estimates for Vote Defence and Vote Defence Force

reports of the Health Committee on the:

2025-26 Estimates for Vote Health and

2025-26 Estimates for Appropriations within Vote Business, Science and Innovation related to the Health Research Fund

reports of the Justice Committee on the:

2025-26 Estimates for Vote Attorney-General

2025-26 Estimates for Vote Corrections

2025-26 Estimates for Vote Courts

2025-26 Estimates for Vote Justice

2025-26 Estimates for Vote Parliamentary Counsel

2025-26 Estimates for Vote Police

2025-26 Estimates for Vote Serious Fraud

reports of the Petitions Committee on the:

petition of Duran Nair

petition of Nick Ruane, and the

petition of Speak Up for Women

reports of the Primary Production Committee on the:

2025-26 Estimates for Vote Forestry and

2025-26 Estimates for Vote Lands

report of the Social Services and Community Committee on the 2025-26 Estimates for Vote Women, and

report of the Transport and Infrastructure Committee on the 2025-26 Estimates for Appropriations within Vote Finance related to the infrastructure sector.

SPEAKER: The Clerk has been informed of the introduction of three bills.

CLERK:

Antisocial Road Use Legislation Amendment Bill, introduction

Public Service Amendment Bill, introduction

Education and Training (Early Childhood Education Reform) Amendment Bill, introduction.

Urgent Debates Declined

Electoral Act—Announced Changes

SPEAKER: I have received a letter from the Hon Dr Duncan Webb seeking to debate under Standing Order 399 the Government’s announcement of changes to the Electoral Act. This is a particular case of recent occurrence for which there is ministerial responsibility. In determining whether a matter requires the immediate attention of the House, one consideration is whether the matter must come before the House reasonably soon in the form of legislation—see Speakers’ ruling 223/5.

The Electoral Amendment Bill is set down as the first Government order of the day for today. It will be debated for reference to a select committee. The Clerk will allocate the associated New Zealand Bill of Rights Act report to a select committee. On that basis, I do not think further time needs be set aside to consider the matter today.

Oral Questions

Questions to Ministers

Question No. 1—Finance

1. SUZE REDMAYNE (National—Rangitīkei) to the Minister of Finance: When were personal income tax thresholds last adjusted?

Hon NICOLA WILLIS (Minister of Finance): Personal income tax thresholds were adjusted almost exactly a year ago, on 31 July 2024, and, as members may recall—because many of them opposed this tax relief for New Zealanders—the Government increased the lowest income tax threshold from $14,000 of annual income to $15,600, the next threshold from $48,000 to $53,000, and the next from $70,000 to $78,100. At the same time, the Government expanded eligibility for the independent earner tax credit, and we increased the in-work tax credit paid to low to middle income families with children.

Suze Redmayne: By how much have New Zealand households benefited from these tax changes over the past year?

Hon NICOLA WILLIS: Well, of course, that depends on their own individual circumstances and those of their family and household. I will give you some averages to illustrate it. Inland Revenue expects that around 1.9 million households will have benefited by $60 a fortnight, on average. That’s $60 a fortnight that would have been denied to them by the members who opposed that tax relief. Inland Revenue also expects that households with children will have benefited by $78 a fortnight, on average—relief that would have been denied to them by those who opposed tax relief—and Inland Revenue points out that in some circumstances, households will have benefited by more than $100 a fortnight.

Suze Redmayne: What other assistance have households received from the Government?

Hon NICOLA WILLIS: More than 65,000 households, and rising, have received additional help with early childhood education costs from FamilyBoost. Members may recall—because many of them still oppose it—that FamilyBoost has so far given households a rebate of 25 percent of their early childhood fees and that from this month it is rising to 40 percent of their early childhood fees. I could point to many more things, but one policy I would particularly highlight is the move to 12month prescriptions, which will be coming early next year. For families who get stable long-term medications like asthma inhalers, insulin for diabetes, ADHD medication, and blood pressure tablets, this move will save them unnecessary medical costs and give health professionals more time to deal with other patients.

Suze Redmayne: What does this mean for the cost of living?

Hon NICOLA WILLIS: The cost of living is the relationship between two things: how much people get in their pay packet—[Interruption]

SPEAKER: Sorry—just a minute. That’s ridiculous. One or two comments by way of interjection—as has always been the case—is acceptable, but not that barrage. The Minister will start again.

Hon NICOLA WILLIS: The cost of living is the relationship between two things: how much people get in their pay packet and the prices they pay. We’ve seen in recent history that when prices rise very rapidly to a peak of 7.3 percent, as in 2022—the highest inflation since 1990—wages can’t keep up, and hence there was a cost of living crisis. The Government is focused on both sides of the equation: on costs and on incomes. We are taking deliberate measures to address structural issues like competition that can lead to prices being higher than otherwise. Opposed by many members of this House, we gave tax relief that benefited working families. We are driving sustainable increases in incomes through measures that will grow the economy.

Question No. 2—Prime Minister

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

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes, and especially our move to ban surcharge fees on in-store debit and credit payments so that Kiwis don’t have to pay to use their own money, and, of course, this follows a recent announcement by the Commerce Commission to reduce the bank fees that retailers pay to accept card payments, saving retailers $90 million a year. We want to make sure those savings are fully passed on to Kiwis, so we are banning fees at the checkout. That means no more nasty surprises or hidden fees, and Kiwis will know what the price is and can shop with confidence.

Rt Hon Chris Hipkins: Why does his Government think that in a cost of living crisis, hiking up the fees of board directors by up to 80 percent is more important than pay rises for teachers and nurses, who are being offered a paltry 1 percent pay increase—less than the rate of inflation?

Rt Hon CHRISTOPHER LUXON: Well, as that member will well understand, having been a Minister for the public sector, we want to make sure that our Crown entities which are delivering some our most critical public services are incredibly well governed and well managed and well led. We’ve been advised that we need more competitive payment for those directors, which, essentially, hasn’t moved in the course of over a decade, although I know that the member would have dealt with it himself when he passed on pay increases to directors back in 2022, I think, as well. What we’re doing is making sure that, actually, we’ve got competitiveness. It’s never going to be as competitive as public sector pay, but it’s important, given that we’ve got large expenditure going on, that it’s well governed.

Rt Hon Chris Hipkins: So why should teachers and nurses have to settle for pay increases below the rate of inflation—in other words, a real-terms pay cut—while he’s increasing the pay of directors by up to 80 percent?

Rt Hon CHRISTOPHER LUXON: Well, in answer to the first leg of the question, I’d just say that on nurses, there has been a big effort around nurse remuneration over a number of years. We are in a place where we have average nurse salary and incomes at $125,000, which is equal to New South Wales, which is 35 percent wealthier than New Zealand, and we’ve also been hiring more nurses. We’ve got 2,100 more nurses in our system, there’s a lot less attrition, and they’re increasingly well remunerated. The only people who lose out on strike actions are those people who want elective surgeries, and we want to be able to get them to them.

Rt Hon Chris Hipkins: So, in addition to denying the fact that the cost of living crisis continues for New Zealand families, is he now asserting that the problem is that nurses are just too well-paid because of the pay increases they got under a Labour Government?

Rt Hon CHRISTOPHER LUXON: I reject the characterisation in that question. All I was explaining to the member, who would well understand, is that it’s important that we will never be able to offer private sector pay to public sector directors. But we’re making sure it’s more competitive so that we get good governance, so that the money that we’re spending is well spent and gives good value for money.

Hon David Seymour: Point of order, Mr Speaker. I seek your guidance. In the past, Speakers have ruled that you cannot begin a question with a word like “So”, make a statement as an assertion, and then lead on to a question. Usually, a question must begin with a question word in this House.

SPEAKER: That’s right, and in this case, it was “So does he deny”, and so I overlooked the “So” in this case. I’m sure that the Leader of the Opposition knows the rules pretty well, in and out. I recall occasions when the Minister himself has asked questions that have had one word preceding a question word, and that’s not unreasonable.

Hon David Seymour: Yeah, but I got away with it!

SPEAKER: Yeah? Well, guess what’s happening here.

Rt Hon Chris Hipkins: Why, during a cost of living crisis, has his Government prioritised $300 million in tax breaks for a multinational tobacco company while everyday New Zealanders are left paying up to $100 per visit just to see their local GP, if they can find one?

Rt Hon CHRISTOPHER LUXON: Again, I reject the characterisation of that question, and the member has come back to this point at all times. What we are doing is making sure that people who are addicted to smoking can actually, through heated tobacco products, have an opportunity to come off smoking. We didn’t have those products in the market; they are now in the market. We’re extending that pilot—that trial. The member knows that it’s not a tax. The member knows that it’s a contingency due to lost excise and revenue that would be coming, because if we are successful at moving people off smoking into other products, it reduces harm. That’s a good thing.

Rt Hon Chris Hipkins: Does he stand by his statement that “We have to fix and rebuild this economy so we can actually reduce the cost of living for people”; if so, why has the economy flatlined and why have costs continued to explode under his leadership?

Rt Hon CHRISTOPHER LUXON: Look, I welcome the member’s new-found interest in the economy and the cost of living, because it’s not that long ago that he was in Government and he actually created this mess that we’re now cleaning up. But I’d just say to that member, let’s just go through a few things, because if you’re really serious about reducing the cost of living, will you support a rates cap on councils—yes or no?

SPEAKER: No, no—sorry. The Prime Minister can answer a question, but he can’t ask questions.

Rt Hon CHRISTOPHER LUXON: It’s a rhetorical one.

SPEAKER: Well, rhetorical or not, it’s a question. [Interruption] Do you want to continue the answer?

Rt Hon CHRISTOPHER LUXON: Sorry, it was just a rhetorical answer—is what I’m asking.

Rt Hon Chris Hipkins: When essential costs like groceries, fees, Government levies, and doctors visits continue to rise, why does he respond to public frustration not with solutions but by making it harder for people who do remain in New Zealand to vote him out?

Rt Hon CHRISTOPHER LUXON: I’d just say to the member that this a Government that is working incredibly hard. We have made sure that we offer people tax relief—low and middle income working New Zealanders who have suffered because of the conditions that his former Government created. This is a Government that’s expanding FamilyBoost to make sure that low and middle income working New Zealanders can get access and subsidisation for their early childcare costs. This is a Government that has created rent stability. This is a Government that has taken people off social housing wait-lists. This is a Government that is doing everything it can to lower the cost of living for people through good economic management—something that he and his party just don’t understand.

Question No. 3—Commerce and Consumer Affairs

3. NANCY LU (National) to the Minister of Commerce and Consumer Affairs: What recent announcements has the Government made regarding reduced fees at the checkout?

Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Good news: the Government is banning surcharges. This ban will apply to in-store payments for debit, credit, and EFTPOS cards, putting money back in Kiwis’ pockets. Whether a customer is tapping, swiping, or paying with their phone, they’ll soon pay the advertised price and no more. It’s a win for consumers and a step towards a fairer, simpler payment system. [Interruption]

SPEAKER: Just wait for a moment, please. All right, carry on.

Nancy Lu: Why is it important that Kiwis know exactly what they are paying before they tap or swipe?

Hon SCOTT SIMPSON: No one likes getting stung with a surprise fee at the checkout, and I believe that New Zealanders should be able to pay for things without being penalised just because they choose to pay for a transaction in a certain way. It’s about honesty, clarity, and respect for people’s hard-earned money.

Nancy Lu: What will this change mean for Mr Major from Thames?

Hon SCOTT SIMPSON: By May 2026 at the latest, this change will do away with those coffee-stained, crumpled-up stickers on payment terminals, and for Mr Major from Thames, he will be able to buy his coffee and scone and know that the price that he sees on the cabinet will be the price he pays at the till. This change is about bringing transparency back to pricing and ensuring Kiwis get the best bang for their buck.

Nancy Lu: What feedback has the Minister received on this change?

Hon SCOTT SIMPSON: I have received overwhelmingly positive feedback from consumers on this change. Consumer New Zealand has said that “scrapping surcharges will put millions back into the pockets of New Zealanders and make accepting payments much simpler for merchants.” Business New Zealand has said that consumers should be encouraged to use modern modes of payment without having to second-guess a purchase or having to do the “insert card” dance at the till. Consumers are tired of these sneaky charges, and under this Government these surcharges are gone.

Question No. 4—Finance

4. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Tank yu tumas, Mr Speaker. Does she stand by all her statements and actions?

Hon NICOLA WILLIS (Minister of Finance): In context, yes.

Hon Barbara Edmonds: Who is right: the New Zealand Food Network, who said, “We genuinely believed that there was going to be a drop off once everything got back to normal, but then this thing called the cost of living crisis kicked in … so it’s not going down”, or Nicola Willis, who says that the country is “back on course”?

Hon NICOLA WILLIS: To address this question, I want to remind members of this House of some cold, hard numbers. I’ll start with December 2022, when food price inflation was 10.7 percent. I’ll then take you to March 2023, when it was 11.3 percent, and June 2023, when it was 12.3 percent. I then take you to June 2025, where it is 4.2 percent. Food price inflation is far lower than it was under the last Government, and I would say that that is progress.

Hon Barbara Edmonds: Are things really getting back on course when the Compassion Soup Kitchen supplied 1,300 more meals than the previous month, and have said, “The increases right now are just unprecedented”?

Hon NICOLA WILLIS: I want to acknowledge the Compassion Soup Kitchen and the many non-governmental organisations who support New Zealanders in need, many of whom are vulnerable, and what I would highlight for the House is the statements I’ve made previously, which is that when unemployment is high—as it currently is—that has a significant impact on households. I note that unemployment is tracking almost exactly to the forecasts members opposite presented prior to the election; in fact, when we look at the granular detail, unemployment is slightly lower than the previous Government was forecasting. So while unemployment at these levels is regrettable and is undoubtedly having an impact on New Zealand families, we are, as a Government, able to say that this is absolutely the result of the economic crisis left to us by the last Government.

Hon Barbara Edmonds: Is the country back on course when Kaibosh Food Rescue have said that four years ago, 20 people showing up at the Lower Hutt food bank was a busy day, and now it sees between 120 to 135 people each day?

Hon NICOLA WILLIS: Well, members of this Government get up every day to think about how we can improve this economy so that it delivers for New Zealanders, including those in need making use of food, rescue services, and other support services. Now, what we can look to is the data to track that progress, and what we can see is that after a couple of years of real GDP per capita going backwards under the last Government, inflation remaining out of control for three years, and interest rates being cranked through the roof, we are now in a situation where we have had two successive quarters of real GDP growth where inflation has got back into target and where interest rates have reduced significantly. Now, those are the foundations. There is a lot more work to do, but it’s a lot of progress since the last lot trashed the joint.

SPEAKER: Yeah, just calm down on those ending comments after some statistics are presented to the House.

Hon Barbara Edmonds: What does it say about her priorities when she finds funding for tobacco companies and board directors but not for community providers, who are dealing with significant increases in demand from families because of her Government’s decisions?

Hon NICOLA WILLIS: Well, I’d reject just about every characterisation in that question, in particular acknowledging that, as the Minister for Social Investment has outlined, we are working to develop a much better contracting approach with community organisations. However, on the question of tobacco excise, I would simply point out to the member that our goal is to move more people away from smoking, and the numbers which she refers to actually would result from people not paying tobacco excise any more because they have stopped smoking. So if the member’s position is that she wants us to collect more tobacco excise because more people should be smoking, I’d put to it her that that’s a very irresponsible position, and I’d prefer to have the reduction in excise that occurs when fewer people are smoking.

Hon David Seymour: Can the Minister of Finance confirm that the inflation peak in 2022 was the highest since 1990, and do those two years have anything in common?

Hon NICOLA WILLIS: Well, students of history will know that Labour Governments have had a history of driving up inflation, putting holes in the books, and destroying the economy. But I would like to just share facts, Mr Speaker—referring to your earlier guidance. It wasn’t just the 7.3 percent peak, I say to the Deputy Prime Minister, but it was also the 7.2 percent in September 2022, the 7.2 percent in December 2022, the 6.7 percent in March 2023, the 6 percent in June 2023, the 5.6 percent—[Interruption]

SPEAKER: Yeah, good—that’s enough, and can I just say to the Opposition that if you want me to do something about something, don’t sit there trying to tell me what the rules are.

Question No. 5—Prime Minister

5. Hon MARAMA DAVIDSON (Co-Leader—Green) to the Prime Minister: E tautoko ana ia i ngā kōrero me ngā mahi katoa a tōna Kāwanatanga?

[Does he stand by all of his Government’s statements and actions?]

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes.

Hon Marama Davidson: Will his changes to voter enrolments lead to more or fewer people voting?

Rt Hon CHRISTOPHER LUXON: Well, I hope more people participate in our democracy. It’s a great thing. It’s a gift that should be really treasured incredibly well, and we hope that more people continue to participate in voting in New Zealand.

Hon Marama Davidson: Does he want to make it easier for more people to vote, and, if so, why is he proposing a change that may see an estimated 22,700 people have their eligibility to vote directly affected?

Rt Hon CHRISTOPHER LUXON: There is plenty of time before the next election for people to get enrolled. All we’re doing is making sure that it’s two weeks before election day and before advance voting begins. That’s a good thing. If Australians can do it 26 days earlier, I’m sure Kiwis can do it in 12 or 13 days.

Hon Marama Davidson: Should renters, young people, Māori, Asian, and Pasifika communities be afforded less access to democracy just because they are more likely to need to cast a special vote?

Rt Hon CHRISTOPHER LUXON: I think all New Zealanders are quite capable of getting registered two weeks out from an election, and I think it would be insulting to suggest otherwise. [Interruption]

SPEAKER: No, don’t—just hold on. This ridiculous level from both sides of the House is very unhelpful.

Hon Marama Davidson: Who does he see as worthy of a say in our democracy, if not renters, young people, Māori, Asian, and Pasifika communities?

Rt Hon CHRISTOPHER LUXON: We want all New Zealanders to have a say in our democracy.

Hon Marama Davidson: Does he agree that the fundamental right to vote sits at the heart of our democratic system, or does he believe it should be reserved as a privilege for those with the time and resources to engage in politics?

Rt Hon CHRISTOPHER LUXON: In answer to the first part of the question, yes. We want all New Zealanders to participate in the voting process.

SPEAKER: Question—

Rt Hon Chris Hipkins: Why are you so scared of voters?

SPEAKER: Well, can we go on? Question No. 6, the Hon Ayesha Verrall.

Question No. 6—Health

6. Hon Dr AYESHA VERRALL (Labour) to the Minister of Health: Does he stand by his statement that his focus “is on putting patients first”?

Hon SIMEON BROWN (Minister of Health): In the context it was made, yes. We’re putting patients first, to ensure that Kiwis can get the care they need when they need it. Our Government inherited significant wait-lists, which meant that too many patients had been waiting too long for the care they need. That’s why we’ve brought back health targets to focus the system on delivery, made a record investment of $16.68 billion over three Budgets, and continued to strengthen our health workforce. Whilst these efforts are starting to show positive progress, we know there is still much more work to be done. We’re getting on with the job, and we won’t stop until we deliver better health outcomes for all New Zealanders.

Hon Dr Ayesha Verrall: How was he putting patients first when he cut the workforce responsible for protecting patient safety by 30 percent?

Hon SIMEON BROWN: Well, the Health New Zealand report which that member is interested in and which that team was responsible for stopped being published in the 2019-20 financial year, and Health New Zealand has committed to restarting publishing of that report next year.

Hon Dr Ayesha Verrall: Point of order, Mr Speaker. That supplementary question did not reference a report. It referenced a 30 percent cut to the workforce that is responsible for protecting patient safety, and I don’t believe that that part of the question was addressed.

SPEAKER: Well, would the Minister like to make a response to that.

Hon SIMEON BROWN: Well, I note that the reporting which that team deliver is going to be restarted next year, after it stopped in 2019-20, and I have made my expectations clear to Health New Zealand that it’s about the outcomes that are important to the delivery for this Government.

Hon Dr Ayesha Verrall: Point of order, Mr Speaker. This team has a global responsibility for the quality and safety systems in their hospital. I didn’t ask a question about writing a report, though I am transacting that issue—

SPEAKER: No, but you did ask the question about, from my memory, whether he is concerned about the outcomes from this group if their numbers are cut. I think he’s just answered that question.

Hon Dr Ayesha Verrall: Is a 30 percent increase in ACC claims for people who suffer injuries, infections, and pressure sores in hospital a sign of a Government that puts patients first, or a sign of an overcrowded and understaffed health system?

Hon SIMEON BROWN: Well, that is not an acceptable rise in pressure injuries in our hospitals, and Health New Zealand has a responsibility to ensure that it is addressing those concerns. However, I would say that this Government has invested significantly in Health New Zealand: $16.68 billion over three Budgets. There are 2,100 more nurses working at Health New Zealand today than when we came into Government, 600 more doctors are working at Health New Zealand today than when we came into Government, and our focus is on ensuring that Health New Zealand is delivering on that investment and people and money so that patients get better access to care, following the significant wait-list the last Government left us to fix up.

Hon Dr Ayesha Verrall: How is he putting patients first when he has cut funding to the Health and Disability Commissioner to investigate instances of poor treatment and breaches of the code of patients’ rights?

Hon SIMEON BROWN: There was a one-off increase in funding allocated in this year’s Budget to ensure that they could continue to address the wait-list—again, a significant wait-list—and complaints made to the Health and Disability Commissioner. There was a one-off funding increase that the previous Government had put forward, which was time-limited. We have put another $1 million in—a time-limited amount of money—to continue the work that the Health and Disability Commissioner is doing to get on top of the wait-list, and the advice that I have received from the Health and Disability Commissioner is that they’re making good progress on that.

Hon Dr Ayesha Verrall: Does he accept that he has cut safety systems, suppressed reporting, ignored the warning signs, and closed off accountability, and that next time when tragedy strikes, he has no one to blame but himself?

Hon SIMEON BROWN: Well, when it comes to the reporting which the member talked about in her question, I—

Hon Dr Ayesha Verrall: I didn’t.

Hon SIMEON BROWN: When she talked about the reporting in her question, I would note the report that she is referencing was a report that was discontinued in the 2019-20 financial year. That report is now being reinstated by Health New Zealand next year.

Hon Dr Ayesha Verrall: Point of order, Mr Speaker. It does seem like the Minister has really got it in his head that this question was about a particular report. He said “a report” in his answer. I’ve not raised a report in my question; I’ve raised serious concerns about the patient safety system, and I’ve not had that addressed.

SPEAKER: You used the word “reporting”, and I’d have to say it’s very hard for me, sitting here listening to your questions about the range of activities across the health sector, without expecting that there might be some reporting of that work. So I don’t agree with you that there is a problem with the answer from the Minister.

Question No. 7—Resources

7. JAMIE ARBUCKLE (NZ First) to the Minister for Resources: What upcoming announcements, if any, is he planning for the resources portfolio?

Hon SHANE JONES (Minister for Resources): This week is an extraordinary time for heat, gas, and steam. Along with my colleagues Minister Upston and Minister Reti, I’ll be launching the Government’s draft geothermal strategy tomorrow, reflective of my commitment to renewable energy. However, to ensure that we don’t repeat the errors of the past and continue the perfidy of the cancellation of the oil and gas industry by Jacinda Ardern, we will have the oil and gas exploration—ill-fated—piece of legislation changed at the end of this week.

Jamie Arbuckle: Why is geothermal energy important for the New Zealand economy?

Hon SHANE JONES: It’s important that our economy boosts its productivity through more affordable and secure energy. As we grapple with the legacy of failed energy policy, cancellation of the oil and gas industry, and unicorn-kissing, shallow green ideas, we’re a lot more serious. We’re unlocking the geothermal potential—

Hon Kieran McAnulty: Point of order, Mr Speaker. Thank you, sir. This is a clear example of the very thing that you have warned this Government about numerous times over various sitting weeks of using a question asked by their own team to express their opinions on previous policies. Now, it is a clear attempt to—

SPEAKER: Thank you. I agree with you, and I think that the Minister should recognise that the attack aspect of his answer is not acceptable. Talking about factual matters is and it has been allowed, but the general tenor of that answer falls in the category of using a Government question to attack the Opposition, which is not acceptable.

Hon SHANE JONES: Point of order, Mr Speaker. I’m very happy that you’ve used the word “factual”. It is a fact that the oil and gas industry was chilled, halted, as a consequence of a decision announced by so-said woman.

SPEAKER: Well, that might be true in your opinion, but the reality is that there is still gas flowing at the moment, so it can’t have been stopped dead. So I’m sure there will be another supplementary that gives you the opportunity to—[Interruption] Oh, sorry, are you still answering that other supplementary?

Hon SHANE JONES: Yes, I think that in the interests of democracy, I should give a fuller answer.

SPEAKER: Well, I think that the House has lost track of it, so Jamie Arbuckle might like to repeat it, word for word.

Jamie Arbuckle: Why is geothermal energy important for the New Zealand economy?

Hon SHANE JONES: Our economy requires a diverse range of energy sources. Geothermal is a key feature in ensuring that we have affordable energy, that our productivity is boosted, and that we have rules, laws, and opportunities where it can be further utilised. We have the ability to become world leaders: we have the human capital and the technology, and, with appropriate modesty, I would say we have the political leadership.

Jamie Arbuckle: What more can he tell us about the draft geothermal strategy?

Hon SHANE JONES: Tomorrow, I shall travel to Taupō, the heart of geothermal potential, and unveil the strategy. Consultation will begin, as befits a participatory democracy like the one I’m privileged to belong to. I’m also very keen to identify what barriers, red tape, and third-party interests might be blighting the ability of us to accelerate the availability of geothermal energy for tourism, recreational purposes, manufacturing, and further electricity. This follows the $60 million funding through the Regional Infrastructure Fund, designed to ensure that supercritical deep geothermal energy can play a bigger role in securing a resilient energy future.

Jamie Arbuckle: What more can he tell us regarding reversing the ban on offshore gas exploration?

Hon SHANE JONES: A worse decision in the history of capitalism in New Zealand, driven by a very shallow, juvenile, and mistaken approach—

Hon Kieran McAnulty: Point of order, sir.

SPEAKER: Sorry, I know what you’re going to say, but for a Minister to say that a previous decision was bad is not out of order. I think you were heading into territory that’s probably unnecessary, but if that was your point, then that’s what I would respond to.

Hon Kieran McAnulty: No, certainly not, sir.

SPEAKER: Oh, it’s something new? My goodness! That’s unusual.

Hon Kieran McAnulty: Point of order, Mr Speaker. Yes, just specifically, the use of “shallow” and “juvenile” surely cannot be an acceptable—

SPEAKER: Yeah, I just said that to him.

Hon Kieran McAnulty: —use of language. That’s right. So—

SPEAKER: Yeah.

Hon Kieran McAnulty: —and with respect, sir, he shouldn’t be allowed to continue along those lines when you’ve already warned him not to do so.

SPEAKER: Yes, that’s right, and so I’m sure he won’t.

Hon SHANE JONES: Right. When this bill passes, it will remove the ban of petroleum exploration beyond onshore Taranaki—something, sadly, that has left Taranaki bereft of economic opportunity. But wait! Ironsands await—they’re on their way. A new tier of mineral permits and a new tier of entitlements will make it easier, and this bill will ensure that when dealing with decommissioning, there’s a balance between protecting the Crown balance sheet and ensuring that investors in this sector continue to prosper. It is also—

SPEAKER: Good—OK.

Hon SHANE JONES: —going to ensure that the thousands of dollars sucked out of the Taranaki economy will over time be restored in inverse—

SPEAKER: Yeah—that’s it.

Hon SHANE JONES: —proportions to what the Māori Party actually deliver—

SPEAKER: No, no—no, sit down. Thank you.

Question No. 8—Justice

8. TOM RUTHERFORD (National—Bay of Plenty) to the Minister of Justice: What recent announcements has he made on the recovery of court fines? [Interruption]

SPEAKER: Just everyone calm down.

Hon PAUL GOLDSMITH (Minister of Justice): Last Friday, I announced that the Government is trialling new technology to identify vehicles registered to those who have overdue court fines and reparations. If they do, the vehicle may be clamped and seized by bailiffs, and the message is simple: pay your court fine and reparations, and if you haven’t—if you’ve left somebody out of pocket—you might soon find yourself walking home. We promised to find new, effective ways to get people paying their court fines, and that’s exactly what we’re delivering.

Tom Rutherford: Why is the recovery of overdue court fines important?

Hon PAUL GOLDSMITH: Because when the courts impose fines or reparations, they need to be paid, or the system loses its credibility, and for reparations victims, the victims are victimised again. As of 30 June this year, there were $456 million in fines and $104 million in reparations outstanding, and that is not something that we’re prepared to tolerate.

Tom Rutherford: What insight can he share on the success of the clamping trial over the weekend?

Hon PAUL GOLDSMITH: Well, 4,859 vehicles were scanned by bailiffs positioned at breath-testing stations on the weekend. Of those, 208 people were identified as having outstanding fines. The majority of them had a payment plan in place, but there were 32 that didn’t. Of those 32, 31 paid their fines in full—without a surcharge, maybe; well, we’re going to change that—and one didn’t pay, and their vehicle was seized and towed. The Ministry of Justice noticed an 11 percent increase in the number of fine payments made online yesterday. The message can’t be clear enough: there are no more excuses—pay your fines.

Tom Rutherford: Will people be left stranded on the streets?

Hon PAUL GOLDSMITH: No. I’ve seen some misinformed comments by other political parties scaremongering on this issue. Bailiffs will make sure that people who have had their cars seized or clamped have arrangements to get to where they need to go. But if you don’t want to use public transport and you don’t want your cars taken, take responsibility and call 0800 4 FINES to make a payment.

Question No. 9—Infrastructure

9. Hon GINNY ANDERSEN (Labour) to the Minister for Infrastructure: Does he stand by his statement, “This is a Government serious about investing in New Zealand’s future. Serious about infrastructure”; if so, why have 18,000 jobs been lost in the construction sector since this Government took office?

Hon CHRIS BISHOP (Minister for Infrastructure): Yes, and, in response to the second part of the question, the construction sector has undoubtedly been affected by the economic downturn. In answer to her question as to why the jobs have been lost, I would say that this Government came to office in November 2023 with record inflation, a cost of living crisis, high interest rates, and, ultimately, a recession, and in a recession, as the rest of the economy has discovered and as has the construction sector, unfortunately, jobs are lost. But we are doing what we need to do as a Government to get this economy growing again, and there are green shoots of confidence coming through, through the EBOSS report and others, and I would point the member to that.

Hon Ginny Andersen: Why did 1,000 people lose their jobs in the construction sector last month?

Hon CHRIS BISHOP: Well, ultimately, if you want the literal answer, the employers of those people decided not to employ them any more. This Government is doing what it can do across a range of initiatives in order to support the construction sector. As the member, I think, noticed—I hope she noticed—there is $6 billion of Government-funded construction due to start in the next six months across roading, across health, and across school property, where there’s $800 million alone of school property projects about to start in the next six months. There are significant roading projects about to start—and, of course, that’s just the Government-funded part of the construction sector. As interest rates come down, there will be increased economic confidence around the construction sector, particularly residential construction, and of course we want employers to have the confidence to employ more people as the economic recovery gets under way.

Hon Ginny Andersen: How many of the 47,000 Kiwis who left New Zealand last year were construction workers?

Rt Hon Christopher Luxon: Support fast track.

Hon CHRIS BISHOP: I don’t have that number to hand, but if the member puts it down in writing, I’m happy to look at it. I would say—as the Prime Minister rightly pointed out as the member was asking that question—the Opposition is good at talk about construction sector losses, but very bad at offering—

SPEAKER: That’s all right.

Hon CHRIS BISHOP: —answers—

SPEAKER: No, no—that’s not their job. Another supplementary?

Hon Ginny Andersen: What does it say about this Government’s commitment to infrastructure when the building sector is the least confident sector surveyed by the New Zealand Institute of Economic Research Quarterly Survey of Business Opinion for July 2025?

Hon CHRIS BISHOP: What it says is that we are in a difficult situation economically caused by the recession induced by the last Government’s profligate spending and useless economic policies. The Government cannot magic up jobs overnight. The Government cannot magic up an economic recovery. What it actually takes is sound fiscal management, reducing red tape, sensible investments in infrastructure—which the Government is doing—across health, across education, across roads, and across rail, and that will generate the economic return to form that this country needs.

Hon Ginny Andersen: How can he claim to be serious about infrastructure when all his Government has done is re-announce infrastructure projects, stop construction work, and slash support for apprenticeships?

Hon CHRIS BISHOP: Well, in relation to the second part of that member’s question, it’s interesting that she can’t name a single project that has been stopped, because stopping Lake Onslow in 2035 does not affect construction jobs today. Stopping—[Interruption]

SPEAKER: No, sorry. The Minister will stop, and the House will go silent for the balance of that answer.

Hon CHRIS BISHOP: Stopping Auckland light rail, which even on the most heroic assumptions was going to start in 2032 or maybe 2033—it may affect the number of people working as the consultants, who made hundreds of millions of dollars out of Auckland light rail, but it doesn’t actually affect construction jobs today. In relation to the first part of the member’s question, the Government has put more money into the projects that we inherited from the last Government. I’ll give you two examples: one is the Melling Interchange, which did not have enough money appropriated to be delivered properly. This Government drew down a tagged contingency to put it into it—[Interruption]

SPEAKER: Sorry, is someone down there talking when I’ve said we’ll hear it in silence?

Rt Hon Chris Hipkins: Point of order, Mr Speaker. I think you might have more chance of getting silence on this side if the Minister was talking about the actions of his Government and not the actions of the previous Government.

SPEAKER: Well, that’s true, but for a moment there I thought he was being complimentary. Please talk entirely about this Government.

Hon CHRIS BISHOP: Well, the member asked me a question about projects of the previous Government, and so I think I’m entitled to respond to those projects. The point is some of the projects the member was talking about had had money appropriated in March 2020, for which the money appropriated was half of what was required. I’ll give you an example: Ōtaki to North Levin, we were told, was going to cost $817 million in February 2020. I can advise the House—

SPEAKER: Yeah—good.

Hon CHRIS BISHOP: —that the cost to deliver that—

SPEAKER: I think you’ve made the point.

Hon CHRIS BISHOP: —is at least double.

SPEAKER: That’ll do. I think you’ve made the point.

Question No. 10—Building and Construction

10. Dr CARLOS CHEUNG (National—Mt Roskill) to the Minister for Building and Construction: What announcements has the Government made about overseas building products?

Hon CHRIS PENK (Minister for Building and Construction): As of yesterday, the first pathway in the Government’s new regime for overseas-approved building products is open. Along with the Prime Minister, I made that announcement in the member’s own electorate on the weekend. It means that thousands more high-quality products can now be used more easily on construction sites across New Zealand. This helps tradies get on with the important job of building housing and other infrastructure that Kiwis need.

Dr Carlos Cheung: Why were these changes needed?

Hon CHRIS PENK: These changes are critical to bringing down the cost of building in New Zealand—costs that had jumped by 40 percent since the year 2019. It’s now 50 percent more expensive in this country to build a stand-alone house than in Australia, which I and others have described as, frankly, outrageous. The Government is pulling every lever to drive economic growth, and by opening access to more quality products, we have the potential to cut thousands of dollars off the cost of building a home. More choice means more competition, which, along with innovation, will help to put downward pressure on prices, giving Kiwis options to suit their budget when building or renovating.

Dr Carlos Cheung: What building products will become easier to access in New Zealand because of this policy?

Hon CHRIS PENK: A hundred and thirty international standards released yesterday cover some of the most important elements of the materials used in homes—for example, plasterboard, cladding, windows, and external doors. I note that we have some of the most expensive plasterboard in the world, with Kiwis paying around 40 to 60 percent more than in comparable countries. Thanks to these changes, plasterboard made in Australia, the UK, the EU, the United States, and, yes, still in New Zealand will be far easier to use here.

Dr Carlos Cheung: What feedback has the Minister received about these changes?

Hon CHRIS PENK: The feedback so far has been overwhelmingly positive. Registered Master Builders chief executive Ankit Sharma called this a big step forward for builders facing rising costs and a shortage of key materials. He has said that “By allowing overseas products that meet standards to be used more readily, we can improve supply chain resilience, reduce delays, and ultimately deliver more homes, faster and more affordably.” I would also like to acknowledge all the parties in the House that supported the passage of the primary legislation allowing this regime, including the coalition Government parties but also parties from across the political aisle. This Government has many more steps planned in addition to make it easier and affordable to build in this country.

Question No. 11—Prime Minister

11. CHLÖE SWARBRICK (Co-Leader—Green) to the Prime Minister: E tautoko ana ia i ngā kōrero me ngā mahi katoa a tōna Kāwanatanga?

[Does he stand by all of his Government’s statements and actions?]

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes.

Chlöe Swarbrick: Who is his Government here to serve—

Hon Members: Whoa!

Chlöe Swarbrick: —banks, supermarkets—

SPEAKER: Right, stop—just stop. Someone is going to go from the backbench very shortly, because questions are heard in silence.

Hon Kieran McAnulty: Are you seeking nominations?

SPEAKER: No, I’m not seeking nominations, but if you want to self-nominate, I’ll certainly oblige.

Chlöe Swarbrick: Who is his Government here to serve: banks, supermarkets, and electricity companies making billions in profit, or regular, hard-working New Zealanders?

Rt Hon CHRISTOPHER LUXON: Well, as the member will be well aware, we are here to support all New Zealanders, and we’re giving particular help to low and middle income working Kiwis. We’re doing that by offering tax relief for the first time in 14 years. It’s not a deeply ideological concept, but one that is the right thing to do, given the inflation that people have encountered. We are expanding the thresholds and the coverage of things like FamilyBoost for working families who have early childcare costs. Most importantly, we’re running the economy well, because if you care about low and middle income working New Zealanders, you run the economy well so that you don’t have high inflation and high interest rates.

Chlöe Swarbrick: Does the Prime Minister take responsibility for the 27,000 fewer jobs and 22,000 more people unemployed than at this time last year?

Rt Hon CHRISTOPHER LUXON: Well, as I’ve explained before, what happens is that when you increase Government spending by 84 percent, it drives up domestic inflation. The only tool that you’re then left with is to drive up interest rates. When interest rates go up, businesses actually have got high interest rates and high inflation costs, and, as a result, they get squeezed, the economy goes into recession, and people lose their jobs. That is the unfortunate thing when you don’t run an economy well—that is the consequence. The people who suffer are low and middle income working people, who the other side of the House used to care about but don’t.

Chlöe Swarbrick: Will the Government guarantee a job for every person that it has made unemployed?

Rt Hon CHRISTOPHER LUXON: Well, we are building an economy to create jobs. We are doing that by making sure we are getting kids taught the basics brilliantly so that they can access high-paying jobs. We’re doing that by making reforms to our science sector to make sure we create value-added products and services that we can sell to the world; we are getting rid of the barnacles that led to over-compliance and higher costs by getting rid of the red tape and the green tape that’s slowing New Zealand up; and we are making sure that we are expanding—doubling—trade and attracting investment to New Zealand, as well as building modern, reliable infrastructure. Those are the things that will lift the collective living standards of all New Zealanders.

Chlöe Swarbrick: Why is his Government forcing small businesses into paying bank interchange fees instead of the banks, which are making billions in profit absorbing it?

Rt Hon CHRISTOPHER LUXON: Well, I’d just say to the member that the Commerce Commission came out last week and identified $90 million worth of reductions that merchants are charged by, say, Mastercard and Visa. We know there has been excessive charging going on. We’re proud of the fact that we’re removing fees and surcharges for New Zealand consumers, and, actually, if there are any other charges, we expect it to be built into pricing, just like it is for everything else.

Chlöe Swarbrick: Will the Government ban banks from charging interchange fees?

Rt Hon CHRISTOPHER LUXON: Well, again, what you’ve seen is a Government that’s actually done something about it by lowering the interchange fees by $90 million—the fees that are charged by Mastercard and Visa—and making sure that $65 million of excessive charges that retailers often pass on to consumers that have no bearing to the cost of those transaction fees is taken away. We’re proud of the fact that we’re taking away fees and surcharges on debit cards, credit cards, and EFTPOS payments.

Question No. 12—Housing

12. Hon PEENI HENARE (Labour) to the Associate Minister of Housing: Does he stand by his statement, “This Government takes homelessness seriously”; if not, why not?

Hon TAMA POTAKA (Associate Minister of Housing): Āna—yes.

Hon Peeni Henare: How can he say that the Government is taking homelessness seriously when homelessness in Tāmaki-makau-rau has increased by 90 percent in just nine months under this Government?

Hon TAMA POTAKA: No one in this Government or, indeed, this House wants to see Kiwis living without shelter or on the streets, or living homeless. That’s why we have undertaken a number of initiatives—both existing and new initiatives—to ensure that we meet these challenges head on, whether or not that’s cost-proofing the transitional housing and Housing First costs that were not cost-proofed before this Government came into administration; the Going for Housing Growth initiatives that Minister Bishop is leading; Priority One and seeing over 2,000 children come out of emergency motels; or whether it is the 1,500 community housing provider houses that we are supporting, the $500 million of support that we continue to support with transitional housing, or other things. Yes, we are not perfect. However, we are confronting these issues head-on and making sure we remain agile to some of the key homelessness concerns that confront many Kiwis.

Hon Peeni Henare: What targeted measures will he implement to support rangatahi or wāhine Māori, who the Auckland Council has shown are overrepresented among the homeless in Tāmaki-makau-rau?

Hon TAMA POTAKA: Yes, and I’d acknowledge that there are some cohorts in our communities—our rangatahi included—that have been disproportionately represented in housing deprivation and homelessness stats for many, many years. We continue to provide a whole range of supports, whether or not that’s rangatahi supported accommodation, transitional housing, or other avenues for those cohorts in those communities that confront these serious housing and homelessness challenges. We are also very determined to ensure that more granny flats and papa kāinga are enabled through national environmental standards changes that can help accommodate some of these folks and whānau members who are in serious housing need.

Hon Peeni Henare: Should the Government’s housing and homelessness strategy be grounded in Te Tiriti o Waitangi principles, as recommended by the Salvation Army and the Waitangi Tribunal?

Hon TAMA POTAKA: There are many views around how we can better confront the homelessness and serious housing deprivation challenges. On this side of the House, we are absolutely committed to ensure that we generate more supply so more Kiwis—Māori, rangatahi, wāhine, and otherwise—can be housed.

Hon Peeni Henare: Who is the Government governing for: the tamariki and whānau who are homeless and freezing, or the landlords that received $3 billion worth of tax cuts?

Hon Paul Goldsmith: We govern for everyone.

Hon TAMA POTAKA: Can I riff off Minister Goldsmith—we govern for all New Zealanders.

SPEAKER: That concludes oral questions. I’ll take 30 seconds while those who need to leave the House for other business do so quietly, and today I’ll be particularly watching for people who decide to have a conversation on the way.

Sittings of the House

Sittings of the House

Hon CHRIS BISHOP (Leader of the House): I move, That the sitting of the House today be extended into tomorrow morning for the recommittal and reconsideration in the committee of the whole House of the Crown Minerals Amendment Bill, the committee stage of the Local Government (Water Services) Bill, the first reading and referral to select committee of the Constitution Amendment Bill, the committee stage of the Crimes Legislation (Stalking and Harassment) Amendment Bill and the Statutes Amendment Bill, and the second reading of the Crimes (Countering Foreign Interference) Amendment Bill and the Customs (Levies and Other Matters) Amendment Bill.

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

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

Bills

Electoral Amendment Bill

First Reading

Hon PAUL GOLDSMITH (Minister of Justice): I present a legislative statement on the Electoral Amendment Bill.

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

Hon PAUL GOLDSMITH: I move, That the Electoral Amendment Bill be now read a first time. I nominate the Justice Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 1 December 2025.

Our electoral laws are a core element of our democracy. The ability to throw Governments out and to bring new ones in, in a manner that is accepted and with a process that is trusted, is fundamental to our democratic accountability. Broadly speaking, our electoral system and our democracy are strong, but they need constant maintenance. Confidence in the Electoral Commission has fallen in recent years, and we know the system has come under significant strain. This bill overhauls a number of our dated and unsustainable electoral laws. The package of amendments will strengthen the system, helping to deliver timelier election results, manage the costs, clarify rules, and provide more efficient services to voters.

When and how people enrol matters. Every democracy we compare ourselves with requires voters to be enrolled in order to vote. But there’s a lot of variation as to how early people must be enrolled. In Australia, at the last federal election, voters were required to be enrolled 26 days before the election. In New Zealand, for many years, voters needed to be enrolled the day before the election. The previous Government allowed enrolling on election day itself.

