Tuesday, 9 September 2025
Volume 786
Sitting date: 9 September 2025
TUESDAY, 9 SEPTEMBER 2025
TUESDAY, 9 SEPTEMBER 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.
Resignations
Benjamin Doyle, Green Party of Aotearoa New Zealand
Benjamin Doyle
SPEAKER: I wish to advise the House that I have received a letter from, resigning their list seat in this House with effect at 11.59 p.m. on 3 October 2025.
Petitions, Papers, Select Committee Reports, and Introduction of Bills
Petitions, Papers, Select Committee Reports, and Introduction of Bills
SPEAKER: Two petitions have been delivered to the Clerk for presentation.
CLERK:
Petition of Dave Macpherson requesting that the House urge the Government to restore the Southerner Train as a regular public transport service
petition of Christopher Ingram requesting that the House urge the Ministry of Health to state on its website that anyone republishing, reproducing, or referring to its advice about low-risk standard alcohol drinks should do so in full.
SPEAKER: Those petitions stand referred to the Petitions Committee. Ministers have delivered five papers.
CLERK:
The Government response to a report of the Petitions Committee on the petition of Kevin Scott
the 2025 Annual Report for the Office of the Māori Trustee
statements of corporate intent for:
the New Zealand Institute for Bioeconomy Science Ltd, and
the New Zealand Institute for Earth Science Ltd
2025-26 statements of performance expectations for Fire and Emergency New Zealand.
SPEAKER: Those papers are published under the authority of the House. Eleven select committee reports have been delivered for presentation.
CLERK:
Report of the Economic Development, Science and Innovation Committee on the briefing on the upcoming reports of the Science System Advisory Group
report of the Finance and Expenditure Committee on the inquiry into banking competition
reports of the Justice Committee on the:
Crimes (Increased Penalties for Slavery Offences) Amendment Bill
Referendums Framework Bill, and
Term of Parliament (Enabling 4-year Term) Legislation Amendment Bill
report of the Māori Affairs Committee on the petition of Deborah Chappell
reports of the Petitions Committee on the:
petition of Miryam Denny
petition of Right to Life New Zealand Inc.
petition of Ross Hoole, and
petition of Social Justice Aotearoa
report of the Transport and Infrastructure Committee on the Land Transport Management (Time of Use Charging) Amendment Bill.
SPEAKER: The bills are set down for second reading. The briefings and inquiry are set down for consideration. The Clerk has been informed of the introduction of three bills.
CLERK:
Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill, introduction
Defence (Workforce) Amendment Bill, introduction
Local Government (Auckland Council) (Transport Governance) Amendment Bill, introduction.
SPEAKER: Those bills are set down for first reading.
Urgent Debates Declined
Appointments to the Employment Relations Authority—Comments by Minister
Reserve Bank—Resignation of Chair
SPEAKER: Members, I've received a letter from the Hon Jan Tinetti seeking to debate under Standing Order 399 comments by the Minister for Workplace Relations and Safety on appointments to the Employment Relations Authority. This is a particular case of recent occurrence for which there is ministerial responsibility. However, I do not think it reaches the level that warrants setting aside the business of the House today. The application is declined.
I've also received a letter from the Hon Barbara Edmonds seeking to debate under Standing Order 399 the resignation of the chair of the Reserve Bank. This is a particular case of recent occurrence for which there is ministerial responsibility. Not all resignations are debated and it is unusual to debate the resignation of someone who is not a Minister. This matter is one that would be better explored through questions to the Minister rather than through an urgent debate. I'm not convinced that it requires the immediate attention of the House. The application is declined.
Oral Questions
Questions to Ministers
Question No. 1—Finance
1. RYAN HAMILTON (National—Hamilton East) to the Minister of Finance: What recent reports has she seen on the economy?
Hon NICOLA WILLIS (Minister of Finance): I saw an interesting report from Westpac recently, comparing the economic outlooks of New Zealand and Australia. A bit of healthy rivalry is a feature of the trans-Tasman relationship, so I was pleased to see Westpac—which operates on both sides of the ditch—saying that economic growth in New Zealand is set to outpace Australia, over the next few years. Westpac is forecasting annual GDP growth in New Zealand to accelerate to 2.4 percent by the end of the year, and 3.1 percent by the end of 2026. That is higher growth than the bank is forecasting for Australia. When Westpac looks at per capita—that is, per person—growth, the difference between the two countries is even greater.
Ryan Hamilton: What is supporting this growth in the New Zealand economy?
Hon NICOLA WILLIS: Consistent with other forecasters, Westpac says that growth in New Zealand will be underpinned by reductions in the official cash rate (OCR) transmitting through the economy. A lower OCR leads to lower interest rates for households and businesses, who respond by spending and investing more. Westpac also points out that increases in New Zealand’s commodity export prices will boost incomes and spending—thank you, farmers. It says that international demand for hard commodities—which Australia exports—is easing, while global demand for dairy and other food products—which New Zealand exports—remains firm.
Ryan Hamilton: How are interest rate reductions flowing through the economy?
Hon NICOLA WILLIS: The Reserve Bank has reduced the OCR by 250 basis points over the past year, taking it down to 3 percent so far. Markets are pricing in two more reductions. Westpac makes the point that around 90 percent of mortgage lending in New Zealand is on fixed rates, compared to only around 10 to 15 percent of Australian mortgage lending. That means that interest rate changes take around 12 to 24 months to pass through the New Zealand economy. The transmission of lower interest rates is therefore still under way, with rate reductions only having begun a year ago—45 percent of mortgage lending is either floating or is due to be reprised within the next six months, which is good news for those coming on to lower interest rates.
Ryan Hamilton: What is the outlook for New Zealand exports?
Hon NICOLA WILLIS: The global outlook suggests that demand for New Zealand exports will remain high despite tariffs; strength in global commodity prices—particularly dairy and meat prices—is supporting farm incomes and rural confidence. The ANZ Commodity Price Index in world prices rose again in August and is 9.3 percent higher than it was a year ago. Recent data shows that New Zealand’s goods terms of trade—that is, the prices we get for our exports relative to the prices we pay for imports—is at a record high, in a series that goes all the way back to the 1950s. So New Zealand’s purchasing power in the world has risen, and that is good news for our households and businesses.
Hon Chris Bishop: What reports has the Minister seen on inflation targeting?
Hon NICOLA WILLIS: I have seen a report that there are spokespeople in this Parliament open to having a discussion about changing the Reserve Bank’s inflation target to allow inflation to run hotter. I’m happy to rule out—
SPEAKER: Probably—
Hon NICOLA WILLIS: —the Government won’t be letting price increases—
SPEAKER: That’s probably where you should leave it.
Question No. 2—Prime Minister
2. Rt Hon CHRIS HIPKINS (Leader of the Opposition) to the Acting Prime Minister: Does he stand by all his Government's statements and actions?
Hon DAVID SEYMOUR (Acting Prime Minister): Yes, and particularly the Government introducing legislation which has led to New Zealanders up and down this country being able to vote on whether their councils should have Māori wards. Having the same basic democratic rights and duties, regardless of background, is a critical cornerstone of our democracy. And now, thanks to this Government, New Zealanders up and down the country will get to have a say about whether that is the policy in their council.
Rt Hon Chris Hipkins: Who speaks for the Government: the Prime Minister who says he wants modest, consistent house price increases, or the housing Minister who says that it's good that house prices are dropping and the Government is trying to drive house prices down?
Hon DAVID SEYMOUR: The facts are that the Government cannot set house prices, and I would be alarmed if any party in this House had that as their plan. What the Government is doing is introducing policies that will make it easier for New Zealanders to build more homes, and in that sense both of them are speaking for the Government because the final track of housing will depend on a range of factors. What we're doing is fixing what matters through Resource Management Act reform, Building Act reform, infrastructure funding, so that wages can grow faster than house prices, which is what we should all want for New Zealand's future.
Rt Hon Chris Hipkins: So is it the Government's goal for house prices to go up or down?
Hon DAVID SEYMOUR: We seem to be having a communication or comprehension problem on behalf of the Leader of the Opposition. My previous answer clearly stated that the Government’s goal is to make it easier to build a home. We’re doing Resource Management Act reform—wonderful work by Chris Bishop and Simon Court; we are doing Building Act reform—wonderful work by Chris Penk, the Minister for Building and Construction; and we are doing infrastructure funding and finance reform across a range of portfolios. Now, what that means is that it is easier and more affordable to build a home, and that means the next generation has ladders of opportunity to be part of a property-owning democracy, something that got further and further into the distance under the previous Government's housing inflation.
Rt Hon Chris Hipkins: Point of order, Mr Speaker. I don't think anyone will be any the wiser as to whether or not the Government's position is that house prices should go up or down as a result of that answer.
SPEAKER: Well—
Rt Hon Chris Hipkins: I'm happy to repeat the question if the member has a comprehension problem with it.
SPEAKER: No, no. You can ask—
Hon DAVID SEYMOUR: Problem’s all yours, buddy.