New Zealand’s approach had the benefit of making it easier for some people to vote, but it also removed the incentive for people to get enrolled before the election. We had the Electoral Commission, on one hand, with one message saying, “Get enrolled; get enrolled.”, and they were funded with many millions of dollars to encourage people to enrol, which the law says you should do; but, on the other hand, they were also saying, “By the way, don’t bother, because you can just rock up on election day and vote.” More people heard the second message than heard the first message. As a result, more and more people were turning up and enrolling when they voted. That’s led to more and more special votes and pressure on the count. The final vote count used to take two weeks. Last election, it took three. The advice I received is that if we leave things as they are, it could well take even longer in future elections.

The 20-day time frame for a final result is likely to be challenging, as it stands, without these changes. Therefore, one of the most significant changes in the bill is to close enrolment before the advance voting begins. People will need to make sure that they enrol and update their enrolment details by midnight on the Sunday before advance voting opens on the Monday. That’s 13 days before election day. The earlier deadline will mean enrolment changes can largely be processed before voting closes. Special voting processing can then begin sooner, reducing pressure on the final vote. This gives people a year to get organised, and I have every confidence that New Zealanders can manage.

We’ve heard lots of claims about 100,000 people being disenfranchised. I reject that absolutely. Around 110,000 enrolled or updated their enrolment details on election day last year only because they were told they could, so some people did. The message will be different this election. People will be told they need to be enrolled well before voting starts. It’s not that hard, and people are capable of doing these things. We’ll be making it even easier to stay enrolled for future elections. The bill modernises and streamlines enrolment in several ways. The Electoral Commission will now be able to use data from other Government agencies to keep address details up to date. This will make it easier for people to stay enrolled. Over time, this change will help keep enrolment details accurate between elections and contribute to a timelier vote count.

Enrolment services need to become more efficient and digital as well. The bill will remove costly postal requirements so that people can be contacted digitally about their enrolment status. I think we all know that if you have large families like me, you’ll have six envelopes from the Electoral Commission in the letterbox on a regular basis. It’s very wasteful, so we’re going to change those rules and adopt more modern methods. The commission will no longer have to collect and update enrolment information that it doesn’t need for electoral purposes, which seems sensible.

The bill also makes several changes related to integrity. It will ban all prisoners serving a prison sentence from voting. This change reverses the 2020 amendment that the previous Government did. Currently, prisoners serving three years or more can’t vote. Now, all sentenced prisoners won’t be able to vote while they’re in prison. Citizens bring both rights and responsibilities. When people are sentenced to prison for committing a crime, they should temporarily lose some of those rights, including the right to vote. This change underlines the importance that New Zealanders afford to the rule of law and personal accountability. When they’re released, of course, they regain the right to vote, and Corrections will work with prisoners to facilitate that. The bill will allow people who have committed a crime but who are detained in a hospital or secure facility on mental health or disability grounds to enrol and vote. This change recognises the different status of people who are detained for the purposes of mental health treatment.

Free and fair elections rely on voters not being subject to improper influence. I’m concerned that the current treating offence, which prevents people from providing food or drink to influence a person’s vote, is unclear and not being enforced. The bill will make it an offence to provide free food, drink, or entertainment within 100 metres of a voting place during the voting period. The offence will be an illegal practice and subject to a fine of up to $10,000. This approach will make some rules around treating clear. It will manage the risk of any perception of inappropriate influence when people are voting. It won’t apply to businesses near voting places undertaking their usual activities or where there is a reasonable excuse. The bill also extends existing offences of treating, bribery, and undue influence to cover inappropriate influence over a person’s enrolment choice. This change will make sure that decisions around enrolling have the same protection as decisions around voting.

The bill makes lots of changes to strengthen the resilience of our system. Currently, the Electoral Commission decides how long the advanced voting period is. This bill will require 12 days of advanced voting at each election guaranteed. This is a useful thing that we’ve done. We’ll also expand the Electoral Commission’s board from three members to up to seven members. This change will ensure the board is well equipped if a board member is unavailable at a critical time and will widen the skill sets of the board.

The bill updates thresholds for reporting donations from $5,000 to $6,000, recognising inflation and rounding it up to a round figure. Finally, the bill makes many systems improvements, such as setting a single deadline for candidate nominations, automating how electoral expenditure limits are set, and addressing gaps in the law. These proposals are outlined in full in the legislative statement.

Well-run elections are vital to upholding public trust and confidence and support the smooth and swift transfer of power, if indeed that is required by the people’s vote. The changes in this bill begin to transition to more modern and sustainable settings and enabling more timely and efficient elections in the future. I commend this bill to the House.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Speaker. Well, it’s a dark day for democracy. Here in New Zealand, we have a proud tradition of extending the franchise to women before any other country in the world and of constantly making our democracy accessible to everyone, and what’s this Government doing? What’s Christopher Luxon doing? He is making it harder for people to vote. It’s shameful—it’s absolutely shameful.

We know that 110,000 people enrolled and voted on election day last year, and it’s all very nice for the Minister of Justice to suppose that they might enrol earlier, but 137,000 people actually changed their details in the voting period. That’s 137,000 people for whom he is making it harder to vote. He wants to stop people enrolling, stop all those people exercising their vote—that’s hundreds of thousands of people who might not get a say in our democracy.

I think that everyone is entitled to have a say in our democracy: working people, busy people, people caring for kids, and—hey, do you know what?—people who forget to enrol two weeks before as well, because not everyone is fixated on politics and elections, and sometimes it takes until the last two weeks to think, “I really need to get around to that.” Politicians should be making it easier for people to vote, not harder. That’s how we make sure that everybody’s voice is heard, that everyone gets a say, and that this democracy—this Parliament—is truly representative.

Making it harder for working Kiwis and Kiwi parents to vote just shows how out of touch Christopher Luxon and this Government is, but do you know what’s really shocking? It is that all of the advice that the Minister has got has said that this is a bad idea. In fact, if you look at the regulatory impact statement, it says that there are other things you can do which are much more effective: enable electronic enrolment, enable automatic enrolment—and then there’s the Attorney-General’s report. The Attorney-General, frankly, slated this bill. I have never seen an Attorney-General’s report which is so bluntly vicious and damning, saying things like “freezing registration earlier in the voting period has the potential to harm confidence and trust”.

If people want to vote and they’re shown the hand and they’re told “Sorry, too late. You’re out of luck—you didn’t do your paperwork.”, what does that say about trust in our democracy? It is undermining the trust in our democracy, and that Government has undermined it a lot already and it’s doing it again.

The Attorney-General also said—and this is important—that the “starting-point is the fundamental importance of the right to vote within a liberal democracy. A compelling justification is required to limit that right.”, and did the Attorney-General think that there was a compelling justification? No, she quite honestly and frankly said that this is not justified. This is an unjustified limitation on the guaranteed right in section 12 of the New Zealand Bill of Rights Act to exercise that vote.

What’s more, if you then go to the departmental work—the regulatory impact statement—it says that it won’t work. Their advice, on page 23 of the report, is that this initiative “Could result in lower enrolment rates, lower turnout, and more disallowed votes.”—

Hon Damien O’Connor: That’s what they want.

Hon Dr DUNCAN WEBB: —and that it “Reduces ease for voters and creates a barrier to participation.” That is right, Damien O’Connor—that’s exactly what they want. They don’t want everyone to get down to the polling booth and have their say, because they don’t represent all of New Zealand. Christopher Luxon is making it harder for people to vote. He is so out of touch with ordinary New Zealanders that he doesn’t get that not everyone remembers to do their administration 14 days before the voting period.

It is a dark day for democracy. This is a huge step backwards, and we should be thoroughly ashamed of it.

Hon MARAMA DAVIDSON (Co-Leader—Green): Here we have this Government making it harder for ordinary, everyday, regular people to be able to have a say and have a vote, and easier for big money to influence Government. The beginning explanatory note of this bill talks about a “modern, robust, and effective” democracy. This bill proposes the exact opposite of a modern and robust, effective democracy, because it intentionally seeks to deny entire groups of people and communities from having easier access to be able to enrol and to be able to vote, while at the same time it is shifting the threshold for donations to be declared.

It allows for more and more of big money to have a say, which is consistent with what this Government’s approach has been this entire term: making it easier for their mates, like tobacco, like fossil fuel executives, to be able to have an influence—like landlords, who own massive swathes of houses, who have more influence on this Government than the ordinary person who’s just trying to get along, just trying to survive, has got a million things to be responsible for, and also doesn’t always see themselves represented in the political decisions of successive Governments.

I would have thought that any Government wants to, actually, instead encourage higher voter turnout, encourage more people wanting to be able to register, wanting to participate. The fact that we had hundreds of thousands of people turning up to vote on election day speaks to the fact that people want to have a say, speaks to the fact that if we were serious about—and this was the Minister’s own words at the beginning of his speech—ensuring a strong democracy, then we would be removing the barriers that this Government is wanting to put back in place by removing the ability to vote on the same day, by it removing the ability to enrol and vote on the same day.

The many research reports—the Auditor-General’s reports and independent election reports after reports after reports—have highlighted exactly who would miss out on being able to participate with these particular proposals; have highlighted that young people, people who rent, Māori communities, Pasifika communities, Asian communities, and people with disabilities have had these barriers for far too long, and that the proposals that this Government is trying to put in place put those barriers down in the concrete even more so. That is the message that they are sending to this country: who they want to make it easier for, and who they want to make it harder for.

I did want to pick up on the prison voting ban as well, because report after report, research after research, has again highlighted that we have inbuilt systemic discrimination in our prison systems, in our justice systems. That has been clear; that’s not even up for debate. It has been said time and time again. It means that disproportionately more Māori are imprisoned, more Pasifika people are imprisoned, more brown people and low-income families are imprisoned. So adding an extra punishment on top of the penalty that they are already receiving—it’s no wonder that the Auditor-General really called that out as actually denying basic, fundamental human rights. We do not add an extra penalty on top of the punishment that they are already serving, and especially when it is highlighted that this justice system already discriminates on communities and people.

So, again, who is this Government wanting to benefit? Not all of those communities that I’ve just mentioned in the speech. In fact, if we were truly interested in a strong democracy, then we would actually reduce the donation disclosure—according to, also, the independent report advice, which wanted to go down to $500, and instead this Government wants to increase it.

We would restore same-day enrolment and voting. That’s what the Greens would do. We would make it 16. If we want a strong democracy, all the evidence shows that when we are able to afford younger voters that opportunity, that will set up good voting habits for life. So that’s something that this Government could do straight away if they wanted. We would ensure things like civics in schools. If you want people to be enrolled, then having that education in schools is a good way of having a strong democracy. The Greens would also cap donations at $30,000. It is clear this Government are here simping for big money in politics.

TODD STEPHENSON (ACT): I rise on behalf of ACT to speak on the Electoral Amendment Bill. Yes, our voting arrangements and our democracy are very important, and it is appropriate that from time to time we do look at the settings under which New Zealanders cast their vote. This bill looks to make some significant but effective changes to ensure that our democracy and the results of our elections are upheld, integrity is maintained, and we have it done in a timely way.

There has been a lot said already about enrolment on voting day. As has been outlined, one of the changes the Minister spoke about is just ensuring that people have to be enrolled 13 days before the election. Voting in a democracy such as ours does come with some responsibilities, and it’s one of those responsibilities to actually be on the electoral roll—that’s a legal requirement. If you can’t be bothered doing that within a short period before an election, you’ve really got to question whether you have a commitment to being a participant in our democracy.

It’s a modest change—13 days before the election, you need to have enrolled. As the Minister has also said, other jurisdictions like Australia require you to have enrolled 26 days before an election, so it’s a fairly modest change. There are actually a thousand days between elections, so that is plenty of time for people to take a few minutes. You can actually enrol online; you can go to elections.org.nz today and enrol, if you wish. There will be plenty of time for people to be enrolled, and the Electoral Commission will be running reminders around that. Tied to that is a really good change around setting 12 days for the advance voting period and putting that in legislation. That’s a really great change.

The other one, which we are very pleased to support, is actually stopping prisoners in prison from voting. Labour made this change, and we think it was unprincipled. As people in New Zealand understand, if you’ve committed a crime, you’ve violated someone else’s rights, and there are consequences for that, and so for prisoners in jail, not voting is one of those consequences. We think these are sensible changes. The other one is around treating. Again, we believe in this clarification around treating, because we don’t believe freebies and gimmicks have any place near the ballot box, and we just want to make sure that’s spelt out very clearly and people understand that.

There will be a select committee process, and as a member of the Justice Committee, I look forward to hearing people’s submissions. But it is important that we ensure that our electoral system integrity is upheld, it is transparent, and it’s not open to fraud. We think these changes do that. Thank you.

ANDY FOSTER (NZ First): Thank you, Mr Speaker. I rise on behalf of New Zealand First to speak in support of the Electoral Amendment Bill. The purpose of this bill is to amend the Electoral Act to make electoral law and administration more modern, robust, and effective ahead of the next general election. It’s about making a range of systems improvements, etc., and I’m going to pick on a couple of those.

The first is that I think we can all remember back to the last election, and one of the things that there was significant concern about was the length of time it took to get to the final result. This piece of legislation is part of—

Hon Dr Duncan Webb: That was your fault.

ANDY FOSTER: The Opposition may have been more concerned about the actual result than about the length of time it took to get to that point, but I think the country wanted to get to the point where we actually had a result, so that the parties could then form a Government and be able to move on with that. This will allow that to happen more effectively, more efficiently, and for the Government to be able to get on with the business of governing. There are a number of other things in terms of efficiency. One of those is to be able to do a lot of the electoral enrolment process in a way that is not confined quite as much as it is today to the postal system.

The other two things I wanted to say: first of all is this issue that we’ve heard raised by the Opposition about 110,000 people now somehow being disenfranchised because they chose, in the last election, to enrol on the day. Well, the reality is that if you say to people, “Look, you’ve got to enrol a number of days in advance of the election to make sure that the electoral rolls are ready and the system is ready to go and is able to deliver the electoral result more efficiently, effectively, and earlier”, then there is a different deadline. Instead of being on the day, it’s some days before that, and that, as we’ve heard before, is about some degree of personal responsibility to be able to get yourself organised in time to enrol.

The other thing I wanted to mention was the Manurewa Marae amendment clause, and that is the one about stopping treating close to a polling place. I think that that is a very sound amendment, because, clearly, if you are giving people something in the process of the election which is associated with a particular political party, that is something that is going to potentially encourage people to vote in a particular way, and that clearly is not appropriate. We all, I think, are looking forward to a report on that matter at some point in time—hopefully, before the next election would be very, very helpful. That, to me, seems a very, very sensible amendment and a very sensible clarification.

The final thing I wanted to say, because we have heard a little bit about the prisoner voting side of things, is, look, if you’re in prison, you can’t be enrolled, can’t vote, but on the flip side of that, which I don’t think I’ve heard the Opposition say yet, people who are in other forms of institutions—whether it’s mental institutions, disability institutions; those kinds of facilities—will now be able to vote, and I think that that is a positive thing there. I know there will be a lot of debate to and fro as this goes to the select committee. I think we will all look forward to that process, and I commend the bill to the House, and good luck to the Justice Committee in dealing with it.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Tēnā koe e te Pīka. First of all, I stand up to oppose this bill. This bill, listening to it all eloquently being introduced as something that’s going to help efficiency and accountability—I call that out. This bill is about silencing. It’s about using power hoarding—this obsessive control—to rig the electoral system.

It’s been really interesting to listen to the previous speaker bring up Manurewa when there’s actually been no conviction. What we’re listening to, in fact, is speculation, and those who are happy to spend millions of dollars to go out and advertise on TV, but for goodness’ sake, don’t dare give a cup of tea to anyone. What it is—and we saw it, actually, this rigged system. We saw the mask slip this week when the so-called Minister for Regulation, David Seymour, who helped design these reforms, had the audacity to label 100,000 people as “dropkicks”. This is, in fact, a politician, a leader whose ideal leader was once Jago.

I want to talk about what this bill will do. First of all, it’s banning enrolments 13 days before the election, which, according to their own team member, the Attorney-General, could disenfranchise over 100,000 people disproportionately: Māori, Pasifika, Asian. It reinstates a total ban on prisoner voting, when every court in the country, including the tribunal, the electoral review, have all said that this is a breach of basic human rights, but—ha!—surprise, surprise from this Government. It raises the donation disclosure threshold, making it easier for the rich donors to buy and influence in silence. It criminalises the provision—as we heard earlier—of free food, where those are going to be eligible for a $10,000 fine, which for some of them is actually more than what their whole income will be.

This is an electoral suppression by design. It is racism by design. It is justice by design in the image of a Government that wants fewer Māori voting, fewer rangatahi engaged, and fewer people with any power. And let’s talk about the numbers. In 2023, 48 percent of Māori voters aged 18 to 19 enrolled or updated their details during the voting period; only 9.8 percent of non-Māori did the same. So nearly 19 percent of Māori roll voters used this period to enrol or update. This bill is not race-neutral; it is race-targeted, like a whole lot of other bills that we’ve seen come through from this Government.

It’s not a coincidence that the very communities who would be silenced are the same communities that wouldn’t vote for this Government, and probably the same communities that made up the netballers on the weekend. They say they’re fixing democracy, but let’s remember this is the same Government that has abolished Māori wards, introduced the Treaty principles bill, dismantled co-governance, Te Aka Whai Ora. And we know, again, why they do not want to see 16-year-olds voting.

Under Te Pāti Māori, we would reinstate the right to vote for all prisoners, because prison shouldn’t mean political erasure. We would bring the vote to 16-year-olds, because many of them are working two jobs before they even go to school—do not insult their intelligence by saying they do not know what this country needs. We would ensure every whānau has the right to enrol right up to the moment that they can cast their vote, because that is what a fair, secure democracy demands. We would defend mana motuhake, because our right to participate in decisions that affect our lives does not begin and end at the convenience of the super-rich and this particular Government.

The bill is a declaration of war on rangatahi Māori, on the rights of the incarcerated, and on the political agency of our people. It’s not about fairness. I want to say to those 100,000 people that have been called “dropkicks” by this Government’s Minister, by this Government’s, actually, current Deputy Prime Minister: you are not the problem. You are not the reason why votes and these types of Governments are getting in. You are the reason why we fight. You are not worthless—you are worthy. You are worthy of dignity, you are worthy of equity, you are worthy of leaders who serve and recognise you. We want to make sure that you never ever ever let this type of Government through again, whānau, so make sure that you enrol. And to David Seymour, if you are so worried about dropkicks, start by looking in the mirror. Kia ora rā.

TOM RUTHERFORD (National—Bay of Plenty): Thank you, Madam Speaker. This is a great piece of legislation. It’s time for people around New Zealand to take some personal responsibility. The law already requires you to be enrolled to vote, so get on and get enrolled in advance of next year’s election. Don’t wait for election day to do it; do it now. Get enrolled today. Get in there and do it. This improves timeliness and efficiency of electoral administration. It’s great to see Te Pāti Māori turn up to the debating chamber today. Strengthening the integrity of electoral law, ensuring resilience of the electoral system—this is a great piece of legislation, and, as a member of the Justice Committee, I’m looking forward to considering it and I’m looking forward to the member making contributions to the Justice Committee as well. I commend it to the House.

CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti): Tēnā koe, Madam Speaker. E tū ana awau ki te whakahē i tēnei pire, arā te Electoral Amendment Bill, mā te Pāti Reipa, mā Ikaroa-Rāwhiti.

[I stand to oppose this bill, the Electoral Amendment Bill, for the Labour Party and for Ikaroa-Rāwhiti.]

The rhetoric around this bill is that these proposed changes will make voting more reliable and efficient. I ask: for whom? The purpose of an election is for the people across Aotearoa to have their say. Each of us here is an elected voice of the people across Aotearoa. They are the priority—the voters. Should we not be making it convenient for them, the people we serve? Minister Goldsmith stated in his introductory speech, “The system is under strain.” How out of touch with New Zealand can you be? If we want to talk about being under strain, let’s talk about whānau across Aotearoa who are under strain—under strain from the everyday struggles this Government is imposing on them; under strain from the cost of living; under strain with worry about where they will live; under strain from job losses—the list goes on. Instead of choosing to sort these very real issues out, the Government is choosing to make it harder to vote.

Māori participation is already low. In Ikaroa-Rāwhiti, voter turnout over the last two elections sat at around 67 percent, rising from 26,047 in 2020 to 27,362 in 2023. That increase of 1,315 voters, I know, partially came from first-time voters enrolling on the day—as they should have the right to do. Voter apathy is very real in our communities, and walking through that door is hard enough for a lot of whānau, who, potentially, have saved up their gas money to be able to do it on the day. While I want to acknowledge the many local faces who work at our polling booths and make what can be a frigid process a bit more comfortable, there were still reports of people being turned away last election. Putting up another barrier is the last thing we need to do. Work does need to be done to increase participation, but the work needs to be done on the system, not the voters—or, as the ACT Party leader called people who enrol late, “disengaged, lazy dropkicks”. E kī, e kī! [Is that so!] How on earth can you claim to be a Government of all people when you are marginalising the voices of voters? The short answer: you can’t. Aotearoa knows this.

One word comes to mind when thinking of the motivation for this bill: mataku—fear. People across Ikaroa-Rāwhiti, and Aotearoa, know that this Government are taking us backwards, and they will be lining up at the polls to make sure this is a one-term Government—and this coalition do not want that. This is another pitiful attempt to marginalise and silence people, and it will be unsuccessful. Continue to enrol, whānau mā.

How exactly are they going to engage with whānau to ensure the opportunity to enrol, and transfer roll, and vote? I don’t know if this Government have noticed, but there’s a housing crisis going on in Aotearoa; people are transient and homeless. Don’t tell me digital communication is the answer, because I invite you to Maraehara Road, Rangitukia, where we don’t have cellphone coverage, and not every home has internet or devices, but we do still have good old rural delivery. Sadly, though, Minister Goldsmith said that postal mail-outs are wasteful—and I guess our rural, isolated voters just ain’t worth it. This bill is another tool to isolate and silence people at a time when this Government know Aotearoa wants them out. I do not commend this bill to the House.

RIMA NAKHLE (National—Takanini): Thank you, Madam Speaker. We’re in the first reading of the Electoral Amendment Bill. I’d just like to remind our listeners that in 1975, the third Labour Government allowed all prisoners to be regifted the privilege to vote, and in 2020 the sixth Labour Government gave convicted prisoners the right to vote again. What does this say? Labour is on the side of criminals; National is on the side of victims. I commend this bill to the House.

VANUSHI WALTERS (Labour): I agree with my colleague that this is a dark day in democracy, and I rise to speak against this irrational and profoundly unjust bill. There are times when this House but also the people of New Zealand need to pay very, very close attention, and it’s when bills are tabled that touch the bones of our democracy, as this one does.

This is an abhorrent breach of rights, because here in New Zealand, we lean so heavily into parliamentary supremacy that the only way people truly have—the singular way people truly have—to agree to being governed or to object to being governed is to exercise their vote. When the vote is diminished and when it’s removed from certain groups of people, we must pay attention, because in many ways, it is following what could be described as a handbook on authoritarian politics, where rule number one is when you get into power, you must work out how to make it very difficult to be removed from power. This is what we’re discussing today.

Now, I want to talk about the irrationality, but firstly I want to talk about an oddity in this legislation. Before it was introduced to the House, it was actually in an omnibus bill with the changes to the Constitution Act that the Government is introducing later today or this week. I was trying to work out why the two have been separated. From what I can see, the philosophy between the two is quite different. With the Constitution Act, the change made acknowledges that a statutory time limit, the 28-day rule, can and should be removed. In this case, what the Minister’s telling us is that the 20-day rule is very, very important. If we can’t get all the valid votes counted in the 20 days, that’s hugely problematic, and we need to stop some people being able to vote. Well, hang on! It feels like there’s an easy solution to this, which is to extend the date, but that doesn’t seem to be something that the Minister has considered. In fact, many countries that we compare ourselves to don’t actually set a date by which those votes must be counted. The UK just has a practical test. Canada doesn’t. Sweden doesn’t. Denmark doesn’t. Norway doesn’t. They recognise that the most important thing is that the most people who have the right to vote are given every opportunity to do so. Yet this Government is taking us backwards—apparently for a very, very disturbingly particular reason.

Now, the other thing I wanted to talk about is the oddities in the bill, and my credit goes to the Attorney-General, who sets this out beautifully in her section 7 report. She talks about the “blanket disenfranchisement” of people imprisoned, and she makes these points about who will and won’t be able to vote: “A person imprisoned for a one-month period, that happens to coincide with polling day, shall be disenfranchised but a person who committed a premeditated murder, but is released on parole in the weeks prior to election day, shall be able to vote, as will a person that serves a two-year sentence in between elections. A person convicted of serious sexual offending but [who has] not yet [been] sentenced, shall be able to vote. Persons sentenced to imprisonment of two years or less are eligible for home detention, but whether [that] person is detained [at home at all or is in prison will depend on whether they’ve got an address to be detained within].” It is absolutely incomprehensible that these people are being treated quite differently, just dependent on where they’re located.

A member opposite referenced the fact that people who are in mental health or other facilities will now be able to vote. Well, guess what! This means that people who are in prison who have medical issues during the election will be able to vote if they’re held in a health facility but won’t be able to vote if they’re held in prison. It is simply irrational, simply illogical, and very, very telling—very telling—about the motivations of this Government when it comes down to really considering whether they want to hear what everyone believes. There are many people who are sick of the rising costs of living who would like to be able to tell this Government so. Give them the right to be heard.

Dr VANESSA WEENINK (National—Banks Peninsula): Thank you, Madam Speaker. It’s a pleasure to speak in support of the Electoral Amendment Bill. Banks Peninsula is one of the most engaged electorates in New Zealand. At the last election, we had 99.5 percent of eligible voters enrolled, and over 86 percent of them turned out to vote. I’m sure that my constituents will be able to get themselves sorted and get themselves enrolled to vote in such outstanding numbers again. I commend the bill to the House.

A party vote was called for on the question, That the Electoral Amendment Bill be now read a first time.

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

Bill read a first time.

DEPUTY SPEAKER: The question is, That the Electoral Amendment Bill be considered by the Justice Committee.

Motion agreed to.

Bill referred to the Justice Committee.

Instruction to the Justice Committee

Hon SIMON WATTS (Minister of Local Government) on behalf of the Minister of Justice: I move, That the Electoral Amendment Bill be reported to the House by 1 December 2025.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): I move, That in the preceding motion, the words “1 December 2025” be replaced by “9 February 2026”.

A party vote was called for on the question, That the amendment in the name of the Hon Dr Duncan Webb be agreed to.

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Noes 68

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

Amendment not agreed to.

A party vote was called for on the question, That the Electoral Amendment Bill be reported to the House by 1 December 2025.

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

Bills

Crown Minerals Amendment Bill

Recommittal

Hon SHANE JONES (Minister for Resources): I move, That the order of the day for the third reading of the Crown Minerals Amendment Bill be discharged and the bill be recommitted immediately to consider Amendment Paper 343 in my name.

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 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

DEPUTY SPEAKER: I declare the House in committee for consideration of Amendment Paper 343.

In Committee

CHAIRPERSON (Maureen Pugh): Members, the House is in committee. The House has resolved to recommit the Crown Minerals Amendment Bill to consider the Minister of Resources’ amendments set out on Amendment Paper 343.

I just wish to give the committee some guidance about the committee stage of the recommitted bill. There are aspects of the bill that were debated when the bill was last considered in the committee of the whole House that are not amended by Amendment Paper 343. These matters are therefore not open for debate again. This includes provisions relating to the issue of Government policy statements in Part 1 of the bill, matters relating to the removal of the ban on new petroleum exploration beyond onshore Taranaki in Part 2 of the bill, and provisions relating to service of documents in Part 3 of the bill. Other aspects of the bill are amended by the Amendment Paper or affected by it. I will provide further guidance at the beginning of each debate. The chair is the sole judge of relevance, and we will be looking for material that is relevant to the Amendment Paper. Noting that this is a complex and technical area, the bill has just been recommitted, and the Amendment Paper was only released at 5 p.m. yesterday.

Amendments to Part 1 set out on Amendment Paper 343

CHAIRPERSON (Maureen Pugh): Members, we come first to the amendments proposed to Part 1 of the bill. This is the debate on amendments to clauses 5, 8, 9, and 10 set out on Amendment Paper 343. This question is that the Minister’s amendments to Part 1 be agreed to.

GLEN BENNETT (Labour): Point of order, Madam Chair. Thank you for your guidance to help us in this, but as you’ve mentioned, it was 5 p.m. yesterday that this was presented. From this side, as we go through and we work our way to make sure we clarify and understand, I think for some of it, we may, potentially, veer in a few spaces because we’re trying to dig into the actual answer. I’d just ask for some guidance, but also some support, from you, as the Chair, that as we do, maybe, veer off, we’re not doing it on purpose; we’re just trying to make sure that we can get clarity and come to the places that we need to in this legislation—which is very unusual. It’s not unprecedented, but it is unusual for us to be coming into this space this afternoon.

CHAIRPERSON (Maureen Pugh): I understand, which is why I made those signals early on, that we’re taking into account the fact that this was only presented at 5 p.m. and that there is some relevance across other parts of the bill—so there will be some leniency in the scope.

Hon SHANE JONES (Minister for Resources): I draw the House’s attention to this Amendment Paper 343 because the contributions to this sensible amendment ought to be tight and they ought to be focused. If I can very quickly elaborate what is the problem that we have sought to remedy: the previous regime did not deal with a particular issue. The issue is that there are several ways how a person or an entity can move on from holding a permit. One is they can sell the permit; one is they can dispose of the script or the equity in an entity that holds a permit; of course, the other two involve the Crown: either have the permit taken off you or, indeed, a surrender back to the Crown.

If I could direct the attention of the various members who will speak on this issue: it became evident to us that someone departing, through a process of a share transfer or disposal of equity, may escape any liability whatsoever. Now, this is an important issue, that an entity or a person, having held these entitlements to derive economic returns from our natural resource base with rights allocated, if not originally under the Petroleum Act 1937 then certainly under the Crown Minerals Act, which we are amending today—so this corrects that loophole, which has actually existed for quite some time. The balance that we’ve sought to strike is to ensure that we don’t provide an unnecessary level of risk to the revenue base of the Crown or, at the same time, we don’t add to the chilling impact that has blighted this sector for quite some time. That is the balance that we’ve sought to strike in remedying the situation that we uncovered once we went to a more finicky level than was originally used.

CHAIRPERSON (Maureen Pugh): Before I take the first call, can I please ask members to refer to the clause that you are speaking to.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. Just as the Minister did, I will spend a little time on the problem definition in this contribution, that one of the—we know that what this bill is doing, this Amendment Paper that we’ve got before us, is around the decommissioning regime and particularly the liability laws and the trailing liability rules that are around that. I think we’re in a relatively unique situation for this House, to have a recommitted bill with an Amendment Paper of this substance to go through.

These are big questions that sit in here that we do need, as a committee, some time to scrutinise. There’re some very important questions that sit in this Amendment Paper that is before us here. The Minister says that these are loopholes that are being closed for the betterment and to protect the public interest. Throughout all parts of this bill, we’ll be saying and asking and asking for an explanation from the Minister: why does that require ministerial discretion-making powers? That is what this Amendment Paper gives. It stops there being a statutory decision being made to one where a Minister or two Ministers—the Minister for Resources and the Minister of Finance—will make discretionary decisions and, as we will go into throughout various parts of this bill, there is no criteria for that decision making.

So the Minister needs to spend his time in the chair answering some very specific questions and outlining to this House—given he has brought an Amendment Paper that has only been before the House for a very small amount of time, given that this has been away from the House for nearly eight months and this has dropped with 24 hours’ notice, he needs to explain in some detail how it is that these discretionary powers are exercised.

Now, obviously, Part 2 of the bill does put into play those discretionary powers, but we can see, for example, clause 10 of Part 1: “to make decisions (with others) on whether to require outgoing guarantees and, if so, to determine what outgoing guarantees are appropriate”—we can see that discretion is coming in here and we need to start doing that.

Now, to say this Amendment Paper has had a unique passage to this House is somewhat of an understatement. This started out that the Government brought a bill to the House, it went away to select committee, and then an Amendment Paper was brought at committee stage around the decommissioning regime.

The Amendment Paper that we have in front of us scraps all of that; it puts aside both the original bill and the original amendment, and proposes a different regime. So this requires some solid explanation, because we are not talking about something trivial or small or, indeed, theoretical. This is about how we protect New Zealand taxpayers, and this is not a theoretical discussion. We know from the cost of the Tui clean-up, when our Government had to change the law because the previous National Government had left the door wide open, that New Zealand taxpayers had to fork out over $440 million to clean up, in that in that scenario. Our Government changed the law to protect New Zealand taxpayers.

The original bill that was brought to this House weakened those decommissioning obligations that we had put in place on the oil and gas companies. This Amendment Paper that we have before us today further weakens those protections for the New Zealand taxpayer, and this is serious, because what we do know is that we have total decommissioning costs for New Zealand oilfields of approximately $2.5 billion sitting ahead of us; we have $2 billion needed for four offshore fields, and nearly $500 million for 2021 onshore fields.

So this is no small or theoretical problem that we are discussing today. Our Government—when we were in Government—was not prepared to put the New Zealand taxpayer at risk. This Government has shown they are. They have bowed to the suggestions of the oil and gas companies and done what they wanted. They have further bowed to the interests of the oil and gas companies in taking eight months to sit with them, find out what they wanted, and then bring a bill back to the House.

This is not a Government that is putting New Zealand first, that is certainly for sure. What we see is a Government that is prepared to put big oil and big gas companies before the interests of the taxpayers of New Zealand, with these watered-down provisions that we are going to be seeking answers about today in these decommissioning obligations that are there. It has been a torturous path to get here; it is going to require some unpicking, and our side of the House certainly will have a series of questions around why a Government thinks it is better to bow to the interests of the oil and gas companies than to stand up New Zealanders and to protect New Zealand taxpayers.

Hon SHANE JONES (Minister for Resources): Just a short response. Can I encourage all contributors to identify what provision and what page they’re referring to, because I suspect they haven’t read the bill. On page 11, new section 41F clearly lays it out. This is why the answers, had they read the bill—you don’t need to address it in a generic way. Those answers lie in front of you. It’s just not reasonable for a recitation of a regime that’s long gone. We don’t need to hear arguments that were recited when this matter was dealt with before, prior to us discovering the loophole that had been left by the Jacinda Ardern regime.

Hon Dr Megan Woods: Point of order.

CHAIRPERSON (Maureen Pugh): There’s no need for a point of order, Dr Megan Woods. I did give instruction at the beginning for contributions to refer to the particular part and clause that we were debating. I gave some leverage on that because it was an introduction to the bill, but I think, from now on, we come back and we’re very explicit about the part and the clause that is being referred to.

Hon Dr MEGAN WOODS (Labour—Wigram): Point of order. Thank you, Madam Chair. I’m just seeking clarification. That ruling that you just made will also apply to the Minister, I take it, to be in the right part of the bill.

CHAIRPERSON (Maureen Pugh): It applies to the whole committee.

TANGI UTIKERE (Labour—Palmerston North): Point of order, Madam Chairperson. Thank you, Madam Chair. I didn’t want to interrupt the flow earlier, but I did note that the Minister has a penchant for, effectively, providing objections from the chair during the contributions from members. It’s well understood that that is not an appropriate practice to adopt, and so I was just wanting to flag that with you so that perhaps we would get off to a good start and good tone, rather than having to draw that to the attention, moving forward.

CHAIRPERSON (Maureen Pugh): I assure you that it did not escape my attention.

TANGI UTIKERE: Thank you.

STEVE ABEL (Green): Thank you, Madam Chair. I will be referring to new clause 26B on Amendment Paper 343, which is the removal of sections 41AA and 41AB, which are to be replaced with new sections 41AA and 41AB, as outlined on page 3. It is important, of course, for context, to understand the problem that we’re trying to deal with here, and in that regard, a lot of my questions will prosecute the scale of the challenge that we face with decommissioning, because defining who is liable for those costs of decommissioning, which can be substantial—as has been outlined by my colleague Megan Woods—is very important, and so is how those liabilities will be met.

Noting that the Minister has obviously grappled with a lot of advice on this matter and has come back to the committee of the whole House a second time with his new amendment, which reverses the position of the bill that was introduced in November 2024 and makes it so that existing permit holders are absolutely liable for unmet commissioning—

CHAIRPERSON (Maureen Pugh): Look, I’m sorry to interrupt the member, but can you please clarify which part—

STEVE ABEL: New clause 26B on page 3.

CHAIRPERSON (Maureen Pugh): Is that in Part 1 of the bill?

STEVE ABEL: Sorry, yes, we’re on Part 1, right—oh, shit!

CHAIRPERSON (Maureen Pugh): Yes.

STEVE ABEL: I’d jumped across.

CHAIRPERSON (Maureen Pugh): I’ll come back to you in Part 2.

STEVE ABEL: Oh, you’re absolutely right—my apologies, Madam Chair. Yes, I’ve got ahead of myself.

Hon Dr DEBORAH RUSSELL (Labour): Thank you, Madam Chair. I want to pick up on something the Minister said. The Minister said that if only we had read the bill, we wouldn’t be asking some of the questions that we were asking. Of course, this Amendment Paper was dropped on the Table at 5 p.m. last night, when no members were here in the House. It’s a substantial Amendment Paper. It might be about a narrow and technical issue, but there are 21 pages before we get to the explanatory note. We actually need to spend some time on this, and we’re going to do it clause by clause.

I want to direct the Minister’s attention right back to the start of this, and I’m going back to clause 5 on Amendment Paper 343—it’s page 1, clause 5—which is in Part 1 of the bill, and it inserts—sorry, it’s page 4 of the bill, page 1 of the Amendment Paper. What it does is it inserts clause 5(5), “a transfer of a participating interest in a permit or the transfer of a license or a participating interest in a license is effective on and after the date of the Minister’s consent to that transfer.” So there’s a couple of things that are interesting there. Now, we do need to explore what the Minister’s consent is. I understand, from the fact that the Minister went into this on his previous contribution, that perhaps that is addressed later on, and we’ll get to that.

The date, as well, is kind of quite interesting, because it just implies that until we know what the conditions of the consent around that are, there’s a degree of judgment, a degree of flexibility, a degree of, I suppose, a capacity for the Minister to delay the particular date of consenting to it, to accelerate the date. There’s a degree of discretion there for the Minister as to when that transfer might become effective. Of course, that then impacts everything else in the bill, because the transfer is quite important. What I want to understand from the Minister is the extent to which that Minister’s consent—which we’re going to discuss later—can be, I suppose, gamed, as it were, by shifting the date around. There’s a possibility that that could happen. I want to know what safeguards the Minister has in mind.

You know, when we give Ministers discretion to do such stuff, it does imply a degree of, of course, trust in the Minister’s judgment. And perhaps the current Minister in the chair is someone we would trust in that judgment. But what about the next Minister and the next Minister after that? We need to know what safeguards the Minister has in place around the exercise of what seems to be a discretion around the date of the consent.

So if the Minister could perhaps just talk a little bit about the safeguards that are there—and perhaps they are there later in the bill. Of course, only having gotten it, you know, perhaps ready today as we all arrived back here, it’s a little hard to know what’s going on here, so just some advice on that. Thank you, Minister.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. I want to speak to clause 10 in Part 1 of the Crown Minerals Amendment Bill. The Amendment Paper is amending “Section 5 amended (Functions of Minister)”—we’re on page 2 of the Amendment Paper.

Section 5 is the amended functions of the Minister. What we have, through clause 10, is “After clause 10(2) (page 7, after line 2), insert: (2A) After section 5(c), insert: (caa) to make decisions (with others) on whether to require outgoing guarantees and, if so, to determine what outgoing guarantees are appropriate:”. So, although the bulk of ministerial discretion and decision-making powers are covered in Part 2 of this bill, what we can see here in clause 10, in Part 1 of the bill, under the functions of the Minister, is we are starting to see the introduction of these discretionary powers—and even in this very short inclusion, around (2A)—“(caa) to make decisions (with others)”. Which others? This is not spelt out. Who are the other people?

We see, in other parts of the bill, that that’s the Minister of Finance, but the Amendment Paper doesn’t say “with an other”—it says “with others”. So who else? It’s plural. Who else is envisioned as being a decision maker in that amended clause, “on whether to require outgoing guarantees and, if so, to determine what outgoing guarantees are appropriate:”? I would seek some of the policy thought that the Minister can share with the committee that went into this clause 10(2A) amendment, around what were the criteria around that. We know that discretionary powers need to be a little bit more than the whim of a Minister. It’s not a statutory decision that’s being made as defined; it’s a discretionary power that’s being granted here. Surely the Minister has had some discussions around parameters, around criteria, and what will guide decision making—what will be the principles that guide his decision making in this area? I look forward to the Minister elucidating further on that.

Hon SHANE JONES (Minister for Resources): Yes, thank you. Look, it’s really a remarkably succinct response I offer. Answers will be revealed as we work in a methodical way through all parts of this Amendment Paper. It is probably superfluous at this stage to go into answers on both of those points when we will get to the necessary detail as we plough through the remainder of the bill.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you. I do just have a follow-up question for the Minister on that, given we are on Part 1, and we are asking questions about clause 10 of the bill. We will get to further parts of the bill at a later date, but given the short period of time that the House has had this bill, can the Minister please refer us to the clause where those parameters or criteria are defined, that we’ll get to in subsequent parts of the bill?

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. Yes. Related to this statement—and noting, as my colleagues have said, that it is interesting to be looking at an Amendment Paper on a bill that’s already been reported back—the point that Dr Megan Woods appeared to be making that I think the Minister was responding to, but I’m not sure, was the relationship with outgoing guarantees and when they are appropriate. I realise that in Part 2, there is a definition of an outgoing guarantee, but the question here is about the Minister’s functions. So it is the Minister’s function now to make decisions on whether to require outgoing guarantees or not, and this seems to be a very big power and a new power for the Minister to have. So it would be very useful for the Minister to comment on—doesn’t have to go on exactly about what outgoing guarantees are—the nature of this new power and whether or not there are any constraints in Part 1 of the principal Act, the principal Act as amended by last time we were in the committee of the whole House, or this Amendment Paper. Are there constraints on those functions that he can point us to?

Hon Dr DEBORAH RUSSELL (Labour): I appreciate the Minister’s position, but he’s kind of just said, “Well, trust me.”—“Trust me.” Perhaps we might have a little bit of concern about that, because the particular history suggests that things get changed around quite dramatically from time to time. It’s a little tricky to just go with it, because we are dealing with an Act and then the bill which amends the Act, and now this Amendment Paper which amends the bill which amends the Act—so there’s the amendment to the amendment. It is actually complicated, and the speed with which we’re having to deal with it does mean that we’re going to have to do a little bit more than just take the Minister’s word for it. All we’ve asked for is which clauses. We don’t need to debate them now, but if he could indicate those clauses, that would be very, very helpful.

Hon SHANE JONES (Minister for Resources): I’m conscious that—please pull me up if I’ve raced ahead too far. What I said to the committee when I referred in my first contribution: sections on pages 10 and 11, essentially, provide the detail, and I accept, Madam Chair, by the time we get to those pages, we’re probably not able, without the leave of the House, to come back to clause 10. But having been pulled up myself many times in this House for talking about the wrong part of the bill—not this bill—I want to be absolutely sure you don’t chide me. Can I suggest, for ease of understanding, that elements of the reference in clause 10, where people may want to understand, well, what will the determination be based on—I direct their attention to pages 10 and 11.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. I’m now going to go backwards and talk about clause 8 in Part 1 of the bill. Amendment Paper 343 deletes the new section 2C(1)(c) inserted by clause 8—that’s page 6, lines 14 to 20. So if we have a look at 2C(1)(c), that’s in the “Determination of permit tier status”, and this is a significant part of how the legislation will operate. So determination of permit tier status 2C(1)(c) is: “at any time that the permit is partially surrendered under section 40(2) if—(i) the partial surrender results in the permit applying to an area not exceeding 50 continue continuous hectares; and (ii) the permit holder, in the application lodged under section 40(1)(a), states that the purpose of the application is to satisfy the requirements of a Tier 3 permit as set out in section 2B(2A).” Now, according to the Amendment Paper, there is no replacement for what is being deleted in this section. So I just would like the Minister for Resources to explain to the committee, first of all, why that is being deleted, what the impact would be, and what the policy rationale is for the removal of that clause. Just to repeat, that’s clause 8 of the Amendment Paper.

Hon Dr DEBORAH RUSSELL (Labour): I just want to add a little bit to what my colleague Megan Woods has talked about, and that is this Minister determining the tier status of a permit: “The Minister must determine the tier status of a permit”—if I can get that phrase out—“… on first granting the permit”, and so on.

By deleting that clause determining the tier status of a permit, does that mean that the tier status of a permit is no longer determined anywhere? Is it just something that doesn’t exist anymore? By deleting that, the Minister has left several unanswered questions about, obviously, what the tier status of a permit is, but is there a clause somewhere else in this Amendment Paper that actually does say how the tier status of a permit is to be determined? It says it is determined by the Minister—this is in the amendment bill—but is it now determined, perhaps, on a factual basis? Is there another way it’s determined? Or is the idea of the tier status abandoned altogether? Or is there something in the original Act that does it?

There is a lot of confusion around this particular clause, and it looks so innocuous in the Amendment Paper. It just says, “In clause 8, delete [this]”, but, in actual fact, when we dig into it, it turns out that there is a wee bit more substance in it and a few unanswered questions there, in terms of what is actually going on with this deletion, what problem it was supposed to solve in the first place, but now, if other problems are introduced by the mere fact of the deletion, that’s all getting a little bit complicated. But this is, indeed, as we said, going to be complicated, and we’re just going to have to try to deal with it. Thank you, Madam Chair.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. While the Minister for Resources prepares his thoughts to tell us why that part that clause is being deleted, what the policy rationale is that sat behind it, and how it is achieving the policy intent that he’s told the House is the reason why he’s bringing this Amendment Paper to the House in this highly unusual fashion in the way in which this bill is progressing, I’d also like to know if there’s a reason why there’s nothing that it’s being replaced with. To simply remove a chunk of an amended piece of legislation that’s gone to the Economic Development, Science and Innovation Committee, that hearings have been held on, that submitters have had the chance to submit on—I can understand sometimes that we need to have clauses of bills that need to be tweaked and fixed, and there might need to be the odd word changed, but to simply just remove quite a large portion of this clause of the bill is quite unusual.

If this was at select committee, Madam Chair, as you will know, there would be quite a discussion with committee members about whether or not that was the right thing to do, and the implications for further on in the bill. We know in these Part 1 bits, where you’re doing things like setting up the functions of the Minister and determining the tier status of permits, that these have long flow-on effects into a piece of legislation.

I just want to hear from the Minister the why—we’ve already indicated and we’re waiting for him to give us an explanation on why it was done—but also further to that why it wasn’t replaced.

Hon SHANE JONES (Minister for Resources): I think it’s important that I remind the committee that this bill not only deals with elements of the oil and gas industry but it also creates a new level of permissiveness for mining. This particular change gets rid of duplication. The power remains solely with the Minister in the event that a tier 2 permit, which is quite restrictive, might then be changed to a tier 3 permit, which, in the bill, is, essentially, a type of hobby mining. But it’s propelled forward by a policy set of impulses that wants to see an acceleration of mining in New Zealand.

Hon Dr MEGAN WOODS (Labour—Wigram): It may just be that I haven’t had the bill very long, but that didn’t really inform me a great deal on what the policy intent was. So I’d like the Minister to clarify, given the answers that he’s just given, whether or not this only applies to hobby mining permits, as he indicated in the answer that he just gave, because I can’t see anything in that “clause 8, delete new section 2C(1)(c)”. New section 2C(1)(c) states: “at any time that the permit is partially surrendered under section 40(2)”, because this is the determination of permit tier status. This clause in the amendment bill that the Amendment Paper is amending does not specify it’s around hobby mining. So I’d just like the Minister to clarify to the committee whether he is indeed informing us that this entire determination of permit tier status is confined to that narrow window.

Hon Dr DEBORAH RUSSELL (Labour): The Minister has a way with words, but I just wonder if his way with words sometimes fails him. In particular, the Minister said—and this has got me even more worried now—that a lot of what was going on in here was “the impulse to allow more mining”. Now, I accept that the Minister was searching for a word, but “impulse” has got me deeply worried. I’m really hoping, Minister, that, in actual fact, it’s more than just an impulse here—that it wasn’t just that the Minister woke up one night and had a bright idea. If that was the case, Minister, I don’t think we actually want to know! I am concerned now; in fact, I am just going to say, Minister, that perhaps every time the Minister speaks, I get a little more worried.

In terms of this, Minister, I do want to understand now this tier 2 to tier 3, and he mentioned hobby mining. I think having mentioned hobby mining, I do want to understand from the Minister what is meant by “hobby mining”? Is this just some kid digging in the backyard? Or is it a farmer having a crack at what she thinks is some deposit on her farm that might actually hold minerals of some worth? What is actually the distinction between hobby mining and proper mining? That’s a distinction that the Minister seems to have brought into this debate. Perhaps he didn’t really mean to; perhaps it was just an “impulse”, but a little bit of clarification around that so that we can be sure that what is going on with this deletion is actually worth it.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): I thank you, Madam Chair. My question to the Minister—look, I think it’s—what are we? Part 1, clauses 8 to 10. Specifically, I want to drill into—and that’s a pun—the trailing liability protections and the problem that the Minister is looking to solve and the confidence with which the Minister is looking to do something completely different to what we’ve seen done in the past. I speak from experience, being one of three—no, I think he’s gone—who live in Taranaki at the moment, and I have seen the knowledge on the ground being disregarded when we’ve seen the likes of Tui and Tamarind and what that cost taxpayers. What should have been a $150 million clean-up then became a $443 million and then a two-hundred and something million.

My question is: from those lessons learnt, is the Minister confident that the amendments will give him the discretion to protect and pre-empt when we see companies not only flipping shares—not permits—and then how sophisticated they are in avoiding decommissioning costs and the way that that affects the wider community?

A follow-up to that question is: if the Minister is confident—having lived in Taranaki for most of my life—what has happened differently in the same agency that existed when Tui and Tamarind were creating those problems? What capacity does he see surrounding the amendments to the bill that he’s making so that not only can the sector get confidence but, obviously, that those who live around these companies and their activities have confidence that we’re not going to have to foot another bill? Also, given that the Minister’s amendments—I’m not sure that they’re ambitious, but they’re looking to solve a problem and a gap that’s clearly been identified. What support does he see and what gear-up of that particular agency is there to ensure that what the gap is will never happen again?

Hon SHANE JONES (Minister for Resources): Without delving into the innards of Part 2, I do respect the contribution that’s been made, because the circumstances of the incident, the Tamarind brouhaha—the answers don’t just lie in this bill; they lie also in another piece of legislation administered by the Environmental Protection Authority. I don’t want to cut across what the honourable member has raised—but I’ll address it when we get into the innards of Part 2—but her point is extremely well made, that, sadly, the last regime spent $300 million more than should’ve been necessary.

STEVE ABEL (Green): Thank you, Madam Chair. Clause 10: after clause 10(2), there will be inserted “to make decisions (with others),”—it would be good to understand the definition of those “others”—“on whether to require outgoing guarantees and, if so, to determine what outgoing guarantees are appropriate:”.

It’s a question as to the discretion of the Minister here, in so far as one of the feedbacks that came in the supplementary analysis report was that it would be useful to have further analysis of the guardrails to support ministerial discretion, to address any risks or perception of risk of regulatory capture, and to ensure discretion is exercised in a consistent manner. It specifically referred to consultation on proposed changes, particularly with iwi and hapū, but I wonder the extent to which the Minister has this discretion and the ability to make determinations about outgoing guarantees and what outgoing guarantees are appropriate. It just seems like a very broad ambit—and understanding what the basis for those things will be.

There will be a strong enthusiasm—and the Minister has clearly expressed a great enthusiasm for trying to bring back this dead industry that had its final nail in the coffin placed by the 2018 ban but was already well on its way to departure—to not put in place barriers to that industry, to the extent that the Minister might be encouraged to not place burdensome or onerous expectations in this area on that industry. That would be a significant concern, given that where those guarantees were not appropriate, the cost would fall to the public purse. So I wonder if the Minister could elucidate us on the parameters around which that sort of discretion will be exercised?

Hon Dr MEGAN WOODS (Labour—Wigram): I’m always trying to be useful. I thought it could be useful at this stage to remind the Minister for Resources of the outstanding questions that still haven’t been addressed that had been put to him in the chair, given the unique nature of this committee stage with a bill being recommitted. We’re still waiting to know which “others” in clause 10(2A) of Amendment Paper 343—“others” plural, where in other parts of this Amendment Paper it only talks about the Minister of Finance. So who does he envision are the other people, and what is the policy intent behind that? Is it specified anywhere in the Act, or is that, again, just an impulse that the Minister will act on?

Clause 8: we’re still waiting to find out is this just confined to hobby mining, or is it indeed the whole gambit of things covered by the Crown Minerals Act? The Minister, in his answer, indicated that it was hobby mining. That’s not my reading, but, as I said, I may well be wrong. We’ve only had this bill for a very short period of time, so I would seek clarification from the Minister who has penned this Amendment Paper and brought it here. It is important that we understand the forensic detail and thinking.

What we’re also wanting to understand and we haven’t had any answers from the Minister on is why it is that there is a clause that is being removed and not replaced with anything, that I asked the Minister of in new section 2C, which is what clause 8 of this bill does. So there are many, many unanswered questions that are sitting out there.

I have another one to add to the list, that we have in clause 10, amending section 5, which of course is the section of the Act which is the functions of the Minister. One of the things I’d like the Minister to let us know: when considering those functions of the Minister—and particularly the new clause 10(2A), inserted by Amendment Paper 343: “After section 5(c), insert: (caa)”—we received advice in the Economic Development, Science and Innovation Committee, the Minister received advice, everybody received advice that what was happening in terms of the reversal and the changes to the decommissioning regime, which is the subject of this Amendment Paper, would reverse the additional protections for some Taranaki conservation land, and iwi were concerned that this would undermine rights in existing Treaty settlements if mining is once again allowed on those tracts, or adjacent tracts, of land. So whether or not the undermining of Treaty settlements was something that the Minister considered when he was considering that clause 10 section of this bill, which are the functions of the Minister—because that is the kind of thing that when a Minister is thinking about their functions, they do need to think broadly about those things.

Hon SHANE JONES (Minister for Resources): Yes, the word “others” obviously refers, as the Hon Megan Woods has already adverted to, to the Minister of Finance. Now, why would that be the case? Largely because there are liability questions at stake here, and the person ordinarily charged with having responsibility for managing what the Crown signs up to and its fiscal impact is the so-said Minister I just referred to.

In respect of clause 8, I repeat what I said: it avoids duplication, and when we get further down the track into Part 2, I’ll be able to point to the necessary sections. I accept that the amendment bill has not been held particularly long, but as a community of parliamentarians, it’s important that trust is exhibited. Yes, there will be large decisions to be made by Ministers, but that’s what we are: we’re public officials accountable for our decisions.

Hon Dr DEBORAH RUSSELL (Labour): Look, first of all, thank you to the Minister for making an attempt at answering that question about “others”. But the Minister is someone who is known for his ability with language—I think, someone who prides himself on his ability with language and of knowledge of how language works. I’m just going to point out to the Minister that “others” is a plural.

Hon Dr Megan Woods: That’s right; words matter.

Hon Dr DEBORAH RUSSELL: Words matter. “Others” is a plural. The last time I looked, the “Minister of Finance” was a singular—I won’t say entity—a singular person. So unless something changed about the nature of the Minister of Finance—I mean, I’m sorry, Minister, that is just not going to fly. It might need to say, “with another”, or something like that. I know it only seems minor, but words matter in law, and as soon as we’re using a plural, we do need to worry about it. So perhaps there is someone in addition to the Minister of Finance who is going to be making that decision with the Minister; perhaps there is not.

But if it is just one person, Minister, I’m very, very happy to put together an Amendment Paper to the Amendment Paper to ensure to take that “s” out. It would be an unusual thing for an Opposition Amendment Paper to be accepted for an Amendment Paper to a Government bill, but perhaps the Minister might be happy to do that. Alternatively, as the master of words that he is known as, perhaps he could let us know who the “other” of these “others” is, other than the Minister of Finance?

STEVE ABEL (Green): Listen, we are prosecuting this particular clause deeply because it has a very significant impact on an issue that we know is a big problem for this industry: decommissioning. Particularly as the industry is in its sunset era, it all the more becomes the concern that if the Minister’s ambitions for attracting back the oil and gas industry fail, then we are going to be on the hook for the cost of decommissioning. Particularly, the companies, as we know and in the examples we’ve been given, go belly-up, they haven’t got the funds to deal with the mess they’ve left behind, and the taxpayer is on the hook for it.

I would just really appreciate if the Minister could give us absolute clarity as to what advice he got on the perception of regulatory capture and the risks of that perception, with the combination of these two wordings that are achieved through this amendment to clause 10, whereby in section 5—the functions of the Minister—the duty to “attract permit applications, including by way of” is associated with “by way of making decisions on whether to require outgoing guarantees”. That seems to be a direct contradiction in the duty of the Minister responsible for protecting the common interest and the common good from the risks of decommissioning not being covered, in terms of its costs and in terms of its impact on people, on the environment.

I would just really appreciate if the Minister could give us some clarity, given that in advice received, the risk of regulatory capture was specifically pointed out as something that should be addressed.

Hon SHANE JONES (Minister for Resources): I repeat again that the parameters within which a ministerial decision or a determination might be exercised will be dealt with when we get to Part 2. I have articulated to the Hon Dr Megan Woods the specific sections. The underlying question that is raised of a policy character, presumably, goes to the point: why have you posited with a politician holding a Crown warrant the responsibility for making these determinations, and could that person act in such a fashion that that person endangers the very things that people feel need to be managed risk-wise very, very fastidiously? I say once again that the essence of this bill is that the power will be with two Ministers. The parameters will be dealt with in Part 2, and I would urge members to race there as quickly as possible.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Mr Chairman. We still have outstanding questions. The Minister has not told us whether or not the clause in this section, in terms of clause 8, section 2C, is just confined to hobby mining. He indicated it in an earlier contribution. We’ve been asking whether that is the intent of this Amendment Paper that he has brought and whether indeed it is just confined to there. We’re not even concerned who the second “other” in the “others” is, in terms of the Minister of Finance—we know that.

I’d like to hear from the Minister in the chair whether or not he’s going to accept the very kind offer of my colleague the Hon Deborah Russell to put forward an Amendment Paper to clear up that misunderstanding that seems to have creeped into the amendment to the amendment to the amendment in an effort to tidy up this bill, to specify that that would just be the Minister of Finance. So clause 10(2A) would then be: “After section 5(c), insert: (caa) to make decisions with the Minister of Finance”—so replace “others” with “the Minister of Finance”. If the Minister is telling the House that is what it is, it is not what is indicated in the wording that is in the Amendment Paper in front of us. It’s a plural; he’s talking about a singular. So we would like to know that.

One of the things, as well as the Amendment Paper being presented to the House, was the annex to the regulatory impact statement to go along with this legislation. One of the things that I think is incredibly important—we’re only in Part 1. We’re talking about the functions of the Minister. We’re talking about the permit tiers—very fundamental parts of the building blocks of our Crown Minerals Act (CMA). The annex to that regulatory impact statement makes the very important point that “Changes to the Minerals Programme for Petroleum will need to be made. The Programmes are considered secondary legislation that interpret the CMA. The Programmes have specific consultation requirements, as set out in the CMA, including public notice and submission requirements. There is currently a process underway to update the Minerals Programme to align with changes being made through the Bill, as [with] … earlier legislative changes that have not yet been incorporated.”

So we’re in this very sticky situation that we’ve got a clear as mud situation of what this Amendment Paper is actually doing, who is making the decisions, and what permits, what tiers it actually applies to. The Minister can’t give us this clarity, and this is the very basis for secondary legislation and how that is going to be passed, so we’re in a very serious and dire situation. The Minister doesn’t seem to understand the Amendment Paper that he’s brought to this House, or certainly can’t articulate what it means to the House.

We are waiting for the Minister to tell us some of the fundamental things that we need to proceed to Part 2 of this bill, where we can discuss in detail the criteria that the Minister may or may not use. The Minister tells us that we need to trust him and trust needs to be put in politicians to make decisions—couldn’t agree more. But part of that contract is that you have a Minister capable of coming to the House and answering some fundamental questions about the legislation they’re bringing, and that’s not what we’re seeing here. We’re having a Minister that thinks that hyperbole is a substitute for an answer to a straight question.

We will keep asking these questions because they are important. I’d also like to know, as well as who the “others” are, and whether or not it’s just relating to hobby mining, whether or not the Minister considered whether this would be in contravention of Treaty settlements.

Hon SHANE JONES (Minister for Resources): Despite my best efforts, the parent bill does not extirpate the reference to the Treaty of Waitangi, so that’s a fact. Secondly, I repeat, in respect—clause 8 takes out a duplication. The original contribution pertained to what we are calling tier 3 hobby entitlements for mining. It became evident in the 2021 legislation—just remember who was the Minister in 2021—there already existed an entitlement, and we are taking this route because it built on something that someone before me had already put in the law. That’s why we call it duplication.

Hon Dr DEBORAH RUSSELL (Labour): Well, the Minister has told us that this is a duplication—a duplication of what? I mean, this is the difficulty. We’re just left with a deletion here and we don’t have a detailed, clause-by-clause analysis which could perhaps have been helpful. We just don’t have anything much to go on except what the Minister can tell us. So he’s asserted that clause 8, deleting new section 2C(1)(c), removes a duplication, but a duplication of what? And where can we check the particular duplication? Because we would like to see—he’s asserted this, could he please tell us exactly where that duplication is so that we can be sure that taking this out does in fact eliminate a duplication?

Hon SHANE JONES (Minister for Resources): OK. I will repeat it again very slowly. In the parent piece of legislation exists section 2. That section was in the 2021 legislation. It already gives enough authority for the necessary changes, if necessary, to be made in terms of a tier 1, 2, or 3 permit needing to be changed. When the bill was first introduced, it introduced—with a specific reference to—hobby mining, which is tier 3. We have now worked out and decided, because of the existing provision entered into the law in the 2021 legislation, it’s now unnecessary, because it represents a duplication.

For fear of trivialising the House’s time, this is the fifth attempt that I’ve had to explain something that was passed by a Minister prior to my arrival.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you to the Minister for clearing it up. It wasn’t that hard; we could have got there sooner.

In terms of the Treaty, the Minister, in his last contribution, talked about the Treaty settlements. What I want to know from the Minister is what advice he received around these changes, and, given that there has not been consultation with iwi on this Amendment Paper 343, whether this is undermining rights in existing Treaty settlements. We know, and the updated regulatory impact statement makes it very clear, that the Minister had his officials—and we’ll come to this more fully later—talking extensively with the oil and gas industry, but there was no consultation on the Amendment Paper with the iwi who were concerned. So I ask whether he’s had advice on whether or not this Amendment Paper could undermine the rights in existing Treaty settlements, bearing in mind that this was part of the initial advice that was provided with the original Crown Minerals Amendment Bill—the need to consult with iwi—because of those Treaty settlements.

Hon SHANE JONES (Minister for Resources): OK, getting very good at this repetitive approach. The parent legislation contains a reference to the Treaty of Waitangi. It also enables engagement, as the member has said, between the different tangata whenua communities. They have been engaged with in relation to the parent bill, and, as I’ve said, that bill does not contain a deletion of the Treaty of Waitangi reference, so in the future, the engagement will happen. This highly technical matter was not the subject of consultation in a detailed way. It was dealt with with a great deal of confidentiality. In terms of providing a Māori dimension, I interviewed myself.

Hon Dr MEGAN WOODS (Labour—Wigram): This is a very serious issue that I think the committee does need some more detail on from the Minister for Resources. We have an amendment bill that he tells us was consulted on in a very confidential manner. Well, the committee of the whole House will be wanting a list of who it was that was consulted with. But whether or not it’s in the parent bill, what we’re debating here today is Amendment Paper 343, and the Minister’s own documents that have been released with the bill and his officials’ documents that have been released with the bill make it patently clear that iwi and hapū were not consulted on this Amendment Paper. So the question becomes whether or not the Amendment Paper that is before the committee is an undermining of those Treaty settlements.

It’s not about the parent bill, and it’s not about the original bill that was brought before the House, which was consulted on, but the point of the matter that the Minister needs to answer is whether or not the Amendment Paper that we are voting on today constitutes a contravention of the Treaty settlements. The Minister can’t just skirt around that. It’s a serious issue that the House deserves an answer to, because if we were at select committee and this bill was going through its normal process, Ministers can’t just circumvent scrutiny of their legislation by withdrawing a bill at third reading and dropping an Amendment Paper and not expect there to be scrutiny in the committee of the whole House. This is a question the House needs and deserves an answer to: does the lack of iwi consultation on this Amendment Paper constitute an undermining of the Treaty settlements in that area?

SIMON COURT (ACT): I propose that the debate on this motion now close.

Hon Dr DEBORAH RUSSELL (Labour): I really want to dig into these tiers now. I’m sorry; I apologise for having my laptop on my desk, but I’ve used it to pull up the Crown Minerals Act. I’ve gone back to section 2C because that’s where—I shouldn’t say damage because that’s not the right thing. So the bill amended 2C, but now Amendment Paper 343 to the bill takes the new 2C out, and that means that the original 2C stands—is that the case?

CHAIRPERSON (Teanau Tuiono): What page are you on?

Hon Dr DEBORAH RUSSELL: The Crown Minerals Amendment Bill replaces section 2C—

CHAIRPERSON (Teanau Tuiono): Yes, but what page are you referring to?

Hon Dr DEBORAH RUSSELL: Oh, I’m sorry—on page 6 of the bill. It’s clause 8 of the Crown Minerals Amendment Bill.

CHAIRPERSON (Teanau Tuiono): Oh yeah, cool.

Hon Dr DEBORAH RUSSELL: There’s a 2C sitting in the Act; clause 8 of the bill replaces 2C. Clause 8 of the Amendment Paper deletes new section 2C(1)(c). So we’re taking out that bit. Oh, it only takes out section 2C(1)(c)—this is the complication with having something delivered at—which is on the partial surrenders and so on like that. What I’m finding complicated here is the stuff around tier 3 permits. The tier 3 permits are the new permits. So they’re brought in by this bill; they’re new to the Act, and they seem to be this area which is less than 50 hectares. That’s sitting in the bill itself.

I’m sorry, Minister. I know that it’s clear and easy in your mind, but this has been dumped on us at the last moment, and we are genuinely trying to sort our way through this to understand what is going on here and why you’ve put the new 2C in and now you’ve taken the new 2C out. We just don’t quite get it, and you said you’ve explained it clearly. I’m just going to assert that we are doing our best to follow this and we would really like—

Simon Court: You’ve got three degrees. You must understand it by now.

Hon Dr DEBORAH RUSSELL: Oh, take a call—take a call. So I would like to hear from the Minister on that one.

Simon Court: Mr Chair.

CHAIRPERSON (Teanau Tuiono): Is that a point of order?

Simon Court: No, I’m taking a call, Mr Chair.

CHAIRPERSON (Teanau Tuiono): Was the member continuing to speak?

Hon Dr DEBORAH RUSSELL: I was finished, yeah.

CHAIRPERSON (Teanau Tuiono): If you’re not taking a point of order, continue.

Hon SHANE JONES (Minister for Resources): I want us to contemplate a situation where an Act is already in existence. That Act has a section 2C. That Act was delivered under the stewardship of a Minister in 2021, and it had some redeeming features in it, right—modest. Then—because the air is thick with redundancy, and these contributions are proving the air is right—the amendment bill was introduced with an additional clause. It has now occurred to the Government that that additional clause is redundant; therefore, it has been removed, but section 2C, delivered in 2021, still stands, and it addresses the issues pertaining to the transition of various mining entitlements. I really can’t say much more, and I’m quite confident that the former Minister, having realised that she’s the architect of this, now realises what I’m talking about.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you very much. I want to move on to a new clause of Part 1, and that is clause 9, which inserts new section 2D(3) into the Crown Minerals Amendment Bill. What this does is it, in clause 9(2), new section 2D(3)(a), replaces “the day after the date of the notification”—and that’s on page 6—with “the date of the notification”.

I want to know what the rationale for changing it to the day of the notification from the day after. When we come to the commencement, there are actually some serious and quite technical questions that we’ll ask, at the appropriate time, around the use of moving from a statutory start date to a statutory instrument - driven start date. But why is it, in clause 9 of that amendment bill, “the date of the notification” rather than “the day after”?

JOSEPH MOONEY (National—Southland): I move, That debate on this question now close.

Hon Dr MEGAN WOODS (Labour—Wigram): Mr Chairman, with all due respect, there’s still a number of questions on Part 1 that the Minister for Resources hasn’t been able to answer and that we’re still waiting for answers to. I think that given the nature of the way in which this Minister is choosing to legislate, with a very atypical process of what has happened in terms of the recalling of this bill from its third reading, and with a very substantial Amendment Paper being put back to the committee of the whole House and not having it go through a select committee phase, it is our job, as parliamentarians, to scrutinise this Amendment Paper 343 in the committee of the whole House.

It is also the job of the Minister to answer the questions. As I have pointed out in previous contributions, the fact is that what is in this bill actually becomes really important in terms of the secondary legislation in that the minerals programme for petroleum is a piece of secondary legislation that is drawn from interpretations of this Act. The regulatory impact statement that the Minister himself has had tabled in the committee here tells us that they’re considering this Amendment Paper. We still have unanswered questions on the very fundamentals of this bill, so I think it would be useful for the House and for the passage of good legislation for the Minister to be able to explain his own legislation.

Hon Dr DEBORAH RUSSELL (Labour): Point of order, Mr Chair. Sorry to do this. I’m just seeking a bit of clarification on how debate on this Amendment Paper goes. We have been concentrating on the clauses in the Amendment Paper that relate to the Part 1. Do we then move a separate closure motion for just those clauses, or how does it work? Because I’m concerned that if we accept a closure motion now, it closes the debate on the entire Amendment Paper, not just—

CHAIRPERSON (Teanau Tuiono): No—there is Part 2 and Part 3 to go to as well.

Hon Dr DEBORAH RUSSELL: Right—OK. So in that case, the motion that is on the floor now is just relating to the clauses relating to Part 1?

CHAIRPERSON (Teanau Tuiono): Yes.

Hon Dr DEBORAH RUSSELL: OK—thank you. I appreciate that clarification.

CHAIRPERSON (Teanau Tuiono): Let me repeat again: this is the debate on amendments to clauses 5, 8, 9, and 10, set out on Amendment Paper 343, and a couple of other debates on that. Just to note, there are other opportunities to ask other questions in Part 2 and Part 3, and, actually, some of those questions might be relevant to those particular parts there as well. We are keeping an eye on relevance and repetition. Acknowledging members have now moved on to clause 9, which, as far as I understand, is new, we are looking for new material.

TOM RUTHERFORD (National—Bay of Plenty): 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 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendments to Part 1 set out on Amendment Paper 343 be agreed to.

Amendments agreed to.

CHAIRPERSON (Teanau Tuiono): The amendments are agreed to; therefore, Part 1 as amended stands part.

Amendments to Part 2 set out on Amendment Paper 343

CHAIRPERSON (Teanau Tuiono): Members, we come now to the Minister’s amendments to Part 2. This is the debate on—[Interruption] Please listen carefully so you can focus your contributions—amendments to clauses 25, new clause 26A to 26C, 27, 28, and new clause 29A, as set out on Amendment Paper 343. The question is the Minister’s amendments to Part 2, set out on Amendment Paper 343, be agreed to.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. I want to start with a contribution on Part 2 on the new clause 26A, “Section 41 amended (Transfer of interest in permit)”, on Amendment Paper 343. Subclause (1) says, “After section 41(6), insert:” new section 41(6A). This is going to be quite a short question, but I’ve heard previous speakers mentioning that the Minister for Resources has a particular way with words, and so I just wanted to get a clarification from the Minister.

In this, we are looking at a conditional sentence, so we are looking at an “if” and “then” sentence. The “if the Ministers require an outgoing guarantee under section 41I,”—that’s the protasis of a conditional sentence. However, the apodosis of a conditional sentence is missing here. What I’m not seeing is where the “then” part of this sentence is. At this stage, if we’re saying that if the Ministers require an outgoing guarantee under section 41I, an outgoing guarantee that the Ministers consider to be appropriate—i.e., let’s say an outgoing guarantee—must have been provided in accordance with that requirement. Does that mean that if the Ministers require an outgoing guarantee, then an outgoing guarantee must have been provided already, before the Ministers required it? What we’re also seeing here is that it is using “require” as a simple present, but it is immediately followed by a conditional, which is present perfect, but the present perfect seems to precede the simple present. It does create an anachronistic sentence in this case.

I’m assuming that the Minister means that if an outgoing guarantee is required, that should be provided—am I getting that correct? But that’s not how that is currently worded, so I just wanted to get clarification from the Minister on where the apodosis of this conditional sentence starts.

Hon SHANE JONES (Minister for Resources): OK, for ease of comprehension, I direct the member to the actual words that he’s quoted. I’m on page 2, at clause 25(1A): “ ‘section 41A(7)’ with ‘sections 41AG(8) or 41A(6)’.”

If the member races ahead, he will see, on page 678, the wording—why does that wording exist? It exists to cope with transfers or revocations. Why is it included? It deals with a temporal issue, the period of time or grace where either a revocation or a transfer takes place, or, indeed, what money is involved. So I strongly urge the Green Party member, rather than randomly quoting scattered parts of the alphabet, to actually go to the page, and the answers are laid out there in comprehensible English.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. So jumping a little bit ahead, then, and speaking in more generic terms, what I’m interested in is the fundamental change here. The bill tells us—the explanatory note—that whereas the previous amendment let you trail back, or have discretion to trail back, to previous permit holders, the Minister’s amendment is changing their ability to go back in time to previous holders of the permit. The hook to do that—the temporal nature—is that any current permit holder has to get the permission of the Ministers—being the Minister and the Minister of Finance—before they are able to on-sell that permit or licence. I’d like the Minister to confirm that that is correct.

Then all of the amendment bill also appears to be about decommissioning, so the decommissioning liabilities. It doesn’t appear to be—and again, this is a question for the Minister—about consent requirements and upholding the operational parameters that will have been set for these permit holders. My question is: does this Amendment Paper have anything to do with the conditions that permit holders have to meet that aren’t decommissioning? Because my understanding is that, normally, you have bonds that address both the “Are you following through with all your consenting requirements?”, and then a separate bond, or some similar financial instrument, for the payment of the decommissioning. So those are my questions there.

I’ve been looking at page 10 of the amendment, and that is the new section 41F that talks about this outgoing guarantee and, I think, the mechanism whereby a permit holder might be on-selling. That goes back to the change to clause 27, so that’s at page 6 of the amendment, which is when the “Minister may consent to change of control of permit operator”, and then there’s a new section inserted after section 41AE(1)(a), a new paragraph (aa): “if the Ministers require an outgoing guarantee under section 41I, an outgoing guarantee that the Minister considers to be appropriate has been provided”. So this language looks very open—and maybe that’s the Minister’s earlier point, to trust the Minister. But if the Minister could comment on the width of that—and I acknowledge that there are further sections that are at pages 11 and 12 of the amendment that do give some parameters, but they don’t seem to be vast, and it does seem to be that there’s a lot of discretion in these new provisions.

Hon SHANE JONES (Minister for Resources): Obviously, for those of you who have the actual Act on your computer, and if we look at the specific wording on page 2, clause 25, in section 39 as amended—what does section 39 do? In the magnum opus Act, section 39 pertains to the revocation or the transfer of entitlements to the Minister. It contemplates a situation where a holder is about to suffer the loss of an entitlement. We have had a situation where these things have, from time to time, been triggered because of non-payment. We have had a period of 90 days in section 39 within the parent Act. What this does is prevent any gaming, any protraction of honouring the fiscal obligation to the Crown. It gets rid of the 90-day period, it retains a 40-day period, and it tightens up the conduct and makes it very clear what the obligations are. It also provides for such a revocation to be reported to the Registrar-General of Land, and also, where the land qualifies as ture whenua land, a notice is also sent to the Māori Land Court. This is how this part of section 39 has been improved.

I don’t mean any disrespect. I am being somewhat laborious because I take on board what the Opposition members have said. It’s very finicky and they haven’t had the full amount of time. But I have to say: we are amending the 2021 legislation and we’re also improving the contribution that this Minister brought forward. We have the expert of the 2021 legislation sitting there, so I shouldn’t need to remind the architect of her work.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Mr Chair. Of course, the whole, sole purpose of the 2021 legislation that the Minister has talked about in his contribution was to protect the New Zealand taxpayer. As I said in an earlier contribution, it wasn’t from a theoretical risk; it was a real risk that previous National Governments had left New Zealand exposed to, and that our Government fixed when we were in Government. It cost a lot to clean up.

What we did—there was liability if a permit holder failed to decommission or meet the cost of the decommissioning either directly or through a financial security, and the Act placed a liability on all former permit holders. This was about protecting New Zealand taxpayers from having to pick up the tab from global multinationals that decided to just exit New Zealand and not pay for the cost of their own decommissioning and clean up after themselves. As a Government, we could not tolerate that.

What we had then is the Minister we had in the chair in September 2024 brought an amendment bill that watered down those protections and altered the trailing liability protections in the decommissioning regime with his amendment legislation. We then had an Amendment Paper that proposed to extend training liability to a wider range of people, beyond existing and previous permit holders, by adding various persons having a controlled interest in a body corporate to the list of persons.

The Amendment Paper that we are debating today wipes both the bill the Minister brought and the Amendment Paper that was put up and replaces it with a new Amendment Paper. So we are in a somewhat absurd situation of the amendment to the amendment to the amendment and trying to trace our way back through that.

It is in this Part 2, it is in these clauses 25, 26A, 26C, 27, 28, and 29A, that we really have the guts of this legislation, of what this amendment is trying to achieve. That is about bowing down to the oil and gas industry and further watering down the liability that they will need to shoulder for doing business in New Zealand.

Now, New Zealand is not an outlier for saying to oil and gas companies that if you operate in our jurisdiction, we’re going to protect our taxpayers, we’re going to protect the people who live in our country, from cleaning up after you. But what we have is a Government who thinks that it’s a good idea to actually not put the interest of New Zealanders first but put the interests of the oil and gas companies at the forefront.

In the Annex to the Regulatory Impact Statement: Amendments to the Crown Minerals Act 1991 relating to petroleum exploration and mining that has been tabled with this Amendment Paper that is in there, it states that the Ministry of Business, Innovation and Employment (MBIE) had several meetings with key stakeholders from December 2024 to March 2025 to hear their concerns, and has shared, in confidence, an outline option of option 4. So the paper, which I’ll come back to when we’re talking about the policy that sits behind these provisions that we’re debating in Part 2 of the Amendment Paper—but this regulatory impact statement tells us that the Minister had his officials sharing with some people what the options would be. What I’d like to know from the Minister is who were the options shared with? Who was privy to those confidential discussions?

We know from the regulatory impact statement that has been provided that iwi certainly weren’t. In fact, despite there being Treaty settlement obligations to consult with iwi, they just were ignored when it came to this. But I’d like to know, for example: were lawyers for climate change consulted? They certainly submitted on the previous bill and are experts in many of these areas.

The Minister needs to tell the committee—if this was a select committee process, we’d know who was being consulted with. It would be open, it would be transparent, there’d be a website, people could see the submissions, they could tune in, they could watch the submissions, and people would know what was being discussed. But what we see in this regulatory impact statement is that MBIE has engaged with these key stakeholders—who were the key stakeholders?—who had voiced a strong opposition to the bill. They didn’t manage to get the changes at select committee. They kept on going, and the Minister sent his officials off to consult with them. So who were these people?

They raised two primary issues: “Extending liability to all persons with controlling interest ‘pierces the corporate veil’ ”, is what the regulatory impact statement tells us, “in a way which they consider undermines the foundation of the Companies Act 1993 and common business practices”. What it doesn’t talk about is whether the Minister instructed his officials to go and talk to groups who had submitted, who had New Zealanders’ interests at their heart—the taxpayers of New Zealand, and the protections that have been put in place for those people. Instead, the Minister was more interested that his officials go off and talk to those who had concerns about “piercing the corporate veil”.

It also went on to say that the concern of the “Imposition of liability on all exiting and existing persons a with controlling interest is a statutory overreach”. Well, on this side of the House, we call that standing up for New Zealanders and protecting New Zealanders from the liability of oil and gas companies just leaving the country and leaving New Zealanders with the tab to clean up after them. But this is the priority of this Minister; this is the priority of this Government. They’re showing very clearly where they are.

We would like to know, and this committee deserves to know, who were these key stakeholders that were shared with the different options that were there—that they shared in confidence an outline of option 4, and who else was privy to those confidential sharing of the various options that were there?

Hon Dr DEBORAH RUSSELL (Labour): I do want to add some force to my colleague the Hon Dr Megan Woods’ speech just now, because I’ve picked up the supplementary analysis report dated 16 June 2025, so the most recent analysis, and, well, there’s some pretty telling lines in it, and they’re rather scary. I’m looking at page 5 of this, right down the bottom: key stakeholders, consultation from January 2025. Flicking over on to page 6 of that, it says, “The sector has been clear that their preference is for no trailing liability in the [Crown Minerals Act].” Well, no kidding. Like, of course they don’t want the liability. Of course they’d like to just, you know, make a mess and walk right away. Then it goes on, “They consider it adds significant costs”—well, those are costs that will be borne by the New Zealand taxpayer if the members of this industry don’t bear the cost themselves—“and [it] reduces the likelihood new entrants will come into the New Zealand market.” But oil and gas is a dying industry anyway. You know, it’s on the way out. I don’t think the new entrants are coming here, and they weren’t coming here a few years ago. They’re certainly not coming now.

Then here’s another telling line: “Despite this position, those consulted preferred Ministerial discretion to the current Act and approach in the Bill.” In other words, these shadowy participants in the oil and gas industry—a dying industry—who we don’t know who they are, much prefer to be able to lobby a Minister and get that Minister to apply ministerial discretion instead of to go through some pretty clearly set out steps in legislation.

This kind of stinks. It actually stinks. You know, does something pass the sniff test? Well, this does not. I think one of the only ways for it to get to pass the sniff test will be if the Minister can tell us exactly who he was consulting with. We don’t know—just that they were participants in the oil and gas industry. And we do know that ordinary New Zealanders have not been consulted, iwi have not been consulted. So this is really worrying.

The next line says, “Targeted consultation was limited to those directly impacted by the proposed change,”. Well, I propose that the New Zealand taxpayers, who have to pick up the tab when these guys just skate off into the never-never and ignore their liabilities—we are directly affected by this too. Why was there not much wider consultation?

So to sum this up: it stinks, and the only way to clear this stink up is for us to know who was consulted with.

STEVE ABEL (Green): Thank you, Mr Chair. You know, gas doesn’t have an aroma; they have to add one to it so that it doesn’t kill us all.

Simon Court: Indigenous gas is the best gas.

STEVE ABEL: And “indigenous gas”—really? Really? That’s such a cooked-up concept.

Simon Court: What do you call it?

STEVE ABEL: Fossil gas is what you’re talking about, and it is a dying industry.

I want to speak to clause 26B, replacing section 41AA. I was so excited to ask this question, and I tried to make it my first question today, but we’re there now—we’re there now. I want to, specifically—there’s other parts to this clause that deserve some prosecution, but I’m going to jump down to new section 41AA, on page 3 of Amendment Paper 343. That is new section 41AA(1): “outgoing person means any of the following: (a) a person who ceases to have a controlling interest in a body corporate that is undergoing a change of control:”—that’s logical; that makes sense—“(b) a person who ceases to have all or part of an interest in a body corporate that is undergoing a change of control that results in another person acquiring a controlling interest in that body corporate:”.

Look, acknowledging the exceeding complexity of these corporate structures, which, let’s be honest, are designed very often to avoid the liability of those corporate interests—so getting this stuff right is important, because these companies, as my colleague just prior articulated, would like to not have any trailing liability; they would like to avoid liability for the mess that they leave behind, of course, just as they would like to avoid liability for climate change, which is a consequence of their whole industry. Paragraph (b) says “a person who ceases to have all or part of an interest”. Paragraph (c) also says “a person who transfers all or part of their participating interest in a permit or licence for petroleum, or transfers their licence for petroleum, to another person”.

So my question to the Minister is: does the definition of an “outgoing person” include those who might have ceased only part of an interest in a body corporate, or part of their participating interest in a permit or licence for petroleum? Can the Minister explain why a person who has only ceased part of an interest in a permit or licence is still captured as an outgoing person, even if they were to retain a significant commercial stake? Thank you.

Hon RACHEL BROOKING (Labour—Dunedin): Going back to my question—and I think the Minister answered part of it; I’m not entirely sure. He kept telling me to go back to the primary piece of legislation, which—obviously, there are a lot of bits of paper to look at here. But my question was around: those outgoing guarantees clauses just seem to be about decommissioning, and I was asking about the ongoing permits and the conditions associated with those. I think he referred to “clause 39”—but I think he might have meant “section 39”, and I’d like that confirmed—of the primary legislation, which is about when the Minister can revoke a permit. At page 8, there is reference to section 39, and there’s a change here on whether or not—or there’s a reference to section 39. So it says, “The Minister may revoke the permit in accordance with the procedure set out in section 39”—which is of the principal Act—“if (a) subsection (1) is contravened; or (b) the Minister is not satisfied that, following the change of control, the permit holder has the financial capability to meet its obligations … or (c) in the case of a change of control of a permit participant that is a permit operator, the Minister is not satisfied that, following the change of control, the permit holder has the technical capacity to meet its obligations under the permit.”

So my question, then, in relation to the Minister’s answer, is: what is the relationship between section 39 and being able to revoke a permit, and the next provisions that are related to decommissioning? What is the relationship between the permits and the operation and the decommissioning? If he could explain that, that would be—

CHAIRPERSON (Teanau Tuiono): Can you just say that again? Sorry.

Hon RACHEL BROOKING: Yeah. The Minister, when he was answering my last series of questions, I think he referred to section 39 of the primary legislation. I think he said it was “clause 39”, though, so I was looking around for it, and I think he was referring to section 39, because that is about revoking permits. My question is: what is the link between the financial instruments and the controls that the Minister will have over both the ongoing conditions around the permit and, separately, the decommissioning of the infrastructure? How do those two relate and what is this amendment to the amendment bill doing to that relationship?

Hon SHANE JONES (Minister for Resources): For members of the committee, I’m on page 9. We’re still on Part 2. Please don’t imagine that I’m not treating this seriously. I’m on new section 41E. The Labour member is absolutely correct: the authority now rests with the Minister. This section, if I understand her question correctly, identifies the nature of the guarantee, and when we go over the page and then we go to new section 41F, when someone does move on, what exactly can the Minister impose upon them as a trailing responsibility liability. That, in contrast to the old regime—and I’m not going to refer, because there’s no profit in it, to the contributions earlier about who we were talking to, because I can’t see what section in Part 2 those remarks actually relate to. So if I come back to new section 41F, “Ministers must consider outgoing guarantee: permits and licences for petroleum”, obviously, the Minister and the Minister of Finance, or the Minister of Finance, may delegate in the unlikely event they’re conflicted or someone’s more appropriate to undertake that issue. I presume that’s where you get the term “others”, which we’ve already spoken to.

So a question was raised: what part of the infrastructure is going to be actually covered where decommissioning obligations can be enforced against someone who is no longer directly involved in running that business? I direct your attention to new section 41F(3)(b)(i): “the petroleum infrastructure and wells were, at the time of the relevant transaction, in place or used for the purposes of carrying out”. A good point was made earlier: is this going to be as thorough or as exacting as what the former Minister for Resources talked to? I hope not. That was a gross overreaction. It was something, in my view, as the surprisingly sensible remark from the Māori Party—I’ll have to bottle that sort of lightning in a bottle. So that gives you an indication as to what needs to be considered, what is the criteria, which I think I understand that to be the essence of the question from the last contributor, the Hon Rachel Brooking.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. I actually just have two very short questions. I think, in terms of what the Minister is talking about in reference to Part 2—I think it’s page 10, new clause 29A, which is inserting new section 41F(1). It perfectly captures the previous question around the fact that the Minister of Finance, as far as we believe in terms of our understanding, is singular. Therefore, the Minister has accurately pointed out that new section 41F is in relation to clause 10. But I think the Minister hasn’t answered the question of who those “others” are. Is there another Minister beyond the Minister of Finance? That “other” doesn’t include the responsible Minister, because the responsible Minister is stated earlier in that clause. So that’s the first question. I think the Minister has very accurately pointed out my colleagues—both the Hon Dr Megan Woods and the Hon Dr Deborah Russell—have been asking consistently on who that other is.

The second question is in terms of what the Minister mentioned before around the policy statement. I think it is important for the Minister to elucidate the committee in terms of some of these consultation processes and who the Minister is consulting with, because, again, we are seeing this for the first time and we have no idea. As part of this committee, we would like to trust in the Minister, but it is also the role and the job of this Parliament and as the legislature to ask these sorts of questions of the executive. So we do understand where the Minister’s coming from as a member of the executive. The Minister has also shown a level of appreciation for the way that us as the legislature are also scrutinising this particular amendment. But the reason I mentioned the part about who the Minister is consulting with—and I’m looking at page 3 of the supplementary analysis paper report—is the fact that when we are looking at something like this, there is the opportunity and the potential risk of judicial review. I think that is something that we haven’t heard from the Minister in terms of what would then be the additional risks of the judicial review as a way of maybe the opaque nature of the way the consultation has been conducted.