SPEAKER: When I’m speaking, no one else is. You can most certainly use your supplementaries to ask another question if you wish, but you can't ask me to judge the quality of the question. That's never been the case.
Rt Hon Chris Hipkins: Was Chris Bishop wrong when he said, “The Government is trying to drive house prices down.”?
Hon DAVID SEYMOUR: No, he was not, because as I have explained and will now explain for the third time—I suspect the rest of New Zealand's got it, but for the benefit of the Leader of the Opposition—many of the policies that the Government is introducing are policies that will increase the supply elasticity of housing and that will, other things being equal, make it more affordable. However, it is also true that as New Zealand's economy grows under the policy of this Government, as New Zealanders become wealthier, as they bid higher prices for housing, they may well end up pushing prices up.
Rt Hon Chris Hipkins: So was Christopher Luxon wrong when he said that the Government wants “modest, consistent house price increases”?
Hon DAVID SEYMOUR: It reminds me of when I used to tutor Econ 101. Let me explain to the Leader of the Opposition: on the one hand, we want New Zealanders to be wealthier, we want our population to grow, we want people to be bidding to raise house prices, but on the other hand, we want to make it easier to build them. Both of us want economic growth, less red tape, less regulation, and I just wish that the Leader of the Opposition would get on board.
Rt Hon Chris Hipkins: So who speaks for the Government on housing intensification: David Seymour, who says that Auckland Council's plan will bring “significant change to the character of New Zealand's oldest suburb”, or Chris Bishop, who's called criticism of the plan “frankly nuts”?
Hon DAVID SEYMOUR: I also heard Chris Bishop say that a local MP should advocate for the interests of their constituents. And it is certainly true that the plan will change the character of the city. That is absolutely true. So, I guess, once again, despite this member's attempts to divide us, we're both right.
Rt Hon Chris Hipkins: So is the Government's position that there is therefore housing intensification and more deregulation around building more houses, except in Epsom?
Hon DAVID SEYMOUR: Well, that's not true at all. For example, the Epsom electorate contains the Mt Eden train station where I expect and support there will be a lot more people living to take advantage of that upgrade in infrastructure. On the other hand, there are parts of the Epsom electorate, indeed parts of Auckland and every city, which have very old infrastructure that is crumbling, in some cases leaking sewage into the sea, and it would be foolhardy to intensify in those areas. That's one reason why this Government has reversed the previous Government's policy of allowing three-storey houses on any section, including floodplains—because the previous Government did some dumb stuff, but that was among the stupidest.
Rt Hon Chris Hipkins: Is his Government committed to meeting New Zealand's emissions targets under the Paris Agreement?
Hon DAVID SEYMOUR: Yes, we are. But this Government, also, is a conscientious and collegial coalition of three parties who actually have a mind of their own. And on that topic, I just wonder when the Leader of the Opposition will tell the world what he thinks about someone saying that Black, Asian, and Indian New Zealanders should not participate in our democracy.
SPEAKER: It’s—[Interruption] I’m sure most people will make the judgment that you might just have.
Rt Hon Chris Hipkins: Point of order, Mr Speaker. How is the Acting Prime Minister reflecting on my character and making a misrepresentation about something that I have or haven't said in any way relevant to the question or acceptable within the House?
SPEAKER: Well, now that you raise it, that's not acceptable, but it is in the nature of debate. I don't think it would be fair to require it to be withdrawn or other such in the circumstances, because if you think about the nature of the questioning, it was along those lines—
Rt Hon Chris Hipkins: Point of order, Mr Speaker.
SPEAKER: No, hang on a minute, I'm still speaking. You were, in your question, questioning the integrity and veracity of statements made by the Hon David Seymour compared to anybody else. It's not unreasonable that there is a comparison put back. Speakers’ Rulings has a number of comments in it: if a political question is asked, expect a political answer. I think that's not unreasonable.
Rt Hon Chris Hipkins: Point of order, Mr Speaker. What in particular did you find political about a question that said, “Is his Government committed to meeting New Zealand's emissions targets under the Paris Agreement?”—because that was the question.
SPEAKER: No, that is quite right. The point I’m making is that, in the nature of the whole exchange, there was a high degree of political contention. Look, Speaker’s ruling 187/1.
Rt Hon Chris Hipkins: Further point of order, Mr Speaker. No matter how political a debate, a member is not entitled to misrepresent the words of another member.
SPEAKER: Well, from my memory, what he said is he invited a comment or a reflection on those, which he shouldn’t have done. But it might help if the Acting Prime Minister, or the Prime Minister in this case, withdrew the comment.
Hon DAVID SEYMOUR: Point of order, Mr Speaker. My answer simply held up a mirror to the Leader of the Opposition’s questions. If he doesn’t like what he sees, then perhaps he should change the questions.
SPEAKER: No, no; that’s your opinion.
Hon DAVID SEYMOUR: For the sake of this country being able to get on with question time, I withdraw the comment.
SPEAKER: Thank you.
Question No. 3—Prime Minister
3. Dr PARMJEET PARMAR (ACT) to the Acting Prime Minister: Does he stand by all of the Government's statements and actions?
Hon DAVID SEYMOUR (Acting Prime Minister): Yes, absolutely and enthusiastically, particularly those actions that this Government is taking to cut wasteful spending, to cut red tape, and to enable New Zealanders to build their lives, their families, their firms, and their farms in this country so that we can all live a more prosperous life and overcome those challenges that we face.
Dr Parmjeet Parmar: What changes are being made to resource management law?
Hon DAVID SEYMOUR: This country is a beautiful place and, in my view, the best in the world to live, but we have made it too hard for too long to build a place to live. That’s why this Government is replacing the resource management laws with laws that don’t say a council and anyone else that they ask has the right to say no all the time, that says that New Zealanders have the right to develop their property as they please, so long as they don’t harm the enjoyment of others’ property. That is a wonderful principle, it is a step-change in land use development, and it will allow the next generation to be able to build their futures, just as their grandparents were able to do, and give each of us, of any background, a brighter future in New Zealand.
Dr Parmjeet Parmar: How will the Government’s changes to our health and safety laws help small businesses?
Hon DAVID SEYMOUR: This country was built on a number eight wire, can-do, Sir Edmund Hillary, Kiwi attitude, and yet too often we find ourselves fearful of the very Government that we pay to enforce the laws. That’s why I’m very proud to have this Government amending the approach to health and safety away from having lots of fear and not enough safety—retooling WorkSafe in such a way that it is there to guide and help people actually achieve safety as much as it is there to punish people. Brooke van Velden is to be commended for going out and listening and making substantial changes that make people’s lives better.
Dr Parmjeet Parmar: How is the Government making it easier for overseas investors to invest in New Zealand businesses and help them grow?
Hon DAVID SEYMOUR: This country has a long history of welcoming our friends around the world to share their money and their ideas, investing together in New Zealand’s future. However, for too long we made it too hard for those people to come and join in New Zealand’s economic success. It’s not because they didn’t want to; it’s because we tied them up in too much bureaucracy and red tape. I’m proud that we have halved the time for overseas investment consents under this Government, and I’m proud that legislative changes before the House at the moment will see even greater improvements in the time taken for people to get consent to bring their money and their ideas in.
Dr Parmjeet Parmar: Why is the Government simplifying our anti - money-laundering legislation?
Hon DAVID SEYMOUR: This is another example where in the rush to satisfy obligations imposed by overseas powers, we have hamstrung New Zealanders with red tape on things as simple as trying to open a bank account for a child. This Government is simplifying anti - money-laundering laws so that people can spend more time doing things that are productive, providing for themselves and their families, and less time tied up in red tape.
Dr Parmjeet Parmar: How is the Government’s Regulatory Standards Bill going to help raise the standard of lawmaking in New Zealand?
Hon DAVID SEYMOUR: For a long time, Governments have made various attempts at improving the quality of regulation and ensuring that there is a voice for the regulated, that people’s property is respected, and that laws are made for the public interest rather than for short-term political advantage by certain politicians. The Regulatory Standards Bill will ensure that people’s rights are set out clearly in law so that the public are better able to judge the quality of the laws being made, and that is a welcome maturation in our constitutional settings in New Zealand.
Question No. 4—Transport
4. DAN BIDOIS (National—Northcote) to the Minister of Transport: What announcements has he made regarding Auckland transport governance?
Hon CHRIS BISHOP (Minister of Transport): Last week, the Government announced—the Minister of Auckland, Hon Simeon Brown, and His Worship Wayne Brown—we’ll be delivering on our promise to restore local democracy to Auckland. Responsibility for most transport functions in Auckland will shift from Auckland Transport to Auckland Council, including all policy and planning work. The council will become the road controlling authority and deliver transport capital projects while maintaining transport infrastructure. This is the case in every other council around the country, apart from in Auckland, and we are now bringing Auckland into line with every other council.
Dan Bidois: How does this change restore local democracy in Auckland?