Hon SHANE JONES (Minister for Resources): OK, I’m about to put a stone on my tongue, but I want to respond in an instructive way to what I understand the member to be referring to. Can we please go to new section 41F(1)(a) and (b), in new clause 29A. Can we contemplate a situation where a party has done a transaction and party B now is the owner of the assets, including what’s in subsection (2). What obligation can the Minister put upon the seller? To understand that, let us go to a definition—and there’s some pretty sharp lawyers on the other side of the Chamber, although things have diminished since my friend David Parker went away, but anyway. At subsection (1)(a), we see “outgoing person”. It gives us a definition of who is qualified to be pursued as the person—and I use that in a figurative sense as well—who formerly owned the asset.

Now, does the Minister, acting jointly with the finance Minister, have the ability to secure, as they go out, a guarantee? Yes, they do. What does it apply to? It applies to the infrastructure outlined in the statute. Is it possible that if you look at paragraphs (a) and (b), that obligation can also be imposed upon a related body corporate to overcome any chicanery? I remind everyone that part of the motivation is that a loophole was discovered. You could effect a transfer of script, of equity, and, in an earlier version of this legislation, including the legislation of 2021, escape liability. Upon myself learning about that in discussions with the officials, it did not seem correct or moral that the Crown should be left with that liability and the people with some very shrewd manoeuvrings of script would escape liability. We have solved that problem.

So about to finish. If you look over the page—

Hon Rachel Brooking: Which page?

Hon SHANE JONES: —I’m now on page 11—we have sought high-quality advice as to what and who is a related body corporate, but what problem do we think we’re solving here? We’re solving the problem of corporate chicanery where shifty transfers of equity did not attract an ongoing liability. That has now been solved; the way in which it’s been solved and what assets it relates to is on page 11. The entities, to the solicitors in the Chamber, are identified in subsection (4). Now, I know it’s technical, but—and I repeat it again—it’s designed to ensure that we capture people who don’t want to be held responsible, therefore they transferred script. That will no longer be legal. They are now caught in terms of a trailing liability.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Mr Chairman. I appreciate the Minister’s sensible contribution there, to talk through the details of this. I do have some questions around the trailing liability because, of course, the 2021 amendment that the Minister is speaking to did put in place a trailing liability for the real reason that these are technical and complex transactions; that the situation that we had, where New Zealand taxpayers were left to pick up the tab, was a result of a parent company selling to a subsidiary and the parent company exiting, and a subsidiary of that parent company, essentially, holding that licence.

Now, one of the concerns that we had at the time, when we were making the changes to protect New Zealanders, and what has been unpicked by this Government, is that if you don’t have trailing liability, you just have enough transactions to go through the line to ensure that the liability doesn’t sit with the permit holder, that there can be liability loopholes. From the Minister’s explanation—I appreciated it—I’m not convinced that New Zealand taxpayers are being protected.

What we see is that this is a Government that has watered down those protections that we’d put in place for New Zealand taxpayers to make sure that if someone does come into New Zealand waters and that they do drill for oil and gas, they are the ones that are responsible for their costs and their fair share of decommissioning. That is not unreasonable, for a Government to put some cast-iron guarantees around that to protect New Zealanders in that way. That is what is being undone, and further undone, in this bill.

As we’ve identified, the sanctions that we’re debating here in Part 2 really are the guts of this trailing liability. What we’ve seen in this regulatory impact statement—the annex to the regulatory impact statement that has been tabled—is the work that has gone on after that committee of the whole House stage and the options that were put to the Minister. This is the updated policy work that has resulted in this Amendment Paper, and it goes through the problem definition but also the proposed policy changes. I think, in this Part 2, it is the time for this House to question him, and for the Minister to have a serious discussion with the committee of the whole House, around the policy process he went through, what the rationale was, and what the merits or otherwise of various options were.

There were five options that officials put to the Minister, as outlined in this annex. One was to maintain the status quo, which was the original amendment bill that he had brought to the House; option two was to partially extend liability by statute in the context of change of control only; option three: extend liability by statute introduced to the bill through an Amendment Paper prior to committee of the whole House—there was an amendment then; option four: extending liability by ministerial discretion at the point of approving transfer changes of control; or option five: broad ministerial discretion to apply liability at any point.

Now, there is a big jump in here. It is one thing to want to tidy up a piece of legislation—it’s not unheard of for a Minister to bring an Amendment Paper—but it is quite unique the way we’re doing this one in terms of how we’ve pulled the bill back from its third reading back into committee of the whole House to do this amendment. This isn’t just tidying up the will and the policy of the Government that was being done through statute; what this has done is actually give the Minister ministerial discretion, and that is a change from the bill that was brought to the House. That is a leap in policy.

The Minister needs to tell us why it was that he was convinced by officials that the only way to solve this problem was for Ministers to make the decision, not as it was—and I may not agree with the Minister’s policies, and I don’t in this area; in fact, I vehemently disagree with them. But why is it that he made the decision to remove it from being a statutory set of provisions that were outlined in a bill to then giving himself and the Minister of Finance discretion to decide this? We’ll come to those discretionary powers and the perimeters of those discretionary powers in other parts of the bill, because I think that the paper goes through some of the critical aspects of each of those options, but we need to understand how the Minister’s thinking thought into this.

What we also know from this regulatory impact statement is that his officials went away and had had confidential meetings with key stakeholders and shared an outline of option four. Now, this wasn’t shared with everybody who’d submitted on the previous bill; this was key stakeholders. It is critical that, in the course of this debate in the committee of the whole House, the committee understands who it was that was privy to these inside conversations that were shared confidentially with some people and not all.

I have here a list of everybody who submitted on this bill. It is long and it is varied. Unless we get a list of who it was that officials went away and did consult with, I think it would only be fitting for the committee to ask, submitter by submitter, reading out from their submissions any contributions they’ve made on the trailing liability and decommissioning regime, what their thoughts were, and ask if the Minister considered this in coming to the policy decisions that are contained in Part 2 of the bill.

That is the alternative. The Minister can give the House a list of who it was that was consulted on in this confidential manner, or we can go through, one by one, everybody who submitted on this bill and ask the question whether their contribution to the trailing liability and decommissioning question was considered. That would obviously be a very lengthy process, but one that we’re willing to do. When you have a look, I think it numbered in the hundreds, the numbers of submitters on this bill, and most were concerned with that issue of decommissioning and the trailing liability question.

This is not just a trifling question; this is fundamental to how law is made—that we had an industry group that were not happy with what had happened through a select committee process, or the committee of the whole House, who then got special access to officials. Not only did they have meetings—what the regulatory impact statement is. They also had the option to provide written feedback in the days following those meetings. So not only face time—and not everyone got that. They’ve had fundamental input into this Amendment Paper that we’ve got before us, and it is the job of this House to understand exactly who those people are.

Hon SHANE JONES (Minister for Resources): I direct the Hon Megan Woods to page 11, clause 29A inserting new section 41G, carrying on with new section 41H and new section 41I. I’ll overlook the highly conspiratorial and clumsy attempt to talk about subterfuge, because the matua is a nationalist. It has fallen to me to restore this part of our economy, and, of course, how I have provided that leadership is reflective of my strong pro-industry approach, something I’ve never hidden—pro-industry to the point that why would you not engage with the stakeholders, the risk-takers, the providers of what precious little gas we have, ruined by the cancel culture? So, yes, of course you should expect nothing less than Shane Jones to be talking to a source of expertise: the people who have prepared themselves to remain involved in this essential industry.

Now, what has come out of that? Here, new section 41G outlines that the Minister, statutorily, has the ability to impose burdens, enforceable claims, liabilities. What sorts of things do they talk about? They talk about, i.e., the proximity that a particular party, person, company may have actually had at the point where the guarantee is either called upon or required. Not only that—what’s the nature of their financial strength beyond that? Will they be expected to offer an ongoing guarantee?

Now, to move beyond these common-room conspiratorial charges, most not befitting of the committee in its tone and its culture and its heritage at all—this is a demonstration that these tawdry attacks show—and I’m sad to say this, Mr Chair—that the contributions are now descending into cant, well away from facts. The facts are laid out here; they provide guardrails. Yes, the decision will lie with the Minister. That is a policy decision that has been taken to ensure that we have a segment of our economy flourishing. In fact, I’m looking forward to some investors coming down off the coast of the South Island to reinvigorate what people were forced to leave because of an abrupt, awful decision—and I’m only sad the person who made that decision is still a fugitive from electoral justice.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Mr Chairman. Now, the Minister has just told us in terms of one of the policy options that he went through—that are outlined in the regulatory impact statement—that it was to ensure a flourishing sector. What he needs to tell us is why that was. What was the evidence? What was the evidential base for this policy decision that the Minister taking that decision was making? He may want that sector to flourish. If that was the outcome he was looking for, why was he convinced that for Ministers making that decision—what was the evidential base that that would ensure that there was a flourishing sector?

I’m very interested that the Minister thinks that him making the decision will ensure more investment on the east coast of the South Island, given the hundreds of millions of dollars, if not billions of dollars, that have been invested in the exploration in those basins and exited because there were not commercial finds. I guess this is what the Minister’s $200 million subsidy fund is for. But why was it that the Minister was convinced that it was ministerial decision-making that would ensure a flourishing sector? That is a causal leap that is not covered in the regulatory impact statement. It jumps from there being statutory fixes along the lines of what the current Government’s policies wanted to be, and that is their prerogative, but then there is a causal link to the Minister having that discretion and him assuming that what will eventuate is a more flourishing sector. I have not seen anything in the documents that have been tabled that showed that there was any policy advice put to the Minister, but I would be very interested to hear what policy advice the Minister received on that.

GRANT McCALLUM (National—Northland): I move, That debate on this question now close.

STEVE ABEL (Green): Thank you, Mr Chair. The question that my colleague Dr Megan Woods just asked is actually a very significant one, because the whole premise of this legislative approach that we’ve seen from the Minister for Resources—to respond to his previous comments—is the presumption that there is some vast reserve of gas or oil to be found. The specific narrative that the Minister has raised and therefore entitled us to respond to—in his previous comment, he referred to himself as a nationalist. In fact, it is offshore oil companies that come and look for oil and gas here.

He then said that it was cancel culture that caused the demise of that industry. Is the Minister aware that before the 2018 ban was put in place, Statoil had come and explored and then relinquished their Northland permits? Is he aware that Petrobras had been awarded a permit in the Raukūmara Basin? They came, they searched, they got rightly harried by some excellent activists out at sea with Te Whānau-ā-Apanui, and they found nothing and they relinquished their permits. Is he aware that Exxon Mobil searched in the Great South Basin and relinquished their permits? Is he aware that Shell Oil sold up their entire domestic infrastructure, and a month before the ban came into place, they sold what remnants they had to OMV? Is he aware that Anadarko did the same thing? They came, they searched for oil, they prospected, they found nothing, and they left.

It’s a very important point, because these companies were coming and looking and leaving before the ban came—

CHAIRPERSON (Teanau Tuiono): Just to help the member, please relate it to Part 2. Yes, the Minister has said some things and members are able to respond to that, and there is some leeway, but then we also need to bring this to Part 2, so if that could be done, I’d appreciate it.

STEVE ABEL: Thank you, Mr Chair. Yes, I will bring it to Part 2. I’ll finish up. I’ll wrap up with that point. Essentially, those companies cancelled themselves. They were not cancelled. This is why this legislation is all the more important, because the premise that underpins it must be an understanding that, in fact, there is a significant risk for us if we don’t have proper decommissioning regulations in place that don’t rely solely on the enthusiasm of the Minister of the day to try and desperately get that dying industry back.

I will go to replacement sections 41AA and 41AB in clause 26B. This might seem a minor question in the context of the overarching issue, but I note that it refers to tier 1 permits for minerals other than petroleum. Why is the change of control provision extended to tier 1 permit operators for minerals other than petroleum when most of the surrounding obligations relate to petroleum? What’s the rationale for this inclusion? That’s the first question.

The second one is replacement section 41AB(3)(a). The bill notes that permit participants must notify the Minister for a change of control. Replacement section 41AB(3) notes that a copy of any agreement or document that specifies change of control must be given to the Minister. Is the requirement to provide a copy of any agreement or documents specifying the change of control sufficiently precise? That’s my question.

What if the change in controlling ownership occurs through a series, for example, of indirect offshore share transactions with no single agreement? How is the Minister or the regulator to keep track of where such a change in control has occurred? What are the obligations on the regulated entity, those corporates, to make sure that they will provide a copy of any agreement or document specifying the change of control? That’s the gist of that question. Thank you very much.

Hon SHANE JONES (Minister for Resources): Given that I’ve been so lucid in my stewardship of this bill, I direct the member’s attention to page 8—this is what I think the member is talking about—replacement clause 28, amending replacement section 41A. The member also raised what level of obligation is on a permit holder to furnish the necessary information to the Crown via the Minister. Well, I direct the member’s attention to 41A(1). The word “must” is not discretionary. The word “must” is, essentially, an enforceable duty. I need to say no more than that.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. Just briefly, noting that the Minister for Resources and the Hon Dr Megan Woods have been talking about some policy decisions and also the role of the Minister, I appreciate that there is a “must” for that notification of a change of control, but then there are a lot of “mays” about what the Minister can do when deciding whether an outgoing guarantee is needed or not. But going back to the conversation I’ve been having with the Minister about that outgoing guarantee and what it applies to, and if it just applies to decommissioning—and I’ve referenced section 39 of the principal Act before, but I still can’t see the hook.

He’s talked about the trading liability. The Minister has talked about how he’s fixing a loophole here. So, as I said in my initial contribution on this part, if this amendment is changing things so that we can’t go back in time to old permit holders and the “must” that the Minister just referred to is when a permit holder wants to sell the operation to somebody else, then they must tell the Minister, and the Minister may set this outgoing guarantee, and that outgoing guarantee is always referring to decommissioning. There is some link to the information that’s required to relate to the permit, but my question is: is there anything in here that links to the Minister, or is it already in the existing legislation and so it doesn’t need to be changed?

Can the Minister require a financial instrument for the ongoing conditions of a permit—so not the decommissioning, but the ongoing permissions? That is the question.

CHAIRPERSON (Teanau Tuiono): The time has come for me to leave the Chair. The House will resume at 7.30.

Sitting suspended from 5.58 p.m. to 7.30 p.m.

CHAIRPERSON (Barbara Kuriger): Good evening, members. When we broke for the dinner break, we were on the Crown Minerals Amendment Bill, and we were on Part 2, the debate on amendments to clause 25, new clauses 26A to 26C, clause 27, clause 28, and clause 29A, set out on Amendment Paper 343.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. I want to go to clause 27, in Part 2 of the legislation. There’s some quite specific legislation. I think we’ve still got a lot of the bigger policy questions that particularly pertain to clause 26, which is where the meat of the changes that we’re seeing come through. But if we go to clause 27, which will replace clause 27 in the amendment bill, one of the things is “Section 41AE amended (When Minister may consent to change of control of permit operator)”. One of the things in clause 27(3) is “In section 41AE(1)(a), replace “change in control” with “change of control”.’ Now, I’m not trifling; this is an amendment that officials and the Minister have decided was important enough to put in an Amendment Paper. Can the Minister explain to us what the material difference between the “change in control” and “change of control” is? Also, what was the policy difference and what was the policy driver behind deciding to use the committee’s time in terms of an amendment to move from “change in control” to “change in control”?

Furthermore, just sticking with clause 27—and, as I say, these are very specific questions—clause 27(5): “In section 41AE(1)(b), replace ‘health and safety requirements of the Health and Safety at Work Act 2015’ with ‘health and safety and environmental requirements of all specified Acts’.” Why was that change made? What was the thinking behind it? Why was the original amendment to the Crown Minerals Act limited to only the Health and Safety at Work Act? Is it a legacy from the parent legislation that was drawn through? Why the change? What drove that? What was the policy thinking behind it, and what other Acts is the Minister, in bringing this amendment to the committee, thinking will be covered off by clause 27(5) when it says the “ ‘health and safety and environmental requirements of all specified Acts’ ”? It’s been broadened out—why is it, and what in particular does it pertain to?

What we are wanting to understand throughout all of this is—there are some very big changes, like going from having statutory decisions being made and a criteria where officials do that, to the Minister seizing discretionary powers, but then there’s some very specific things, like “change in control” to “change of control”, and we’re trying to understand what’s driving both of these changes that we’re seeing in this amendment bill. On clause 27, we’ll be really looking for some insight from the Minister around that.

Hon Dr DEBORAH RUSSELL (Labour): I just want to remind the committee that before the dinner break, one of the issues we were discussing was who exactly was consulted with by the Minister. There is very targeted consultation, limited to those directly impacted by the proposed change. We’ve asked the Minister for who he actually consulted with in terms of these changes, and the Minister doesn’t seem able to tell us, so we are going to go on a bit of a forensic process here.

I’ve gone to some of the submissions that have actually come up that were made. If the Minister won’t tell us who commissioned him, we’re going to have to ask for it. I’m looking right now at the submission by Energy Resources Aotearoa, “Powering a better New Zealand together”. I just want to go to paragraph 36 of their submission—“Updating the decommissioning provisions”—and they absolutely argue for much less liabilities for energy resource firms. They say, “Our concern is that the changes”—that the Minister had put in, that were there—“do not sufficiently or more fairly reallocate risk between the Crown and permit holders. The unequal burden on permit holders will continue to dampen the desire to invest in new exploration, appraisal, and development,” and so on. So they were actually quite strong advocates for much less liability. In fact, if we go down to paragraph 41, they say “trailing liability is redundant with appropriate financial security arrangements”.

This is a group of people who are very, very, very clearly in support of much reduced liability for energy companies, when it came to decommissioning wells. Given that the Minister won’t tell us who he consulted with, we’re going to have to go, one by one, through all these submissions and ask a very straightforward question.

If the Minister won’t tell us, we’re going to ask, one by one: in terms of forming this very last-minute Amendment Paper, did the Minister or his officials consult with Energy Resources Aotearoa Ltd? Straightforward question, Minister.

Hon SHANE JONES (Minister for Resources): Obviously, we’re no longer talking about Part 2, which is disappointing because I was hoping to raise the quality of contribution by ensuring it’s of some technical relevance. However, needs must.

CHAIRPERSON (Barbara Kuriger): We do have some questions from Part 2, Minister.

Hon SHANE JONES: I’ve been asked a question of clause 27. The improvement and the change reflects, from the drafting personnel, a superior form of wording. There is nothing else beyond that.

I got asked a question also—and I’m on page 6, at new clause 27(4)(aa). It is evident that when the Minister exercises his or her discretion, then it’s what the Minister considers to be appropriate, but, once again, the appropriateness is measured against the schema, the criteria outlined in the various sections, which I took us through prior to the dinner.

There was one other question which I do want to respond to. A reference was made to bonds—so, this pertains to the decommissioning obligations under the Crown Minerals Act. Any other obligations that may have been incurred by an operator will inevitably fall under environmental legislation, and that is where they may also attract enforceable obligations. But our attention tonight is dedicated to the Minister enjoying the statutory authority, his or her judgment, based on criteria which is clearly and lucidly articulated in this pithy but lucid amendment bill.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. I have a very small question for the Minister. I really appreciate both the Hon Dr Megan Woods and the Hon Dr Deborah Russell for their forensic analysis of the submitters, but I’ve done a little bit of forensic analysis in a different way and I’ve gone through the comparable sections of the Crown Minerals Act. The section I’m referring to is clause 28, which is replacing section 41A(1). This is a section that the Minister was referring to just before the dinner break.

My question is in the existing Crown Minerals Act, in section 41A(b)—and it is quite small, and, hopefully, it’s a quick confirmation from the Minister. There is a definition that is given to a “guarantor”, but that definition, in the updated version of section 41A in Amendment Paper 343, has been removed. In the Crown Minerals Act, the definition for “guarantor” is right after the body corporate “has provided a guarantee for the permit participant’s obligations under the permit (a guarantor) has undergone a change of control.” But that bracket with the definition of “guarantor” has been replaced by “other than a body corporate that has provided an outgoing guarantee for those obligations”.

I just want to check with the Minister, in lieu of having no definition, that the definition of a “guarantor” is still the same—that is, a body corporate “that has provided a guarantee for the permit participant’s obligations under the permit”, “other than a body corporate that has provided an outgoing guarantee for those obligations”. So is that still the definition of “guarantor”? And I’m guessing that a body corporate that is for providing an outgoing guarantee is not a guarantor. Thank you.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. Going from that very specific clause 27, going back to the question that I had posed before the dinner break around who are the stakeholders that the Minister had officials meet with, it’s talked about that there were confidential forward drafts of the proposed amendment given to them. We’ve asked the Minister to give a list. He hasn’t been forthcoming with that, so we’re left with no option but to go through each and every submitter and ask the Minister if this was an area that did feed into the final Amendment Paper that we have here. I think everyone in this committee will note there’s around 500 submissions.

I want to turn us now to the Lawyers for Climate Action submission that was a very fulsome submission to the original bill. I want to know whether or not they are one of the key stakeholders that were consulted with, as set out in the annex to the regulatory impact statement that’s been tabled along with this Amendment Paper, which pertains to the meat of this legislation, which is in this clause 24 kind of area. Paragraph 27 of their very fulsome submission to the select committee—the Lawyers for Climate Action, who are a group of legal professionals in this country who have a great deal of expertise in this area—noted that “perpetual liability on the last remaining permit holder for decommissioning costs is not an adequate substitute for requiring payment of upfront security for such costs. New Zealand would be left with no recourse if a company ceased to exist, had insufficient assets to pay, or if its assets were in jurisdictions where rights of recovery were not recognised. These are all highly likely scenarios [and] there are already plenty of contaminated sites in Aotearoa New Zealand caused by private companies that are no longer around to clean them up.”

This is a group of legal professionals that have a lot to offer. I would expect that this would have been part of the group of stakeholders, given their expertise, that the Minister would have had his officials meet with and who would have been privy to confidential briefings—not only a meeting and a confidential briefing, but given the opportunity to give further advice in writing, as is outlined in the annex to the regulatory impact statement. So I’d like to know from the Minister whether or not the Lawyers for Climate Action were one of the key stakeholders that were consulted with.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. A small question here, and it is on page 4 of Amendment Paper 343. It is related to new clause 26B, which is inserting new section 41AA, which is an interpretation section, and at subsection (2), there is a definition of “controlling interest”. It is a controlling interest if they have control of “50% or more of the voting rights in the body corporate” in terms of “person A” in subsection (2)(a) and (b). The question is whether or not the Minister has looked at any advice to say that this is enough of a controlling interest, and how this definition relates to the people who are in control. “Change of control” is a phrase that is used throughout the amendment.

Again, I’m interested in how this links through to the legislation and whether it’s a change or not, and that goes to the wider policy point that the Minister was making before the break about the whole idea of his amendment being to stop loopholes and to stop companies—I can’t remember the word that he used, but to stop companies sliding out of some obligation. So does he think that that definition of “controlling interest” is strong enough in the new section 41AA?

Hon PEENI HENARE (Labour): Tēnā koe, Madam Chair. Perhaps, because I can with the Minister, in this exchange if I may, Madam Chair, I’ll speak in te reo Māori, because I think it will capture exactly the spirit in which this question is asked towards his Amendment Paper.

E mōhio ana au, e te Minita, i te wā i whakaritehia tēnei pepa hei whakaarotanga mā ngā iwi me ngā hapū huri noa, i haere, i whātoro atu koe, otirā ō āpiha, ki ngā tini hapū, ki ngā tini iwi. Engari ki roto i tēnei o ngā pepa tāpiri, Amendment Paper and an amendment, me te panonitanga i tērā o ngā pepa tūturu nei, ko te pātai nui ki a koe mehemea kua whātoro atu ō āpiha, tō tari anō hoki ki wēnei o ngā iwi i noho ki roto i te nohoanga tuatahi o tēnei pire?

Nō reira he maha ngā iwi ki roto i tērā o ngā rōpū, ki tērā o ngā rārangi ingoa. Ko ētahi, anā, ko ngā mana nui me ngā tapu nui o Te Arawa waka, me te mōhio anō hoki he tini ngā hapū me ngā iwi kei roto, ā, ko te hiahia kia whakarongo atu mehemea ki roto i wō pepa e whakarerekē nei i te pire tuatahi, mehemea kua noho ngātahi ō āpiha me tō tari ki te taha o Te Arawa waka whānui.

Engari e mōhio ana koe ki ngā rārangi ingoa ki runga i ngā rōpū e pā kau atu ana ki tēnei pire, mai i Te Rarawa, ka huri tua atu ki roto i a tāua i Te Taitokerau, anā ka heke iho rā ki roto i te Waipounamu me te tini o ngā rawa o te whenua kei raro iho i ngā mana whakahaere a te iwi, kei raro anō hoki i ngā mana kua whakaritehia e tēnei Whare e pā ana ki ngā take Tiriti kua tatūngia ki roto i ngā tau kua pahure ake.

Kāre au i te whākī i te roanga ake o ngā rārangi ingoa ki roto i ngā rōpū kua kōrerohia nei e au, heoi anō ko tāku e hiahia ana kia whakarongo atu mehemea kua hoki atu anō ngā āpiha me tō tari ki wēnei o ngā tāngata e whai pānga ana ki te kaupapa.

[I am aware, Minister, that at the time this paper was prepared for consideration by the iwi and hapū all around, you went, you visited, indeed your officials, the many hapū and manu iwi. However, within this Amendment Paper and amendment, and the amendments to this particular original paper, the main question to you is whether your officials, your office has visited these particular iwi that engaged in the first sitting of this bill?

And so there are many iwi within that particular group, on that list of names. Some of them, indeed, are significant and sacred authorities of the Arawa confederation, and I’m aware that there are many hapū and iwi within it, and I would like to hear whether within your papers that amend the first bill, whether your officials and your office has engaged with the wider Arawa confederation.

However, you know the list of names on the parties that are affected by this bill, from Te Rarawa, and turning beyond that to you and me in Northland, and then coming down into the South Island and the various assets of the land that are under the governance authority of the iwi, and also under the authority that was arranged by this House with respect to the Treaty issues that were resolved over the years that have passed.

I will not recount the entire list of names within the parties that I have spoken about, however I would like to hear whether the officials and your office have returned to these particular people that have interest in the topic.]

Hon SHANE JONES (Minister for Resources): Tēnā koe e te Tiamana. Me huri e tātou ō tātou whakaaro ki te wā i whārikitia mā tā tingia ai te pire. Kātahi ka kitea he kōhaohao. Ka haria mai he menemata nō te marama o Nōema. Ka whakatakotongia tēnā menemata, kātahi ahau ka mōhio ko te takoto o ngā kupu kāhore e tino ū ana ki tāku i hiahia ai.

Kīhai ahau i whakapapā atu ki te tangata whenua, heoi nā noa te wā i whakapapā atu ahau ki te tangata whenua, te wā i waihangatia ai te pire ake.

Ko tātou e kōrero nei mō ngā menemata, ngā pepa nonohi nei, pēnei me te matikara o te pepa ake. Te hunga nāku i whakapā atu, ko te hunga e whai pakihi ana, e whai pānga ūmanga ana ki roto i tēnei rāngai o te ao ohanga. Kīhai ahau i whakapā atu ki ngā kākāriki, ki ngā tāngata e pahupahu ana mō te huarere. Koinā noa te hunga i whakapā ai ahau ko te hunga e whakangao ana o rātou pūtea ki roto i tēnei rāngai o te ao ohanga.

[My acknowledgments, Madam Chair. We should think back to when the bill was first presented. As it was then that gaps were noticed. In November, an amendment was brought. When the amendment was tabled, I saw that the wording did not align with what I wanted.

I didn’t initially contact the locally affiliated tribal groups, but when the bill itself was put together, that was a time that I did contact the affiliated tribes.

We are discussing the amendments here, these little documents, like the fingerprint of the paper itself. The people that I did contact were the people who have companies, those who have a business involved in this sector of the economic world. I didn’t make contact with the greenies, with people who yabber on about the weather. The only people that I contacted were those who invest their own money in this sector of the economic world.]

The consultation with tangata whenua ended when the bill was established, and they were very keen on a decommissioning regime that avoided the pitfalls of the Tamarind imbroglio. When the November amendment, which sought to redress a failing, which was the ability of people to trade shares and, potentially, evade liability—there was no consultation with the tangata whenua. Then when that amendment—I’m talking November now—was studied, and it became evident to me that the words in that particular amendment did not capture the outcomes that, from a policy perspective, we determined were necessary to reinvigorate the sector. I spoke to no climate group. I spoke to no tangata whenua group. I engaged with the people who are investing and who will be the risk takers to salvage and rescue this sector, and I’m extraordinarily proud of myself that I’ve done that.

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

CHAIRPERSON (Barbara Kuriger): I’m going to take a question from the Hon Dr Megan Woods, but I do think now that the Minister has answered the question around consultation—not as comprehensively as members may have wished in terms of not naming each of the groups, but that is the Minister’s answer—I’m looking for broader questions now.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. The Minister has said he has not met with any environmental groups and he has not met with any iwi. So I will not ask him any questions about whether or not he has met with those, because that has been answered.

What I am interested in is: where’s the expert legal advice, given that a number of submitters came at it from a legal perspective in terms of offering their submissions on the original bill? I’ve already asked the Minister about the Lawyers for Climate Action; I won’t be asking about them again. What I am going to ask the Minister about is the Environmental Law Initiative submission, which is an incredibly comprehensive submission on the original bill that went in there. It goes through the changes that were made in 2021 around how the changes were made so we could avoid the situation where taxpayers were lumbered with the liability again and then goes through the changes that the Government was proposing in that original piece of legislation that was brought.

They made a very good point, and I would have thought something that the Minister would want his officials to have followed up on. He would have wanted this point to be taken into policy advice in bringing this Amendment Paper to the House, because they made the point in paragraph 30 of their submission: “While the Government has argued that it is possible to ‘make adjustments to the petroleum decommissioning regime in a way that does not materially increase risk to the Crown’, it is ELI’s”—that’s the Environmental Law Initiative’s—“view that the changes proposed will undermine the intent of the whole regime by making it much easier for companies to avoid liability for decommissioning by transferring permits to smaller, less well-resourced companies towards the end of the productive life of the field, as is known to occur in New Zealand and overseas. These smaller companies are less likely to have the resources to pay for decommissioning, increasing the risk that the Crown will end up having to foot the bill.”

Now, for any Minister whose job it is to put New Zealand’s interests first, this is exactly the kind of advice that should be followed up. To only go to the largely multinational companies that want to come into New Zealand, who have made it clear they don’t want to pay their own way, and seek their opinion is a dereliction of the duty of that Minister to stand up for New Zealanders, to make sure that he is protecting the interests of the taxpayers of New Zealand. Putting corporate interests before the interests of the New Zealand taxpayer is not something that New Zealanders expect of their Ministers.

So it is imperative, when we know that there have been comprehensive legal submissions into a select committee process, and the Minister then decides to have a very unusual process for amending that legislation in terms of bringing the bill back out, when it was due for third reading, and recommitting it to committee stages, that this is the only chance we get to examine this. There were some expert opinions that were put into that select committee process—that was bypassed, and we’re going through this quite extraordinary process to do it. The Minister needs to tell us: is this the kind of meeting that he instructed his officials to have? We’re told that there were confidential briefings on different options that were under consideration. I think the New Zealand public and this House, in deciding whether to pass this legislation, needs to know whether warnings like this factored into the paper that the Minister has brought to the House.

Hon SHANE JONES (Minister for Resources): I’ll make a few additional remarks. I did not meet in the engagement pertaining to this document, which establishes the Minister, within guardrails, to enjoy a certain level of discretion to deal with the ebb and flow of decommissioning. There was no contact with the Environmental Law Initiative group. They are a shadowy organisation funded from Americans, and I will never ever talk to them.

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

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

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Minister’s amendments to Part 2 set out on Amendment Paper 343 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 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Amendments agreed to.

CHAIRPERSON (Barbara Kuriger): The amendments are agreed to; therefore, Part 2 as amended stands part.

Amendments to Part 3 set out on Amendment Paper 343

CHAIRPERSON (Barbara Kuriger): Members, we now come to the Minister’s amendments to Part 3. This is the debate on amendments to clause 36, new clauses 36A to 36C, 37, 38, 39, 40, 43, 44, 45, 45A and 45B, new clauses 46AAA, 47A and 47B, clause 49, and amendments to the Schedule, set out on Amendment Paper 343. The question is that the Minister’s amendments to Part 3 set out on Amendment Paper 343 be agreed to.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. Short question to start with—on new clause 36A, inserted by clause 36, so on page 13. This is about the decommissioning and totally removing it, and then there’s some exemptions, but then at subsection (2A), it says: “Despite subsection (2), an item of infrastructure left in place in accordance with an exemption … must be treated as having been decommissioned.” So I take that to mean that oil and gas infrastructure can be left to contaminate the seabed. I wonder, with the Minister, has he consulted the Minister for Oceans and Fisheries about the impacts that leaving such infrastructure on the seabed could have?

Also, going back to the questions that we were having in Part 2 that are relevant to Part 3, as well, on the people who were consulted on this amendment: I know the Minister has said that there’s been no consultation with environmental groups or iwi groups, but has there been consultation with the type of people who know how to decommission this large infrastructure in a difficult environment?

Also, the guarantees—I know the guarantees might be more in Part 2 of the bill that we just closed off, but it is relevant, the guarantee, to the decommissioning and the cost of decommissioning, because, of course, if an incorrect cost is assumed for the cost of decommissioning earlier on in a process, and it turns out that it’s actually going to be a much larger cost to decommission because of—who knows; it might be health and safety laws. Who knows what might change, but the decommissioning might be more expensive than first anticipated. So how is the financial mechanism going to provide for that increase in cost of decommissioning, and did the Minister consult with any of the financial institutions that might provide that sort of guarantee to work out how much the liability is?

STEVE ABEL (Green): Thank you, Madam Chair. Extending on those questions from my colleague Rachel Brooking—the decommissioning cost is a crucial question. One thing that, also, we didn’t get to ask in Part 2 was how the evaluations are made for the appropriate level of liability or guarantee that is to be set aside for different forms of petroleum exploration. We know that shallow wells have costs associated, but a deep-water well would have significantly more costs in terms of decommissioning. What are the evaluations that are made? What are the means by which the nature and extent of an outgoing guarantee may vary between these different types of wells? That’s the essence of my question. Thank you.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. My questions pertain to new clauses 36B and 36C. That’s page 13 of the Amendment Paper.

What we know is that this Amendment Paper, in essence, what it’s doing is it’s removing automatic liability for the cost of decommissioning—which has been covered off in questions from the Hon Rachel Brooking and from Steve Abel—from those previous permit holders. But more importantly, and also one of the things that the legislation that we put in place in 2021 did, was it brought in associated criminal offences and pecuniary penalties for failing to meet the cost of decommissioning. But this Amendment Paper is removing all of that. It is a complete watering down of those protections that were there for the New Zealand taxpayer.

What we see from new clause 36B is that removal of their automatic liability and the associated criminal offences from a person with a participating interest in a permit, whenever that was granted, who transfers all or any part of their participating interest in the permit. Then 36C does that “from a licence holder or any person with a participating interest in a licence who transfers the licence or all or any part of their participating interest in the licence (see the repeal of section 89K(2) by new clause 36C, inserted by this Amendment Paper).”

So what I would like to know from the Minister—and he never addressed the question in Part 2, but it pertains as much to Part 3 as it does to the question of the five policy options that are spelt out in the annex to the regulatory impact statement that were considered. What was it that made him settle on the preferred option, option four, that the Government ultimately went with? Why was it that it was ministerial discretion to decide these things that were decided on? We haven’t had a policy explanation from the Minister about—sure, he may have seen that there were some problems with the bill he’d brought to the House and that it needed to be tidied up, but there’s a leapfrog away from having those decisions laid out in statute to then giving discretionary power to a Minister to decide. That has not been adequately explained to the House.

What was the policy rationale between not only the first and second reading and the select committee stage and the committee of the whole House, that we get to the point where the bill is looking for its third reading and that scrutiny has already happened, and there is such a fundamental shift, going from a decision that is defined by statute, to giving discretionary power to a Minister to make that decision? That needs to be spelt out.

It wasn’t all of the options that were put to the Minister. He’s told us that the explanation was that he wanted to see the industry blossom. Well, there is no causal connection. He needs to explain to us how it is that giving a Minister the discretionary power to do it is going to lead to that particular outcome, because the logic simply doesn’t follow and it doesn’t stack up. What was the advice that he received that actually saying to multinational companies, “You can come to New Zealand, and if you just leave your mess for New Zealand taxpayers to leave up, don’t worry, there’s no penalties. I’m removing those in the legislation as well and letting you off scot-free.”—what was the rationale that led him to that?

Hon SHANE JONES (Minister for Resources): Now, the rationale is best conceived in the following way: this piece of legislation is a response to the worst energy natural resource decision ever recorded since the Treaty of Waitangi. Sadly, the main instigator is a political fugitive from electoral justice living at Harvard, so it has fallen to our Government. With the stroke of genius in new clauses 36A and 36B, it posits the responsibility with a Minister to make the judgment as to what flexibility—because no statute, no bureaucrat can know all the scenarios, and as a consequence of these two clauses, the policy intent is absolutely clear. We are not going to trust our economy, corrode the productivity of our economy, by denying ourselves access to fossil fuels. The high-tide mark of that heresy has come and gone. That is why, in every speech I give about this bill, I am hailed and feted by all four corners of our motu.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. I think the Minister needs to realise this is a committee of the whole House stage, where there are very particular questions put about individual sections of the bill. The Minister has theoretically opened this debate up to any energy decision made since the Treaty of Waitangi was signed with the contribution that he just gave. So I do encourage the Minister to actually start addressing the questions that are put to him. They are serious questions. This is a very atypical process that this bill is going through in that it has been recommitted to the House and is bypassing that scrutiny that it had previously gone through at select committee stage and the committee of the whole House. It’s made some fundamental changes, not least of all the Minister giving himself discretionary power.

Now, that is something that a Minister should come to this House prepared to answer questions about, not engage in hyperbole. They should actually be on top of the bills that they bring to this House and be able to answer basic questions like “What does this section do?”. That is not too much to ask of a Minister, and we haven’t been able to get any of that detail out of this Minister in the time that he has sat in the chair. Don’t worry, Madam Chair, I’m not going to engage with every energy decision since 1840, which the Minister has brought into scope of this debate. So he may want to curb his enthusiasm while he sits in that chair, because he’s broadening the debate with every utterance he makes.

But I go back to the policy rationale. We are asking for this. It has not been adequately explained why it is that it requires ministerial discretionary decision-making to make it. Now, I might not agree, and I don’t agree, with the changes the Minister is making, but why could he not pursue those through the original amendment bill that he brought, which wasn’t through ministerial discretion making? There was a different route to do that and there were five options that were considered by his officials that are laid out in the regulatory impact statement.

I’m not debating on this occasion the merits of the decision. I’m just asking about why he has chosen this particular route. The committee does need to understand that. It’s not enough just to say that he wants to be heralded from all four corners of the land—that just makes no sense. Why is it—what is the causal connection between ministerial discretion and what he thinks are the desired outcomes? The committee is still waiting and the committee deserves to know.

Hon DAMIEN O’CONNOR (Labour): Thank you very much, Madam Chair. I take the first call on this piece of legislation, as someone who did represent an area that arguably had the largest reserves of hydrocarbons and mining. I’m not going to go off onto a wider tangent—I’m tempted to—but I will focus on the issue and the points being discussed now, and that is ministerial discretion.

The Minister will himself know that we have three-year terms in this Government, and if indeed he is looking to support the mining sector—and, coming from a region that has quite a history of mining, of decisions, good and bad, that have been made, some by politicians, others by heads of companies; decisions that have left the region of the West Coast in a mixed kind of situation. At the moment, it’s OK. If you had a look and tried to assess the value of mining to the economy or to the community, you would expect that every person on the West Coast would be a multimillionaire. We should be multimillionaires. There have, literally, been billions and billions of dollars of resources taken from the West Coast region and, indeed, still are being taken from our region. We have towns that can’t even put in a decent water-supply system. We have ratepayers who can’t afford to pay rates. So the mining doesn’t guarantee benefits and prosperity to the communities—neither, indeed, to the wider community.

The question of who makes the decisions as to whether these projects should go ahead or whether we have prospecting is a proposition put forward by the Minister, that the Minister should—he should be reminded that there are a lot of people working around this country to ensure that there might be a Green Minister in 18 months or 20 months. Is that, indeed, what the Minister is seeking? That is a realistic outcome. What we do in this House is to try to balance decision making by politicians and Ministers against the independence of quasi-Government organisations—or, indeed, it might be put out to an independent authority, where there’s total independent decision-making; semi-independent back, where a Minister has oversight of a Government organisation; or it could be the Minister, as is being proposed here.

What goes around comes around, and I’d suggest, and the Minister will know this, that to offer certainty, as he’s trying to do, for the mining sector, for the prospecting and hydrocarbon sector—they need a more robust and consistent process than the whims of a Minister. Because as I say, what goes around comes around. He may be aware of this, but not everyone is supportive of his proposals across the wider economy. I certainly understand and see the value of mining, but we are living in a world that is moving away from hydrocarbons. That reality must be taken on board.

Trying to give assurance to prospecting companies that the Minister of the day is very supportive—and we would certainly acknowledge that—and that that will continue beyond the next election is actually a falsehood. The Minister can no longer give an assurance beyond the next term because of the independence of this parliamentary system. Some people like it, some people don’t. But the question of ministerial decision-making does come with a lot of risks, and it is important that those risks are tabled in this House here today.

The Minister, I’m sure, will take a call, and I ask the question: has he considered a more independent process, to give more assurance to the mining sector that, in fact, the decisions made by him will, indeed, be enduring, or could they perhaps be overturned by a Minister with another set of objectives?

Hon SHANE JONES (Minister for Resources): I thank the honourable member for that contribution. In my delivery this evening, I have not obfuscated the fact of a cardinal choice, a decision that was made to go for the Minister, who him- or herself will be accountable under this legislation. Potentially, his or her acts will be justiciable. That is how our system works. That politician, that Minister, is, yes, as the honourable member said, going to be able to exercise a certain level of discretion against criteria laid out—and I don’t want to belabour it, because I have referred incessantly to the criteria upon which she or he will make the decision. It is a choice that was taken by our Government. Yes, there were other choices, but we have decided, given where we are in the arc of our nation’s journey to secure affordable, secure, and sustainable energy sources, the decision we’ve made.

SCOTT WILLIS (Green): Thank you, Madam Chair. This is the first time I’ve risen to take a call on this question, and I appreciate the Minister for Resources’ explanation of the arc of our nation’s journey towards our energy future. I’m thinking here about new clause 36A, “Section 89E amended (Decommissioning)”, as well, and, in particular, the ministerial discretion around decommissioning. If we look at the other forms of legislation that are out there at the moment, why are we rushing through, or having this messy process that we’ve had with this bill—where we’ve got an amendment upon an amendment for a bill—to try and complicate things even further?

My question to the Minister, really, is: why are we not seeing some greater consistency across Government bills? We have the Offshore Renewable Energy Bill, which has a very different regime for decommissioning, and I’m concerned. But the Minister could explain whether there is a reason why this is distinct, and why the decommissioning here is simply to give it ministerial discretion, rather than a more consistent decommissioning regime that allows for environmental concerns and that allows for other users to be taken into account. The Minister might like to respond directly and, hopefully, with a bit more clarity.

I think it is important that we have consistency in our legislation and that it makes sense that there are not too many bits that just jar, because we’ve already seen what happens when we have to amend an amendment to legislation, and it’s just poor process. So if the Minister could explain why we aren’t following a simple process, that would be helpful. Thank you.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. I’d like to go to clause 44 of the Amendment Paper, on page 16, which is the exemption powers of the Minister, section 89ZZA, and that’s amended and replaced with “The Minister may, if they consider it appropriate and if satisfied that the criteria in section 89ZZB(1) are satisfied, exempt a permit holder or license holder from the obligation to carry out and meet the costs of any post-decommissioning work.”

Now, I think this strikes at the heart of the questions that we’re asking, these exemptions powers, these discretionary powers that the Minister is going to hold—the Minister of the day, whoever that is, is going to hold—under this legislation. I think what the committee would like—and certainly on this side of the committee we’d like to understand: “if they consider it appropriate and if satisfied”. This is quite unusual wording in a piece of legislation. Usually, it would be that a Minister would exercise discretion if a set of criteria set out in a different clause of the Act was satisfied. But this Act has quite a different and quite a unique turn of phrase in it: “if they consider it appropriate and if satisfied”.

I’d like the Minister to explain exactly how that will be exercised, what that means, how that is different than the criteria in section 89ZZB(1) being satisfied and fulfilled, what the appropriate test actually looks like—is it a subjective test? Are there some objective measures around it? How does the Minister consider that that will be exercised, and what are the policy discussions that have gone in to say that it needed to not just be that if the conditions in section 89ZZB(1) are satisfied, then the Minister can make this decision and come up with an exemption? Why is it that we’ve got that quite unusual wording in that clause?