Hon CHRIS BISHOP: Local democracy in Auckland is very important. Right now, Aucklanders raise their transport concerns with local councillors, local board members, or even the mayor. That’s instinctively who New Zealanders think are responsible for their local roads, but the levers Auckland Council has to effect change are very little. Auckland Council does not have direct control over its transport system currently, nor is it a road controlling authority. We are making Auckland Council directly responsible for local roads again so that when Aucklanders raise concerns with their elected local representatives, they actually have levers to do something about it.
Dan Bidois: What about future planning for Auckland’s transport system?
Hon CHRIS BISHOP: The changes will establish an Auckland regional transport committee, comprising an equal share of Auckland Council members and ministerial appointees alongside an independent chair. It will prepare a 30-year transport plan for Auckland, building on the previous Auckland Transport alignment project from the last National Government, to steer investment and shape the future of transport in Auckland. It’s critical to get central and local government aligned, and I’m really confident this plan will do just that.
Dan Bidois: What reaction has he seen to this announcement?
Hon CHRIS BISHOP: There has been widespread support from many Aucklanders. I quote proud Aucklander Simeon Brown: “For too long, Auckland Transport has not listened to Aucklanders.” I want to thank Mayor Brown and Simeon Brown for their hard work on these campaigns. Aucklanders don’t have to wait too long for these changes to be made. The bill will have its first reading this month and it’s meant to pass into law next year, so we can get on with restoring local democracy to Auckland.
Question No. 5—Finance
5. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Does she stand by all her statements and actions in relation to the resignations of the former Reserve Bank Chair and Governor?
Hon NICOLA WILLIS (Minister of Finance): Mr Speaker, yes.
Hon Barbara Edmonds: When did she first become aware of the reasons for Adrian Orr’s resignation?
Hon NICOLA WILLIS: That was on the Thursday night when I read the Ombudsman’s ruling—which, as I check my timing, was 27 August—which outlined the specific concerns which were in the letter of concerns shared by the Reserve Bank, a letter I have not seen and had not seen previously, and which also detailed events preceding the receipt of that letter.
Hon Barbara Edmonds: Was she aware that a letter of concern had been sent before 28 August?
Hon NICOLA WILLIS: On 27 February, I received a text message from the Secretary to the Treasury informing me that the Reserve Bank of New Zealand board had agreed to start an employment process in respect of the Governor of the Reserve Bank. Later that night, in a separate text message, I was informed that the governor had elected to go on leave until the end of the process, and that he had been given until the close of business Monday to respond to a board statement of concern on his conduct.
Hon Barbara Edmonds: Why was the contents of that text on 27 February withheld under the Official Information Act (OIA)?
Hon NICOLA WILLIS: I have asked that very question today of my own team, who, through Treasury, I think have upheld high standards over the OIA throughout this exchange. They inform me that it was withheld under section 9(ba)(i), which is to protect information which is subject to an obligation of confidence likely to prejudice the supply of information of that sort in future. I have judged that it is in the public interest for me to share the contents of that text message with Parliament today.
Hon Barbara Edmonds: Is she aware that the contents of that text was withheld in an earlier OIA request, and why is it that just today she is releasing to the public the contents of that text, given her responsibility under the Reserve Bank of New Zealand Act?
Hon NICOLA WILLIS: Well, because I am satisfied that the grounds for withholding under the Official Information Act were valid. I also think that it is now correct, given the official information that has been released by the Reserve Bank, that I provide this information to Parliament.
SPEAKER: I just suggest that this is not a matter for some of the cross-House banter that’s going on while answers are being given.
Rt Hon Winston Peters: Can I ask the Minister, has she heard the song, “Who wants yesterday’s paper? Who wants yesterday’s news?”, and is she getting on with the future management of the Reserve Bank?
Hon NICOLA WILLIS: A very good question, indeed, and I look forward to welcoming a new Governor of the Reserve Bank very soon.
Hon Barbara Edmonds: Was her office or herself consulted on in relation to the OIA, under which the text of 27 February was withheld?
Hon NICOLA WILLIS: I would have to check to give you the most accurate answer, but it is normal that when Treasury receives an Official Information Act request, my office is informed about their intended response to it. I think, in this case, Treasury was making a judgment based on two things: one, the fact that the text specifically referred to an employment process that had been commenced that, at that point, had not been released by the employer in question, and so therefore sharing that information when the employer subject to the exit agreement had chosen not to share it would have actually triggered the concern in the Official Information Act—[Interruption] It is very hard to even hear myself think with all of that barracking, Mr Speaker. It is, therefore, in terms of the Official Information Act, correct that it could have prejudiced the receipt of that sort of information in future, as I’ve said in this House clearly. It is my view now, in light of the timeline of events that the Ombudsman has released, which makes clear that that letter of concern had been released, that it is in the public interest for me to share that I was informed of that employment process having begun on 27 February.
Hon Barbara Edmonds: Is she confirming that neither she nor her office was consulted in relation to the information and contents of a text that was withheld under the Official Information Act (OIA)?
Hon NICOLA WILLIS: I’m confirming no such thing.
Hon Barbara Edmonds: Is she confident that her handling of information requests relating to the exit of the former governor did meet her expectations of transparency and of public accountability?
Hon NICOLA WILLIS: Yes.
Hon Barbara Edmonds: Why should New Zealanders have confidence in her when she has only just advised the House and the public of the contents of a text on 27 February, and how is it not usual that either she or her office have not reviewed the OIA before it was released?
Hon NICOLA WILLIS: Because these are matters relating to an employment process. If Ministers choose to engage themselves in employment processes characterising them when they have not been a party to those processes, they risk politicising those processes in ways that can threaten the reputation of important institutions.
Rt Hon Winston Peters: Regardless of this boring dialogue, how will the new Reserve Bank Governor go if there is no inflation cap set for the governor?
Hon Kieran McAnulty: Just for absolute clarity in the House, it’s now OK to provide that sort of commentary before asking a question?
SPEAKER: It’s an observation, and it is not something that should be done. Questions should be simple, start with a question word, and carry on, and I’ve made that point before.
Rt Hon Chris Hipkins: They also have to relate to the primary.
SPEAKER: Well, if you look at the primary, it talks in relation to—
Rt Hon Chris Hipkins: The resignation.
SPEAKER: —statements and actions in relation to the resignation of the former—but, look, as we know, questions move on. [Interruption] Wait on, wait on. I think, in this case, we will simply move on. The point has been made.
Question No. 6—Finance
6. CHLÖE SWARBRICK (Co-Leader—Green) to the Minister of Finance: Does she stand by all the Government’s statements and actions on economic and fiscal policy?
Hon NICOLA WILLIS (Minister of Finance): Yes, and I particularly stand by our commitment to an inflation target of 1 to 3 percent with a midpoint of 2. Unlike some members of this House, I won’t be advocating for faster price increases across the economy, which would only add to the cost of living.
Chlöe Swarbrick: Does she stand by her statement that “investing in smart, targeted … interventions … not only make a difference in the lives of … whānau, but mean the Government reduces the money it might otherwise [spend] on treating the symptoms rather than the cause of dysfunction”, and, if she does, does she consider ensuring that our most vulnerable New Zealanders have somewhere safe to sleep at night a “smart, targeted early intervention”?
Hon NICOLA WILLIS: In answer to the first part of the question: yes.
Chlöe Swarbrick: What does she consider to be “treating the symptoms rather than the cause of dysfunction” if not her Government’s decision to cancel thousands of new public homes and now pump taxpayer money into the private rental market for just 300 temporary homes?
Hon NICOLA WILLIS: Well, a very good example of treating the symptoms and not the cause of a problem would be the Government continuing to provide ever-larger subsidies for State-sponsored housing while failing to deal with the underlying driver of ridiculous house price increases in New Zealand, which is planning law that has been weaponised against progress and development, weaponised against new housing subdivisions, weaponised against housing intensification. This Government is getting to the root cause of New Zealand’s housing unaffordability problems by getting rid of the Resource Management Act (RMA) and saying yes to more houses.
Chlöe Swarbrick: Does she accept that investment in public housing reduces crime; saves money in health; and improves educational, employment, and broader economic outcomes, and, if so, why has the Government decided to cancel building thousands of new State homes and slash emergency housing access, generating greater homelessness across the country?
Hon NICOLA WILLIS: Well, yes, I agree that publicly funded housing can deliver a range of positive social outcomes. But it’s also the case that we need to ensure that public housing is delivered efficiently, that it is the right kind of houses that are of the right typographies created in a value-for-money way. It’s also the case that, under the last Government, the number of people on the State house waiting list multiplied even while they said they were dealing with State housing challenges.
Rt Hon Winston Peters: Could I ask the Minister, on this question of the house rental costs, has it gone up in the last 12 months or has it come down?
Hon NICOLA WILLIS: Well, I understand that, in fact, rent increases are the lowest they’ve been in some years. In fact, according to a measure I read yesterday, rents have actually declined, which I would have thought the member for Auckland Central—who used to claim she stood for renters—would be welcoming and even celebrating.
Chlöe Swarbrick: What is the economic cost of the increased homelessness that has resulted from Government decisions which it was warned would happen if it went ahead with those very decisions?