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. Helpfully, my question is also on clause 44, but a different question, because what clause 44 does is replaces amended section 89ZZA(1) with what the Hon Dr Megan Woods has just read out. But the principal Act has another bit in it that is being deleted by this, which is it requires an “obligation to obtain and maintain a financial security under section 89ZV(1)(b)”. And if we look at 89ZV(1)(b)—that’s at clause 33—it amends 89ZV to, again, remove the phrase that talks about “obtain and maintain” a financial obligation.

So my question is: this deletion of having to obtain and maintain a financial security, is that something specific to this amendment of the amendment bill, or how is this explained in terms of the explanatory note and the other issues that the Minister has talked about? Is there somewhere else that has a requirement to obtain and maintain a financial security, or is it now just gone—no financial security is required?

Hon SHANE JONES (Minister for Resources): I think the contributors are confusing two regimes. The regime that imposes the vast majority of the liability, in terms of environmental outcomes, is not this statute. What this statute does is it gives an elected politician, or the Crown warrant, within the guardrails of this Act, the ability to exercise some flexibility in terms of the final decommissioning obligations in this statute. It is wrong to suggest that it erodes liability imposed under other statutes. I have traversed why our Government has plonked for this particular approach. There, really, is nothing that I can usefully add, because it’s striking a wall of indifference.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. I think it is important in these sorts of instances, because what we are seeing here is that the further we get into this amendment, based on the Minister’s response, it’s a worrying trend of the extent of the executive power on the way that we’re able to move regulations, and the way that we’re looking at legislation and legislation-making power, which I think is a concern, not just simply for this particular bill but in terms of the way that our system works in general.

I wanted to draw the attention of the Minister to a specific area—and I know that other people have lots more to talk about in terms of decommissioning. But I wanted to draw the Minister’s attention to the Schedule. Now, in the amendments to the Schedule—and I’m looking at the new clause 45 that replaces clause 45, as an example—actually, I’m going to go with new clause 44 and new clause 45, which is in the Crown Minerals Amendment Bill, regarding tier 3 permits—

CHAIRPERSON (Barbara Kuriger): Which page are you specifically referring to?

Dr LAWRENCE XU-NAN: I am looking at pages 18 and 19 of the new Amendment Paper 343, which is referring to pages 31 and 32 of the old Amendment Paper 214. On pages 18 and 19, we’re looking at clauses 44 and 45 in the Schedule, which was previously tier 3 permits. I’ll talk about financial securities if I get another opportunity, but I want to focus on these two first, because one of the first striking differences here is that rather than giving a specific date, as it has done in the previous amendment bill, what we have seen is a date that is now done by Order in Council. Granted, the original date has already passed, which was 30 June 2025, but I wanted to ask as my first question to the Minister why a concrete date hasn’t been given in this case and why, instead, we will be requiring an Order in Council for a new date. That’s my first question.

My second question is this: in the Schedule, in new clause 45, “Existing Tier 2 permits may become Tier 3 permits”, under the existing amendment bill, at new clause 45, it does mention that a Minister must consider different criteria. In this case, subclause (3) says that “The Minister must—(a) consider whether the permit satisfies the requirements of a Tier 3 permit as set out in section 2B(2A);”. However, there was no part in the previous Amendment Paper that had subclause (3)(b) mentioned at all, which determines “whether the permit area is an appropriate area.” This is a new clause that’s been added in this new Amendment Paper, which is different from the previous one. So my second question to the Minister is: what is the rationale for adding in this specific clause? Considering it doesn’t need to meet the criteria set out in section 2B(2A) because it’s a different subclause, what is, then, the Minister’s definition for “appropriate”?

Hon RACHEL BROOKING (Labour—Dunedin): Thank you. Going back to the Minister for Resources’ answer about my question around the deletion of “to obtain and maintain a financial security”, the Minister said that’s to do with different Acts. I’m quoting from the principal Act, the Crown Minerals Act. Then, we turn over the pages and we hear what our colleague has just spoken about in terms of financial securities at page 19 and that being a transitional provision. So, surely, the answer to my question, Minister, is that you are removing the need for a financial security under your amendment and that is what your change is. If it’s not—if it’s somewhere else in the legislation—could you point us to it? If the Minister is saying that it’s somewhere in some other legislation, I’m interested in that, as well, but to say that it’s not governed by the legislation is wrong. It is governed by the Crown Minerals Act. The Minister may want to say that his changes will mean that it’s not included in the Act, when this bill becomes an Act, but those are two different points, and so I’d like the Minister to clarify that point, please.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. I’d now like to turn my attention to clause 40 on page 15 of the Amendment Paper. What clause 40, and I think 39 before it, if I’m not mistaken, do is they amend sections 89M and 89U of the Crown Minerals Act. They are the sections—89M and 89U—being repealed, and that, effectively, removes the liability for former permit and licence holders. This is a category that we haven’t talked about. We’ve talked about current operations, and what happens if there’s a transfer of those assets and the shareholdings change. But what we haven’t talked about is those former permit and licence holders and what risks this poses to the Crown.

What I’d like to know from the Minister is whether or not there was any economic modelling of the risk to the Crown in terms of potential costs? We know that there’s about a $2.5 billion decommissioning cost out there, in New Zealand, in terms of what these changes mean, in terms of that risk profile to the Crown and, therefore, the New Zealand taxpayer. And if that modelling doesn’t exist, why didn’t he ask for that?

Hon SHANE JONES (Minister for Resources): Obviously, this legislation in no way negates the existence of an obligation enforceable against a permit holder to ensure that they’re held responsible for decommissioning outcomes, subject to the discretion exercised by the Minister. Now, I accept that it is a philosophical or institutional policy decision that our Government has taken which is at odds with the prosecutors in the Opposition, but it is what it is.

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

Hon Dr MEGAN WOODS (Labour—Wigram): I’d just like to follow up on that answer that the Minister gave. Obviously, we hold very different views on this, but what I would like to know from the Minister is whether or not economic modelling was done around the risk profile to the Crown, and if it wasn’t, why he didn’t ask for that.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. I’m interested in page 19, which is to do with the Schedule at clause 45, “Existing Tier 2 permits may become Tier 3 permits”, and I’m wondering if the Minister can explain why we have this provision. Wouldn’t it be better that tier 2 permits remained tier 2 permits and didn’t become tier 3 permits?

Hon Dr DEBORAH RUSSELL (Labour): I’m just puzzling my way through the amendments, and in the original Act, it’s to section 89ZZA. Now, in the amendment bill, it was amended by clause 44. And now, in the amendment to the amendment bill, it is being amended yet again. In effect, it’s worth just ignoring what’s gone through in the Crown Minerals Amendment Bill and just going straight from the source legislation—the parent legislation, as it were—to the—

Hon Rachel Brooking: The principal legislation.

Hon Dr DEBORAH RUSSELL: —the principal legislation; I knew there must be a lawyer’s term for that, thank you—to what’s sitting in the amendment bill. So, in the exemption part, the amended section 89ZZA is another one which gives the Minister exemption powers. It’s been there quite some time—well, it was inserted on 1 December 2023, so that’s quite interesting. But they say: “(1) The Minister may, if they consider it appropriate and if satisfied that the criteria in section 89ZZB(1)(a) or (b) are satisfied, exempt a permit holder or a licence holder from the obligation to pay all or part of any amount the person would otherwise be required to pay under section 89ZV(1)(a) or from the obligation to obtain and maintain a financial security under section 89ZV(1)(b).”

So that’s the section in the principal legislation. But by the time it’s amended: “(1) The Minister may, if they consider it appropriate and if satisfied that the criteria in section 89ZZB(1) are satisfied, exempt a permit holder or a licence holder from the obligation to carry out and meet the costs of any post-decommissioning work.” So, previously, as far as I can tell, because this is not legislation I’m especially familiar with, a permit holder or a licence holder would have posted a bond, they’d have had to pay something, they had to maintain a financial security, and the Minister could grant an exemption from that.

Now, that bit around actually paying some money upfront that the Minister can exempt people from is that the Minister can now exempt someone from actually carrying out and meeting the costs of any post-decommissioning work. So there’s a little bit of an analysis that’s needed here, because under the old section that’s sitting in the principal Act, the person would have been required to pay some money—presumably quite a lot, because this is expensive stuff—but now they, under the ministerial discretion, can be exempted from the obligation to carry out and meet any of the costs of the post-commissioning work. So there’s a shift there.

What I want to know, given that it’s been changed around like this, is the extent to which any modelling was done on this about the amounts of money that might be involved and what the costs might have been to the petroleum exploration companies or whoever is doing the work or whatever, or, alternatively, what the residual cost to the Crown might be. That’s the bit that really worries me. You see, the difficulty is that we know from the Tamarind experience that the cost to the Crown was quite extraordinary in terms of cleaning up the mess that was left behind.

So what I’m looking for is whether the Minister requested any advice in changing from the original section 89ZZA to this new section 89ZZA, where the change is from paying a sum of money to actually paying the cost of any post-commissioning work, and the Minister can exempt the person from doing that. What I’m looking for is just whether the Minister sought any advice on that, any modelling on it, any quantification of the numbers involved. The reason this is important is, of course, if the Minister issues an exemption, then the people who clean up the mess are the New Zealand taxpayers who end up paying the sums there. So I’m hoping that the Minister has requested some advice on that.

Hon SHANE JONES (Minister for Resources): The advice taken was of a highly professional nature. It was within the bounds of proper conduct from our professional civil service. There is a clear pathway forward in each of these clauses, which shows that liabilities can still be imposed, costs can still be recovered. But the genius of the bill is that it ensconces a Minister, entrusted with the interests of the entire nation, to effect rational, flexible outcomes. And upon that note, here endeth the lesson.

TOM RUTHERFORD (National—Bay of Plenty): 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 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Minister’s amendments to Part 3 set out on Amendment Paper 343 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 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Amendments agreed to.

CHAIRPERSON (Barbara Kuriger): The amendments are agreed to; therefore, Part 3 as amended stands part.

The question is—on the Schedule, where there is no debate—that the Minister’s amendments to the Schedule set out on Amendment Paper 343 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 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Amendments agreed to.

CHAIRPERSON (Barbara Kuriger): The amendments are agreed to; therefore, the Schedule as amended stands part.

Amendments to Clause 2 set out on Amendment Paper 343

CHAIRPERSON (Barbara Kuriger): Members, we come now to our final debate: clause 2. This is the debate on the Minister for Resources’ amendment to clause 2, set out on Amendment Paper 343.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. In clause 2, the commencement date, there’s a very interesting change that has happened between the Act; the Crown Minerals Amendment Bill that came to the House, went through select committee; and this Amendment Paper that landed. In clause 2, the commencement was the Act came into force on the day after Royal assent—“However, the following sections come into force on 1 July 2025”. Now, clearly, that date has been missed—and that’s not the subject of my question to the Minister—because the change in the Amendment Paper that we’ve got before us is: “However, the following sections come into force on a single date set by Order in Council:”.

So my question for the Minister is why we’ve gone from having a date defined in the statute that could have just been updated to reflect the passage of time that this legislation is now going through the House—why we’re now going to a statutory instrument in the form of an Order in Council? Why are we going to secondary legislation? This is atypical for the way to set commencement of legislation, and, obviously, a conscious decision that has been made by the Minister in bringing this Amendment Paper to the House.

Now, given that there hasn’t been any chance to look at this at any other point since now, it is quite a fundamental shift, and one, I think, that the House should debate and understand why it is—the date is immaterial to us. Obviously, the date has to shift. There’s been a huge delay with this legislation. It’s been knocking around for around seven or eight months while the Minister had his officials talking to the oil and gas industry. But what we don’t know is why it is we’re now using a statutory instrument, why it is we’re using secondary legislation in the form of an Order in Council, to set that date. Why aren’t we just defining that date in the Amendment Paper that we have before us?

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. Another change with the commencement clause is that clauses 44 and 45 of Part 6 of Schedule 1 also come into force on this single date, rather than the more generic 1 January date. Clauses 44 and 45 of the Schedule relate to pre-existing applications and existing tier 2 permits becoming tier 3 permits. I note that the Minister didn’t answer my question on that in Part 3 of the debate. But why is it that only clauses 44 and 45 of the Schedule need to come into force by Order in Council and not the other provisions in the Schedule?

Hon Dr DEBORAH RUSSELL (Labour): Here was I, just going to get—

Hon Dr Megan Woods: You were trying to get off from speaking on this bill!

Hon Dr DEBORAH RUSSELL: Yeah. I do want to query something, and it just goes to this business that my colleague Megan Woods spoke about, and that is the Act coming into force using an Order in Council, which is what is set out here.

Hon Dr Megan Woods: It’s highly unusual.

Hon Dr DEBORAH RUSSELL: It is unusual. In the normal progress of this bill, we would normally expect that with the committee stage today—and we think we’ll be here debating this well until 10 o’clock, won’t we?

Francisco Hernandez: 1 a.m.

Hon Dr DEBORAH RUSSELL: Ha, ha! But we are going to keep on, and then it’s a members’ day tomorrow, so this bill is going to perhaps reappear for its third reading on Thursday of this week. Maybe it won’t make it for its third reading until the next sitting block, and, ordinarily, we would think that if something was going through the House and it was going to pass into law, it would simply go to the Governor-General a few days after that. That’s just a fairly regular process for the legislation that went through the House this week. We’d expect it to be signed off by the Governor-General within a week or two—no worries. So why an Order in Council?

What is the reason for delaying the start of this Act—that can be the only reason for it. The Act can’t come into effect any sooner than the Royal assent. It’s not law until the Royal assent is given, so why the potential delay? What’s going on, and is the Minister concerned that there is yet another problem sitting in here that he’s going to need to fix up at some stage? Is he just giving himself a little bit of time so that if absolutely necessary, something can be fixed?

Now, it can’t be recommitted to the House, but we’re just deeply concerned that the Minister is just kind of playing jiggery-pokery with the House here. I want to understand—

Grant McCallum: “Jiggery-pokery”—what does that mean?

Hon Dr DEBORAH RUSSELL: Jiggery-pokery—it means jiggery-pokery. Careful what you’re opening yourself up to there, Mr McCallum.

The Minister has been very secretive, actually, about this Amendment Paper 343. He’s been very secretive about who he has consulted with. We don’t know who the officials met with. We don’t know who got to write this bill for him—because some of it just has the hallmarks of that. We don’t know and he won’t tell us who he consulted with.

This is particularly concerning when there’s a whole lot of ministerial exemptions in here, and now we’ve got something else which amounts to another bit of ministerial discretion. It’s ministerial discretion. I know what the regular process is around an Order in Council and Cabinet, and this, that, and the other. Nevertheless, the Minister is getting to choose exactly when this bill comes into force and when the regulations sitting in there start happening, and that is deeply worrying. I think that the Minister needs to explain to us that it’s not just a matter of “This is what the Government decided to do.” Why? Why has this Government decided to have yet more discretion over the starting date for when this bill comes into effect?

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. While we’re waiting for the Minister to respond to the questions around the commencement date changing from a solid date to Order in Council, I have a different question to ask the Minister which is not so much about what’s there but what isn’t there.

Now, one of the things we see in the existing legislation is that indeed the Act comes into force the day after Royal assent. That is clause 2, subclause (1). In subclause (2), it gives the concrete date of 1 July. It has been mentioned before that the 1 July date has already passed. That’s fine. However, between the Royal assent date and the 1 July date, there must be a period that requires some form of update or implementation in order to get us to that 1 July date; otherwise, everything in the existing amendment would say the day after Royal assent. It wouldn’t give a date which, presumably, at that stage, was three to six months into the future.

The question, then, is while there is Order in Council and there is the back-up date of 1 January 2026, subclause (2) mentions all of the clauses that are covered by the Order in Council. But in terms of the clauses that weren’t covered by the Order in Council, which, presumably, will still take effect the day after Royal assent, have any of those things been made inviable or has the viability been tested as a result of the delay of the introduction of this piece of legislation?

I think that is also a different question for the Minister to respond to—that with the delay of this bill’s third reading and, ostensibly, Royal assent, that original Royal assent date in other parts of the legislation may be affected. If so, are there any other sections that have been affected as a result?

Hon SHANE JONES (Minister for Resources): A brief response: the Order in Council option is reflective of the fine balance of this whole statute. It enables commencement of all portions of the regime to take place contemporaneously. It is not unreasonable for that power to be exercised to reduce the prospect of people being bewildered as to when the operational portions of the Act all come into force together. The Order in Council enables us to achieve that outcome.

Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Mr Chairman, and I thank the Minister for that explanation. But still, I’m perplexed why it is that the original Crown Minerals Amendment Bill that came to the House did have a bifurcated commencement regime in it, in that commencement: “(1) This Act comes into force on the day after Royal assent”; “(2) However, the following sections come into force on 1 July 2025”. So that had already separated out and had two different pathways for the commencement.

I absolutely accept from the Minister that there needs to be some staggering and different parts of the bill will need to come into force at different times. But we’re still, in this committee, not understanding why this Amendment Paper has opted for the Order in Council route—to go for a secondary legislation option—when the original bill that was brought to the House had a perfectly adequate way of achieving that bifurcation of making sure that there were different pathways for different parts of the Act because it made sense for them to come in at different times. So while the Minister gave, I thought, a persuasive contribution to the House on why different parts needed to come in at different times, he didn’t explain why it is that you need that mechanism of the Order in Council in the Amendment Paper that hasn’t been required in the original amendment Act.

GRANT McCALLUM (National—Northland): I move, That debate on this question now close.

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

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendments to clause 2 set out on Amendment Paper 343 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 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Amendments agreed to.

CHAIRPERSON (Teanau Tuiono): The amendment is agreed to; therefore, clause 2 as amended stands part.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Teanau Tuiono): Madam Speaker, the committee has further considered the Crown Minerals Amendment Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: I declare the House in committee for consideration of the Local Government (Water Services) Bill.

Bills

Local Government (Water Services) Bill

In Committee

Part 1 Preliminary provisions and Schedule 1

CHAIRPERSON (Teanau Tuiono): Members, the House is in committee on the Local Government (Water Services) Bill. We start with debate on Part 1. Part 1 is the debate on clauses 3 to 6A “Preliminary provisions” and Schedule 1. The question is that Part 1 stand part.

Hon SIMON WATTS (Minister of Local Government): Colleagues, I just wish to make a statement in regards to a matter that I think is relevant to the timing. I, firstly, would like to acknowledge the officials from the Department of Internal Affairs that have supported the local government water reform over the last few years. In particular, I wish to acknowledge Michael Lovett, deputy secretary of policy and Te Tiriti, who has passed away today following a short battle with illness.

Michael started at the Department of Internal Affairs in August 2017 and built a strong relationship with the local government sector as a partnership director, then later becoming the deputy chief executive of the local government branch.

I wish to acknowledge Michael and thank him for his service to this portfolio, and I recognise the 20-year contribution he made to the New Zealand Public Service.

CHAIRPERSON (Teanau Tuiono): Aroha nui e te whānau.

TANGI UTIKERE (Labour—Palmerston North): Kia orana, Mr Chair, thank you. Can I firstly join the Minister of Local Government in acknowledging the passing of Michael, which is unfortunate to learn of this evening. On behalf of the Labour Party, we extend our condolences to his family and acknowledge the service to this country in what is important reform across a number of Governments in the past.

This is a hefty piece of legislation that, effectively, does complete the Government’s sort of final tranche of water reform. We on this side of the Chamber will be taking the opportunity to step through what is a fairly hefty bill that’s in front of us. There have been, out of the Finance and Expenditure Committee, 367 amendments, and there are a number of amendments contained in the Minister’s name. There are a number of amendments from members of the Opposition as well that we’ll work to look through.

But the reality is that this is a piece of legislation that is very significant but also has regulatory and legal complexities that come with it, and so our questions will be framed in that particular space. I understand that my colleagues in the Labour Party, when we get to the relevant part of the bill, will have a number of questions as they pertain to their local constituencies that they represent, so I will leave that over to them.

But I want to turn to clause 3, which is the first substantive part of Part 1, and this, fundamentally, is around the purposes. My question to the Minister is how the purposes as outlined in the bill, in clause 3, can in fact follow through to the remainder of the bill, particularly looking at where this is a piece of legislation that would seek to provide a framework for the local government sector around the area of flexibility.

I point out flexibility because the question for the Minister is how he is able to reconcile that statement in the purpose clause around flexibility but also, actually, sustainability—and in this context, the bill does identify that it’s “financial sustainability”. How is he able to reconcile those stated purposes with the fact that this is a bill that perhaps will remove a desire and incentive for what is regional scale and shared service models? Now, we’ll get to that later in the piece, but, fundamentally, first question for the Minister is how he reconciles, particularly, the flexibility and the financial sustainability component of clause 3 with the ability to deliver regional scale and shared service models.

LAN PHAM (Green): Thank you, Mr Chair. Firstly, I would really like to take the time, too, to acknowledge Michael Lovett, his family and friends, and really thank the Minister for Local Government for taking that time to acknowledge Michael and his contribution—really, really sad to hear that tonight.

My contribution, first and foremost, at the outset, is also picking up on the purpose of the bill, particularly because we know that this bill is already live in the sense that we’ve already had the preliminary bills, and we know that councils are already in the process of various consultation measures that they are undertaking to be set up to actually put in place this now primary bill, which will set out how those potential water entities will be operated, how they’ll be set up. And it has really clear, very significant consequences for our communities, particularly with local government elections this year, and, particularly, it has consequences for our environment. So we’re really keen to be looking at so many aspects of the bill ahead, which we think could be clearly improved on, and to hear from the Minister about questions, particularly about how these clauses then have implications and consequences for our communities and for the environment.

The first aspect that I wanted to pick up on is actually outlined in a number of amendments that I’m proposing to the purposes in clause 3 in Part 1. The first is: the bill sets out really clearly in clause 3(b)(i), in Part 5, that the purpose is to “enable effective and proportionate economic regulation of water services and water quality regulation”. What I’m proposing is replacing those words with “enable effective water quality regulation and proportionate economic regulation of water services”. Why I think it needs to be in that order is because it needs to place water quality and the actual water service outcomes as that primary purpose over the economic regulation, which we know is also central to this bill. But the way that it has it—and the purpose emphasises that—is economic regulation over that of the actual outcomes for our communities’ drinking water in particular but also for the environment. I’d really like to hear from the Minister if he would consider that amendment.

The second amendment I have on that clause is just further below that, at clause 3(b)(ii). Currently, it talks about, basically, empowering the Minister of Local Government with powers to act when a water service provider is facing a problem or a potential problem. The rationale with what I’m proposing is to change this to actually say: “provide the Minister of Local Government with powers to intervene on behalf of communities when a water service provider is facing a problem”. Now, the reason I think that this would be appropriate is it actually amends this so that it’s talking about actual problems that communities are facing—and they’re real problems that are identified, not just potential ones—and, surely, if ministerial intervention is warranted, then, surely, the power to act should be granted to the Minister when they actually hear very real concerns from the community, and the community is facing that problem. I’d really like to hear if the Minister would consider that.

Then, thirdly, still on this purpose clause, clause 3, I’m proposing to add a further part to the purpose clause. The point of this amendment is that the purpose itself is so important in actually delivering these clear outcomes that this bill seeks to achieve, and what it’s really missing is reference to not only environmental sustainability but, particularly, equitable access to water services. So I’m proposing that we insert a clause 3(c) under clause 3 that says: “to ensure the environmental sustainability and equitable access to water services by water service providers”. This is particularly important, because we know what we’re seeing—although councils are really doing their best to work together and pull together, there are inevitably these councils that are, essentially, being left out, and what that means in reality is communities are being left out when it comes to actual improvement of water, which they so badly need.

It’s really concerning that there is nothing here in these purpose clauses about equitable access to water services, particularly when we know guaranteeing access to water is a human right, and particularly here in Aotearoa New Zealand, we want it to be really clear that no matter where you go in the country, you can have access to safe, clean drinking water, which we know has, unfortunately, not been the case.

We think that there should be a really clear, upfront purpose clause that speaks to that environmental sustainability and the equitable access to water services of communities, and I’d really like to hear from the Minister what considerations he’s had around this, and why they are not currently in the purpose clause. Thank you.

Hon SIMON WATTS (Minister of Local Government): Thank you very much, members, for those questions. In regards to the points raised by Lan Pham in regards to the two amendments being proposed, the member will be no doubt aware of the water-quality regulator that is in place, which does have, within its remit, water-quality regulation in the setting of the appropriate standards, including environmental standards in that context. That is the entity which executes a wide range of the elements which the member was referring to, and it is where it is appropriately placed. It is an area that is important as part of the overarching package of the way in which water services are delivered.

In regards to the questions on clause 3, in the context of the definitions and the interplay that was noted between flexibility and financial sustainability, the premise of the overarching legislation recognises that water services entities that will be created as a result of this need to be financially sustainable, and the mechanism in regards to how entities are structured is a decision for local councils. So there is no context or no blockage, as the member was implying, around not being able to establish regionalised entities—actually, quite the opposite. You are seeing groupings of councils take that action, so that is within the provisions of the clause.

A large number of amendments made by the Finance and Expenditure Committee actually improved and enhanced the definition clauses of this bill. As Minister for this legislation, the fact that there are over 300 amendments signals clearly that the select committee process played an integral part in improving the bill. It was very much the case, from my perspective, of ensuring that we took on board the feedback from the select committee to enhance the bill so that it was a much better bill as a result, and I do believe we have got to that point.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. So on Part 1, we’ve already traversed a little bit the purpose clause in clause 3, and I want to focus on the type of council that we’re talking about and how it relates to the interpretation section. So this is at clause 3(a)(i): “providing for territorial authorities responsibility for providing water services”. I, of course, understand that some territorial authorities are unitary authorities so include that regional council role as well. But then I’m interested in the definitions and how this all links together with a “water service provider”, which includes—so this is in the definitions section, so I’m on page 34 of the bill—at (c), “a regional council that has not transferred all of its responsibility for providing water services”. Then water services is defined on the next page as meaning “any or all of the following: (a) water supply services: (b) stormwater services: (c) wastewater services”.

So I’m wondering if the Minister can comment on the role that regional councils have in this scheme when they’re not a unitary authority—when they’re a normal regional council—and whether they should be then included in the purpose clause if there is an element of them providing water services rather than regulating those water services or requiring permissions to take water or to get consent for stormwater or waste-water discharges.

Then, just while I’ve got your attention, on page 36, the definition of “watercourse” is there: “includes a river, stream, passage, and channel”. But this has been deleted by the select committee: “along which water flows, whether continuously or intermittently”. Then, “along which water flows continuously” is repeated. So the point of this change is that “intermittently” has been removed from the definition of “watercourse” for this bill, and I’m wondering why that is. Obviously, there are a lot of watercourses that can be dry at different times of the year, and these are areas where you might have stormwater overflows and the like.

So two questions there. One, why are we getting rid of intermittent watercourses from the definition? And two, how are regional councils seen, given the purpose and those definitions that I read out?

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. This is a big bill, so we’re going to try and stick very closely to the sections so that we’re also able to indicate to the person in the chair which area we’re on. I’m going to start with clause 3, on the purposes. I appreciated what the Minister mentioned before in terms of what is stated in clause 3(b)(i), which has the inclusion of the term “water quality regulation”. However, I want to look at the broader context of this, I think, starting with clause 3(a).

Now, the reason that I would encourage the Minister to consider my colleague Lan Pham’s amendment, particularly when it comes to water quality but also in terms of environmental sustainability, is—for context, I was born in a city of 15 million people, a small, medium-sized city in China. Growing up, we were not able to drink tap water as a result of severe water pollution in my home city. The only thing we had available to us was bottled water—filtered water, even at that stage, wasn’t a thing. It was a shock and a surprise upon arriving, when my family migrated to Aotearoa New Zealand, when I saw people drinking straight out of the tap. I remember my 10-year-old self being highly fearful that they were going to get sick, because this is what I’d been told growing up.

I think back to that and think about what we are seeing nowadays in terms of our freshwater quality, most recently in Gore with the level of nitrates, and I did think, “How can a country with a low population not manage our water-quality system?” I think this is really crucial to the crux of the purpose of this bill, and I do want to ask the Minister, in this case, even if the Minister thinks that there is enough protection around environmental protection and water quality in clause 3(a), does “accountable manner” accurately capture and encompass water quality in a way that ensures that everyone in Aotearoa New Zealand can have water from the tap by right?

For example, when we were looking at the framing of “accountable manner”—and I do apologise; I was not part of the select committee process—does “accountable manner” address the issue that, for example, we’ve recently seen in Gore and the level of nitrates? When we are looking at clause 3(b), when we are looking at water quality regulation, it’s specified that clause 3(b) is only in reference to Part 5, amendments to other bills. Does it also mean that Parts 1 to 4 are exempted from having to have a degree of water-quality regulation?

I understand, also, the Minister mentioned before that Part 5 is probably where it’s most relevant, but even looking at a cursory reading of Part 5, it covers amendment bills like the Income Tax Act and the Commerce Act. I actually think that if we’re really serious about water-quality regulations, we do need to see that term in subclause (a) as well as subclause (b). That’s my second question.

My final question to the Minister is subclause (b)(ii), which does talk about the Minister of Local Government or the Minister of the day having powers to act when a water service provider is facing a problem or potential problem. I also support my colleague Lan Pham’s amendment on this. But what we are not seeing, at least in the purpose section—and this, I’m sure, may come up later on, but if the Minister wouldn’t mind speaking to it—is what problem, or potential problem, is the Minister seeing? Again, using Gore and the nitrates example, is that sufficient enough to see it as a problem that requires a ministerial intervention? Thank you.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. Look, I’ve only had a chance to see our colleague Lan Pham’s tabled amendment’s today, and the Labour Party will be supporting all three of those tabled amendments as they relate to clause 3 because we do believe that the role of environmental sustainability needs to be not just included but given a little bit of shining light in that space, as does the quality of water as a primary purpose in achieving the outcome of this legislation.

The one that I do want to speak on briefly is the tabled amendment that relates to the role in which the Minister of Local Government would be able to exercise the powers that they would have for the purpose of intervention. I want to thank Lan Pham for what is a very sensible amendment, because it, basically, I think, is framed in a way of supporting local decision makers and local democracy. So the Minister would still have powers of intervention and the ability, therefore, to intervene when it comes to the purpose, but only in circumstances where there were actual and real problems that had been identified—not “what ifs”, “what might be’s”, hypotheticals, but actual rational thinking around intervention. I think that is a very sensible amendment. So the Labour Party will be supporting that amendment through this process.

The Minister has touched on the fact that there were more than 360 amendments, and he says that that’s, you know, a responsive select committee. I think it also lends itself to the argument that this was a bad piece of legislation that the Government introduced and it required extra effort on the part of the select committee, those that submitted. Let’s not forget about the fact, Minister, that this was a bill that did require additional time from the Business Committee to progress some of the changes that they wanted to, given the time constraints. This really is part of this Government’s “national water done bad” approach to water reform in this country.

The question that I have for the Minister is still on clause 3, although it takes a different particular tack, and it is around the evidence to support the claim that has been confirmed by the Minister that, in actual fact, this particular framework that is, essentially, established under this bill will be more cost-effective than what was the previous reform model. We hear a lot about the cost of infrastructure and, in particular, water infrastructure, ageing water infrastructure, that councils around the country are facing. The Government doesn’t seem to want to accept the fact that the figure of around $185 billion over a 30-year horizon in this particular space—those are real issues that need to be thought through.

My question to the Minister—and I do acknowledge his previous response to my other question about flexibility and financial sustainability, but, Minister, I’m interested to understand what actual evidence exists to support that claim that the framework will, in fact, be more cost effective than the previous reform model that was on the cards.

Hon SIMON WATTS (Minister of Local Government): Thanks, Mr Chair. I’ll come back with some responses to prior questions, starting with the Hon Rachel Brooking’s questions in regards to regional councils’ role in water services. The member is correct in the context of unitary councils, which obviously include components of regional council responsibilities with them.

Basically, this bill enables regional councils to transfer some of those water responsibilities. It’s not part of this part, but it is part of a part that we will come to soon, so I won’t go too much more into it. But a good example in that context is Greater Wellington Regional Council, who currently provide bulk water supply, as one of the examples.

The other question asked by the member was in regards to why the definition has been removed in regards to watercourse. It is primarily to make a distinction between the overland flow paths, which have stormwater and the sea, and the watercourses that have water in them all the time. That’s the reason why the change was made, in that regard.

There were a number of questions in regards to intervention powers by the Minister. I mean, I think the reality is that intervention is done as a last resort. The last time that we’ve seen that is in Wellington’s instance, and I think there was plenty of evidence to support the deployment of that, and it’s actually been a positive outcome, in the context of the work there. But the threshold is high before that’s considered—I think it’s in the right place.

Clause 3(b)(ii): I don’t believe there’s sufficient basis for any changes from where the select committee has reached in those aspects. I’ve noted already around clause 3 in my prior response around the aspects around water quality. We’ve actually got a separate water-quality regulator, which shows the importance of water quality and the environmental impacts. It is that important; hence we’ve got a separate regulated entity, and I think having a separate independent regulated entity is also important.

The other element the regional councils play is, sometimes, in some instances, such as Auckland Council, they act as an enforcement agency for some of the consents of water care—so there is an interplay between the levels of local government and these entities, and I think that is just an acknowledgment of the question asked.

Hon RACHEL BROOKING (Labour—Dunedin): Hey, thank you—that was a bit informal, wasn’t it? Thank you for those answers. I look forward to the part where we discuss the empowering role of regional councils. On the overflow paths—I thank the Minister for his answer about the watercourses removing intermittently—I wonder, though, if there are intermittent watercourses that aren’t overflow paths that would still relate to stormwater.

I wanted to move on to clause 6, and that is “Act binds the Crown”, but then there’s an exception from that, which is to say that the Crown is exempt from paying those development contributions. That specific section—section 109—comes up later in the bill. It doesn’t apply to Kāinga Ora, but it does seem to apply to every other Crown thing that might happen that might require some sort of development contribution—perhaps hospitals, or perhaps universities. These are things that I think about in my part of the world. Maybe the Minister could comment on what exempting them will mean for the councils that have these water organisations that might be requiring development contributions, or we can deal with that later on as well.

Then, at clause 6A, the Treaty clause has been moved by the select committee to the front of the Act, and the commentary of the select committee is that the wording aligns with legislation such as the Fast-track Approvals Act 2024. To that, I would say that is probably not the best piece of legislation to be looking for good Treaty clauses, and all it is is “All persons must act consistently with Treaty settlement obligations”. Does this Government see that there is no place for any Treaty obligations under this bill for non-settled iwi, noting, of course, that we have large parts of the country that do have real water services problems having no settlement? Of course I’m thinking of Northland as the obvious case in point.

LAN PHAM (Green): Thank you, Mr Chair. I wanted to move on slightly just to clause 9, but it’s really to do with the entirety of Subpart 1 in terms of responsibility for providing water services. There’s a number of clauses—

CHAIRPERSON (Teanau Tuiono): Just to confirm, clause 9 is in Part 2. This is the debate for Part 1.

LAN PHAM: Oh, sorry. You’re right. I’ve moved on to Part 2—sorry. My apologies.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair, I want to pick up on clause 4, which is the definitions. There are a number of changes that have been made to the definitions. One of the interesting ones is, basically, removing a definition of “infrastructure”. What was originally in the bill was a very broad—well, it was infrastructure. It wasn’t traffic corridor infrastructure, it wasn’t water service infrastructure; it was just infrastructure. My sort of take from what now lies within this clause is a new definition which largely expands the definition of “water services infrastructure”. So I do think it is very important, given that’s what this is largely about. When one compares what was in the former, now struck out, definition for “infrastructure”, it is very similar. The only point of difference is that the previous definition for “infrastructure” excluded the conveyance of water. So my question to the Minister of Local Government is whether he is comfortable, on the advice that he has received, that that definition of infrastructure for water services, which is very vital to this bill and what it seeks to achieve, has been drafted in a way that, basically, covers all aspects. No issue with removing the “infrastructure” in isolation as a definition and inserting it somewhere else, but just interested in the Minister’s thoughts around that one.

I want to also look at clause 5, which relates to Schedule 1, which I understand we are debating as part of this part. This is around the “Transitional, savings, and related provisions” piece. The question to the Minister is: what does he foresee as the level of support that would be made available to councils who are in a process of navigating what could be complex transitional processes as part of this, especially those that might be some way through some form of reform process? Now, there are many councils around the country who are already on some particular path to water reform. I reflect that my own constituency of Palmerston North is certainly in that particular boat. What sort of level of support is available to councils who are part way through some form of reform? Now, I appreciate that local authorities are expected to deliver a water services delivery plan by—well, within the first week of September or thereabouts. But that’s what the question relates to.

Specifically on Schedule 1, this is a level of more detail that relates to various individuals that might be impacted and the like. The question for the Minister is: when it comes to smaller or rural councils—and we have many of those around Aotearoa New Zealand—what is the justification in what appears to be a lack of flexibility in transitional arrangements for smaller or rural councils? So, on the one hand, the Government is saying that there must be some provisions related to a transitional phase—OK, we understand that. But why is it that there is a lack of flexibility when it might come to the arrangements for smaller or rural councils in that particular space? But also, why is there no capacity to provide any review opportunity? You know, this is a huge piece of work, and we fundamentally have issues with the Government’s approach to this. But, none the less, has the Minister considered some review mechanism at some point that might look at, as part of that transitional approach, where there is a provision for ensuring that, yes, there is some form of continuity around service, whether that’s waste water, stormwater, or drinking water delivery? But why is there no opportunity to have any sort of mechanism to review what the impact would be on communities as part of the Government’s reform approach?

Hon SIMON WATTS (Minister of Local Government): Thanks very much for those questions. With regard to the question from the Hon Rachel Brooking, in regard to Treaty clauses, there was quite comprehensive engagement with iwi, in regards to this bill, through the select committee process. The reality is—the question around iwi that have not undertaken settlement—the Treaty settlement obligations apply when the settlement is made; therefore, as and when those iwi enter into agreements, that will be covered off through that. There are also requirements around the entities and how they must interact with and meet obligations in regards to that, and councils themselves already have those obligations.

In regards to the points around rural councils and a review mechanism, as part of the water services delivery plans, those plans include reasonably comprehensive milestones in terms of points. As you would expect with any long-term capital plan, there will be regular points of reassessment of that. There’s no difference between a small rural or semi-urban council and a large rural or large urban one. It’s not one size fits all; their plans will be appropriate to their needs and requirements.

In regards to clause 6A, which is around functions and duties and powers within the Act, the select committee did expand the scope of the requirements in response to submissions. You can see enhancements of that clause, which is positive.

The other question, I believe, in regards to clause 4, the interpretations, which is the definitions section, I think the key element there to highlight is that the definition element within that, for example, deals with the Watercare entity and ensuring that the definition of “water service provider” and “water organisation” clearly incorporates that Auckland water organisation, which is the primary purpose of that clause 4.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. I have two questions for the Minister regarding clause 4 of Part 1. I know the Minister has touched on Treaty settlements, but we do see a conflation between Te Tiriti obligations and Treaty settlements, because not all hapū and iwi would have those kinds of Treaty settlements. Treaty settlements are very separate and have been well covered in the definition and certain parts of this bill. What I’m more interested in is the broader Te Tiriti obligations, understanding that there aren’t any specific Te Tiriti clauses within Part 1 of this bill, neither under clause 3 nor, as far as I can see, under clause 4. However, I do note that, for example, under the definition of “shareholder”, it has been suggested that iwi and hapū, potentially, are able to join by agreement of the territorial authority to actually enter as a shareholder. That was suggested as an inclusion into the definition of “shareholder”. However, that wasn’t included with the reasoning that “any other body that is permitted to hold shares under an exemption granted under section 57”—not to preclude other things that could be covered under section 57.

Can I just check with the Minister that under the definition of “shareholder”, should hapū or iwi want to be shareholders alongside the territorial authority, how would that work in terms of getting that exemption through either a Minister or through any other avenues? That’s my first question.

My second question is around the removed definition of “infrastructure”. It is also kind of peculiar that there was no indication that such a definition should be removed, especially since that the recommendation by the department was to amend the definition to include other aspects. I want to check with the Minister on what the rationale is to remove the definition for “infrastructure” here. Is it covered in another section? Those are my two questions for the Minister.

CELIA WADE-BROWN (Green): Thank you, Mr Chair. I didn’t have the joy of sitting through all of the debate and the submissions in the Finance and Expenditure Committee, but I have a number of questions.

I’d like to start with clause 4 and the focus on stormwater. I’ve got some questions that I would like you to answer about “stormwater service zone”, first of all, and where you’re talking about a geographic area with one or more urban areas, how does that relate to smaller settlements? I went to a meeting of Hawke’s Bay Regional Council, talking about resilience in Pōrangahau, and they are very concerned about how the stormwater and the dangers of flooding will affect that small rural community. They probably wouldn’t think of themselves as an urban community, but would they be included in that urban area?

Another question I had about the stormwater services—and I would thank my colleague Rachel Brooking for mentioning intermittent streams. I think they might also sometimes be referred to as “ephemeral”—ones that run in the winter but not the summer. I’m not sure whether you think that’s exactly the same or not.

My third question for the moment about stormwater is about why you’re excluding the transport corridors. There has been a lot of work done by urban design organisations, by Biophilic Cities Network, and so on, about permeable surfaces. Those permeable surfaces might well fit within the transport corridor. Often, people think the transport corridor is just kerb to kerb, but quite often, technically, in district plans, it’s wider than that. The potential is for using—where you don’t have houses that will be damaged—where you’ve got excellent run off from the tarmac on to potential areas that could absorb water if they were well designed with planting, with the right kinds of surfaces. Often, you have car parks, either adjacent to or within a transport corridor, and, all too often, the cheapest, non-permeable surface is chosen rather than something that could actually cope with the increasing intensity of rainfall.

Again, from my experience, the unplanted clay soils in and around our urban areas, or some of our urban areas, if they’re not planted up, if they do not have permeable design criteria in their construction, it actually makes it worse and it runs off faster. The opportunity is also not just potential for reducing the risk of flooding but potential for being able to use that water for the local communities, whether it’s a community garden, whether it’s for emergency water—those sorts of issues. I would like some answers to the Minister’s thinking on that.

DAN BIDOIS (National—Northcote): I move, That debate on this question now close.

Hon SIMON WATTS (Minister of Local Government): Thanks. I’ll just answer the last remaining questions. The question in regards to the Treaty obligations and shareholder questions I raised before, the councils have obligations to support the Crown in meeting its Treaty obligations under sections of the Local Government Act, so that’s where those components of coverage apply, and they obviously continue to apply as well. The question around shareholders and around iwi, shareholders of these entities can only be local authorities, consumer trusts, or a cooperative company, which is, basically, another mechanism around consumer ownership. The mechanism in which this has been proposed is not something that is possible under the arrangement, because the premise being that these are owned is outlined by the entities that I’ve described. In regards to the other question, I have answered the point around clause 4, subclause (3). The other element that was raised in regards to the exclusions around stormwater as well is relevant to the points I raised around the overland flow paths before.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. I thank the Minister of Local Government for that. I was hoping to hear from the Minister a response to the issue around the “infrastructure” definition.

Hon Simon Watts: Oh.

TANGI UTIKERE: You want to get up?

Hon SIMON WATTS (Minister of Local Government): “Infrastructure” was replaced with “water services infrastructure”.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair, and thank you to the Minister for that. I guess the related point to that question—and Dr Lawrence Xu-Nan talked about the removal of “infrastructure”. I didn’t pick up on the concerns around whether it was adequately removed or not. But the follow-up question was the issue around water conveyance, which was not in the original definition of “infrastructure” but now is in the “water services infrastructure” piece. So I’d be interested in in the Minister’s response around that.

The other point around definitions—and there are a lot of definitions in here, and a lot of them have had significant and substantive change. The only other one that, at this stage, I do want to touch on is reference to the definition of a “district plan”. My colleague Celia Wade-Brown just referred to a district plan. As part of the “Interpretation”, clause 4, there is a change in that the district plan has been modified, as a definition, to be a term that is defined in section 43AA of the Resource Management Act (RMA). What was there was that it was an authority’s district plan prepared under the RMA. It might be semantics, but semantics matter. So my question to the Minister is: are there specific changes envisaged here that a council, in the preparation of a district plan, which is a completely different process to actually having a district plan—where is the interplay with that? Is this a specific move to redefine the relevance of a district plan, whereas all the work, or some of the work, that may have gone into the preparation aspects is now being not part of the consideration? So that’s a question for the Minister there.

The other one is: looking at all of those interpretation facets, is the Minister concerned that there could potentially be a risk around inconsistent approaches to the definitions in different councils, or is that something that he doesn’t see as an issue, or, if so, he accepts that there is a possibility for inconsistency—that that doesn’t matter; and if so, why?

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. I asked a question earlier about development contributions and I don’t think the Minister answered it.

CHAIRPERSON (Teanau Tuiono): Could you say that again?

Hon RACHEL BROOKING: I asked a question before about development contributions, which I don’t think the Minister answered. We have at, I think, clause 6: “section 109 partially exempts the Crown from making development contributions”, and you go to that section, and it says there’s an exemption for Kāinga Ora. What analysis and thought has gone into the sorts of development contributions that the Crown might be not paying by this exemption?

Hon SIMON WATTS (Minister of Local Government): Just in regards to that question by the Hon Rachel Brooking, the provisions within the Local Government Act 2002—this basically preserves the status quo in regards to those aspects. The development contribution will obviously be replaced by development levies, which is the work under way at the moment, but the Local Government Act clause, as I’ve noted, deals with the aspect that’s been raised. So that covers that point.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. I would like to actually move to clause 5 of Part 1, which is around Schedule 1. I think there are actually a lot of really important questions for the Minister around transitional savings and related provisions, but I want to start by asking the Minister, hopefully, a really simple and straightforward question, which is around Part 1 of Schedule 1, clause 1, “Identification of affected employees” and a transfer of any from one service provider to another water service provider. I just want to check with the Minister, in those kinds of cases, what sorts of precautions, if any, have been put in place around collective agreements? Are there any water service employees that are part of collective agreements that may be affected by this? And how would one, then, untangle themselves from this as part of the transitional measures? I just want to start by asking the Minister that question.

I can keep asking the Minister questions. I’m guessing the Minister is still waiting to get some advice on that. I think, in terms of other transitional measures, and there are still quite a lot, if we’re looking at clause 6, when it comes to “water services annual report”—actually, Mr Chair, may I ask a point of clarification?

CHAIRPERSON (Teanau Tuiono): Sure.

Dr LAWRENCE XU-NAN: What I’m mentioning, in terms of clause 1 and clause 2, is related to Part 1, but when we’re looking at Schedule 1—Part 1, for example—clause 5 refers to Part 4 of the bill. Would it be more appropriate to have those discussions of Schedule 1, even though they’re in Part 1, when we get to Part 4? Would that be appropriate? I’m seeing nods from the Minister.

CHAIRPERSON (Teanau Tuiono): I mean, this debate includes Schedule 1. Let me read it out—

Dr LAWRENCE XU-NAN: Yes—this debate includes Schedule 1, which is in Part 1, but within Schedule 1, it makes references to Part 4. For example, in clause 5 of Schedule 1, it says, “Despite Part 4 coming into force sooner,”. The question would be: would it be OK to have the debate on Schedule 1, on Part 4—that refers to Part 4—when Part 4 comes up?

CHAIRPERSON (Teanau Tuiono): No, the debate on Schedule 1 is now.

Dr LAWRENCE XU-NAN: OK. In that case, my question to the Minister, for clause 6, “first water services annual report”, regardless of what happens in Part 4—we might discuss Part 4 around that—I wondered, with the dates that have been provided, are there any sorts of precautions or any thoughts that the Minister may have around the provisions of that water services report and what those transitional measures would entail?

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair, and thank you for the clarification around Schedule 1 in its entirety. That does open up, actually, quite a number of points and a number of questions that I’ll now sort of commence on the pathway.

Suze Redmayne: Tangi, you’re a lawyer; you know how it works.

TANGI UTIKERE: No lawyer, no lawyer, no lawyer here. Feel free to take a call and share your thoughts with the committee.

The interesting thing is that this actually spends a little bit of time identifying what would happen to employees who are, effectively, part of a transfer as part of this process. That is quite a significant implication for people in the community when we think about—regardless of the option that councils might choose to head down, and there will be there will be a number of different options that some do take—that there will be, as outlined in clause 1(2)(b) of Schedule 1, a number of employees who basically will cease, in terms of their employment with a provider, as a result of the transfer.

So as I understand, it’s a circumstance where the water services are being transferred across to a water service provider. As a result of that, it means that there will be some employees who will be retained as part of that transfer process, and there will be some that are not retained. For those whose employment will cease as a result of the transfer under clause 1(2)(b) of Schedule 1, there are some following criteria that actually identify, for those who do receive an offer of employment, what happens in certain circumstances. Now, the interesting thing around that is there is this reference that where the offer for employment is for, substantially, the same position as the position the employee held at the previous provider prior to the transfer, that, basically, there would be no entitlement to any additional benefit. OK, I understand that. But my question for the Minister is: what specifically guides the criteria outlined in clause 1(3)(a), (b), and (c) of Schedule 1? I’m happy to yield my time for the Minister.

Hon SIMON WATTS (Minister of Local Government): So the provisions within the Local Government Act deal with the rights protections in regards to collective contracts, and those apply irrespective of where these individuals will transfer to. It’s obviously acknowledged that a large number of local government employees are under these type of arrangements and the mechanisms I’ve outlined. To the question that the member’s asking—what over-pins that—well, the provisions from the Local Government Act over-pin it.

NANCY LU (National): I move, That debate on this question now close.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. I think my colleague Tangi Utikere might have some more to say on this Schedule 1 as well. I have a question around clause 5 of Schedule 1—so that’s at page 337—and it’s: can the Minister of Local Government explain why the phrase “water service provider” is used in subclause (2) and subclause (1) but not subclause (3)? So I will explain, and I note that both these terms are defined. “Water service provider” can mean a range of different things, and a “water organisation” has a specific meaning as well, and that can include a range of different groupings. “Water organisation” includes a council-control organisation—and there are some commencement dates in that—an Auckland water organisation, as well as an organisation established under section 36, whereas a “water service provider” includes a territorial authority that has not transferred all of its responsibilities, a water organisation to which a territorial authority has transferred responsibility, a regional council that hasn’t transferred responsibility, and an Auckland water organisation. So there seems to be a lot of crossover between the definitions of “water organisation” and “water service provider”.

Then going to clause 5 in Schedule 1, we have subclauses (1) and (2) talking about a water services provider and the commencement dates for those, when they have to produce their first water services strategy. But then the Finance and Expenditure Committee has added in subclause (3) to say that those timings don’t apply for a water organisation that is established after the date on which this clause comes into effect. I can understand the rationale for having a different timing there, so that’s not my question. The question is: why is subclause (3) only referring to a water organisation and not a water service provider, and does the Minister want to comment more generally on those two definitions back in the definition clause—also in Part 1—about a “water organisation” and “water service provider”, and when they overlap and when they don’t overlap, and why there’s that difference in terms?

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. I do have a final question. I promise this is the final question for Part 1, but I’m just taking advice from the Chair that we need to ask all of the questions relating to Schedule 1 here at this moment, rather than in the relevant sections.

So I have a question for the Minister of Local Government regarding clause 7 of Schedule 1. This is on page 338. This is about the “Alternative form of funding impact statement”. Now, understanding that when we’re looking at other clauses, which will be mentioned a little bit later, there are two alternative ways—

CHAIRPERSON (Teanau Tuiono): Did you say page 338? That looks like it’s in Schedule 4.

Dr LAWRENCE XU-NAN: Page 338. That is Schedule 1.

CHAIRPERSON (Teanau Tuiono): Are you on the bill? Sorry, we’ve got the revision-tracked bill. Sorry.

Dr LAWRENCE XU-NAN: Schedule 1, Part 1, clause 7. Now, it does give the option for two alternative ways for the funding impact statement. One of them is in terms of the water services strategy as a financial matter; the other one is around a funding impact statement. But I’m curious about clause 7(2), which says that a water service provider must provide the funding impact statement for the purposes of preparing a water services strategy—form 2—or for the purposes of preparing a water services annual report—form 4. I can’t see form 2 or form 4 in this bill, so I’m just wanting to check with the Minister, if the Minister wouldn’t mind pointing to where we can find form 2 and form 4.

Hon SIMON WATTS (Minister of Local Government): I’m happy to take this session offline, on exactly the point and page, but I can clarify the Schedule 1, clause 7 aspect, which is primarily around the transitional arrangements for—where you’ve got an example of an existing council-controlled organisation that is going to become a water organisation upon commencement, basically, those aspects of detail, in terms of the board adopting a document and within the time period, is what that clause of that Schedule is outlining primarily.

CHAIRPERSON (Teanau Tuiono): Members, the time has come for me to leave the Chair. The committee will resume tomorrow at 9 a.m.

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

TUESDAY, 29 JULY 2025

(continued on Wednesday, 30 July 2025)

Bills

Local Government (Water Services) Bill

In Committee

Debate resumed.

Part 1 Preliminary provisions (continued)

CHAIRPERSON (Teanau Tuiono): The committee is resumed. Members, when we suspended last night, we were considering the Local Government (Water Services) Bill, and we were debating Part 1. Part 1 of the debate is on clauses 3 to 6A, “Preliminary provisions”, and Schedule 1. The question, again, is that Part 1 stand part.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair, and good morning. It’s good to be able to resume contributions and questions in Part 1 of what is a fairly lengthy bill.

I want to just reiterate, perhaps for the Minister of Local Government’s benefit and other colleagues, the position that we were heading down when we were considering this late last night. We had some issues with the flexibility component that the Minister has started to address, not necessarily the sustainability part, and how that might be undermined by that sense of bitsy-ism or fragmentation of the possible service delivery opportunities. We still stand by the tabled amendment by Lan Pham—or amendments, plural—particularly around the environmental standards and the desire of the Minister to be able to intervene, if necessary, but only where there is an actual issue—not a perceived issue, but an actual issue—when it comes to water service delivery.

One of the things that I didn’t get a chance to touch on last was the Labour Party’s position on where the environmental objectives sit in the purpose. It’s a little bit light, unfortunately, for our liking here. We would like to see a little bit more focus in that area. My question to the Minister, in that regard, is: why has he not sought to beef up the environmental protectional standards as part of the purpose clause in Part 1 of this bill?

I look forward, perhaps, to the Minister providing a response around the question that still has not been addressed fully, and that is the interpretation clause, whether there is a risk there that there is an opportunity for what’s sought to be achieved here to be undermined as a result of the risk around inconsistent application for councils across there. I note the Minister is seeking advice, but perhaps he’ll be able to answer that question shortly.

I do think that it is very interesting that this is a bill that has the generic inclusion around “This is an Act that binds the Crown”. Now, we’ve got no issue with that; however, this might be a bill that binds the Crown but fails to bind it to any financial support for councils around the country, so there is that level of inconsistency there. I’d invite the Minister to, perhaps, respond to that.

The final point I’d like to raise—and this goes back to Dr Xu-Nan’s contribution late last night around Schedule 1, because there are still some issues with Schedule 1—is that I’d like to draw the Minister’s attention to clause 8(4) in Schedule 1. Now, this is a component that, basically, is about a time period where a transfer is to be entered into—an agreement around transfer from one council organisation through to another. What’s interesting is that when this bill came before the House, it had no specific time frame associated with this particular clause. What we see now in this schedule is the introduction of a time frame within which the clause must actually come into effect, and that’s within three years. It’s specified there: “Within 3 years after the date on which this clause comes into [effect],” then there is a requirement that the territorial authority must enter into under paragraph (a) and (b). So my question to the Minister is: why are we now seeing a time frame for, effectively, the trigger for this particular course of action being introduced into Schedule 1?

Hon SIMON WATTS (Minister of Local Government): Thanks, members, for the questions. In regards to the points raised by both aspects of the Opposition around environmental standards, I don’t want to go into other parts of the bill, but for those that have read the bill, they will see that in the next part they cover off quite clearly the objectives of water services providers. I’m just simply noting that for navigation for those that are working their way through the bill, but they are covered there and deal with the questions that have been asked.

CELIA WADE-BROWN (Green): Tēnā koe, Mr Chair, and tēnā koe, Minita. I was reflecting on the questions I asked last night, and I’ve also been contacted. There were people watching our questions about water services last night, as well, and I don’t feel that I got any answer to whether small settlements like Pōrangahau were considered urban or not in the context. I don’t consider that I really received answers about the permeability and design issues and why the transport corridor was unilaterally ruled out, given that the corridor is often bigger than the road. I appreciate that the Minister is aiming to answer people’s questions—he’s not brushing us off; he’s not treating them as unimportant—but, on reflection, what I asked and what got answered last night, I wonder if he could be a little fuller in his response. Thank you.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Mr Chair. I’m still interested in this difference between “water organisation” and “water service provider”. I note that the Minister of Local Government just said there’s more to come on water service providers, but there must be a reason why there are these two quite separate definitions.

Now going to Schedule 1, at clause 8, that my colleague Tangi Utikere was just talking about, council-controlled organisations are deemed to be water organisations, and so there are some time frames associated with that in clause 8, and this is at page 339. But then you go back to the definition of “water organisation” in clause 4 of the bill, and the definition at (b) means “a council-controlled organisation that,—(i) immediately before the commencement of this Act … was providing water services or had been established for the purpose of providing water services;”, so it catches both the existing council-controlled organisations and the ones that are being set up. That same wording is repeated in clause 8(1)(a) of Schedule 1, which deems those council-controlled organisations to be a water organisation. I’m interested in why a deeming provision is needed in this schedule—noting that there are some other time frames associated with that, that Tangi Utikere was talking about—when it appears to be covered off in the definitions of a water organisation.

Also, given that I’m sure we will soon go to the other parts of the bill, if he could give a more fulsome comment on the importance of these terms, “water organisation” versus “water service provider”, and how they’re different and how that’s reflected through the drafting of the bill, I think that would be helpful.

Hon SIMON WATTS (Minister of Local Government): Just in response to the questions in regards to the urban-rural portion and also the points around rural connections, rural connections is covered in future parts of the bill, not the part we’re currently discussing, and I’m happy to answer it when we get to that point. The context around what is the definition of urban and rural—primarily, that is a determination made by and through the district plans of the relevant councils, and so that’s where that aspect is dealt with.

TOM RUTHERFORD (National—Bay of Plenty): 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 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

CHAIRPERSON (Teanau Tuiono): Tākuta Ferris’ tabled amendment to Amendment Paper 346, amending clause 3(a)(ii), is out of order as not being in the correct form of legislation.

The question is that the Minister’s amendments to Part 1 set out on Amendment Paper 346 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 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Amendments agreed to.

CHAIRPERSON (Teanau Tuiono): The question is that Tākuta Ferris’ amendment to clause 3 to insert new paragraph (aa) be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Teanau Tuiono): Lan Pham’s two tabled amendments to replace clause 3(b)(i) are both out of order as being inconsistent with a previous decision of the committee.

Lan Pham’s tabled amendment to clause 3 to insert new paragraph (c) is out of order as being inconsistent with a previous decision of the committee.

The question is that Tākuta Ferris’ amendment to replace clause 6A be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Noes 68

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

Amendment not agreed to.

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

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Part 1, as amended, agreed to.

Part 2 Structural arrangements for providing water services

CHAIRPERSON (Teanau Tuiono): We now come to the debate on Part 2. Part 2 is the debate on clauses 7 to 58H, “Structural arrangements for providing water services”, and Schedule 2. The question is that Part 2 stand part.

Before I take a call, just to remind people, it is clauses 7 to 58H, and it would help the committee if you referred to the sections or clauses in your interventions, and the page number in the document that you’re referring to, because it is quite a big document. That would be very helpful.

TANGI UTIKERE (Labour—Palmerston North): Kia orana. Meitaki maata. Thank you, Mr Chair. I’m happy to follow your direction in that space. It’s the intention of Labour members, given your comment, sir, that it is a big document, to attempt to tackle this subpart by subpart, which seems to be a more conscious sort of effort to keep tabs on where things are. I’ll restrict my contributions to Subpart 1 first, which I had noted is clauses 8 through to 30F.

This is a really significant part of this bill. Effectively, this does set in train the arrangements for the provision of water services. From the outset—and if you would like a specific reference, I’ll do that—clause 7 in particular is the outline of where things are heading, and so I’ll restrict my comments and contributions to clause 7, which is on page 37 of the document that I’m working off, which includes the report from the Finance and Expenditure Committee.

Fundamentally, the position that we adopt is one of opposition to what is, clearly, a decentralised model, allowing councils to opt out of an opportunity for regional collaboration. Now, the Minister and his Government might take a different view and say that regional collaboration still exists. Well, the evidence that is currently before this House strongly signifies that that is far from the case. We have a number of councils that are going it alone. We have a number of councils that are in models that are going to cause significant hardship to ratepayers further down the track. So my very first question to the Minister, having prefaced that, is how he can continue to suggest that this is a model that does lead to regional collaboration. What incentivisation is there for any aspects of regional collaboration in this particular space? We will hear—as part of this particular subpart, certainly from Labour members—talk about the impact of, potentially, and questions around, the applicability of the proposals for their particular districts and areas around the country—and they do vary, and that’s accepted.

I do hope that the Minister is not going to adopt a view of one where we have to wait and see in terms of when those decisions are taken. The public record does demonstrate that those decisions have already been taken, because they have been forced into, effectively, landing their water services delivery plan by 3 September, and we can talk about the role that the Minister may take, and I know that he is on the public record of indicating that it is his hope that regional collaboration does take place. But, Minister, this is a bill that does not incentivise—where is the incentivisation in this bill that lends itself to councils actually wanting to work together? Where is it? It seems to be absent in the sense of no incentivisation for them to do so.

The difficulty that we have, of course, is that there are a number of different councils that have a different number of rate bases—that, fundamentally, is the way in which they generate revenue to meet costs. When it comes to that early first clause, clause 7, the outline of this, in terms of Subpart 1, how can he justify that there is a prudent approach to this, but also one that meets the various needs of different communities when it comes to water services and water provision?

I think of the opportunities there that do exist around that, but also the regional accountability—where is that? Where does the Minister see the regional accountability? He may very well say, “Well, that’s going to come later when it comes to the annual reports.” We all know that annual reports are exactly that—they’re done on an annual basis. Where is the accountability on day seven, eight, nine, 37—whatever—where water services fail and that accountability doesn’t exist?

That’s the first aspect—how he justifies the complexity of these arrangements where there was more certainty around collaboration in the former model.

Hon SIMON WATTS (Minister of Local Government): Thanks very much, Mr Chair. Well, I’ll be measured in my response to that, but it is ironic when the member Tangi Utikere is seeking clarification from me on where the incentives are. To translate that for those at home, that means “Where is the blank cheque from ratepayers’ back pockets and taxpayers’ pockets to pay for councils that aren’t performing?” That’s just a translation for those at home that are watching. When he says, “Where are the incentives?”, “Where is the magic money tree?” is another way to say it.

The reality is—and we’re not going to go through this—we have a different position. Our key objective here is to ensure that councils are financially sustainable. We haven’t dictated in terms of how they should structure it. It is for them to determine with their local communities, and that is the mechanism.

The evidence, as we stand five weeks away from when the deadline for the plan is, is that the majority of councils will form together in regional groupings. That is the reality of where we’re at, and those numbers are increasing and changing as we work. Guess what! That is without blank cheques being written by this Government in order to incentivise councils to get it. They’ve done it off their own backs. They’ve done it with their communities in conjunction with iwi Māori.

The questions in regard to clause 7 in that context are points of difference between the two parties. I thought most people had moved on from that conversation after the election, because it was pretty clear that New Zealanders did not support the prior reform. We’re in a new space. I think what every Kiwi wants is certainty around water infrastructure and investment, making sure those assets stay in local control, and making sure that those assets are financially sustainable, and that’s what this plan will deliver.

LAN PHAM (Green): Thank you, Mr Chair. I’m really keen to pick up on the key aspects of Part 2 and particularly those that relate to clauses 7 through to 11, because these all set out really clearly the different methods that councils can use and consider when they’re actually thinking about what structure of service provision arrangements will work for them. It’s talking about regions in which regional councils can actually play a role in these potential multi-council entities and the different methods for establishment and ownership and how that all works together under this Act.

The one thing that I’m unsure about with all of these sections, and I’d really appreciate the Minister providing some answers for councils—because we’re talking about these lack of incentives for them to actually work with their neighbours. I think, as someone who has been on a council previously, you want to know what all your options are. What was unclear, in all of these clauses, is what would actually happen if a council worked together in good faith with its neighbours to establish these multientity structures but then, for whatever reason, it’s not working or they actually want to remove themselves from these entities. Can councils actually exit multi-entity water service providers or do they need the permission of all the shareholders—i.e., all the other councils—who are actually part of that?

It would be really good for the Minister to address this directly, particularly because we know councils are live in their consultation, in their considerations right now. Like the development of this bill, they are also moving at pace to make sure that they are setting up the right structures and have the right information and assessments to actually advise, deliberate, and then decide on what those structures are for their communities, but they need to know the end game, I guess. If, going into these aspects and entities in good faith, they do find that actually, ultimately, they’re not in the best interests of their community, at what point in time they can actually remove themselves? Are there clear guidelines for this?

I think, rather than councils using that as a kind of “get out of jail” card if things go wrong, it might actually encourage them to be bolder and to make better decisions and to go further than they otherwise would if they don’t need to be so cautious and feel like they need to have explored absolutely every avenue. They can be taking steps and exploring things, knowing that, if things actually turn out not so great for their community, they might be able to back out. I’m really interested in the Minister pointing out where in the bill that happens. Thank you.

Hon SIMON WATTS (Minister of Local Government): Thank you. I direct members to clause 15 of Part 2, which outlines the objectives of water services providers. It links to the questions that were asked in the last section in regard to environmental safeguards and things. It’s very clear there in 15(1)(a)(iii), (iv), and (v), those aspects around quality, of consumer expectations, and also regulatory requirements. That includes Resource Management Act regulatory as well as water quality services.

The question is: do councils have options in terms of whether they stay in or out? Well, the short answer is: those are local decisions made by local councils, and, in short, the answer is yes. Likewise, on the flip side, you’ve seen a number of councils announce structures that have the mechanism to allow other councils to be part of that in the future, which is the opposite to what the member was referring to in terms of going alone. The criteria and the incentive is, fundamentally, under this reform, that communities will have water services entities that are financially sustainable. That is the incentive, that is an enduring incentive, and the incentives and the objectives outlined in the objectives under clause 15 here outline the components and, in effect, the meat on the bone around that.

I think in terms of where we are and where we want to be in the future, having water services entities and water services across our communities delivered in a financially sustainable manner that meets water quality, environmental, and health quality standards is a fundamental step change in terms of the status quo, and this model will deliver that.

Hon Dr DEBORAH RUSSELL (Labour): I want to draw the committee’s attention to some extraordinary statements that the Minister made in response to my colleague Tangi Utikere’s first contribution in this part of the debate, in Part 2, when we were just looking at the outline part of this bill and trying to set up what is going on. Now, we’re concerned here, obviously, about some of the financial matters that are going on. The Minister has used some interesting phrases and words. He said one of the objectives here is to provide good quality water—we all buy into that—but then he said, “Where is the blank cheque?” He followed that up with “Where is the magic money tree?” Where is the magical supply of good water? It doesn’t come out of nowhere. The water that falls out of the sky might be quite good, but it actually needs to be treated. It actually needs to be put through pipes. It needs to arrive in people’s houses. The waste water needs to be taken away safely and processed. The stormwater needs to go where it needs to go. The water has to go through a whole series of processes. Where is the magic water services provision tree?

Now, that is a Government that is, extraordinarily, going around saying, “We want rates caps”. They are complaining about the fact that rates are contributing to inflation. At the same time, we have the Minister in the chair saying we’ve got to somehow provide water for free. There is no blank cheque, he said. “There is no magic money tree.” Who is going to pay?

Now, the previous Government had a good solution in place. The central government was going to help with the cost of water provision. Instead of just putting an unfunded mandate onto local bodies, that this Government is doing, we were actually going to make a substantial financial contribution to ensure that when we turn the tap on, the water that comes out is safe to drink. That’s what the people in Havelock North wanted—water that was safe to drink—and they didn’t get it.

There are people in this country who have been on boil water notices for two and three and four years. All they want is water that is safe to drink, but it does not come for free. The money has to come from somewhere. This Government is pushing that cost on to local bodies, at the same time as advocating for a rates cap. The cognitive dissonance is extraordinary.

The Minister has opened this up by talking about “Where is the blank cheque? Where is the magic money tree?” How is he going to resolve what we could politely call cognitive dissonance between all the things that that Government wants? These are simply contradictory imperatives.

That’s without even starting to think about the problem of orphan councils. There’s a huge problem with orphan councils, councils which have been left out of these regional water bodies that are forming, councils that have been left to go it on their own.

Joseph Mooney: Probably left out because they decided to stay out—ha, ha! They’re voting to stay out, some of them.

Hon Dr DEBORAH RUSSELL: I’d be careful over there, Mr Joseph Mooney, because one of the councils that is sitting there as an orphan council is the Queenstown Lakes District Council. The Queenstown Lakes District Council is in trouble because the rate of growth there is so much that they are having real difficulty providing for it. I would be careful talking about it in Kaipara. Kaipara is an orphan council. It’s been left out of all the arrangements for water services councils off a rating base of just 12,000 rating units. How are they going to pay for water? This Government is just holding a cudgel over their heads, telling them they’ve got to get with the party, telling them that they’re going to have to pay for it somehow, and at the same time advocating for no rates increases. Those things do not add up.

So the challenge for the Minister who said there is no blank cheque, who said there is no magic money tree—Minister, where is the magic water tree?

Hon SIMON WATTS (Minister of Local Government): Yeah, we maybe missed that, but I’m just trying to work—what clause was that?

CHAIRPERSON (Teanau Tuiono): That was in response.

CELIA WADE-BROWN (Green): Kia ora. I just wanted to follow up, if the Minister of Local Government would like to elucidate some of his comments—and I will try to keep the temperature a little cooler. I wonder if this inevitable focus is going to push much stronger user-pays at the expense of the public good. I wonder if the Minister would reflect on the fact that 18 councils have had their credit ratings downgraded, which doesn’t just mean that new debt is going to be more expensive but existing debt is going to be more expensive, and it is perfectly reasonable to spread the costs of infrastructure over the years so that current ratepayers do not have all of the costs.

If we look at the parallels with roading infrastructure, central government makes the financial assistance rate available, which is variable by different governments, for different priorities—State highways, of course, 100 percent; but local roads around about 50 percent, higher in some of the rural areas. This Government returns half of the waste levy to local governments—I mean, not this Government; Governments ever since Nándor Tánczos brought in that bill return it. So to dismiss the idea of partnership as some kind of money dream by councils, I find both inaccurate and patronising.

I was quite keen to table—and I’ll ask for leave of the committee in a moment, but I just wanted to draw the Minister’s attention to two graphs from my experience at Wellington City Council. Before I was mayor, I was a councillor there with the three waters portfolio. Can I assure you and people listening that councils took water very seriously. In 2009, we had a water conservation plan to try and avoid having the regional Whakatiki dam, and the per capita litres per year went down 2006-2007, went down 2007-2008, and down 2008-2009. We’d gone from 18 percent water leaks, down to 12 percent. Here’s a lovely graph. That can be found publicly, so maybe I don’t want to table it. But if you also look at the amount of money that Wellington City put in—and this is just the CAPEX for the three waters—when I began, it was about $22 million to $23 million; it went up consistently. Whether it was Mayor Lester for Labour, whether it was Mayor Foster from New Zealand First, and then when it was Mayor Whanau, it increased dramatically. Now, that is not altogether consistent with what was reducing.

My point is that the earthquakes of 2013 and 2016 put up the cost for fixing our pipes extraordinarily. Yes, there are issues, but what I want the Minister to address is how councils can possibly square limiting rate rises and fixing—whether it is past investment, whether it is issues like floods, or whether it is issues like earthquakes—with his view that we should not be increasing rates at all.

Hon SIMON WATTS (Minister of Local Government): I must say, I am finding it difficult to be able to answer specific members’ questions without a specific clause and general statement, but I do encourage—if I do that, I will do my best to do so.

The point was raised in regard to more generic terms around how we’re funding it. I would simply point the member to the fact that a number of councils have already submitted their plans for water services entities, and they have been approved. That is a combination of go alone and also multi-council arrangements. There is a clear precedent for how this will and can work, and it’s already happening in reality.

CHAIRPERSON (Teanau Tuiono): Just for further guidance for the committee as well, this is a debate and members are able to respond to the Minister of Local Government’s remarks, but that has to be done within reason. Once you’ve made your point, please come back to the bill, because it’ll help this debate to flow more smoothly.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. I have a question in terms of the interaction between clause 8(2) and clause 9(4). Now, clause 8 is quite straightforward: territorial authorities are responsible for water services. But in subclause (2) they may discharge their responsibility under subclause (1) to a water organisation through a transfer agreement. I have some questions around transfer agreements a little bit later.

One of the things that is possibly contradictory, so I’m looking for the Minister of Local Government’s clarification—and I see that submitters, particularly from local government, have also expressed similar concern around interpretation—is in 8. Question number one: territorial authorities may discharge responsibility to a water organisation; they may not, despite there being a water organisation—is that a correct interpretation of that?

Question two: if a territorial authority discharges its responsibility to a water organisation, but clause 9(4) says that a territorial authority then continues to be responsible for ensuring provisions, albeit (4)(b) does say, “other party to the contract or arrangement”—I would assume that includes a water organisation. But the responsibility in that sense still lies with the territorial authority, and they are responsible for ensuring other parties exercise all regulatory requirement.

I guess the first question then—just to recap—is: by using “may”, is there a situation where there is a water organisation, but a territorial authority does not need to discharge the responsibility to it? And question two: if a territorial authority does in fact discharge its responsibility to a water organisation, how are they then still responsible and also needing to ensure that the other party to the contract or arrangement—i.e., a water organisation—exercises its regulatory requirement? Those are my two questions now, but just a signal to the Minister that I have some questions around transfer agreements later.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. I do want to respond briefly to the Minister of Local Government’s response to the question I asked him around incentivisation, because what he has basically said to this committee is that “incentives” means the magical money tree and the blank cheque. That is the message that he is sending to councils: that, actually, we have no magic money tree, we have no blank cheque—although the decisions of this Government indicate that when it comes to tobacco lobbyists and others, they take a different approach to that. They take a different approach to that. What this Minister is basically confirming is that we are going to basically tie the hands of councils behind their backs and still expect them to do stuff, but we’re not going to give them any funding for that.

Perhaps I can rephrase the question for the Minister, which is still related to clause 7, and that is perhaps not what incentive but what support is the Government going to be giving to councils to deliver on the water reform needs that this council is expecting them to do—not an incentive, but what is the support? I’ll leave that with the Minister.

I move on now to clause 8 in Subpart 1, and my colleague the Hon Dr Deborah Russell has touched on this issue, which is not just colloquially known but is well known as “orphan councils”. Orphan councils—those who are left to fend for themselves even though they may have wanted something different. Actually, when we look at the list of orphan councils that have been forced into becoming orphans, they are councils that have been forced into this particular decision because the neighbouring councils have already made their decision that they don’t want to take on the additional costs and responsibilities that their ratepayers would have to bear as a result of having to upgrade water infrastructure needs in a neighbouring council.

One that I want to specifically ask the Minister about is whether he’s concerned about these orphan councils. Minister, are you concerned about Queenstown Lakes District Council having to be an orphan council? I note that the local member of Parliament—the person who is elected by that community to represent them—is here in the Chamber today. Members, I’m sure, would like to hear from him about what he is going to say about this water reform and what it means for his local community.

Suze Redmayne: Back to the bill! Back to the bill!

TANGI UTIKERE: Don’t you worry, I’m going to talk about Palmerston North in a moment. That’s the community that’s elected me to represent their needs, and I’ll be talking about that. I’m sure that other members around in the committee will want to share with the Minister and ask him directly how that is fair about what this Government is seeking to force on to councils without any support whatsoever.

When it comes to Queenstown, in the absence of hearing from the local member himself, we’ll have to fill that gap for him. It is a high-growth council, but it has a low ratepayer base. That is accepted. When we look at the level of debt that is projected to increase for that community, it is quite a significant increase in less than a decade from now.

Joseph Mooney: They’re growing quickly. Have you paid attention?

TANGI UTIKERE: So, Minister, my question is: what level of support—what was that, Mr Mooney?

Joseph Mooney: They’re growing very quickly. Have you paid attention? There’s a regional deal on the table.

Hon Dr Deborah Russell: Take a call! Take a call!

TANGI UTIKERE: Oh, OK. So—

Tom Rutherford: We tried to take a call.

CHAIRPERSON (Teanau Tuiono): I can offer a call if there’s going to be a substantial call—fair enough. I don’t want conversations across the Chamber. OK?

TANGI UTIKERE: Thank you, Mr Chair.

Hon Matt Doocey: He doesn’t want to talk about his own electorate.

TANGI UTIKERE: It’s interesting that members are saying, “Oh, he’s not interested in talking about his own electorate.” Look at the record, Mr Doocey. I’m very happy to talk about my own electorate, whether it’s about health, whether it’s about transport, whether it’s about all sorts of other things.

Now, the interesting thing is that we’re not hearing from members in this contribution or asking the Minister about what it is that meets their needs. We have Selwyn, for example; we have Waimakariri and others that are making decisions, yet we have members who are chirping away, not prepared to take substantive calls because they don’t want this on the record. They do not want this on the record about what it means for their community.

I’ll get back to my question for the Minister, and that’s about the orphan councils. When it comes to Queenstown, a significant portion of what that debt is going to be in the next 10 years—over half, or nearly two-thirds, I understand—is for water infrastructure needs. So what concern does the Minister have for these self-determined orphans that he and his Government are basically delivering in that space? What concern does he have for orphan councils that would like to have another choice but basically have no choice but to go it alone?

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

LAN PHAM (Green): Thank you, Mr Chair. There is so much in this part that has serious implications for the bill, so it would be fantastic to be able to step through it. I would like to speak directly to—as the Minister for Local Government pointed out—the objectives of the water service providers. This is all about clause 15, which is on page 43 of the bill.

Now, I note that the Minister directed us here when he was talking about, basically, the environmental considerations that exist within the bill, but what has been hugely disappointing about the select committee process and where it’s landed is there are two key parts that were originally placed in this bill by this Government that were about the objectives of a water service provider to provide water services that, one, provide safe drinking water to consumers and, two, do not have adverse effects on the environment. Now, unfortunately, in the process of the Finance and Expenditure Committee, these have now been removed. So what I am putting on the Table today, and what I’d love the Minister and the Government to consider, is actually reinserting both of those things. The whole point of that is that they are literally the objectives that should be at the heart of the entire point of what us and communities and councils are trying to do here.

I really agree, and I’d like the Minister’s thoughts about the proposition that we had from several submitters, but particularly Water New Zealand, to actually strengthen these objectives. Water New Zealand thought that the recasting of them as obligations or requirements instead of objectives would actually be far more directive and far more clear for shareholders that they need to pick up on these when they’re setting their statement of expectations and their water services strategy, so I’m interested if the Minister has considered that.

Then the first part I want to pick up on is the point around the removal of providing safe drinking water to consumers. I’m actually really unclear where in the process this was actually removed, because I noted in an earlier version of the bill—version 18—that it still remains. I actually missed the very last meeting where we deliberated, so perhaps it happened there. Not only should it be put back in, but, if anything, it should be expanded.

Again, Water New Zealand made it really clear why, and they talked about the whole picture of this not being about safe drinking water, but it actually needs to be about safe waste water and safe stormwater. They talked about how they would like to see these clear provisions when it comes to both environmental and public health, and they talked about the failure to do so in terms of treating and disposing of waste water. It can lead to these significant public health risks, which we have seen and do see, particularly when it comes to severe weather events, so they would like to see it expanded from just drinking water rather than removed entirely.

The other aspect that I’m suggesting is reinstating “do not have adverse effects on the environment;”. The reason for this is there were a lot of submitters who picked up on this and also talked about it. The fact is that this whole bill and the uplift in investment needs to be fit for purpose. It needs to be at a level of investment that actually delivers clear outcomes, not only for our communities but particularly for our environment. I know the rationale about there being a regulator and that they can do the environmental regulation and the pick-up of this—Mr Chair, I’d really like to just finish this call.

CHAIRPERSON (Teanau Tuiono): Simon Watts, and then I’ll come back to you to finish.

Hon SIMON WATTS (Minister of Local Government): I’ll respond to those questions the members are asking. First and foremost, to Lawrence Xu-Nan’s questions in regard to clause 8(2), primarily what you’re seeing play through there is flexibility within the bill. There are instances where a council is not required to have a water organisation, so that’s why the word “may” is included there. Clause 9(4) does not apply if there is a water organisation, as is clarified in clause 9(3), which limits clause 9(4). That’s the interplay between those two aspects.

To the question that was raised by Tangi Utikere, in regard to “What support?”, the Government has a number of mechanisms in play to support councils. First and foremost, the Department of Internal Affairs (DIA) provides, has provided, and continues to provide significant support to individual councils to help them in the preparation of their water services plans. We do have one council observer in play at the moment, which is coming to an end in Wellington, and we have DIA facilitators that are in certain regions working with those councils to bring them together.

In terms of the funding and financing mechanism, which has been referred to, the mechanisms and tools available under the Local Government Funding Agency have been broadened, and they provide mechanisms in order to match the funding and financing for these entities or for individual councils, to match the asset life. One of the major challenges is the cost of infrastructure, and one of the major mechanisms in terms of the pressure on rates is that the funding of that infrastructure is done reasonably short term. The funding of the infrastructure should match its asset life. Water pipes last for maybe up to 100 years. We therefore need to spread that cost, because future generations will benefit alongside those here today. That’s the fundamental complexity and opportunity within how you fund and finance local government. There’s a wide range of points of difference in the current model.

In terms of the questions from Lan Pham, in regard to clause 15(1)(a)(vi) and the challenge in regard to water environmental quality, it is very clear there that clause 15 that I’ve referred to says, “meet all regulatory requirements”. It is fair to say that because of the importance of water quality for health and safety and the importance of the environmental, we have, and prior Governments also have, been supporters of the establishment of a water quality regulator that has powers of enforcement, powers to set consistent standards. This bill simply acknowledges that we have that vehicle. In addition, it’s not us saying it’s not important. Actually, the fact that we have that mechanism amplifies the critical importance of those two factors, which is, primarily, the interaction between this bill and those aspects.

Hon Dr DEBORAH RUSSELL (Labour): Thank you, Mr Chair. I want to raise an issue—we’re still working on Subpart 1 of this really substantive part. I want to go to Subpart 1, clause 8. We’ve had a little bit of discussion of clause 8, but not the particular subclause that I’m interested in here, and I want to understand its interaction with clause 15.

In clause 8, “Territorial authority responsible for providing water services”, subclause (1) says that a territorial authority has to provide water services “in its district in accordance with this Act”. But then subclause (3) says, “Despite subsection (1), no person may require a territorial authority or water organisation to provide a water service to that person.” That’s got me really worried, and I want the Minister to explain how that fits with the objectives of a water services provider, which is to act in the best interests of current and future consumers, and so on, to support housing growth and urban development.

I can just see a possibility here, and it is going to interact later on in Subpart 2 of this, with clause 58F, “Power to close down or transfer small water service”. What say a water authority just decides it doesn’t want to supply water any more to a particular consumer? Now, I can get that this clause might be in there so that if you’ve got, say, a large commercial entity coming on board which wants to use water, but the local water services authority might perhaps say, “Look, mate, sorry—we can’t actually supply water to you unless you contribute something to the upgrade of services.”, and so on—I can see that kind of thing happening.

But I can also see that a water services entity or a territorial authority might decide it just can’t be bothered supplying water to a particular group of people. Now, that can be catered for, I think, under 58F—we’ll have to have a look at that when we get to that bit. But I can also see that being used in a somewhat punitive fashion. You can imagine a troublesome ratepayer—and we all know who they are—and I know it seems absurd, but a territorial authority might decide that they’re just not going to supply water to that person any more. I can think of people who have been, if you like, troublesome ratepayers in my own area up in Auckland—people who are continually on the side of local government. I’m sure the members in this committee who have previously been on local body councils and entities will have the same people in mind, the people who write to them constantly who raise protests, and so on.

What I want to understand from the Minister—and it seems like an obscure possibility, but it is one—is what protections are there in and around clause 8(3)? You can’t require a territorial authority or water organisation to provide a water service; what protections are there around the territorial authority or water services provider to actually exercise that power reasonably? Now, there’s stuff around small water services that we’re coming to later on, but I can just envisage the capacity for something quite unreasonable to be done in that space.

I’m assuming the Minister has thought of this, and I want to understand what protections are in place, what lengths a person might have to go to if a territorial authority or a water services authority is being unreasonable in its decision not to supply water services. If the Minister could just take us through that and ensure that there are protections in place, particularly for ordinary people who don’t have the resources to go to war with the local council. You always say, you know, don’t fight against city hall—well, you can see something going on here, in that regard. So if the Minister could just turn his attention to that for a moment.

Hon SIMON WATTS (Minister of Local Government): I refer the member to clause 58F(3)(b), which outlines that any of these decisions to exercise the closure would need input from the chief Medical Officer of Health, which obviously has considerations around the community. Clause 58F(3)(c) then outlines that there needs to be due process including evaluation, reviews, and adequate consideration in regard to that. Lastly, clause 58F(3)(d) ensures that the provision of all of that analysis and all of that decision making is in the public domain, which is another mechanism. So there are three examples of, in effect, belts and braces around that decision that a water entity would need to undertake.

JOSEPH MOONEY (National—Southland): Thank you, Mr Chair.

Steve Abel: Mr Chair—

JOSEPH MOONEY: Just a very brief question—

Steve Abel: Mr Chair—

CHAIRPERSON (Teanau Tuiono): I said Joseph Mooney. Sit down. Joseph Mooney has got the call.

JOSEPH MOONEY: —just to respond to some of the, frankly, misinformed comments that we heard earlier about the Queenstown Lakes District Council. Can the Minister just confirm that councils aren’t forced to consider different options, but they have different options, and in that case the Queenstown Lakes District Council has assessed a range of available options and settled on the one they wanted to look at, which was the water services council-control organisation, which they consulted on with their community?

Hon SIMON WATTS (Minister of Local Government): Yes, I can confirm for the member.

RACHEL BOYACK (Labour—Nelson): Thank you, Mr Chair. It’s a pleasure to take a call and to ask a couple of questions of the Minister of Local Government. Can I also just put on record what an excellent local MP for Palmerston North, Tangi Utikere, we have sitting next to me. I’ve known the member for over 30 years, and I can assure you that all he ever does is talk about Palmerston North ad nauseam—so an excellent local MP, I can assure you.

I have some questions for the Minister, specifically coming back to clause 9 around how services are provided under the legislation. What particularly interests me is there is an issue between the decisions that have been made by the three councils across the top of the South, particularly the Nelson and Tasman councils, that is actually at odds with how some of the water services are provided.

This is going to cause some challenges, in my view, around where the accountability sits, where the investment comes, and it becomes inefficient, actually. The big example we can speak to is the Nelson Regional Sewerage Business Unit, which is a shared service between the Nelson and Tasman councils. It’s the waste-water treatment plant in that area. For many years, our councils have actually worked together very well on water services and sharing those services and sharing decision making. Yet under this legislation, in terms of setting up the provision of water services, they’re staying separated. What concerns me is that that ultimately leads to greater costs to the ratepayer—they don’t get the economies of scale of having just one organisation and entity that’s set up on behalf of the two councils, and it becomes inefficient. So that’s going to essentially lead to greater costs for ratepayers.

The other opportunity is that we’ve had massive investment in a particular project, the Waimea Dam, which is partially owned by Tasman District Council but actually has real benefit to Nelson City Council. There is some concern from the Tasman side that Nelson actually benefits through water provision through the dam but hasn’t contributed very much at all through its contribution. Around a $5 million contribution—that’s the sole contribution for that infrastructure. There could have been an opportunity under this legislation and under the roll-out of it to ensure there’s actually fairness across Nelson and Tasman around contributing to the costs of the dam. The people of Nelson have actually managed to get access to very, very cheap water infrastructure because of the way that has been overseen and governed, and that’s not going to change. Is that actually fair for the people of Tasman?

The other issue I just want to put on record is that Tasman is going to have significant infrastructure costs to recover from the recent damage. That’s transport, but also there is water services infrastructure that’s going to need to be both fixed and improved. Tasman is seriously struggling in terms of its ability to access capital at the moment. Based on the Minister’s earlier comments about there not being a magic money tree, how exactly can Tasman District Council in particular have some certainty and some opportunities to actually fund significant infrastructure going forward? The fact that they are going alone—we have three orphan councils across the top of the South. Tasman is one of the lowest areas in New Zealand in terms of productivity, in terms of incomes—a huge rural area with significant amounts of infrastructure that’s going to need upgrading, replacing, and fixing, but a really small rating base, when you look at it.