Hon NICOLA WILLIS: Well, there are a lot of assertions in that question, but what is absolutely the case—and which the numbers prove—is that while that member was a supporting member of this Parliament of the previous Government, it is the case that thousands of children were being raised in motel rooms that I can guarantee didn’t meet your healthy homes standards. You stood by; you tolerated it. We’ve fixed it. [Interruption]
Hon Chris Bishop: Supplementary question.
SPEAKER: Hold on. We’re going to wait while everybody calms down.
Hon Chris Bishop: Can the Minister confirm that 50 percent of people on the social housing register need a one-bedroom unit but Kāinga Ora only has 12 percent of its stock being one bedroom, and of the 1,500 houses funded in Budget 2024 that have been allocated so far, 89 percent of those houses are for one- and two-bedroom units?
Hon NICOLA WILLIS: Yes. What this underscores is the importance of ensuring we don’t just build houses, but that we build the right houses that respond to the needs we see in our community. I’m also happy to confirm that the creation of the community housing fund means that this Government has deliberately decreased the cost of borrowing for those community organisations wishing to build more public housing.
Chlöe Swarbrick: Will the finance Minister then take up the invitation—which the Prime Minister has so far ignored—to walk the streets of Auckland Central to meet the people, including the children, who her Government’s decisions have made homeless?
Hon NICOLA WILLIS: Well, I think the more immediate response, if the member is aware of any children living on the street, would be for her to urgently bring that information to the Ministry of Social Development to ensure those children get the support to which they are entitled.
Rt Hon Winston Peters: If the Prime Minister does take up the invitation, could she possibly warn the Prime Minister that if he does, he’ll have to face all those orange cones that the Green Party and others have put on the main street of central Auckland—in her electorate?
SPEAKER: No, that’s not a question for the Minister of Finance.
Question No. 7—Health
7. Dr VANESSA WEENINK (National—Banks Peninsula) to the Minister of Health: What recent announcements has he made about improved access to elective procedures for patients?
Hon SIMEON BROWN (Minister of Health): Good news: the Government has exceeded its first Elective Boost target, delivering 16,005 additional procedures by 30 June—that is 50.3 percent more than planned, meaning thousands more New Zealanders have received life-changing surgery, such as hip and knee replacements and cataract operations, sooner. Our initiative has reduced pressure on wait-lists and, most importantly, helped Kiwis get the care they need when they need it.
Dr Vanessa Weenink: What impact has the Elective Boost had on wait-lists?
Hon SIMEON BROWN: Well, since the boost began, the total elective treatment wait-list has dropped by 9 percent, and the number of people waiting more than four months has fallen by 22 percent. These improvements have been felt across the country, with 4,766 procedures being carried out in the Northern region, 5,051 in the Midland, 2,961 in Central, and 3,227 procedures in the South Island. We acknowledge that too many New Zealanders have been waiting too long for the care that they need, and that’s why we’re continuing to put patients first and deliver for them.
Dr Vanessa Weenink: Who has benefited from the Elective Boost so far?
Hon SIMEON BROWN: Kiwis from all walks of life have benefited from our Elective Boost. We’ve seen 638 hip surgeries, 751 knee surgeries, and 5,058 cataract surgeries carried out. Behind each one of those numbers is a New Zealander whose quality of life has been improved—whether it’s a tradie who can get back to work, a nana being able to see her grandchildren clearly again, or a child finally getting their tonsils removed. This Government is focused on patients and delivering the outcomes that New Zealanders expect.
Dr Vanessa Weenink: What is the next step in the Government’s plan to improve access to elective procedures?
Hon SIMEON BROWN: Well, this is just the beginning, and the next phase is already under way, with the target of an additional 21,000 elective procedures over the coming year. We’re making the health system work smarter, using both public hospitals and private providers in a coordinated national effort. New Zealanders don’t care who is delivering the service; they just want it done, and they want it done quickly. That is the approach this Government is taking, and it’s delivering results.
Question No. 8—Health
8. Hon Dr AYESHA VERRALL (Labour) to the Minister of Health: Does he stand by his statement, “we want to get value for money for the taxpayer” for surgeries outsourced to private hospitals; if so, how is Health New Zealand achieving value for money?
Hon SIMEON BROWN (Minister of Health): To the first part of that question, in the context it was made, yes. As I've said before, working with private providers means we can deliver more hip operations, knee replacements, and cataract surgeries, helping to reduce wait-lists. I'm advised that Health New Zealand operated a competitive request for proposal (RFP) process across the private hospitals for planned care treatment in 2024. It is now preparing to renew the panel agreements from 2026 with nationally standardised terms and conditions while maintaining a competitive market. This process has given Health New Zealand insights and prices from all providers for a wide range of procedures. Health New Zealand used this information and its own internal costings to negotiate the optimal price for each location and each treatment. As a result of the boost, the total wait-list has fallen by 9 percent and the number of people waiting more than four months has dropped by 22 percent—a great result for patients.
Hon Dr Ayesha Verrall: Will he release the price Health New Zealand pays for outsourcing surgeries to private providers?
Hon SIMEON BROWN: Well, as I announced back in March, Health New Zealand had allocated approximately $50 million as part of the elective boost to deliver an extra 10,500 procedures by the middle of the year, and, of course, they delivered more than that, which is great news for patients.
Hon Dr Ayesha Verrall: Point of order, Mr Speaker. The question was about the price paid for the procedures, not the cost to Health New Zealand. The price wasn't even addressed.
SPEAKER: Well, I think it was, when he said that the allocation was $50 million and they got more for it than they did.
Hon Dr Ayesha Verrall: Speaking to the point of order, that is the amount Health New Zealand spends, but the price—for example, that a hip operation cost $20,000—wasn't addressed at all.
SPEAKER: OK, I'm sitting here thinking, “Should I ask the Minister to say more?”, but, I'm sorry, in my head, when I heard $50 million was spent and they got more for it than they expected, they're probably in the right space, but if the Minister wants to make a comment, that's his prerogative.
Hon Dr Ayesha Verrall: Why, when ACC releases the price per procedure that they pay for surgeries, won't Health New Zealand release that information for private surgeries?
Hon SIMEON BROWN: Well, as I said in my primary answer, they have gone through a competitive RFP process to ensure that they can negotiate the prices. I'm advised that Health New Zealand at this time is going through further procurement processes with nationally consistent terms, and it is important that they are able to maintain a competitive market. Ultimately, we've allocated funds, and our focus is on making sure that we deliver outcomes for patients and get those treatments done sooner. It's exactly what the previous Minister of Health, the Rt Hon Chris Hipkins, said in a Cabinet paper in 2020, where he said, “I expect DHBs and their local private hospital(s) to reach appropriate contractual arrangements that allow for services to be increased to address backlogs.” That's exactly what we're doing.
Hon Dr Ayesha Verrall: Why, when the Government is, in his own words, paying significant premiums for outsourced surgeries, won’t he release the price of those surgeries?
Hon SIMEON BROWN: Well, Health New Zealand is working through a contractual process to ensure value for money. That is the right thing for them to do. Ultimately, this is about delivering additional services—
Hon Damien O'Connor: Money for your mates.
Hon SIMEON BROWN: —for New Zealanders so they spend less time waiting on wait-lists. We've been very clear that $50 million was allocated; more surgeries were delivered. The final cost of the elective boost in the first half of this year will—ultimately, the costings of that will be confirmed as part of the end-of-year financial accounts. The fact that over 50 percent more surgeries were delivered means that the cost was probably likely to be higher than the $50 million allocated, but, ultimately, this is about patients getting the services they need in a more timely manner.
Hon David Seymour: Point of order. During that answer, a Labour member said, “Money for your mates.” in reference to the Government's procurement process. That member happens to be a real stickler for the rules; I wonder if he'd like to withdraw it.
SPEAKER: Well, whoever said it needs to just rein themselves in a bit. That is not an acceptable thing.
Hon Damien O'Connor: Point of order, Mr Speaker. Thank you, Mr Speaker. I said that, but I'm not a sticker for the rules, so I'm not quite sure who the member was referring to.
SPEAKER: Yep, well, only a West Coaster could come up with that, so you get a bit of leeway.
Question No. 9—Trade and Investment
9. RIMA NAKHLE (National—Takanini) to the Minister for Trade and Investment: What recent progress has the Government made in unlocking new opportunities for New Zealand exporters in the United Arab Emirates?
Hon TODD McCLAY (Minister for Trade and Investment): On 28 August, the New Zealand - United Arab Emirates Comprehensive Economic Partnership Agreement officially entered into force, just seven months after signature. It’s New Zealand’s fastest ever negotiated agreement—negotiated in just on four months—and is one of New Zealand’s highest-quality agreements on entry into force. It’s part of the Government’s plan to back Kiwi exporters, create more jobs, and to increase wages.
Rima Nakhle: What specific market access improvements does the United Arab Emirates deal deliver for New Zealand exporters, especially for the primary sector?