Parts of the Tasman district fall in my electorate of Nelson, but the people of Tasman are going to face a significant burden on their rates over coming years. Under this set-up, there’s no requirement, even though Nelson and Tasman are joined at the hip and work together on so many issues. We could have got some real efficiencies and collectively driven down costs for the whole region by actually having a joined-up water services provision. It’s common sense. So where’s the common sense? There isn’t any in this legislation. Where’s the support going to come for the people of Tasman over the coming years?

CHAIRPERSON (Maureen Pugh): Before I take another call—I’m not going to take a closure motion just yet. Before we proceed, I did note that the previous Chair alerted members to refer to the part and clause number that is being debated at the time, because the purpose of this is to interrogate the bill. I’m just alerting people to that fact.

CELIA WADE-BROWN (Green): Thank you, Madam Chair. I would like to refer to clause 10 in this part, about transport corridors. I’m wanting to follow up on a submission that Water New Zealand made on this bill. In particular, it says here that a council should not transfer the ownership or control of any transport corridor stormwater infrastructure. So my first question to the Minister is: how is this going to work with any kind of integrated catchment planning?

Another question would be—I mean, a lot of transport corridors are the overland water route in the floods. Because of the way that our vehicles, whether it’s the tyres, whether it’s oil leaks, whatever, add contaminants to the stormwater—who is going to be responsible for that? Is it Waka Kotahi? Is it KiwiRail? We’ve talked about transport corridors mainly in terms of roading, but, of course, transport corridors include rail corridors, and, of course, if my colleague Julie Anne Genter has her way, there will be a lot more trains going along those—possibly, the Hon Winston Peters as well. The delineation of assets and ownership is complex, but the responsibilities for stormwater really ought to be clarified, in my view.

I’d like to also ask the Minister to clarify clause 10. If you can’t transfer ownership or control, can you choose to contract with a water organisation—a water organisation could be a trust or it could be a council-controlled organisation—to manage the transport corridor stormwater network? There we’ve got one of the subclauses in clause 9 looking at how they can contract for management across the whole of the catchment network. I look forward to hearing the Minister’s points on that.

Hon SIMON WATTS (Minister of Local Government): Thank you very much, Madam Chair. In regard to the questions on clauses 9 and 10 by the member in regard to transport corridors, basically what the bill recognises and balances is that in many parts of rural and provincial New Zealand in particular, the transport corridor is also the stormwater corridor. However, obviously, having duplicate control and ownership is not an optimal state, so what the bill allows is that councils can allocate management and operational responsibilities of those transport corridors to the water services entity but not the ownership aspect of that, and I think that is reasonable. Its primary purpose is transport, acknowledging a secondary is stormwater, and in rural or provincial the ratios are much higher than in other aspects. So that’s the flexibility that’s implemented as part of those two clauses.

In regards to the questions around clause 9 in regards to the Tasman district, fundamentally the way in which the legislation is set up is that it is for that council and its ratepayers to make a decision in terms of the type of entity structure in which it chooses. They have not at this point submitted their draft plans. I can’t comment in regards to what that looks like, but we understand that that is very well advanced and will be coming.

The point around why they are not forming a regional entity—well, our mechanism is deliberately structured so that that is a decision for local communities between the Nelson community and the Tasman community, potentially. I can’t speak for them, but as the member is a local advocate on that side of it and is obviously very keenly supportive of more regionalisation for the benefits in which she’s outlined—which no doubt, you know, are reasonable—then that’s the level at which it needs to be determined by the communities in order to come up with that entity structure.

GLEN BENNETT (Labour): Kia ora, Madam Chair. Thank you. I want to continue on this line of questioning around clause 10 and the expectation of transport corridors. I come from the perspective of New Plymouth and New Plymouth District Council. I was listening to the contribution from my Green colleague and from this side of the floor and I was looking up what New Plymouth District Council actually was asking. I’ve talked to them about clarity and the challenge they have when looking at clause 10, which is the transport corridors, and they say—and I quote—“Clarification and clear directive of who is responsible for ownership, operation, maintenance of stormwater networks within the transport corridors is required.”

There’s the thing around ownership—you’ve discussed that; you’ve given us some sort of an answer—but then there’s the operation and maintenance. As I look through clause 10 and look at the preamble on it, it does explain a little bit about what this is, but the challenge for New Plymouth and, I’m sure, for other councils is around when you look—because they’ve got so many levers and so many responsibilities to be playing. There’s integrated transport planning and what that looks like and where that fits in with a piece of legislation like this. The expectation for the transport corridor—is there clarity in the way this clause is written around who the owner is but also around the operation and maintenance of that space?

Then I continue and look at the responsibility when it comes to transport corridors and integrated plans and what other services are provided on many of these roads, and I look at the challenge for another regional council in my area, which is Stratford District Council. Stratford District Council is a mighty small council. I think, off the top of my head, just over 10,000 residents live in the Stratford district. There’s around about, I think, 3,000 dwellings. In terms of their voter base, they have some real challenges. Recently, the council did some serious work around infrastructure, around transport, around a subdivision. They built a new subdivision. It was council supported and funded, but, of course, there’s the infrastructure around the transport corridors into those spaces, then the stormwater, then the drinking water, as well as, of course, the power and the other infrastructure.

If we look at what came back from the select committee, there’s a whole lot that’s been removed. We have clause 10, the expectation on the transport corridor. We have subclauses (1) and (2), but then (3) has been removed. I’m just concerned, as I look at my colleagues from Stratford and I look at what the New Plymouth District Council is saying about clarification and a clear directive—can the Minister assure this committee that what the Minister is doing in this piece of legislation will clarify, will be clear, will be directive around ownership, around operation, and around maintenance of the stormwater networks?

Hon SIMON WATTS (Minister of Local Government): Yeah, so the clause that the member’s referring to does articulate the points that I’ve noted already in my prior response in regards to the ability to allocate operational and management responsibilities in regards to that. The questions raised by the member in regards to arrangements for transport corridors—just for the purpose of helping the member—that is part of the next part, Part 3, clause 176, so I won’t answer it here and I will in the next part.

CELIA WADE-BROWN (Green): Point of order, Madam Chair. I seek leave to table two graphs that I referred to in a previous question.

CHAIRPERSON (Maureen Pugh): Are they not publicly available?

Celia Wade-Brown: Not in this form, no. There was quite a lot of research to pull this together.

CHAIRPERSON (Maureen Pugh): Leave is sought for that purpose. Is there any objection? There appears to be none.

Documents, by leave, laid on the Table of the House.

NANCY LU (National): I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): In the short time I’ve been here I’ve heard some repetition, so I’m just encouraging members that we need new material.

STEVE ABEL (Green): Thank you very much, Madam Chair. I have new material I’d like to refer, please.

Hon Matt Doocey: Have you got new graphs, though?

STEVE ABEL: I’m not of that calibre as Celia Wade-Brown. I have graphs in my mind—you’d know about that. [Interruption]

CHAIRPERSON (Maureen Pugh): Back to the bill.

STEVE ABEL: I’d like to talk to clause 16, please—“Financial principles for water service providers”, page 44. This is a very important clause in so far as it may serve to have the effect of imputing an orientation of a water provider around its financial view of its role over its public service view of its role. I specifically have a question regarding clause 16(1)(a). The wording says, “(1) A water service provider must act in accordance with the following financial principles:”, and under (a), it ends with “providing for growth”. My question to the Minister is: in what sense does that clause mean growth? Does it mean economic growth, financial growth, or does it mean population growth?

It’s an important thing to understand, because there’s a colon after clause 16(1)(a), after which comes (b), (c), and (d), and paragraph (c) says, “the provider’s revenue and funding (including from charges), expenses, and dividends (if applicable) must be transparent to the public:”. I think that there is a risk that if the interpretation of that term “growth” there is financial growth—and it’s important to clarify what the sense of growth has meant—then the implication might be that dividends are an important part of the financial principles under which a water service provider should operate.

There was clear feedback in submissions against the reference to dividends. Multiple submissions, including from councils and NGOs, disagreed with allowing water organisations to provide dividend payments to the shareholders. I’d appreciate also, as a second question, that the Minister clarify why there was a decision to include dividends and, furthermore, the extent to which it contradicts the Local Government (Auckland Council) Act 2009, which prohibits the payment of dividends from Watercare to Auckland Council—for good reason, because—I remember this very well—there was an extensive and rightful public debate about the first and essential purpose of a water provider being to provide safe, potable water to its constituents. The idea that it should be trying to make a dividend out of it was very concerning. There were significant concerns at the time around it being a precursor to privatisation of those water providers, which we know has happened all across the world. So I would seek clarification on why the Minister has chosen to include dividends.

Furthermore, I would like to refer to the tabled amendment of my colleague Lan Pham, which would solve the problem of the confusion around the mention of dividends by removing “dividends (if applicable)” out of clause 16(1)(c).

I also want to refer to the core purpose of a water service provider, which is to ensure that everyone has access to safe drinking water as a basic human right. It should not be imputed or implied by this clause that somehow a service provider has a duty to provide a dividend. That is a problematic imputation. I wonder if the people in Gore right now, who in the last two weeks have been told they can’t drink their water because of nitrate contamination, know whether there will be a dividend returned to the council by that water service provider and whether that would be their expectation. What is the Minister’s response to the effect of including dividends in a clause that says “providing for growth” in so far as it distorts the primary purpose and focus of a water provider, which is to provide safe, clean drinking water to the public?

I also refer in that regard to the tabled amendment of my colleague earlier to clause 15, which outlines that that should be clearly stated—that their task is to provide safe drinking water to consumers and that it does not have an adverse effect on the environment.

Hon SIMON WATTS (Minister of Local Government): That’s a reasonable question in the context of entities and the way in which they operate. Under the current status quo, in the model under prior Governments, there are already council-controlled organisation water entities that are operational. I think, in a Christchurch sense, in terms of Citycare, which already has mechanisms in play that have the ability, should they choose to do so, to provide dividends back into their council. Those entities are accountable to the ratepayer, and so they are the controls on mechanism in place, but the current status quo already has that mechanism.

What is being done by this point in the legislation, which is the point the member raised around the distortion effect—if you look at clause 16(3)(b), it actually provides a clear mechanism: “The organisation must not pay a dividend”, etc., etc., and it refers back to clause 16(1)(b), which ensures that the revenue is being spent on providing the core purpose of the entity. So that aspect there deals as a protection mechanism to counteract, you know, potentially, a scenario that the member is saying.

At the end of the day, some entities already provide dividends back to the councils, but the way in which they do so is that they are accountable to the ratepayers. At the end of the day, ratepayers have a decision in regards to that, and they can convey that through to the councils in terms of their preference, but it simply reflects the status quo.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. Madam Chair, thank you also for the earlier guidance around repetition. I’m sure you may be aware that the Opposition is being very purposeful in its approach to this part and we’ve stuck strictly to Subpart 1, and we’re very happy to move on to Subpart 2. But it would be helpful to get some guidance if that is the case, although there are a number of other clauses that I’d like to touch on as well.

Before I do that, can I just thank Mr Mooney for taking a call in this debate. The point, though, still remains in that there are councils, such as the one that he has alluded to, that still have little to no choice when they are basically left on their own—not being able to collaborate with other councils because the other councils don’t want them. So I’ll make that particular point.

I want to ask a question for the Minister of Local Government. This relates to clause 11, and it is in a similar vein, albeit a different clause, to the question that my colleague Dr Russell touched on, and that really is around the transfer opportunities and the level of transparency and awareness around that. My question to the Minister for clause 11, which is around the agreements that would be in place for transfers with a water organisation, is how he expects the transparency aspect to play out. How does he expect the public accountability in those agreements to be exactly that—public? Now, the answer to that could be perhaps that, well, that’s a matter for the council. None the less, the Minister does have some intervention rights and opportunities, and so my question is, very simply, around that one—around how he intends to ensure that there is a level of transparency in the transfer or transition agreements that would sort of flow from that.

One thing I have not had a chance to speak to, and it hasn’t been addressed yet, is one of the Amendment Papers that is in my name, and it has been circulated well in advance of today’s session, and it is Amendment Paper 337. Now, this would seek to amend clause 9. It is a very simplistic course of action that this amendment would take, but the implications, I think, would lend itself to encouraging regional collaboration. What it seeks to do is, basically, to delete paragraph (a) within clause 9(1). It basically rules out as an option the ability for an authority to provide the water services itself directly. So in the case of Queenstown, perhaps, it would still be an opportunity to enter into an agreement but would not allow councils to in-house have an opportunity to deliver on this. I’m interested in the Minister’s thoughts around my Amendment Paper.

I do believe that would, in some circumstances, encourage a further level of conversation with other councils and may invite further regional collaboration. I know the Minister has said, well, that’s a matter for councils to think about in terms of which one they choose. But is the Minister open to supporting the Amendment Paper? He might have information based on the plans that have been delivered well in advance of that 3 September deadline around how many of those are actually looking to adopt an approach which is providing the water services themselves in-house directly. So I’ll look forward to the Minister’s response.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. I have two short questions for the Minister. Firstly, thank you, Minister, for responding to my earlier question around clause 8(2). It’s very helpful to know that it’s not so much that the territorial authority can discharge responsibility if there is a water organisation, but the “may” implies that a territorial authority has a choice on whether to have a water organisation in the first place. That’s very helpful.

I did mention to the Chair and to the Minister before that I have some questions around transfer agreements. A specific provision I want to focus on is clause 13, “When new transfer agreement required”. Now, the reason I want to focus on this part is, for example, in clause 11(2), the article “a water organisation” has been adjusted to “the water organisation”. The use of the definite article instead of the indefinite article is significant in this case. I think we’re seeing similar potential confusion in clause 13, where in clause 13—can I just check with the Minister. In subclause (1) it mentions “a water organisation” but in paragraph (a) it talks about transfer to “the water organisation”, so they are referring to the same organisation. I want to check with the Minister—in these cases, is there a possibility to have more than one water organisation, and can a territorial authority transfer from one water organisation to another by means of this particular clause?

I do know that later on we’ll see that clause 18 has limitations when it comes to contractual agreements, and the Minister before mentioned, further along, clause 58F, which does cover the closure of small water organisations, but we’re not seeing, as part of clauses 11A, 12, and 13, what happens when a territorial authority wants to wrap up its ability—unless there’s another clause—to have a water organisation or to retract the transfer agreement, if that makes sense. Can they just then move from one water organisation to the other? So those are my two questions around transfer agreements.

My last question relates to clause 15(1)(a)(i) and (ii). I know the Minister has responded about subparagraph (ii), but in the departmental report, there was no recommendation to move subparagraph (i), for providing safe drinking water to consumers, under subparagraph (vi). My question is on the rationale behind moving that. Providing safe drinking water to consumers is a straightforward principle or objective, but by moving it under subparagraph (vi), “… providing drinking water that is safe for consumers;” but prefacing it on having to meet regulatory requirements—is meeting regulatory requirements comparable to being safe for consumers? What happens if the regulatory requirement itself may not be the same thing and we have, I guess, shrunk the scope of “safe drinking water for consumers;” as a stand-alone objective. So those are my three questions. Thank you.

Hon Dr DEBORAH RUSSELL (Labour): I want to follow on from my colleague Dr Lawrence Xu-Nan’s questions around transfer arrangements and pick up on an aspect that he hasn’t spoken about. If we look at clause 12(1)(b), it’s talking about the purpose and effect of a transfer arrangement. They have to make sure that the effect of the agreement “is transparent”—to the board, obviously, and the territorial authority—but then in paragraph (b), it says “can be readily ascertained by the public.” I just want to understand what the Minister of Local Government has in mind by that, because, frankly, board minutes and records of meetings and the like are not particularly—I mean, they’re available, one can search them out, one can google them. It takes a particular type of local body nerdy wonk to really go chasing after them. I’m sure every member of this House would put themselves in that category.

Nevertheless, to make sure it’s “readily ascertained by the public”—I want to have an understanding from the Minister of how he envisaged that occurring and how the costs of that are to be borne. “Readily ascertained”—it doesn’t mean the local authorities are going to have to put a letter in every ratepayer’s letterbox, but it does imply that ratepayers need to know that it’s happening and then that they can find out the details of it in some pretty transparent way.

There’s that first aspect of it, but relating to that “readily ascertained by the public”, I just want to clarify, because clause 13 goes on to talk about when a new transfer agreement might be required. I want to be sure about something here. It talks about how a water organisation might change what it’s doing—maybe it’s going to take a new entity; maybe Queenstown is going to get lucky after all and find that someone does want to talk to it—so there’d have to be a new arrangement formed. Obviously, that sort of arrangement matters to the ratepayers, to the shareholders, to the territorial authorities, and so on. There are a variety of provisions in clause 13 as to how that process is to go ahead.

I want to be sure, however, that a transfer agreement in clause 12, which can be “readily ascertained by the public”—that a new transfer agreement is not some separate thing that doesn’t have to be “readily ascertained by the public” but actually falls under the clause 12 idea of what a transfer agreement is. Now, that, to me, is the obvious solution there—that a new transfer agreement is not an entirely separate thing from a transfer agreement, which can be “readily ascertained by the public”. If just the Minister could clarify that, in fact, with a new transfer arrangement, that is expected to be “readily ascertained by the public” as well.

Two questions there. How does that “readily ascertainable” work, and how does it apply to new transfer agreements?

Hon SIMON WATTS (Minister of Local Government): I refer the member to clause 14, which stipulates clearly that the requirement there is for transfer agreements to be published, and that obviously provides a context in terms of the transparency that’s required that the member is alluding to.

Hon Members: Madam Chair.

CHAIRPERSON (Maureen Pugh): I’m not going to take a closure motion. We are still on Subpart 1 of this particular part, but can I encourage members to move on. We’ve had over an hour on Subpart 1. I think it’s time to move to Subpart 2 and begin the questions there.

TANGI UTIKERE (Labour—Palmerston North): Point of order. Thank you for that, Madam Chair. Before I seek another call, can I just clarify that there are still some Amendment Papers that have been tabled and have been up on the New Zealand Legislation website for the last couple of days that have not had an opportunity to be aired yet. Are you saying that I’m not able to refer to those as part of Subpart 1?

CHAIRPERSON (Maureen Pugh): Thank you for that point of order. The opportunity to speak to those is every time a member gets to their feet. Like I say, we have interrogated this Subpart 1 for quite some time. I think it’s time to move on to the next part.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. I will, having taken your guidance on that, refer to the Amendment Papers that are in my name that seek to amend clause 17. This is something that has not been referred to by the Minister of Local Government, so this committee stage is unaware as to the Minister’s position on what has been circulated in advance. The Minister has had at least a couple of days to consider his position on this. In light of that, I would welcome a response from him.

To assist other members who might be interested, this is an attempt to provide some certainty in a number of really important areas in clause 17. There is a requirement for a water service provider to continue the provision of water services—that’s good. But what this Amendment Paper 339 seeks to do is to provide some further assurances to the public and the community in four areas.

The first relates to inserting five additional paragraphs after clause 17(2)(c). The first one is to ensure that there is no declination in freshwater quality or ecosystem within a service area. So that’s the first one that would be introduced within this.

The second one is, basically, ensuring that there is a requirement that the provider is able to identify how it is that an ongoing compliance with drinking-water standards would be given effect to. So that’s the second one.

The third one is, really, in that public health realm. My question to the Minister: given that a lot of the reform space has been from the genesis of what was experienced in Havelock North and in other parts of the rohe as well, why does he not believe that there needs to be a compliance factor around public health obligations that would be introduced around proposed paragraph (f) in Amendment Paper 339? I’m interested in the Minister’s response around that.

Then, in proposed paragraph (g) in Amendment Paper 339, there is an opportunity for ensuring that there is a level of community support for any proposed transfer and change that would follow. This talks about introducing a referendum, which has not been mentioned in this committee stage at all, the possibility of a referendum; this is completely new—but whether or not the Minister would be inclined to support that.

The final one, which follows from Dr Russell’s sort of look at previous clauses, is around this accountability frame. What this amendment would do is it would introduce a requirement for a public annual meeting to be held within six months of the end of each financial year, and that that would have an open opportunity for accountability for questions to be posed. My question specifically on this Amendment Paper hasn’t been canvassed, and I’m interested on the Minister’s thoughts around that.

STEVE ABEL (Green): Thank you, Madam Chair, and we hear your concerns about us cracking on with this part. I have a specific reference to clause 26(3) in Part 2, which reads “If any of the options identified under subsection (1) involve a significant decision in relation to land or a body of water, the authority must take into account the relationship of Māori and their culture and traditions with their ancestral land, water, sites, wāhi tapu, valued flora and fauna, and other taonga.”

My question is: why the wording “take into account”, which is sort of a lower bar—i.e., it’s not a strong articulation? We have a tabled amendment from my colleague Lan Pham, which proposes that it could be changed to “seek to protect and provide for” that list. I wonder if the Minister of Local Government could reflect on that, noting that many submitters outlined that this clause and others should be amended to require councils to meaningfully consult with Māori. In terms of the obligation of the Crown to protect taonga and ensure that Māori have the ability to express their tino rangatiratanga over their taonga and resources, it would be appropriate to strengthen the wording in that clause.

Furthermore, I wonder if the Minister could reflect on where councils are obliged to give effect to not only Treaty settlement obligations, for which there is now limited provision, but Te Tiriti o Waitangi itself more broadly when it comes to the rights and interests of unsettled iwi and hapū. Of course, whether settled of not, Māori have the right of tino rangatiratanga, and Te Tiriti o Waitangi is an obligation of the Crown.

In summary, I wonder if the Minister can reflect on whether he would consider strengthening that clause, which references appropriately and clearly the importance of the relationship of Māori and their culture with traditions, ancestral water sites, wāhi tapu, valued flora and fauna, and other taonga. The wording of that is commendable aside from the weakness in the preamble. Would he consider changing “must take into account” for “must protect and provide for”? Thank you.

Hon SIMON WATTS (Minister of Local Government): I have reflected on the Opposition members’ Amendment Papers, and have made a decision that I do not support them because I don’t believe that they are going to be adding more than the amendments that have been made—over 300 or so—through the select committee process which the members were part of.

In regards to the answer to clause 26(3) by the member, the wording in subclause (3), as I outlined last night in response to a similar question, is taken from the Local Government Act, and that has the precedent in terms of the way in which the interaction and responsibilities by councils and the Treaty are required, and those set precedents in the context of this bill that’s on the Table.

Hon Dr DEBORAH RUSSELL (Labour): Thank you, Madam Chair. I just have one last question I wish to raise in respect of the clauses in Subpart 1 of Part 2, and it’s just to do with the interaction of a couple of clauses: the financial principles, clause 16, but also then the clause around obligations before entering into contracts, clause 22. I want to draw the Minister’s attention—and, in fact, the committee’s attention—to clause 22(3) and the preamble of (3). This is on page 50 of the bill, not the Amendment Paper, and it says, “Before entering into a contract that a provider determines to be a significant contract because it will create a public-private partnership,”. Now, I haven’t had the time to work out where else public-private partnerships are contemplated in this bill, but I do want to link this back to clause 16.

Here’s the problem: public-private partnerships may well be an appropriate model to use—it’s an empirical case every single time—but the thing with a public-private contract is that the private partner in that partnership expects a return. All right, that’s fair enough; that’s why people make investments, and it’s in order to earn a return. We all do this all the time. It’s a straightforward aspect of the way our society operates. We expect a return. Anyone who’s entering into a public-private partnership is going to have to have an eye to revenue streams, to the extent to which those revenue streams generate sufficient additional income that they can then, in turn, pay a dividend. Clause 16, as the Minister has explained to us, has said that we have to pay dividends responsibly, but I guess I see a real concern here that when we allow private entities to enter into our water services provision, that really accelerates the profit motive.

Now, we want these entities to earn sufficient to be able to pay for the infrastructure, to pay for the water flows, to pay for the waste water, the stormwater, the drinking water—that’s the point—but to what extent, then, as soon as we have a public-private partnership in there, are we going to have a profit motive in there over and above the needs of maintaining the network? I wonder if the Minister could just give us a bit of his thinking around the use of public-private partnerships in the context of water supply and, again, to what extent that profit motive is going to somewhat pull against many of the financial principles in clause 16 of this bill.

Hon SIMON WATTS (Minister of Local Government): Thank you. What this clause reflects is, in effect, belts and braces to the aspects that the member has referenced in regards to how these entities may interact with the water service entities. In regards to clause 22(4), it outlines there that a public-private partnership means a long-term contract for the delivery of water services, and it goes on to outline the specifics around that.

The reality is that to have a financially sustainable model, you are going to have long-term contracts in order to deliver that. The current status quo, before this legislation—an example is Veolia, which operates in Papakura in Auckland and has a contract with Watercare to provide long-term services. That’s been in place for a long time. It is an example. The belts and braces of this ensure that there are appropriate controls and mechanisms outlined in clause 22(3), primarily, and 22(4), to make sure that the considerations around those entities and the relationship have the appropriate controls around them to ensure that that meets the requirements of the community.

LAN PHAM (Green): Thank you, Madam Chair. I want to point out as well how substantial this earlier part of the bill is, and particularly as someone who was on the Finance and Expenditure Committee, or sitting in on that, particularly for this bill, I want to make it really clear that this was an absolutely rushed process and time frame. There are big sections of this bill that have not actually had any scrutiny put on them. So I really appreciate the opportunity to be able to ask the Minister questions, put up our amendments, and actually have a response back.

I want to thank my colleague Deborah Russell for picking up on the public-private partnerships, and I don’t need to go into that, but I wanted to go into one specific aspect that the Minister has just raised as well, which I’d really like some consideration about. That is about specifically the length of the water services contracts, and I have an amendment for these.

We heard actually from a number of submitters during the process that they were all really concerned, particularly about this 50-year maximum limit for contracting out these water services. Now, we can all have different ideas about the role of public-private partnerships and their benefits or not, but our concern that we share with many of submitters that submitted on this bill is about privatisation. When you have, particularly, contracts which may be numerous in size, which may be at scale and for such a long period of time, we’re really concerned about that acting as de facto privatisation. While we accept the need for public-private partnerships, particularly when it comes to major assets, we think the major provider should ideally always be the public entity and that we’re investing in that.

If we are enabling commercial operators to actually hold these concessions, then that must be in line with all the purposes and the objectives like the best interests, like the good employer tests, which are earlier in the objectives. However, we would like to see, and we’d like the Minister to consider, actually shortening the time frame within clause 21(2A), which is the subject of my proposed amendment—to replace 50 years with 20 years. We think that that would be a more valid length of time in terms of, essentially, this once in a generation consideration of the arrangements within a natural contracting cycle. That seems very fit for purpose, particularly when we know that these are decisions that need to be looked at as a community and things really do change over decades.

As part of this amendment as well, I’m suggesting at clause 21(2A) that we actually insert new subclause 2B that says, “For the avoidance of doubt, day-to-day operations must be provided by the public entity.” That’s really to emphasise that we want investment in these public entities and them to hold as much of the contracts and be actually doing the work as possible. I’d really appreciate the Minister’s thoughts on those. Thank you.

CHAIRPERSON (Maureen Pugh): Before I take the next call, I think Subpart 2 has been well canvassed. There’s further reference to the organisations in Subpart 3, so can I suggest we move on to Subpart 3.

TANGI UTIKERE (Labour—Palmerston North): Point of order. Sorry—thank you, Madam Chair—can I just seek some clarity around that. Subpart 2 is primarily related to the role of regional councils in this, and I don’t believe there have been contributions—

Dr Lawrence Xu-Nan: It’s a short subpart, but we haven’t covered it.

TANGI UTIKERE: A very short subpart, but there haven’t been any contributions related to regional councils as far as I can ascertain.

CHAIRPERSON (Maureen Pugh): Well, to me, that’s a signal that there were no questions about regional councils if it hasn’t been raised, and so we’ve moved on to the organisations in the Amendment Paper, so I’m suggesting we move to Subpart 3 for that purpose.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. Moving on to Subpart 3, which does relate to the water organisations—I did have an earlier Amendment Paper previous, but I’ll leave that. I think the Minister of Local Government hasn’t addressed it but has given a response none the less.

Subpart 3 in relation to clause 36 is, effectively, establishing the water organisations. One of the issues that I’m interested in hearing from the Minister—and it might be that he has a particular view around this—is that clause 36 basically sets the organisations. My question to the Minister is: how will he ensure—if he intends to ensure at all—that those water organisations that will be established will not be used to privatise or, effectively, corporatise what are essential services?

The water organisations themselves can—are empowered to—undertake any of the water services. Now, there is provision within the bill to separate that out if that’s the decision that territorial authorities take. But it’s not quite clear what is the Minister’s perspective on ensuring that any establishment opportunity for an organisation in this space is not going to be protected or allow for the privatisation, effectively, of water in this country. It might be that the Minister can point us to a different part in the bill or it might be that he wishes to put on record what his particular view around that is, but it is interesting, none the less.

The other aspect is that this change in clause 36(3A) is around the preparation of the foundation documents. Now, this is something that hasn’t been sort of transferred in from any other part of that clause—it is a new, discrete addition—and so my question to the Minister is: what sort of time frames would exist alongside that? There are other time frames in other corresponding parts of the bill that talk to when particular documents need to be lodged, when a strategy needs to be prepared. This is around the foundation documents, and it might be that that’s actually all-encompassing in terms of the strategy document, and the fact that there is a trigger elsewhere in the bill negates the need for it to be specified here, but I’m interested in in the Minister’s response around that.

When it comes to the ownership of the water organisation—and this specifically is outlined in clause 37—there are obviously a number of options depending on what particular track the councils take around this. I’m interested to hear from the Minister around whether there are higher levels of public accountability concerns with the nature and ownership of water organisations that are outlined there. For example, it is specified as to what a company needs—I think it’s accepted that if a company is formed, it needs to comply with what the legislation is. There’s no issue with that. But if there is, for example, an exemption that has been applied and one has been granted, where is the public accountability aspect that sits within this particular domain or this particular area when it relates to not just the nature within which the organisation is established but the way in which it might be owned, particularly if it’s being, effectively, set up outside of the council opportunities?

I guess the interesting thing there is that members—certainly on this side of the Chamber—would be keen to get an understanding from the Minister around what protections exist to ensure that the future ownership of these organisations remain in public ownership or, at the bare minimum, what sort of protections exist to ensure that the dilution of public ownership is not a particular pathway or a journey that that heads down. I’ll leave with those questions for the Minister first.

Hon Dr DEBORAH RUSSELL (Labour): Thank you. I’m looking at clause 40. It’s around the governance of water organisations. Clause 40 itself concerns itself with the appointment of directors to a board, the boards of water organisations, so it’s fairly straightforward. The first provision is that the director “must be appointed on the basis of their competency to perform the role.”, which is absolutely straightforward, and I’d hope they were all competent.

But what I do find interesting is the people who are not able to be appointed as a director of a water organisation. I’m assuming it’s not because they’re deemed to be incompetent, because the first one refers to elected members of territorial authorities. I do just want to explore that a little bit, and also the provision that employees of territorial authorities and also employees that are shareholders of water organisations cannot be appointed. So, basically, elected officials and employees can’t be appointed to be directors of the water services organisation.

I just want to query that a little bit in respect of the chief executive officer of a water organisation. It’s fairly common for CEOs to be on the board of an organisation. It’s not an unheard of arrangement. I just want to clarify with the Minister—I’m assuming that, perhaps, the CEO might be an ex officio member of the board but not have voting rights, or something like that. But obviously the CEO themselves is going to be highly competent, we would hope, in this space, and will have a great deal of knowledge to bring to the roles. I would be hoping there would be some reasonable arrangement that the CEO of the water organisation could have, even if it were not for them to sit on the board as a director but to actually have board level input into the organisation and what it’s doing.

That’s the first question in respect of the board directors. The second one is around elected members of a territorial authority. Again, that does seem pretty sensible to me, but I just want to clarify—I’m assuming that that particular clause doesn’t bar someone who has been an elected member of a territorial authority from being appointed to the board. Now, again, we’ve got a fair amount of precedent here at central government level where former Ministers and MPs are appointed to boards, and for good reason. They bring a degree of experience of what it is to manage an organisation that is a somewhat political organisation and it has to have an ear to the political currents around the place, to be appointed to boards. Sometimes they’re boards of public entities; sometimes they’re boards of private entities. There is a real value they bring to that.

I just want to check with the member: local body politicians and people who’ve worked in that space, at the provision of local body services, who understand the political currents—that’s actually a valuable voice to be heard on the board. So if the Minister could clarify: currently elected members are obviously not to go on the board, but I’m assuming that former elected members might well be within scope to be appointed to the board, provided they have the required competencies.

Hon SIMON WATTS (Minister of Local Government): Thanks, Madam Chair. In regard to the questions from members around accountability, the public accountability of water organisations is, obviously, through the councils or consumer trusts that are shareholders of these organisations. Councils and trustees are, obviously, elected by the public, and there are various requirements through the legislation and other mechanisms in regard to shareholders’ responsibilities, including through Part 4 of the bill, which I’m eagerly looking forward to progressing to.

Clause 36 relates to the question in regard to privatisation and other protections. The water organisations are water service providers, and there are a range of protections against privatisation—for example, clauses 17 and 18 outline requirements that only councils and trustees of consumer trusts can own a water organisation, and this includes clause 37. Now, I know all the Opposition members have read the bill but, you know, that’s where you see it in black and white.

The question around can a CEO of an organisation sit on the board—I mean, I’m not going to do an Institute of Directors 101 course on corporate governance, but I would go as far to say it’s probably not good practice to have a chief executive be a member of your governance board, because, last time I looked, governance boards set the strategy and actually employ the CEO, so a bit of conflict there. I think what the member’s referring to there is prior members and other people—well, again, it comes down to the competency of individuals. The CEO would be part of and attend board meetings, no doubt, in their executive capacity, alongside other people such as a chief financial officer. Hopefully that clarifies that point.

CHAIRPERSON (Maureen Pugh): I am torn about the detail we’re getting down into, but I will take another call from Tangi Utikere.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. A lot of this particular subpart, Subpart 3, that you’ve indicated you’d like us to focus on is related to the mechanics of the consumer trust arrangements. I want to refer now to clause 45, which hasn’t been referred to yet. This is the content of a trust deed for a consumer trust. I guess, when we think about what’s in a trust deed, this can be fairly mundane from time to time, but it is still really important, the contents of the trust deed. I’m assuming from this—I mean, there’s lots of legislation around that basically outlines what needs to be contained within a deed or other documents, and the Minister of Local Government hasn’t quite responded to the foundation documents question yet, either. But I’m assuming that this is not a simple sort of lift and shift from another piece of legislation—that this is a list of criteria or inclusions or considerations that is, basically, bespoke, because there has been some changes around the way in which conflicts of interest will be declared and pecuniary interests and the like.

My question for the Minister is: in preparing the list of items that must be in a trust deed—because the bill says that the trust “must” ensure that the deed provides for the following matters—why has the Government not mandated for a stronger level of public engagement requirements in the trust deed? That’s the first question for the Minister. What’s lacking in that list is the ability for the consumer trust to turn their minds in an active way to how they would engage with the public about their activities. I think that’s a very keen sort of inclusion, because we are talking about the provision of water services that have a direct impact on communities. Where is the sort of mandate around a stronger level of public engagement within the trust deed?

Flowing on from that, of course, is the requirement for any trust deed to reflect the diverse nature of communities. I invite the Minister to point out where in that particular clause is the requirement for the deed to have consideration of communities, because if we think about the fact that all of the different councils around New Zealand will be representative of different communities—in some populations, it will be a largely rural community; in others, it will be fairly urban; in others, it will be a provincial sort of mix of both worlds. Where in the trust deed is there a place for that? Maybe the Minister doesn’t believe that that should sit there. If not, then where in the scheme of things should there be a requirement to address those considerations?

The other one that I want to touch on is related to clause 51, and this relates to the financial statements and the audits. Now, there has been some change to this clause within the bill. It originally did have a specific reference to practice related to the Financial Reporting Act 2013. That’s been removed. The point that I want to identify and the question I want to put to the Minister is—in a circumstance where a trustee of the trust wilfully, basically, doesn’t comply with subclause (1), which is around the auditing nature of things, there is a specified consequence, and it is a convictable consequence, which is a fine of not exceeding $200,000. Now, in select committee, we come up against this all the time, right, where there is an offence that’s been generated, and then the penalty provisions are either drawn from another statute or there is some comparative with another statute to ensure that it’s like-for-like and similar. My question for the Minister is: that penalty provision—where has that come from? Is it consistent with other similar offending? It might be that it comes from a similar Act, but I’d be interested in a response to that.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. I also just want to say that we really appreciate the Chair’s guidance around when to move to the next subpart, and just want to signal here, Madam Chair, that I have one very small question for Subpart 3, and after this I will be moving on to Subpart 4.

CHAIRPERSON (Barbara Kuriger): Thank you.

Dr LAWRENCE XU-NAN: In terms of Subpart 3, the one question I have is to do with clause 38, “Limited role of water organisation”. I want to check with the Minister that in this case, water organisations “must not do anything”. Those are absolute terms. One of the things that I’m curious about is why there wasn’t a provision at least in place that allows clause 38 to be subjected to clauses 55 to 58 around exemptions, because in clauses 55 to 58 it does allow for exemptions, and there is a suite of process and also criteria that a water organisation, for example, must meet before being eligible for such exemption. So I just want to check with the Minister—was there any consideration to include something like that in clause 38 so that in that way, clause 38 isn’t in absolute terms?

CHAIRPERSON (Barbara Kuriger): Lan Pham—I just would note, having watched the previous Chairperson and appreciating Mr Xu-Nan’s comments, I do feel like it’s time now to move on to Subpart 4. Thank you. Is there a quick question about Subpart 3?

Lan Pham: I’ve just got a quick question about consideration of my amendment—

CHAIRPERSON (Barbara Kuriger): OK, we’ll make this the last question on Subpart 3 and then we’ll move on to Subpart 4.

LAN PHAM (Green): Thank you, Madam Chair. My suggested amendment—which I’ll get straight to—is to delete clause 55. It was really great to hear the Minister of Local Government assure us that there is, essentially, an avoidance of doubt clause which actually prohibits against risk of privatisation. I’m suggesting we take that one step further in deleting clause 55(5), and this relates to the exemptions. We had some really clear submissions, particularly from the grouping of Wellington councils and their mana whenua partners. Tauranga City Council also recommended the deletion of this clause, because they saw it as the potential for a water organisation to be a cooperative company and that this could be a possible avenue for privatisation. We also had Ngā Waihua o Paerangi and Ngāti Haua Iwi Trust noting their concerns with this, and also the Institute of Directors, who considered that councils should not be able to seek an exemption to the requirement that trustees have no other roles and responsibilities in relation to the water organisation.

My suggested amendment to further ensure that these water entities are protected from possible avenues of privatisation is to delete clause 55, and I’d like to hear that being considered. Thank you.

Hon SIMON WATTS (Minister of Local Government): I thank the member for the question. Exemptions from clause 38 are provided for in clause 55(3). That’s the reason why clause 55 is in place—there was a prior question in regards to clause 38. In regards to the question on clause 45 around consumer trusts and how they deal with consumer engagement, clause 45 requires that a trustee sets out how trustees will engage with consumers, and the ultimate accountability that is in place for consumer trust is consumer trust elections, and that ensures that the accountability mechanism is in place.

CHAIRPERSON (Barbara Kuriger): I’m just going to now indicate that we’re moving on to Subpart 4, so that’s clause 58A through to 58H.

Hon Dr DEBORAH RUSSELL (Labour): Thank you, Madam Chair. This is actually a really interesting part of this bill, because what it does is it provides a capacity—in fact, a requirement—for territorial authorities to actually assess the work that the water provider is doing in terms of testing the quality of the water that’s supplied and making sure that all the systems are working as specified.

I don’t have a great deal to add in terms of the assessment of drinking water—no particular questions around that, because some of that is so self-evident, but also that’s obviously very much a response to the disasters of the past.

What I want to focus on—I’ll leave that drinking water to some other people who do know more about this. I just want to look at clause 58D and, in particular, the assessment of communities’ stormwater and waste-water services. I’m sure we’re all aware of the huge amounts of rain that have been falling across this country in the last few days. It’s been falling again up in my rohe in Auckland, around West Auckland. We’ll all remember—

Steve Abel: Our rohe.

Hon Dr DEBORAH RUSSELL: Our—yep, our rohe. Yes, very much so, ours. The disaster of the—

Steve Abel: We’re not claiming mana whenua status, by the way.

Hon Dr DEBORAH RUSSELL: No, not at all. We all remember the disaster of the Auckland Anniversary floods—all right. Now, around the stormwater, in clause 58D(1) it says, “A territorial authority must assess the provision within its district of (a) stormwater services;” and then in clause 58D(2), “The purpose of an assessment is to assess, from a public health perspective, the [provision] of stormwater services”.

Now, obviously, we want to assess the provision of stormwater services, I would hope, from, obviously, the threat to life—I suppose we can call that a public health perspective, but it’s kind of a little bit of an odd way to put it. I would have thought the threat to life is worthy of thinking about in itself. In terms of a public health perspective—again, we think of assessing stormwater services in relation to the possible damage to property, a really known problem, but I just want to hear what the perspective is around that public health perspective. Does that sort of comprehend a broad understanding of public health? Are we talking about the impact on people’s mental health if the stormwater provisions aren’t adequate? We know up in our area that children out at Pīhā and in Karekare have nightmares when it rains. Is that the sort of thing that is intended within that public health perspective?

I just wonder if the Minister of Local Government could talk a little bit about what is intended from that public health perspective, aside from the obvious dangers to life and limb. Are we talking about things like potential disease but also some of the mental health aspects that go along with, well, inadequate stormwater protection? A little around that would be very helpful.

STEVE ABEL (Green): Thank you, Madam Chair. This is a very important part, Subpart 4—I’m on clause 58A and specifically 58B, actually. Clause 58A speaks to the definitions in relation to water services. We have “significant problem or potential problem”: “(a) a drinking water supplier has persistently failed to comply with the requirements of the Services Act 202; or (b) there is a risk to public health from the supply provided by a drinking water supplier;”. If we cross the page to clause 58B, “Assessment of communities’ access to drinking water”, this is all around the obligation of a territorial authority to inform itself about the access that each community in its district has to drinking water services by undertaking an assessment of drinking water. If we go further down, that includes subclause (2)(d)(ii)—that’s line 19, I guess: “any reasonably foreseeable risks to the community’s access to drinking water services in the future;”. Then, further down, at paragraph (f): “identify and assess any public health risks related to the drinking water services supplied to the community”—there will be a logic to why I’m pointing out all these points in a moment. Then to paragraph (g)(i): “assess the consequences if the community loses access to drinking water services in the future, or is provided with drinking water services that are deficient in any way, including the implications for the community’s public health”.

The risk to the community’s public health is a highly pertinent question. The obligations a water authority is required to meet are set by things such as the maximum acceptable value of certain contaminants. The most pertinent topical one of the day is nitrate right now, because, literally, Gore has just been told—a city of 8,000 people—that it needs to not drink its water about 10 days ago because it exceeded the maximum acceptable value. That is a risk for blue baby syndrome. There’s also other emerging risks for chronic exposure to bowel cancer, and pre-term birth is a risk at 5 milligrams—significantly lower than the maximum acceptable value. But I specifically asked, in the last week, the Gore council what their obligation was to inform their residents of the health risks of nitrate at 7 milligrams per litre, which is what it’s currently sitting at on average. Which is to say it falls below the maximum acceptable value, but it is above emerging evidence of health risks, namely a Californian study from 2021 that shows that at 5 milligrams, there is a 47 percent increase in the risk of pre-term birth for pregnant people who are consuming nitrate at that level.

My question is: does the water provider have any obligation in its responsibility to provide drinking water services—that impact a community’s public health? Does it have any obligation to give advice to that community on the health implications of contaminants such as nitrate, or does it simply have to meet the maximum acceptable value? Would it, for instance, Minister, be acceptable, under these clauses and definitions, for that council to advise the public that the water was perfectly safe to drink, even though there is scientific evidence and peer-reviewed literature that’s showing that it is not perfectly safe to drink, in the instance of Gore at 7 milligrams?

My other point I would like to ask, which is totally related to that, is that where, as in the case of Gore, it’s very obvious the source of the nitrate—the nitrate contamination is an ongoing problem in that city. I know, from having been there and tested the water myself in a previous role, that the nitrate has been steadily rising over the course of—[Time expired]

Hon SIMON WATTS (Minister of Local Government): The member’s points are out of the scope of this bill because they relate to the fact that water service providers’ obligations are to comply with the water quality regulations. So all of that lovely stuff and conversation is very nice but it’s not relevant to this provision because the regulations in terms of water quality are outlined under the requirements for the water services regulator.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. I’d like to turn to proposed clause 58F. Some colleagues have touched on the proceeding clauses around what information is to be made available for the assessment of services and the like. This clause is very specific, and it relates to the possible transfer or the closure of small water services. That’s the first question for the Minister of Local Government—the definition of a “small water service”—because when one looks at the interpretation clause, there is no definition that I can see for a “small water service”. What Subpart 4, helpfully, does, actually, is it identifies, for the purposes of this subpart, definitions in there, and likewise there is no definition for a “small water service”. So I’d like to understand what that actually looks like in terms of how many numbers we are talking about there.