Hon TODD McCLAY: Well, the UAE is a key hub in the Gulf region, with two-way trade valued at just under $1.5 billion annually; and 98.5 percent of New Zealand’s exports to the UAE will now enter duty free, rising to 99 percent within three years. Key goods including dairy, red meat, apples, kiwifruit, seafood, forestry products, and honey—they’re all duty free now. The agreement also includes significant commitments to support New Zealand’s professional services, including the education, gaming, film, and engineering industries.
Rima Nakhle: How will the United Arab Emirates deal improve New Zealand’s global competitiveness?
Hon TODD McCLAY: Well, New Zealand’s a trading nation and we don’t get rich only selling to ourselves, so the agreement positions New Zealand to compete with the best in the world. It secures preferential access for New Zealand exporters across competitive sectors vital to our economy and in areas that our exporters have had to compete against others in the UAE. It also strengthens supply chains with a vital trading partner and introduces provisions on sustainable development, intellectual property, and labour that reflect New Zealand’s high standards. This is a trade deal that delivers for hard-working New Zealanders and means our exporters can do better in a market that will return more money to the pockets of Kiwis.
Rima Nakhle: How does this United Arab Emirates deal align with the Government’s trade and investment strategy?
Hon TODD McCLAY: Well, the UAE trade deal’s an important step in our strategy to reduce trade barriers and offer new opportunities to New Zealand exporters. The deal unlocks a US$500 billion economy that’s growing and diversifying rapidly. The UAE imports 90 percent of its food, creating strong new opportunities for New Zealand’s world-class food producers and, of course, therefore our farmers. With this agreement and the conclusion of the Gulf Cooperation Council (GCC) deal last October, the Government is focused on growing the economy; unlocking key markets; increasing export returns; and, again, creating higher-paying jobs for New Zealanders.
Question No. 10—Prime Minister
10. DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori) to the Acting Prime Minister: Does he stand by all his Government's statements and actions?
Hon DAVID SEYMOUR (Acting Prime Minister): Yes, absolutely. I’d particularly like to reference this Government’s reintroduction of charter schools, kura hourua: in the Far North, Te Rito; in South Auckland, TIPENE; and now in Kaikohe, potentially, Northland College—schools where communities are adopting the charter school, kura hourua model. They are enabling students from all backgrounds, but in many cases Māori students, to be empowered to navigate the 21st century with the skills and education that all of us require to do that. I note that, in the past, the member’s party has been a staunch supporter of the charter school concept, and I hope that she will reaffirm it.
Debbie Ngarewa-Packer: Will the Prime Minister call for the safe passage of the Global Sumud Flotilla, a fleet of boats carrying delegations from all around the world, including New Zealanders, delivering humanitarian aid to Gaza?
Hon DAVID SEYMOUR: We are focused on the wellbeing of people in New Zealand primarily. There is a huge amount of suffering, of people right here in this country, that we are focused on alleviating. I find it strange that a party is so focused on a symbolic statement that it would like to see the Government make. I would have thought their priorities would be a little closer to home.
Debbie Ngarewa-Packer: Point of order. New Zealand has a UN membership duty to protect its own citizens abroad. That squarely sits within this Government’s responsibility. That question should be asked and answered squarely for all New Zealanders who want to know what you’re doing to protect New Zealanders that are on the flotilla.
SPEAKER: Well, that might be the response that the member wants, but the question was answered when the Acting Prime Minister said that primarily the focus is on people suffering in this country.
Rt Hon Winston Peters: Point of order. With respect, the question is bordering on the requisite to rule it out, because we have put out official statements, in the interests of New Zealanders’ safety, against entry to Gaza, the possible human damage that will result from it, and on joining flotillas, for the same purpose. This Government has put out numerous statements for people not to do that, and you’ve got somebody here today in question time demanding that we do just that.
SPEAKER: Well, the question was, with all due respect, about what is being done, and perhaps that was an answer the Acting Prime Minister might have given, but I think the intervention is most useful in that regard. Debbie Ngarewa-Packer, please contain your question—just ask your question.
Debbie Ngarewa-Packer: Does he accept that failing to demand safe humanitarian corridors puts New Zealanders delivering aid at risk?
SPEAKER: Sorry, can I hear that question again?
Debbie Ngarewa-Packer: Does he accept that failing to demand safe humanitarian corridors puts New Zealanders delivering humanitarian aid to Gaza at risk?
SPEAKER: Look, I don’t know that the Prime Minister could have responsibility for that. With all due respect, there is no answer available for that.
Debbie Ngarewa-Packer: Does the Prime Minister believe that the Government has an obligation to protect New Zealand citizens abroad?
Hon DAVID SEYMOUR: Yes, the New Zealand Government does its best to protect New Zealand citizens abroad, but often the way that the New Zealand Government does that is by warning them not to go to dangerous places, and the reason for that is that the New Zealand Government does not have the power to influence the safety of every person on the planet, agile and effective though the New Zealand Defence Force may be. But there is something in this line of questioning where the member really believes that the New Zealand Government making a demand will make people on the other side of the world safe. Now, when we live in a country where a child is killed, on average, every five weeks, I would have thought it would be time to return to the real and the practical, rather than the symbolic and the theatrical.
Debbie Ngarewa-Packer: Does he accept the findings of the United Nations, the World Health Organization, and the International Criminal Court that the famine in Gaza City affecting over 500,000 people is man-made?
Hon DAVID SEYMOUR: Well, those organisations might very well make those claims, but the fact is that the New Zealand Government takes practical actions where it believes it can have an effect. That includes devoting, if my memory serves me, $37 million of taxpayer money in aid to that part of the world. That includes sanctioning two Israeli Ministers that we believe have said things that they certainly should not have said. That includes criticising and calling for the immediate release of all hostages by Hamas. If the member believes the most important thing we can do is talk about whether an organisation’s statement is correct or not, I don’t think she is living in the real world.
Debbie Ngarewa-Packer: Has the Government sought assurances from Israel that humanitarian workers will be protected?
Hon DAVID SEYMOUR: This is an area which is at war, and we do well to remember that it is at war because a terrorist group invaded a peaceful country, kidnapped, raped, and kept hostages and continues to use those hostages as bargaining chips. I would have thought a bit of awareness would leave the member well ahead of where she is right now in her understanding.
Debbie Ngarewa-Packer: Point of order. [Interruption]
SPEAKER: Points of order are heard in silence.
Debbie Ngarewa-Packer: My question is not about Hamas. It is about New Zealanders delivering humanitarian aid and the community accepting that the famine is man-made. My supplementary, please, for the Speaker.
SPEAKER: Yes, and the question was most—
Debbie Ngarewa-Packer: Is the Prime Minister—
SPEAKER: Sorry, sorry—where are you at? You just took a point of order, and you hadn’t asked me to respond to it.
Debbie Ngarewa-Packer: Sorry, if you want to, that’s great. Apologies.
SPEAKER: The question was addressed. Ask another supplementary.
Debbie Ngarewa-Packer: Is the Prime Minister stating that they dispute the findings of the United Nations, the World Health Organization, and the Integrated Food Security Phase Classification (IPC)?
Hon DAVID SEYMOUR: What I’m saying is that the Government does not have responsibility for—as the member said just a second ago—what the community thinks. Now, there are some societies where the Government does take responsibility for what the community thinks, but I don’t want to live in one of those societies.
Question No. 11—Economic Growth
11. Hon GINNY ANDERSEN (Labour) to the Minister for Economic Growth: Does she agree with the statement of the Minister of Finance that “cost of living relief is on its way”; if so, why?
Hon NICOLA WILLIS (Minister for Economic Growth): Yes. As Minister of Finance, I made that statement last year when announcing tax relief that benefitted millions of New Zealand households. Changes to income tax thresholds, the in-work tax credit, and other measures made around 1.9 million New Zealand households better off, on average, by $60 a fortnight. Households with children were even better off, on average, by $78 a fortnight. All superannuitants were better off, and members opposite voted against it.
Hon Ginny Andersen: Why is administrative inflation the highest it’s been since 1990?
Hon NICOLA WILLIS: The largest driver of that is rates increases, which is why, on this side of the House, we have the courage to investigate caps on rates rises, which her leader seems to think would be a terrible thing.
Hon Ginny Andersen: Why should families carry the burden of higher costs, such as public transport and vehicle registrations, when those pressures stem directly from her Government’s decision to cut spending and raise fees?
Hon NICOLA WILLIS: I am very concerned by price increases in the economy, which is why, under this Government, we’re targeting inflation between 1 to 3 percent with a mid-band of 2 percent. I understand that the approach of that member and her party is to advocate for higher price increases across the economy with an inflation mid-point of 2.5 percent, which would mean higher prices for everything.
Hon Ginny Andersen: Is the reason that 60 percent of New Zealanders still rank the cost of living as their number one concern due to her Government continually hiking up fees that Kiwis are forced to pay?
Hon NICOLA WILLIS: No.
Hon Ginny Andersen: Is the reason that Kiwis are losing faith with National’s ability to manage the economy due to her empty promises that relief is on its way, while she continues to hike fees that just make the cost of living even worse?
Hon NICOLA WILLIS: No. If we’re going to talk about empty promises, let’s talk about crocodile tears. If that member really cared about the cost of living and providing income relief to New Zealand households, she would have voted for tax relief, and she would vote for the increases in the FamilyBoost rebate that this party will soon bring to the House.
Question No. 12—Foreign Affairs
12. Hon MARAMA DAVIDSON (Co-Leader—Green) to the Minister of Foreign Affairs: Does he stand by all of the Government’s statements and actions on foreign policy?
Rt Hon WINSTON PETERS (Minister of Foreign Affairs): Yes, as articulated and undertaken by the Minister of Foreign Affairs, as written by his staff this afternoon, and endorsed by all of Foreign Affairs here and in the many far-flung posts abroad.
Hon Marama Davidson: Does he stand by his statement of 29 days ago that “The Government will carefully weigh up its position over the next month on recognition of a state of Palestine.”, and, if so, what decision, if any, has the Government come to?
Rt Hon WINSTON PETERS: To the first part of that question, of course I stand by that decision, and to the second part, when the decision is made, I’ll tell that member what it is.
Hon Marama Davidson: Why is his Government still making up its mind on recognising statehood while France, Canada, the UK, Australia, Norway, and Spain have all opted to do so?
Rt Hon WINSTON PETERS: Well, with the greatest of respect, if you want to look at democracies, which one of those countries can tell us what a democracy should look like, given our proud record going all the way back to 1854, and giving Māori the vote in 1867 and women the vote first, before all the other countries.
Debbie Ngarewa-Packer: Oh, lucky Māoris! You “gave” us—you “gave” us.
Rt Hon WINSTON PETERS: No, no, no, no—not half-Māori; I mean real ones. Not the Irish Packers—not Irish Packers.
Debbie Ngarewa-Packer: Point of order, Mr Speaker.
SPEAKER: Point of order, Debbie Ngarewa-Packer—to be heard in silence.
Debbie Ngarewa-Packer: I take offence to what the previous speaker has just said. It is not appropriate to use this place to blood-quantum, and to sit there and suggest that someone—
Hon Members: Oh!
Debbie Ngarewa-Packer: —is part something.
SPEAKER: Just a moment. Now, Debbie Ngarewa-Packer is going to repeat her point of order, and there will be no response along those lines. Anyone who does will of course be leaving the House.
Debbie Ngarewa-Packer: Mr Speaker, thank you. I take exception to the language that was used by the previous speaker suggesting blood quantum and that Māori should be considered “part”. That is unparliamentary language.
SPEAKER: Well, it certainly is, and I’d invite the member to withdraw that comment and continue his—
Rt Hon WINSTON PETERS: No, no. Point of order, Mr Speaker. When I got to the point about the quality of New Zealand’s democracy, first in 1854 and then Māori getting the vote in 1867, that’s when they started shouting about blood quantum and everything else. It’s they that made the offence, sir, and I was reacting to it. They just can’t take the heat.
SPEAKER: I must confess that there was an awful lot of noise. I didn’t hear the full exchange. I will look at the Hansard and come back to the House.
Hon Kieran McAnulty: Point of order, Mr Speaker.
SPEAKER: Sorry?
Hon Kieran McAnulty: Point of order, sir.
SPEAKER: Look, I’ve just told you that I’m coming back to the House when I’ve looked at the Hansard, so there’s no other bits to it.
Hon Kieran McAnulty: Well, I’m not disputing that, sir—
SPEAKER: Good.
Hon Kieran McAnulty: —but you’ve asked a member to withdraw, and he did not.
SPEAKER: That’s right, and I’ve said that I would now look at the Hansard because I never heard the comment and the member has disputed that it was objectionable.
Debbie Ngarewa-Packer: Point of order, Mr Speaker. You can check the Hansard, but I can guarantee that I did not say that, and it was me that placed the point of order.
SPEAKER: Well, that is trifling with the Chair, which is not an advisable thing.
Hon Marama Davidson: Is he comfortable with allowing New Zealand to become part of just 20 percent of nations who still have no commitment to recognising Palestinian statehood?
Rt Hon WINSTON PETERS: The reality is that the circumstances are dramatically changing. We’re going off to the United Nations, and, hopefully, by then we will know all the facts. If this was a financial decision, that’s the least we would do, and this is a critical decision, as well. We’ve said from the very beginning that it’s not a question of “if”; it’s “when”, but it’s the quality of the recognition, or the standards we have set, that we do not seek to let ourselves down on. This is not against anyone at all, and might I just say this: we have spent considerable time talking to scores and scores of countries in the Middle East and elsewhere who understand our position and respect it. Who has she talked to?
Hon Marama Davidson: Is he concerned that every day the international community delays recognition of Palestinian statehood, a two-State solution becomes further out of reach, as Israel continues building illegal settlements without consequence?
Hon Shane Jones: Speculation.
Rt Hon WINSTON PETERS: This is the kind of illogical thinking that should be—
Chlöe Swarbrick: We voted on the motion, Shane, in September.
SPEAKER: No, no, hang on—sorry. Don’t ask a question—
Rt Hon WINSTON PETERS: But I can handle it—don’t worry.
SPEAKER: I’m not talking to you. I’m just saying to these people over here on the other side of the House: don’t ask a question of that nature, which is barely permissible under the Standing Orders, and then start barracking over the top of it when an answer starts.
Rt Hon WINSTON PETERS: This the kind of illogical thinking that we’d hope would be expunged from somebody before they even got to Parliament. To come here and make that statement when there’s not a shred of evidence to back it up is, I think, a disappointment for this Parliament and, dare I say, for the Green Party.
Hon Marama Davidson: Does he agree with the Ministry of Foreign Affairs and Trade that “As a small country which depends on the international rules-based system for both security and prosperity, it is fundamental to New Zealand interests that these rules are supported and that serious violations are sanctioned.”, and, if so, why has the Government not sanctioned Israel for their serious violations of international law in Palestine?
Rt Hon WINSTON PETERS: For the umpteenth time, we have condemned on countless occasions more than any other circumstance we’ve been involved in in recent politics what has gone on there, and we have sanctioned Israelis, and we have sanctioned members of Parliament, as well. This has all been stated to this country. What would we do now? This idea that, somehow, whatever New Zealand does is going to stop the strife and solve the situation is, I think, extraordinarily naïve. But here’s the point: we’re going to the United Nations, and we’ll have the benefit of every country’s view at that point in time, and then we can make a seriously considered decision then.
SPEAKER: That concludes oral questions.
Point of Order—Withdrawal of Statements by Ministers
Hon KIERAN McANULTY (Labour): Point of order, Mr Speaker. Thank you very much, sir. On two occasions today during question time, you asked a Minister to withdraw a statement. On the first occasion, there was commentary provided by the Minister before the withdrawal was made, and on the second occasion there was no withdrawal made. Now, a former member for the seat of Ilam, when shadow Leader of the House, if asked to withdraw and apologise would do so and then make a point of order, which is the proper process, and given your commitment to review what has occurred during the last question, I wonder whether you would also agree to review whether the request to withdraw comments today was followed as it should be. My concern is if that is the approach that is allowed moving forward, it is yet another step towards disorder in the House.
SPEAKER: Well, I thank you for pointing out the considerable wisdom of the former member for the Ilam seat. Certainly, a volume of information from that member is going to be considered in any decisions I make, and I’ll come back to the member tomorrow with an answer on that.
I declare the House in committee for consideration of the Appropriation (2025/26 Estimates) Bill.
Estimates Debate
In Committee
CHAIRPERSON (Barbara Kuriger): Members, the House is in committee for consideration of the Appropriation (2025/26 Estimates) Bill. The Business Committee has determined to organise the debate by portfolio, so there will be no sector-specific debates. All Votes are available for debate, but only specific Ministers will be available each day to speak to the indicated portfolio. The Government has indicated that the Minister of Finance, the Minister of Commerce and Consumer Affairs, the Minister of Transport, the Minister of Housing, the Minister for the Environment, and the Minister for Vocational Education will be available today.
Each debate will be led by a call from the chairperson or member of the committee that considers the Estimates most closely related to the Minister’s portfolio. In leading off the debate, the chairperson should take care not to be overly political and should ensure their call gives a fair reflection of the committee’s report on the Votes relevant to the portfolio. The debate expires after 11 hours, at which point questions will be put that the Vote stand part of the schedules and on the provisions of the Appropriation (2025/26 Estimates) Bill.
New Zealand National has four hours and 25 minutes. New Zealand Labour has three hours and four minutes. The Green Party of Aotearoa New Zealand has one hour and 21 minutes. ACT New Zealand has 60 minutes. New Zealand First has 43 minutes. Te Pāti Māori has 27 minutes. The Estimates debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. A compendium of the reports of select committees on the Votes is available on the Table. The question is that the Votes contained in the Estimates of Appropriations for 2025-26 stand part of the schedules.