When we look at 58F(1)(b), this is the trigger, really—that there is a service that has been operated by a provider but that it is no longer appropriate to maintain. The question for the Minister is: what leads to that inappropriateness? The proceeding clauses are talking about circumstances where a problem has perhaps been identified—I don’t think that’s what is meant by it’s “no longer appropriate to maintain.”, let alone operate. Are we talking about the fact that it has already been decommissioned or the infrastructure is in a state in which it is not able to be operated or is non-functional? I’m just interested in what that actually means.

The rest of that particular clause talks about, basically, leading up to what is a vote or a binding referendum for ratepayers in that particular community. Now, there is a requirement helpfully outlined that talks about the provider—you know, there’s certain things. The number of folk—and it might be that the fewer than 200 is the trigger for a small provider; I don’t know. I can’t see it defined there. But there is a requirement for the provider to consult with the Medical Officer of Health. Now, in the proceeding clauses, the nature of what individuals need to be consulted on for assessment purposes is outlined. Here there is no description or definition around what it is that the Medical Officer of Health is seeking to be consulted on. Now, we know and councils know that when it comes to district licensing committees, they’re provided with an opportunity as a statutory officer to provide a view on that. What is it that the Medical Officer of Health is to be providing, in that particular sense? It’s appropriate that there is a role there, but it would be interesting to understand what that is.

Once that information has been provided, when we go to subclause 3(d)(ii), it talks about—I assume for the purposes of the referendum—making all of this information publicly available. Now, that’s all good and well. However, it talks about it being made publicly available in a balanced and timely manner. Now, timely manner, we can probably understand that, but what is this “balanced” perspective? When it comes to Medical Officer of Health considerations and information, balance from one community to another could be very, very different, so I’m interested in what guides that balanced approach. Timely, we can understand—that is, effectively, a time frame. Is it just the provision of all the information; if so, why is that not stipulated here in the clause?

The other thing—just finally on this, Minister—is the trigger points for change. In clause 58F(3)(f)(i) and (ii), it talks about the 75 percent threshold for, effectively, shutting down the provision of the service, whereas the transfer is 50 percent. Why the different thresholds between the two—75 percent for closing the provision or getting rid of the service, and 50 percent for retaining but transferring it across to another provider?

Hon SIMON WATTS (Minister of Local Government): Clause 58F(3)(a) refers to a number of 200 persons to provide an indication of 200 or fewer, which is the point that the member’s potentially getting to, into the context around what is seen as small. There is no subsequent definition of what is small, but the context around 200 provides some guidance. Paragraph (f) provides the belts and braces around the referendum that needs to apply if this decision is proceeded. As you can see, it’s a pretty comprehensive mechanism in order to provide protections around this. I’ve already answered this question in prior responses in regards to points (b), (c), and (d). Again, I’m now repeating.

CHAIRPERSON (Barbara Kuriger): I call the Hon Dr Deborah Russell. I want the questions to home in now rather than being speeches, because we’ve spent a bit of time now on subclause (4).

Hon Dr DEBORAH RUSSELL (Labour): I’ve got a couple of questions to ask here. The first is around this 200 or fewer persons. Now, I’m contemplating a scenario where there are 200 people in an area and then someone has a baby and suddenly makes it to 201. It is curious, because we’re talking about the number of persons, not the number of connections. What I want to understand here is—I guess there must have been a little bit of advice around this, as to what were taken to be small organisations and the number of people, not connections, who are normally part of a small water services organisation. There must be a flex point where you go, “Yeah, there’s too many people here.” Why 200? Why not 150? Why not 300? Did officials do some survey work to have a look at what might be called small water services and do some work and find out that, actually, 200 was a kind of reasonably good demarcation between small and not so small, or was it just a number dragged out of the air? I’d just like to see a little bit of the background around that. I’m hoping that there aren’t too many water services on the margin, because we wouldn’t want that. We’d want them to be clearly small or clearly big. So that’s the first question there.

The other question is around the referendum. It talks about eligible voters, and that’s got me a little bit more worried. Voting eligibility in this country goes on permanent residence and citizenship and age. The citizenship and age is fairly straightforward, but, you know, people who aren’t permanent residents but are nevertheless perhaps paying rent are affected by a water service closure but wouldn’t necessarily then have a say in whether or not the water services were going to continue to the property that they were in—even the people who can own might be able to do that. So there’s a little bit of a worry there, because this is talking about the provision of a service that everyone needs, but some people, because we’re going on eligible voters, might be excluded from a say in whether or not the water service to their home continues.

There’s a little bit of a further point here as well. We’ve done it in terms of persons, but we can contemplate that some large households might only have one vote for the household, or two votes for the household—you can imagine a family with a number of children, whereas some households might have, say, an older couple, maybe in farming—well, maybe not farming but in a small community where they may have a tenant. They might end up with more votes per property. So I just want the Minister to give me a little bit of the thinking around that—around how we could determine the eligibility for voting based on need rather than in the electoral voting, as it’s a slightly different matter. I get it in terms of who gets to vote for elected officials and things like that, but this is a referendum around whether or not a service is provided, and it’s a slightly different matter. Again, there must be some thinking in behind this. I’d be interested to hear it.

Hon SIMON WATTS (Minister of Local Government): Yes, so the member has asked for clarification of where the 200 number comes from. Clause 58F is actually taken from the Local Government Act. The number of 200 is actually used in other aspects of legislation, including health legislation, in the context of quantification around that size. That’s the precedent. A reminder: while this is a long and complex bill, it has been through a full select committee process, and these types of detailed questions have been covered extensively through those conversations. I am repeating a lot of that just because it’s big. There has been a full process on that.

CHAIRPERSON (Barbara Kuriger): I’m going to allow the opportunity to ask some questions on Subpart 5. Steve Abel—have you got a question on Subpart 5?

STEVE ABEL (Green): May I have one very quick one on Subpart 4?

CHAIRPERSON (Barbara Kuriger): It’ll have to be only, like, that big—only because I saw you have a go before, OK?

STEVE ABEL: Well, it’s on the same question. Because the authority is required to provide safe drinking water, right, in accordance with the water services authority Taumata Arowai, does a regional authority, in its duty of providing safe drinking water as part of its obligation, and consistent with clause 16 in terms of its financial duty, have any recourse to seek compensation from an industry or a party that is diminishing its ability to provide safe drinking water—i.e., through contaminating the drinking water? If the provider knows the source of a contaminant and its duty is to provide for the public, does it have an ability to seek compensation from the entity that is causing the contamination?

There’s a very specific instance of this. I know, in Gore, they’ve, literally, just spent money to drill a bore so they can pump water from the Mataura River into the water supply to dilute it so that the nitrate is below the maximum allowable value. They’re spending public money to fix a contamination problem. Can they seek compensation from the entity that is causing the contamination?

CHAIRPERSON (Barbara Kuriger): I’m moving, now, on to Subpart 5.

Hon Dr DEBORAH RUSSELL (Labour): Exactly where I’m going, Madam Chair.

CHAIRPERSON (Barbara Kuriger): Thank you.

Hon Dr DEBORAH RUSSELL: Madam Chair, first of all, I want to thank you for alerting us to Subpart 5. We’ve been working from the bill as it came from the Finance and Expenditure Committee, and, of course, Subpart 5 is in the Minister of Local Government’s Amendment Paper.

CHAIRPERSON (Barbara Kuriger): I’m sure previous speakers have been alerted to the subparts, because I’ve heard that comment already, yeah.

Hon Dr DEBORAH RUSSELL: Well, news to me, Madam Chair, but I’m very grateful to you.

Look, a very simple question for the Minister, because we’ve only just sort of gone “Oh my goodness!”—was this transferred from another part of the bill? I know we discussed these water services delivery plans in select committee. It must have been sitting somewhere else in the bill. If the Minister could just guide us to where this was originally in the bill—if it’s been transferred in. If it’s completely new, obviously we need to examine it, but I don’t think it is. Can someone advise us as to where this came from in the bill?

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair—and, sorry, I thought the body language of the Minister sort of indicated that he was poised to respond to that, which is why—

CHAIRPERSON (Barbara Kuriger): That was my hesitation, yes.

TANGI UTIKERE: Yes—across the Chamber. In the absence of confirmation from the Minister that this is a simple transfer from elsewhere in the bill, I want to turn to what is proposed to be clause 58L, “Water services delivery plans: adoption and consultation”, and this is set out on Amendment Paper 346 in the name of the Minister.

We’re working through a process throughout this country at the moment where the water delivery plan is basically with the Government before 3 September, and that might be why in clause 58J(2) we are seeing this, because it has the date “3 September” but it will be in 2030. I’m interested to hear from the Minister about that.

But I want to just look at clause 58L, which is the adoption and consultation of the water services delivery plan. Now, it talks about the fact that the local territorial authority, basically, needs to adopt this plan by a resolution. The interesting thing, of course, is that we’ve just talked about and asked questions about a binding referendum outcome that has a 50 percent trigger and a 75 percent trigger for certain things. To ensure that there is community-level support by way of elected members around local council decision-making tables, was there any thought around ensuring that there was a particular threshold that would need to be surpassed when the council, basically, passed that resolution?

It’s not unheard of to have a particular higher threshold for certain decisions to be taken. Those that do have local government experience will know that often they are for things like setting aside the standing orders of a committee or thereabouts. So my question to the Minister is: given that this is about the way in which water services in a community are to be delivered, and there will be lots of discussion and perhaps concern around that as communities think about what the financial implication around that is—and we hear that a lot at the moment as rates are going up as a result of the Government’s unfunded mandates and expectations on to councils—was there any thought about having a different threshold around the adoption of a water services delivery plan, even if it was at 75 percent? This is to ensure that there is community buy-in around this. That is the first question for the Minister.

Hon SIMON WATTS (Minister of Local Government): Yeah, in regards to the clause reference—so, as the member will see on page 81, in the little small font under Subpart 4, there’s a little number there which refers to the Local Government Act reference. I know the member’s read the bill, but just helping him again to identify clause 131 as referring to the aspect in regards to the 200 number that I answered before.

DAN BIDOIS (National—Northcote): I move, That debate on this question now close.

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

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Motion agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Minister’s tabled amendment to Amendment Paper 346, to replace clause 7(5), be agreed to.

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

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Amendment to the amendment agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Minister’s amendments to Part 2, set out on Amendment Paper 346, as amended, be agreed to.

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

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Amendments, as amended, agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Tangi Utikere’s amendment to clause 9(1), set out on Amendment Paper 337, be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Tangi Utikere’s amendment to clause 15(1), set out on Amendment Paper 338, be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Lan Pham’s tabled amendment to clause 15(1)(a), to insert new subparagraphs (i) and (ii), be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 15(1)(a), to insert new subparagraph (ii) regarding Te Mana o te Wai, be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 15(1)(a), to insert new subparagraph (ii) requiring water services to be safe and accessible, be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 15(1)(b)(i) be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 15(1)(b)(ii) be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 15(1)(c)(ii) be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Lan Pham’s tabled amendments to clause 16 be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Noes 68

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

Amendments not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Tangi Utikere’s amendment to clause 17(2), set out on Amendment Paper 339, be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Tangi Utikere’s amendment to clause 18(1), set out on Amendment Paper 340, be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Tangi Utikere’s amendment to clause 18(1), set out on Amendment Paper 341, be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Lan Pham’s tabled amendments to clause 21 be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Noes 68

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

Amendments not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that Tākuta Ferris’ tabled amendment to clause 24(1A) be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 24(2), to insert paragraph (c), be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Lan Pham’s tabled amendment to clause 26 be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 36(1) be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 36(3) be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 36(3A) be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Lan Pham’s tabled amendment to clause 37, to insert new subclause (2A), be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

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 Tākuta Ferris’ tabled amendment to clause 40, to replace subclause (3), be agreed to.

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

Ayes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): Lan Pham’s tabled amendment to delete clause 55(5) is out of order as being inconsistent with a previous decision of the committee.

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

Ayes 68

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

Noes 54

New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 5.

Part 2, as amended, agreed to.

Part 3 Provision of water services: operational matters

CHAIRPERSON (Barbara Kuriger): Members, we now come to the debate on Part 3, which is the debate on clauses 59 to 178A: the “Provision of water services: operational matters”. The question is that Part 3 stand part.

Hon SIMON WATTS (Minister of Local Government): Thank you very much, Madam Chair. We’re now over four hours into a six-part bill and we’re at Part 3. I am looking forward to some good questions but concise, taking account that this bill has been through a full select committee process.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair, and I thank the Minister for that contribution. It’s interesting, because we’ve heard now a number of times that the Minister said this has gone through a full select committee process—

Hon Simon Watts: Because it has.

TANGI UTIKERE: And it has—the Minister’s right; it has. Actually, we had to go through and extend it a little bit further because of the complexities in the regulatory approaches of this bill. That was the opportunity for the community and others to have their say. Just because something’s gone through a full select committee process doesn’t mean that we need to short-tail this particular opportunity for all members of the House who may not have been part of that select committee process to have their say. It’s also an opportunity for us to scrutinise, for example, the amendments that the Minister seeks to address. So I do hope that the Minister will continue to engage in relation to the questions.

What we are finding, of course, though, is that some of the questions have gone unanswered, including the one about why we suddenly had this new Subpart 5 appear in the Minister’s own Amendment Paper. Now, I know he’s the Minister of Revenue—we know he can count. The simple answer to that is now clear in this particular part—that it was in this part and now it’s in the other. So, you know, let’s not trifle, Minister, with the suggestion that it’s been through a full select committee process. It’s also—

Ryan Hamilton: Question?

TANGI UTIKERE: —an opportunity for you to—well, yes, I’ve got a question for the Minister. My question is: why didn’t he simply say that Subpart 5 has been replaced from this section and you can find it in the other? He had plenty of opportunity to do that.

Now, Part 3 relates to the operational matters for the provision of water services. The approach from Labour members will be to stick specifically to the subparts. Madam Chair, you’ve been very helpful in assisting the committee in terms of identifying that.

CHAIRPERSON (Maureen Pugh): Moving right along.

TANGI UTIKERE: Thank you very much—very helpful, as always. I want to identify clause 59A, and this is the “Purpose of subpart”, before we get into the sort of subpart proper. My question to the Minister around this is that this, here, talks about the ability to charge for providing water services and that they can’t provide charges—they can’t charge unless it’s provided for in this particular section. My question to the Minister is how, again, he reconciles the purpose of fairness, in terms of the overarching purpose of this bill, with the risk—that will be a real risk—of affordability or, more specifically, unaffordability for not just low-income households but for households all around the country. So my question for the Minister is the provision of charges, which this will enable and allow, provided that criteria is met—how he reconciles that with what will be an inability for households around the country to be able to meet those particular charges and that particular need, as well.

I want to have a look at clause 60, and this is about the fact that the organisation may set charges and they can do so for all three waters, and it also includes the trade-waste services opportunity that’s there. There aren’t really any limitations or expectations that have been imposed by the provision of this particular clause. The question I have for the Minister is: where in the bill, Minister, is the potential around safeguards to ensure that there is not an inequitable level of charging that would flow from the organisation? On the one hand, this empowers or permits the organisations to levy a charge against households. The question I have is: where is the provision in there that basically acts as a safeguard to ensure that there is some control, to ensure that there isn’t an excessive level of charges being charged?

Now, the Minister does have some powers in terms of the legislation that he’s already referred to previously. I’m not talking about that in relation to these. I’m talking about where in the bill is there this provision? This is the part that authorises the levy, but where is the ability for the Minister to intervene, or is that not a concern that he believes is justified—that there will be inequities across households, whether they’re low-, medium-income households, that will not have an ability to meet the affordability frame of this particular clause?

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. I’m also interested in clause 59A, the “Purpose of subpart”, so: “The purpose of this subpart is to provide water organisations with the ability to charge for providing water services”. We’ve heard, just in that last contribution, about this question around equity. What I’m still interested in and looking for from the Minister is a clear explanation about the difference and the use of the phrases throughout the legislation, including in this Part 3, of “water organisations”, which is a defined term, as opposed to a “water services provider”, also a defined term—defined in an earlier part of the bill. It’s relevant here, because why is it that this subpart is just about water organisations and not water service providers?

Linked to that is just the role of where the territorial authority and other councils sit within these definitions, because over the page at clause 65, on page 91, a water organisation and territorial authority must not both charge for a water service. I understand that heading—that makes sense—but wouldn’t a territorial authority be a water services provider if it wasn’t a water organisation, and why, then, is the term “territorial authority” used rather than “a water services provider”? I’m asking the Minister to be clear in the legislation about why these terms are used and how the two sets of terms interact together, given that there is that overlap.

Noting, going back to clause 59A, that it’s talking about that “The purpose of this subpart is to provide water organisations”—the defined term—“with the ability to charge for providing water services”. Then, of course, “water services” is a defined term and different from “water services provider”, which is the defined term, but here we have it providing water services.

I know that the Parliamentary Counsel Office will have used those terms for specific reasons, and my question to the Minister, as we get into the depths of the bill, is: can he explain why, and where will we see that throughout the rest of the bill, as well? Thank you, Madam Chair.

Hon SIMON WATTS (Minister of Local Government): In regards to questions on clauses 59 and 60 and specific questions around ministerial intervention powers, the ministerial intervention powers are outlined as part of the Local Government Act, not this bill, so it’s not in scope in the context of the question for this part of the bill. However, the elements, in addition to ministerial intervention powers, also include the fact that under this model, there will be economic regulation, and the economic regulator also has mechanisms and powers to intervene.

In regards to the points around fair pricing and the equities and challenges in regards to charges for those individuals and their means to pay, one of the key elements of economic regulation is that assurance that the prices charged for water are fair prices in the context of the costs incurred in order to provide those services. That, again, is a regulated area of the reforms. There are plenty of belts and braces in the context of protections around ensuring that the prices of water, through this mechanism, are appropriate, and when there are cases of hardship, then there are mechanisms in front of that.

In regards to the questions around defined terms, again, this was discussed at length through the select committee process.

Hon JULIE ANNE GENTER (Green—Rongotai): Thank you, Madam Chair, sorry to interrupt the Hon Rachel Brooking.

I wanted to direct my questions to this whole subpart, but particularly around a subclause, so clause 61(3): “A water organisation must not collect a charge for stormwater services from a corridor manager.” We have real concerns about this, because, ultimately, we’ve got all these different—we’re trying to set up a kind of user-pays approach, right? I mean, that’s my understanding of this system—is we’re transitioning away from a sort of, like, general charges linked to rates and rateable value, to more direct charging of people who are putting costs onto our different water networks, or taking water out. Stormwater, in particular, is very, very influenced by urban development; it’s influenced by transport infrastructure. If we want to get better outcomes, there’s huge opportunities to get much better outcomes for our community.

Here, the users of water—whether it’s drinking water, waste water, stormwater—are all expected to be charged for it. But we’re saying that the Government is completely exempting corridor managers, and I’m wondering—so that’s for ongoing costs, but at the point at which we’re making decisions about which infrastructure to build and how to build it, it would make a lot of sense, I would think, if the people providing and managing the corridor were thinking about minimising stormwater costs at the time of design of the project.

Last year, I attended the World Green Infrastructure Congress in Auckland, and there’ve been developments right around the world where they’re calling for a greener approach to infrastructure that can massively reduce the cost on our stormwater system. Yet if we’re excluding the ability of water organisations to charge for stormwater collection services from corridor managers, where is the incentive for the people designing and building the infrastructure to reduce the runoff of stormwater and the costs on the system? Who has the ability to require the infrastructure designer and provider to use low-impact development, for example, which would reduce the cost on the reticulated system but would also have a whole lot of co-benefits in terms of water quality, nature, and amenity in the area?

Back when we had those horrific floods—which are becoming very, very common now up in Auckland—there was a big emphasis on sponge cities. I’m just wondering, through this provision, if we’re not allowing for direct charging, who has the responsibility? A water organisation, presumably, is not going to have the ability to regulate the New Zealand Transport Agency or councils in terms of their infrastructure, or a private developer in terms of their infrastructure design. If you’re relying on direct user-charges but we’re excluding the ability of transport corridor managers to be charged, where is the incentive going to come from for the corridor manager to minimise the impact on the stormwater system?

This was one of the reasons why the Green Party, even back when the last Government was looking at three waters, was advocating for councils to retain stormwater, because there’s such a connection between urban development, transport, and stormwater. There’s a huge opportunity to mitigate costs and get better outcomes by doing things differently. But in order for us to do so, we need to have those costs be more direct. Now that it is potentially sitting with a water organisation, whether that’s a council or someone else they’ve put it down to, I’m just wondering about this clause 61(3) and why transport corridor managers have been excluded.

If the Minister could comment on that and what he sees—I mean, obviously, with the amendment that was just dropped, there are a whole lot of, like, technical tidy-up changes to the bill, but is there anywhere providing for incentives for green infrastructure, particularly the management of stormwater in this bill?

Hon SIMON WATTS (Minister of Local Government): I thank the member for the question and agree in principle, because the points that the member’s making in regards to whether stormwater is, in effect, in or out are absolutely areas that I’m having flashbacks now of discussing in prior lives. That is the point of why we have given, under this structure, the choice around how that works. Auckland’s a good example, right? We’ve got Healthy Waters, which sits outside of Watercare. In effect, Watercare is a water services entity, but stormwater sits outside that. It works in that context, but in other parts of the country that’s not applicable.

The choice around where stormwater sits is a determination for local communities, and there are examples of where it’s included within an entity and where it’s not. Our view is that that’s the most optimal way to deal with this, because of the reality of how stormwater is so heavily integrated, particularly in an urban setting in regards to the way in which you’ve got parks and reserves and other multi-purpose venues. Again, horses for courses, but that’s the way in which the flexibility of the bill allows for different circumstances.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you. Remaining on this topic about clause 61(3) and the transport corridor being exempt from a charge, the Minister, just in his response to the Hon Julie Anne Genter, said that it’s up to the local community to choose how they deal with stormwater. I agree with both members, both Minister and member, that stormwater is a difficult issue to deal with.

What I’m interested to know is that some “transport corridor manager”—which is the phrase used—who cannot be charged are not councils, I’m presuming. If you go back to the definitions of “transport corridor manager”, there’s nothing in the definition section. “Transport corridor” relates to section 4 of the Utilities Access Act 2010, I think. Presumably—and I apologise; I haven’t looked up what that section says—a transport corridor manager could be the New Zealand Transport Agency (NZTA); it could be a council. My question is: could it be anybody else? I understand where it’s a council that the council’s obviously related in the service provider, as well, but what about when it is NZTA being a transport corridor manager, if that’s a possibility—why shouldn’t there be a collection of charge? Also, can a transport corridor manager be a private organisation? For instance, if you’re doing a large subdivision somewhere, and you might have private roads within that subdivision, does that make you a transport corridor manager and mean that there cannot be a charge for those stormwater services?

Going back to where it’s NZTA, was there any consideration of the exemption in Part 1 for the Crown around development contributions not being paid to the Crown—a consideration of this exemption being part of the earlier on provision about where the Act binds the Crown or not? So a couple of questions in that.

I note that I was out for the Part 2 debate. I was meeting with Beef + Lamb—I acknowledge Minister Hoggard, who’s also been meeting with them—and they were telling me as part of that conversation that it is a large annoyance to them. This was a specific example that they gave: you can do a whole lot of wetland protection, but then there’s a road and there’s a flooding event and there’s a stormwater runoff from the road and then they get blamed for it. There are real difficult issues around roads and stormwater.

I want to also make the point that the Minister, in his answer to my other question, was a non-answer. He said the select committee have traversed the issue of the phrases around water organisations and what it means, and the different phrasing in the bill. This opportunity that we have in the House, in the committee stage, is to get things into Hansard and to have things explained in a way that they are not in the select committee report. I wonder if the Minister understands the difference in those terms, if he continues to refuse to answer this question. I encourage the Minister to rethink his answers, where he just says, “Things were discussed at select committee”, and to use this opportunity to explain and to make his case, which will then be helpful for people who are coming to this very large bill and come across different clauses and wonder what it’s about.

Two questions there. One is around this transport corridor manager: who they are, can it be private bodies as well as the NZTA, and did he consider the role of them—and, presumably, it’s also councils. Secondly, if he can reconsider his answers that just refer back to the select committee. Thank you.

Hon SIMON WATTS (Minister of Local Government): In regards to questions around transport corridors, I refer the member Rachel Brooking to clause 176, which provides for the integrated management of that aspect. Each participant carries their own costs in regards to the way in which those components operate.

In regards to the other question, all I remember was the point around Beef + Lamb New Zealand. I was just thinking, coming up to lunchtime and five hours into this bill, how hungry I am and I was thinking of lamb chops, but I can’t make any other further comment in regards to that question.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. So the question was around—and maybe the Minister of Local Government answered it—could there be private roads that are considered? Also, where does the New Zealand Transport Agency (NZTA) fit with it, and if NZTA is a transport corridor manager, should there not be some ability to charge for the stormwater service so the farmers don’t get blamed?

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. I have two questions—well, two and a half questions—for the Minister. The first one is that the Minister has, just before, mentioned about water organisations having the choice. I’m looking at clause 61(3), which my colleague the Hon Julie Anne Genter has touched on before, but can I just check—clause 61(3) doesn’t allow there to be a choice, because the wording is “must not collect”, so can I just check with the Minister what he means by “choice”?

Also just in terms of this section around stormwater, one of the things we did see in terms of the submission—which then allowed for the amendment to include a definition of “stormwater service zone”—is to do with the fact that a lot of the things we are currently seeing regarding stormwater management is around man-made infrastructure such as piping etc. I think, with regard to this part but also in relation to what my colleague Hon Julie Anne Genter mentioned before, how does that give allowances for alternative and more natural than man-made considerations to stormwater management? That’s my first question around this.

My second question is around clause 60(3): “When setting a charge, the water organisation may determine—”. Now, going through the departmental report, there’s a number of considerations of things in terms of charges being assessed, due, collected, etc., but one of the things I haven’t noticed in this—and I wanted to check with the Minister if that has been an active consideration—is whether charges can be deferred. What we see, for example, in terms of council rates and the number of councils which allow the deferment of the payment of rates, particularly for senior citizens, for example—does this clause also give allowances to deferment, if that has been a consideration?

Those are my two questions. One of them is clarification on choice if the legislation—specifically clause 61(3)—specifically says “must not” and around broader considerations of natural versus man-made stormwater management, and then also in terms of deferment of rates.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. I note that the Minister of Local Government has talked about the amount of time that this seems to be taking, so my first question to the Minister: is he expecting that this will be done before 1 o’clock, or is he actually prepared to work through some of the issues that have been raised to identify the fact that households in this country would rather he focus on ensuring that they can actually meet these costs rather than what he’s going to have for lunch? That’s the first question.

The second question is around the modelling and whether or not there has been any modelling that has been done to assess the impact of what these provisions will mean for household budgets—is the first one there.

In terms of clause 61, clause 61 is about the additional requirements for setting the particular charges for stormwater services. The Minister has talked around the fact that there will be a fair process around some of these issues, and he’s also talked about how the ministerial intervention power is not contained in this bill; it’s in the Local Government Act. But how will the Government, when it looks at clause 61, ensure that stormwater charges are transparent and based on actual use that’s being received, or does he suggest that that’s actually something that doesn’t fall within the Government’s remit but needs to be dealt with by the various service providers that are stood up as a result of that?

Then I’m also interested, in the same clause, around what protections, if any, there are for ratepayers who find themselves in areas where there might be informal forms of infrastructure, or what could be described as legacy infrastructure, over many years as well.

I’d like to also touch on clause 62. This is about the serviceability charge, where a property is not connected to the network. I guess there’s a question there around whether that’s going to be—there is a risk there, depending on what councils opt for, as to whether there is some certainty and consistency being provided or whether there is going to be some variation, and whether the Minister is comfortable with that, as well. We all know that councils, under this reform, will adopt different approaches based on a handful of options, but when it comes to the serviceability charge, where does that, particularly, land itself or find itself?

The only other question that I have on clause 62 at this stage is again around the thresholds. We had asked questions previously around where a referendum had been held and the trigger point was 75 percent for one course of action and 50 percent for another course of action. When it relates to clause 62(3), where the property is 50 percent non-rateable land as specified, then the organisation can only set a charge that is 50 percent of it. Why is it 50 percent is the particular threshold there, whereas land might actually be non-rateable at a higher threshold? Is it then not fair to assume that a higher threshold of the charge would be applicable or not, or is it just that it’s a 50 percent mechanism and therefore 50 percent is easiest to pursue?

Hon SIMON WATTS (Minister of Local Government): In regards to questions on clause 62 and the member’s question to me asking am I comfortable with that, I am comfortable. The due process in regards to that, again, has been well considered by officials and input from the Finance and Expenditure Committee to enhance it. In regards to clause 62(3) and the percentage, I refer the member to that clause where it stipulates the Local Government (Rating) Act reference in regards to the proxy for that number, and that’s the basis for it.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. Moving on to clauses 70A and 70B—this is the waiver of water services charges. Clause 70A sets up that a water organisation may waive those charges, but it’s got to do so in accordance with its waiver policy. Then you look down and clause 70B is “Water organisation must adopt and publish waiver policy”. What I’m interested in is the criteria around that waiver policy, because I was expecting to see that in clause 70B, but instead we just see that a water organisation must prepare and adopt a policy for a water services charge or a penalty. When preparing that policy, they must use its significance and engagement policy to determine the amount of public consultation and the form of their consultation, and then it must make its waiver policy publicly available. What seems to be missing from this clause is that there are no criteria about why they might be waiving it.

We heard in an earlier contribution from my colleague Tangi Utikere about whether or not there have been any equity considerations. What are the types of criteria or circumstances that the Minister considers would be appropriate for a waiver of policy, and would they include issues such as the ability to pay, or that there are a large number of people in a household, or there is particular hardship? I think it would be useful for the Minister to explain what his expectations for a waiver policy are.

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. I’d like to turn now to clause 64. This is the ability or requirement for a water organisation to publish the list of charges. We’re already in a situation where the transfer has taken place. They’ve gone through a process of identifying what the various charges might be. One of the interesting things with this clause is that it, basically, identifies the fact that there is an accountability frame here—that water organisations will not just be expected but required to set out their full list of charges. Consumers are familiar with this. If they get an electricity bill or if they get a rates notice, these are always broken down.

I certainly support the public accountability sort of aspect of requiring these entities and organisations to publish the list and for that to be on a frequent sort of basis—so too with the requirement for the organisations, if they charge a particular fee or a rate and then a change follows, for them to go ahead and make the publicly available list known and that the charge has been changed. What I don’t see, though, in this particular section is reference to the consequence where organisations don’t actually do that.

Elsewhere in this bill, we have examples where there is an expectation and, if things don’t happen, there is a consequence. We saw that with the consumer trust bills, where someone is liable on conviction to a certain fine. The Minister didn’t address that at the time—OK, park that—but where is the consequence for an organisation who either fails to publish the list of charges or fails to follow up, in a reasonable time frame, to publish a list of charges or a change to a charge once the change has been authorised by the entity or the organisation?

There is nothing in this particular section, and I guess that lends itself to an argument about, “If there is nothing, should there be something?” Otherwise, effectively, on the one hand, the Government is saying they want to be publicly accountable and transparent—I totally accept that. I think that is a good move and would support that. But so too is the requirement that, if these entities don’t actually follow through with that—well, what is the consequence? What is the consequence?

I’d like to hear from the Minister: where is there a consequence, and if there isn’t—maybe it’s caught up in a catch-all, that if a certain provision of a section is not met, then this is the consequence or the penalty provision. But there is no penalty provision. And if not, how can the public have confidence in the ability for these organisations to actually follow through with that, to be transparent if there isn’t not just an obligation but a sanction that would be imposed if they were not to do so?

CELIA WADE-BROWN (Green): Thank you, Madam Chair. Tēnā koe. Tēnā koe e te Minita. I wanted to ask some questions about clause 109 and the Crown exemptions from development contributions. Earlier on, there was a reasonable amount of questioning and, in my view, some unhelpful answers talking about why central government chose not to fund, not to support, local government in the water services area. But in clause 109 it suggests that the Crown should be exempt from development contributions, so it sounds to me like the Minister of Local Government is expecting local government to subsidise central government. Development contributions are created for a reason, so that growth that requires new infrastructure pays for that infrastructure.

In particular, I find it egregious that Kāinga Ora—oh, it’s so nice to see te reo first—Homes and Communities should expect to pay. We’re expecting public housing, which then has to extract rental payments from often our most impoverished, is going to pay a development contribution, but if the Ministry for Regulation set up a brand-spanking-new office—let’s say maybe in Epsom, just to be convenient for commuting—they wouldn’t pay development contributions.

I would like the Minister to answer why the Crown, in its most supportive area, has to pay development contributions, but other parts of the Crown, which may be essential or may not be essential but are certainly not providing low-income housing, are expected to pay. I’d like to refer him to Taituarā, the local government management organisation, and also Infrastructure New Zealand and Water New Zealand and many councils—they submitted that the Crown should not be exempt from development contributions, and they wanted clause 109 to be deleted. They did not necessarily draw that distinction between the Crown as in Kāinga Ora and in other manifestations of the Crown. At least there should be an exemption that the Crown applies for in specific examples. Whangārei District Council has got a specific recommendation to change its clause so that instead of making the Crown exempt, their assessment criterion is on the impact of any development.

We do think that the equivalent regime, the Local Government Act, is out of date. It’s inconsistent with a partnership between central and local government. The local government Minister and the Minister for this bill may like to comment on whether this is consistent with his view of a partnership between central and local government. Thank you, Madam Chair.

Hon SIMON WATTS (Minister of Local Government): Thank you very much, members, for those questions. In regard to the questions around the consequences and ministerial intervention in clause 64, the consequences and the provisions for monitoring and ministerial intervention are included within the Local Government Act and not this Act, as mentioned on a few occasions already—so, out of scope, but that’s where the member can find that information.

In regard to clause 109 around the exemption portion noted there, this is basically a continuation of the status quo. Development contributions are being replaced by a new development levy mechanism—again, that I noted last evening—under the Going for Housing Growth policy.

Another question was asked in regard to—I didn’t get the clause number—the waiver policy. Basically, this is providing for local choice. It’s really up to the local water organisation and the shareholding council to determine the appropriate mechanisms as and when that waiver policy will be put into place.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, and thank you for answering my question about the waiver policy. I appreciate that it’s up to the council, then, or the water organisation. You touched on, last night—and you just touched on it then again—the changes to the development contributions from the primary legislation, being the Local Government Act (LGA), changing at some point in the future to development levies. A question, then, is: how does he foresee those changes impacting on all these provisions in this bill relating to development contributions?

I also query the lack of criteria for the waiver policy, which the Minister of Local Government just said is about choice, and note that in the development contributions—which is often a bigger amount of money than what a waiver would be; I acknowledge that. But what happens in the bill at clause 87 is the “Contents of development contributions policy”, and at subclause (1)(c) it refers to explain, “by reference to the considerations set out in section 101(3) of the LGA 2002 … why the water organisation has determined to use the funding sources referred to”.

Then if you go to section 101(3) of the LGA, it does then say, “The funding needs of the local authority must be met from those sources that the local authority determines to be appropriate, following consideration of, (a) in relation to each activity to be funded, (i) the community outcomes to which the activity primarily contributes; and (ii) the distribution of benefits between the community as a whole, any identifiable part of the community, and individuals; and (iii) the period [that] those benefits are expected to occur; and (iv) the extent to which the actions or inaction of particular individuals or a group contribute to the need to undertake the activity; and (v) the costs and benefits … for transparency”.

My point is: there you have some criteria in a statute that seem sensible and also give enough room for the local water organisation to work out how they’re going to do the development contribution under those criteria. So why not have criteria for the waiver policy and—and—include in those criteria the issues of equity that seem to be missing from everywhere in this bill?

Then, noting, as well, that this Government—and apologies if there are changes made to the Local Government Act by this bill later on—has said that it’s going to change the purpose of the Local Government Act to get rid of the four wellbeings. If you don’t have those wellbeings, will that constrain councils’ ability to consider equity issues under the waiver policy? Has he considered the interactions between the proposed changes to the Local Government Act and then how they’ll play out in this water services framework with these new entities that won’t have those wellbeings to fall back on to consider issues of equity, and is that, in fact, his point?

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

TANGI UTIKERE (Labour—Palmerston North): Thank you, Madam Chair. I’ve got some questions that relate to Subpart 2 in the development contributions space. In particular, I want to look at clause 81. This is about the development contributions agreements that would be entered into and what is, basically, a legislative requirement to share the information that’s been made available.

Now, this clause, as proposed, is quite—some significant change, a lot of it around the wording that’s to be used, as well. But this is only applicable where a water organisation seeks to adopt a policy for development contributions (DCs) under the provisions of this law. They do need to be able to request relevant information in order to assess DC levels, but there is a provision there around the information being made reasonably available. My question for the Government progressing this bill is really around how the Government intends that there will be a guarantee or an assurance that this information will be shared and made in a timely manner. What we’re hearing a lot from the Minister of Local Government is that there are provisions already contained in other legislation to guide this, whether it’s a carrot or a stick sort of approach. I do thank the Minister for his answers around that. He answered my question around what sort of consequence or penalty provision exists—very helpful, Minister. Thank you for identifying that.

My question is around how the Government intends to ensure that the data sharing or information sharing that’s provided is transparent but also that there is some accountability around that. If it’s the water services organisation seeking to gather that information and where they request it from, the current approach in many circumstances is that it requires a proactive release on the local territorial authority’s part or it’s in response to some other method like the Local Government Official Information and Meetings Act when it concerns the sector. So a question there around how the Government intends that that will be transparent, but also will there be a level of accountability around that as well?

When it concerns clause 83, and this is around—OK, all of that happens; now, what is going to be the consequential or the resultant limit on the policy for an authority around DCs or contributions of a financial nature? Again, what sort of approach is the Government thinking around ensuring that the timeliness of organisations to update that information, particularly councils, is going to be done in a timely way? There is nothing in here except to say that yes, they must amend it in order to remove duplication that exists because it’s contained within the water organisation’s DC policy. But is there, within that, sort of, suite of provisions, a requirement that there is going to be councils updating and sharing that promptly, accurately, and in a timely manner, and, if so, what sort of support will be available to councils as part of that transition process?

Hon SIMON WATTS (Minister of Local Government): Thank you, Madam Chair. In regards to clauses 81 and 83, the question is primarily seeking guidance around additional powers to ensure that the information disclosure components outlined in the bill actually do occur, and, if they don’t, what mechanisms are in place to ensure that they do. I’ve outlined already the ministerial intervention powers. In addition to that, as part of this, these entities will be subject to economic regulation by the Commerce Commission. The Commerce Commission, as the member will be aware, has a multitude of powers and mechanisms in order to ensure that information is provided in a manner that is appropriate. The ability for that independent organisation to achieve its means—it has a variety of tools within its toolkit to do that, both soft and hard, and it will consider those mechanisms as appropriate.

In addition to that, the reporting of this information in a public manner, including some of the work Government is doing in regards to reporting and increasing transparency and accountability of local government, are also other mechanisms. So there are a multitude of mechanisms in order to achieve the outcome, and protect and ensure that the outcome is achieved as the member is outlining.

CELIA WADE-BROWN (Green): Thank you, Madam Chair. I’m not convinced that the Minister of Local Government fully answered the question about why Kāinga Ora was the exception, and maybe he can be more fulsome in his answer there.

My question now is on clause 168A. We recently, through the Statutes Amendment Bill, had some discussion in the Governance and Administration Committee about when audiovisual and when audio links are appropriate. I note that under subsection (5), it says “For the purposes of, but without limiting, subsection (4)(d), the provider may allow any person to present their views to the territorial authority by way of audio link or audiovisual link.”

My question is: why be so equivocal? Why not say they “must” allow them? I mean, some people will want to come in in person—they find that more convincing, more convenient. In the Wairarapa electorate, it’s fairly thinly populated, people are often a long way away from the council office, and you usually get a five- or 10-minute opportunity to present. It is just not efficient nor inclusive, in my view, to say that it’s up to the provider to choose whether they should be able to do audio link or audiovisual link. Lan Pham has a tabled amendment to strengthen that. Why would he discourage a provider from having to make that provision?

In this day and age, it certainly won’t be the territorial authority that lacks the capacity for having audio link or audiovisual link. We certainly don’t have to worry, in this example, if it is audio only. Many rural properties have, unfortunately, less than stellar internet access, whereas—again, going back to the example in the Statutes Amendment Bill—it was quite clear that it needed to be audiovisual so you could be quite clear that somebody wasn’t being coerced. I don’t think anyone’s going to be coerced into making a submission to a territorial authority. So, quite happy that it’s audio link or audiovisual link, but not at all happy with them not being required to provide that.

DAN BIDOIS (National—Northcote): I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): I’m not going to put the question just yet, as long as there is new material coming through. The Hon Rachel Brooking.

Hon Simon Watts: Madam Chair, sorry.

CHAIRPERSON (Maureen Pugh): Sorry, I’d already called.

Hon Simon Watts: Oh, well, I was going to answer.

CHAIRPERSON (Maureen Pugh): OK, the Hon Simon Watts.

Hon SIMON WATTS (Minister of Local Government): Thank you for the opportunity. Clause 168A(5) actually enables the use of audio and audiovisual services. The precedent that may exist in the status quo is that that option is not, so it’s providing additional mechanisms. Again, it’s not one-size-fits-all, but that’s the purpose of that clause.

Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. I’d like to move on to Subpart 3 of Part 3. I know people might be on other subparts, but this is about “Water service networks: connections”. My questions are really around by-laws. Clause 110 is “Bylaws for purposes of connections”. Again, it might be useful for the Minister of Local Government to explain the different terms that are being used, that he says were well traversed in the Finance and Expenditure Committee—a select committee that I wasn’t on, and a select committee that doesn’t have Hansard recorded like this House does.

Why it’s relevant to this point is because a water services by-law can be made—this is a territorial authority making this by-law about connections—but then there’s a reference in subclause (1A) to a water services by-law being made under section 347. If you go to clause 347—and I acknowledge that it’s in a different part of the bill—it’s about water service providers making by-laws. So I’m interested in the relationship between the different by-laws and the water service providers. Also, the select committee seems to have amended quite a lot of this clause about the by-laws, and there’s a—and this isn’t a change—three-step approach about approval of concept plans, approval of engineering plans, and sign-off. Everything about this by-law, in this clause 101, seems to be about new connections. I’m wondering if there’s any provision for by-laws relating to existing connections that might need some sort of authorisation or some change, or is it only to new connections, and what happens if those triggers don’t need to exist—so if there is no resource consent, which comes up later?

I’m also wondering, given that water services connections are probably quite similar around the country, if there’s any desire from the Minister for a template by-law to be produced for those water service providers, or if they’re being encouraged to work together so that it was the same throughout the country, and where those differences might lie, but, again, how this by-law about the water services connection made by the territorial authority will link into those other by-laws made by the water services provider, and what the difference is.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. I just want to get a very quick clarification from the Minister first. In both Amendment Paper 346 and also in the original version from the select committee, would the Minister help clarify where does Subpart 5 start, because I can see that Subpart 4, “Accessing land to carry out water services infrastructure work”, starts at clause 115, but I can’t see a subheading for Subpart 5, and then we go to Subpart 6, “Trade waste discharges”, in clause 149. That’s just more of a formatting question for the Minister, if the Minister wouldn’t mind clarifying.

I think my section is related to Subpart 4, “Accessing land to carry out water services infrastructure work”, and I want to ask the Minister specifically about clauses 129 and 130. Now, the reason I want to focus on this area, which is around appeals relating to Māori-owned land—appeals both to the Māori Land Court and the Māori Appellate Court—is because this is one of the few sections in Part 3 that has a substantial change between Amendment Paper 346 and the version that came out of the select committee. In Amendment Paper 346, clause 129 has added subclauses (5) and (6). I want to focus on subclause (6) here, because in the previous version, when we’re looking at clause 129, it doesn’t specify in terms of the reviewer’s determination, but in this case, what we are looking at is a separation between when an owner of Māori land appeals and when the services provider appeals. I wanted to check with the Minister on the rationale on splitting those two.

Then, in clause 129(6), it gives very specific instructions on elements that the Māori Land Court may make orders on—

CHAIRPERSON (Maureen Pugh): I’m sorry to interrupt the member, but it is time to report progress.

House resumed.

CHAIRPERSON (Maureen Pugh): Madam Speaker, the committee has considered the Local Government (Water Services) Bill and reports that it has made progress on the bill. I move, That the report be adopted.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: This bill is set down for further consideration in committee next sitting day. The House stands adjourned until 2 p.m. today.

The House adjourned at 12.57 p.m. (Wednesday)