Members, we start with the Minister of Finance. The Minister is available to speak to that portfolio from 3 o’clock to 4 o’clock. We may have to look, due to question time, whether that end time frame is suitable, but I’ll keep you informed. I now give the call to the chairperson of the Finance and Expenditure Committee, Cameron Brewer.
Finance
CAMERON BREWER (Chairperson of the Finance and Expenditure Committee): Thank you, Madam Chair. When the Government came to office, we immediately restored fiscal discipline but we also wanted to drive and direct New Zealand’s economic recovery. Budget 2025 reinforced and highlighted this Government’s priorities and approach.
On Budget day, the finance Minister’s announcement of Investment Boost got a quick and positive response out there in small-business New Zealand. Investment Boost lets businesses deduct 20 percent of the cost of a new asset off their taxable income—on top of depreciation—designed to have both an instant and sustainable hit. In fact, Treasury and Inland Revenue advised at the time that Investment Boost would contribute to GDP growth, wages, and capital stock over time.
Secondly, significant KiwiSaver changes. Budget 2025 saw the default rate up, over time, from 3 to 4 percent. The Government contribution for those earning over $180,000 was taken away and the popular extension of contributions was entrenched for 16- and 17-year-olds. A third highlight, for me, was in education: the largest boost in a generation for learning support, meaning more teacher aid hours, learning support coordinators across years 1 and 8, and an overhaul of the Ongoing Resourcing Scheme funding system. Our higher needs kids will finally get the support they need.
Budget 2025 backs investment, builds savings and support where it matters most. My question is to the Minister of Finance and asks: what evidence, on the ground, has she seen that the Investment Boost is indeed making a difference to Kiwi businesses and the wider New Zealand economy?
TANGI UTIKERE (Labour—Palmerston North): Point of order. Thank you, Madam Chair. I didn’t want to interrupt the member. Thank you for your earlier comment about the time. I know that it would be helpful for members on this side of the Chamber to get an indication on whether the Minister was going to go through to the full hour or not.
CHAIRPERSON (Barbara Kuriger): Ah, yes. Yes, I was just going to announce that as I called the Minister up to speak. And we’re looking at about 4.12 instead of 4 o’clock. Thank you.
Hon NICOLA WILLIS (Minister of Finance): I’m pleased to share with the committee that I receive anecdotal feedback on the impact of Investment Boost on a weekly basis—most recently from the MP for Ōtaki, Tim Costley, who shared with me a text message from a small business owner in his community who had felt confident enough to replace their work vehicle as a result of the Investment Boost policy.
I do want to make clear to the House that Investment Boost is not a short-term measure; it is a long-term initiative to get more investment for Kiwi businesses, which, of course, happens over many years, not just weeks or months. Right now, firms are facing uncertainty so some of them will have muted investment intentions, but that will change as the economy picks up. The Investment Boost policy is intended to encourage levels of capital investment, which will lead to greater future productivity and greater wage rises.
I was also in Australia last week, where I spoke with a range of Australian businesses who were very interested indeed in New Zealand’s Investment Boost policy. In the words of the Australian Financial Review, who reported on our policies, “New Zealand’s Minister for finance and economic growth … has stolen a march on Australia by offering a tax break for companies investing across the Tasman.” That is just another confirmation that this is a very good policy indeed.
Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Chair. Despite all the introductory comments by the chair of the Finance and Expenditure Committee, which I understood was meant to be non-political and actually a really good opportunity to go through the actual report, I do want to question the Minister to begin with around some of the responses that she had to that member, because, actually, we have a different view around Budget and the backdrop of Budget.
Budget 2025 is that thousands of businesses have shut down, tens of thousands of people have lost their jobs, and people are skipping doctors’ visits because they can't actually afford it. The Minister said that she has received a lot of anecdotal data around the support for Investment Boost, including from one further up the line, about 30 minutes away from here. I want to hear from the Minister whether she's actually received any data around the actual uptake of Investment Boost to date, and, if so, can the Minister please share that with the House?
Hon NICOLA WILLIS (Minister of Finance): As previously communicated to that member, we have not received data, because it is very difficult for IRD to disaggregate what investment is a consequence of Investment Boost and what isn't. At the end of the year, of course, we will be able to see how many claims have been made for the Investment Boost policy. I just hope that the member’s not changing her tune, because I'm looking at an article from 27 May, in which Barbara Edmonds says the Government’s Investment Boost is “good for business”.
Hon BARBARA EDMONDS (Labour—Mana): Again, it’s really great to hear my own words being repeated to me, because I actually know my own words. I also know a bit about tax. So the question I actually have for the Minister is: if she is unable to provide any data to date because it can't be disaggregated, what is the data to date that has not been disaggregated?
Hon NICOLA WILLIS (Minister of Finance): No, it's simply that there isn't any data yet.
CHAIRPERSON (Barbara Kuriger): Just before the member asks the next question, the point of this exercise is for members to be able to ask questions to the Minister. There's a lot of shouting coming from the other side, making it difficult for everyone in the Chamber to be able to hear some of the questions.
Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Chair. To my next line of questioning: both the Prime Minister and the Minister of Finance, when she appeared before the select committee, had made claims around there being 240,000 more jobs over the forecast period. My question to the Minister is: how many jobs are as a result of that Government policy, and can she provide a specific breakdown of the policy and how many jobs will be created?
Hon NICOLA WILLIS (Minister of Finance): Those are just standard Treasury forecasts forecasting the jobs that will be created in the economy over the forecast period.
Hon BARBARA EDMONDS (Labour—Mana): If that's the response from the Minister, we can surmise, therefore, that the Government’s claim that they're creating those jobs is actually misleading. Therefore, I'm going to ask the Minister, since you've spoken about those particular 240,000 more jobs and that it's Treasury’s forecast: is that, therefore, not the result of the working-age population actually growing by 250 percent? If not, provide a breakdown from Treasury as to why and how they got to 240,000.
Hon NICOLA WILLIS (Minister of Finance): It's sad, isn't it, when Opposition members want to quibble about job creation—a thing that I thought both sides of the House could agree on is one of the positive things that comes from a consistently growing economy, which is what the Treasury is forecasting and is the basis of that number.
Hon BARBARA EDMONDS (Labour—Mana): It's, again, very interesting to see the modus operandi of this particular Minister of Finance. Instead of providing the detail—because, actually, that's the most important thing: if you want to make a claim that your Government is going to create 240,000 jobs, back it up. Therefore, when I am asking the question to provide the backup, to provide the breakdown—because, actually, my response is, that's only because of population growth—the Minister can only spin around and then basically push it back, or what we call “projection”, on to the Opposition for even asking the question in the first place. That is our job.
Therefore, Minister, the question is, the number of people in work has dropped by 36,000 since you took office. Why should Kiwis feel confident about job growth when the number of people in work gets worse and worse?
Hon NICOLA WILLIS (Minister of Finance): That member may take economic growth for granted. I don't, particularly when I think about what would happen if we had a Labour - Te Pāti Māori - Green Party Government that was targeting higher inflation, higher interest rates, and lower growth. There would be less job creation under that policy mix. To the member’s question—she's asking about job creation—well, yes—
RAWIRI WAITITI (Co-Leader—Te Pāti Māori): Point of order, Madam Chair. The Minister of Finance made a comment that Te Pāti Māori was in Government; we were never in Government with the Greens.
CHAIRPERSON (Barbara Kuriger): I think it was wishful thinking—just answering the member’s point of order. But I was, while the Minister is actually seated at the moment and not asking a question, going to make the point to the Minister that it’s not a session for political attacks; it’s a session for asking the questions. Perhaps we’ll just start getting things back in order.
CHLÖE SWARBRICK (Co-Leader—Green): E te Māngai, tēnā koe. Tēnā koutou e te Whare. I have a direct question for the Minister of Finance after having gone through all of the documents that have now been released over the past week that the Government was advised on with regard to this Budget. What do you call it, Minister, when the Government makes decisions that it is told will worsen homelessness, deepen child poverty, generate more crime, reduce the quality and quantity of higher education, and increase climate-changing emissions, and then you decide to go ahead with all of those things anyway?
Hon NICOLA WILLIS (Minister of Finance): Well, Madam Chair, I’d just simply call that the Green Party’s characterisations of the Government’s policies.
CHLÖE SWARBRICK (Co-Leader—Green): I would refer members of the public who may be watching along at home to the official information and advice that was given to the Government about the impacts of the decisions that they were intending to make, because, in fact, the information is objective and it is clear.
I guess, when this Government is provided with advice that the decisions it intends to make will do all of those negative things for our country and for our society, and the Minister refuses to answer about what that actually means about the shape of this Government, the question we’re kind of left with—or, rather, the answer that we’re left with—is that this Government is irresponsible or arrogant or just, frankly, incompetent. Is this supposed to be taken as a sign that this Government think that it knows better than everyone, including its own officials, including experts, including economists, including regular hard-working New Zealanders outside of these comfortable walls who can see the country falling apart around their ears as a result of this Government’s decisions?
Perhaps another question which I hope to get an answer on out of the Minister of Finance: knowing that that was the official advice—that so many things would get so much worse as a result of the Government’s merciless cuts and the decisions that it was making—what analysis, if any, did she decide to undertake, perhaps with her social investment hat on, on the costs in the long term of all of these cuts to social service provision?
Hon NICOLA WILLIS (Minister of Finance): I reject the member’s characterisation, because, actually, I believe that this Government is pursuing policies that will deliver better housing affordability and less homelessness, in particular because we have the courage to address the underlying driver of unaffordable house prices in this country, which is restrictive green and red tape primarily through the Resource Management Act, which we are replacing—also because we are advancing the fast track regime, which will see subdivisions that that member would say no to go ahead, meaning more housing supply for the country. I reject the characterisation that we’re increasing emissions when we’ve presented a thoughtful Emissions Reduction Plan which shows us achieving our zero carbon targets over that emissions period.
To the member’s question about cuts, I’d just remind her that we are running a deficit this year of $12 billion, which is one of the largest deficits of countries in the OECD and reflects the fact that the Government is taking a gradual path to fiscal consolidation, in which we are continuing to increase spending in health, in education, in law and order, and in critical public services because we think it’s the right thing to do for Kiwi households, businesses, and the economy as a whole. If the member’s position is that what the Government should do is just borrow ever more, tax ever more, and spend ever more, and that will solve every problem, I’ll just say that I reject that view.
CHLÖE SWARBRICK (Co-Leader—Green): Just responding particularly to that point that the Minister made around the Government’s Emissions Reduction Plan. The Minister herself—and I’m sure this House and members of the public will be aware that the Government is currently being sued over its Emissions Reduction Plan because it’s not actually worth the paper that it is written on. To that effect, the different decisions that we could see made in this House would be the likes of He Ara Anamata, the Greens’ Emissions Reduction Plan, which would see emissions cut six times faster than the Government’s so-called plan while reducing the cost of living and increasing quality of life.
Another question for the Minister, particularly about our emissions, because there were actually some interesting comments made by her colleagues on a political panel at the Climate Change & Business Conference just yesterday in Tāmaki-makau-rau, Auckland: is the Minister going to be budgeting for, or has there been any consideration whatsoever around budgeting for, meeting our Nationally Determined Contributions under the Paris Agreement, particularly as necessary, unfortunately, for offshore mitigation, which becomes all the higher a cost as a result of the Government reducing its investment in onshore mitigation?
Hon NICOLA WILLIS (Minister of Finance): I have to say, I welcome this member getting back to the environment, because I’ve never heard her so passionate on that subject. Normally, Palestine is what gets her more passionate. In terms of the specific question that she has asked, look, the Estimates clearly show that we are not forecasting spending billions of dollars offshore to meet the Nationally Determined Contributions, which James Shaw signed us up to.
To the second part of the question, is it a good thing that we are now in a position where gas is diminishing in availability in this country, such that we’re having to depend on a mountain of coal to keep the lights on? No, that’s not ideal, and so I’d love to wind back time and not ban oil and gas, as Jacinda Ardern and the Greens did—that would be a better position—but, unfortunately, we can’t wind back time. This Government is looking at what we can do to shore up confidence in oil and gas exploration.
Hon Dr MEGAN WOODS (Labour—Wigram): Just one question to the Minister of Finance based on her last comment: what is the average time in New Zealand for a new oil and gas field to come into production?
Hon NICOLA WILLIS (Minister of Finance): Off the top of my head, it can take up to six years, which imagine if they hadn’t banned it—we’d have some new ones on score by now.
Hon Dr Megan Woods: No, 10.
Hon NICOLA WILLIS: Oh, it’s 10 according to Megan Woods; I take her at her word.
Hon DAVID SEYMOUR (Associate Minister of Finance): Could it also be the case that, if you knock the stuffing out of an industry, the skilled people leave and the ability to keep production up is reduced in the short term?
Hon NICOLA WILLIS (Minister of Finance): Well, the member makes a good point, but the broader point here is that we have these tears on the other side of the Chamber about how long it’s going to take to find gas, which has half the emissions of coal, when they’re the ones that banned the gas exploration in the first place. This is a wonderful come-to-Muhammad moment, because, actually, the reality is that Megan Woods, the member who asked that question, was the one who went out there, banned oil and gas, and set our electricity prices soaring, which led to a coal mountain at Huntly—well done.
Hon Dr MEGAN WOODS (Labour—Wigram): Thank you, Madam Chair. Given the Minister's comments that she's just made, which are factually incorrect in many ways, I’d just like to reiterate that the Labour Party has absolutely no intention of bringing back the ability to explore for oil and gas. But what I would like to ask the Minister is how much money was invested in existing New Zealand oil and gas fields between 2018 and 2023, since the Minister is talking about there being capital flight in her comments.
CHAIRPERSON (Barbara Kuriger): I think we’re going backwards instead of forward. Is there a way the member can rephrase that question?
Hon Dr MEGAN WOODS: Sure. So given the Minister has allowed $200 million to co-invest in oil and gas fields in the Budget that we are debating, what is the level of investment that happened—did she take advice on the level of investment that happened between 2018 and 2023, and how did that compare to the five years of investment in existing fields before that?
Hon NICOLA WILLIS (Minister of Finance): Well, I didn't take advice on this matter because, due to the management of conflicts of interest and in alignment with the Cabinet Manual, I was not involved in Cabinet discussions relating to this matter.
CHLÖE SWARBRICK (Co-Leader—Green): It felt appropriate to respond, given that the Minister, in attempting to answer my questions, threw back some quite nasty stuff. So I just want to make it crystal clear that genocide is a biodiversity and climate disaster—in fact, more military intervention and more war results in all the more climate-changing emissions, which result in an all the more unlivable planet for everybody, including New Zealanders. I also just wanted to further dig into the point that was raised by the Hon Dr Megan Woods, particularly about the decisions that this Government has chosen to undertake. The $200 million subsidy for new fossil fuel production in this country comes with an opportunity cost—
Ryan Hamilton: It’s not a subsidy—co-investment.
CHLÖE SWARBRICK: To the point that is being heckled at me right now, I have put multiple Official Information Act requests, parliamentary written questions and oral questions—both to Minister Todd McClay and to the Prime Minister—asking for any clear and explicit evidence that it is not a subsidy. Because, in fact, we have clear and explicit evidence that it is a subsidy. So can the Minister now stand and tell us that it is not a subsidy and provide the evidence behind that assertion? Because if not, in the absence of that evidence, it very clearly is a subsidy for new fossil fuel production. That’s my first question.
My second question is: did she, or her team, or anyone in Cabinet, do any form of investigation into the opportunity cost with investing this $200 million subsidy into new fossil fuel production, and what, for example, we could have achieved in terms of resilience in our energy system, with that money going into the likes of renewable energy?
Hon NICOLA WILLIS (Minister of Finance): Can I just sincerely say to the member that when it comes to the situation in Gaza, I think we can both agree that we are both equally appalled by the loss of life and the devastating events that are occurring there. For me, it's more about children dying than biodiversity, but I think we can both agree that we're both concerned by that.
Now, in terms of the questions that are relating to the energy policy in the Budget, I'm going to invite the member to put those questions to Minister Bishop, who is the Minister who took those decisions on my behalf.
Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Chair. Where I want to go with this line of questioning is in relation to reprioritisations, as the Minister would say. What we have seen progressively across the country since this Government came into power is a worsening of our public services and a health system that is increasingly under pressure. The question is: is meeting her fiscal objectives, as she has set out in the Budget documents, more important than funding the services that people need?
Hon NICOLA WILLIS (Minister of Finance): We can do both.
Hon BARBARA EDMONDS (Labour—Mana): Treasury advised that, in order to meet her fiscal strategy—and it was released under an Official Information Act request for a report that was dated December 2024. It was only released after a complaint to the Ombudsman. That advice said that, in order for the Minister to meet her fiscal strategy, it will require constraining expenditure growth—it will require “significant structural changes to how these services are funded and delivered. All such choices rely on either reducing access to health and education services, an implied reduction in their quality, or historically large increases in productivity.” Does this not explicitly say that she plans to degrade services in health and education?
Hon NICOLA WILLIS (Minister of Finance): No, it doesn’t say that, and I congratulate the member on catching up with a report that was first released around, I think, a month ago. What that report does is look 15 years ahead. What we set out very clearly in the forecasts that this Budget debate relates to is that, over the next four years, the Government will achieve its fiscal strategy by getting Government spending as a proportion of GDP down, getting the debt curve bending down, getting us back to surplus, and all the while increasing funding for health and education. We have left more than enough headroom over the next few Budgets to increase spending for health and education, and I’m quite happy to commit to that member that, for so long as I am finance Minister, there will be more funding for health and education. The hopeless scaremongering and the latter discovery of an OIA request doesn’t make any of that untrue.
Hon BARBARA EDMONDS (Labour—Mana): Therefore, in relation to the Minister’s response, will the funding for health and education meet both inflation and population growth?
Hon NICOLA WILLIS (Minister of Finance): I want first to acknowledge that Chris Bishop is in the House. Both Megan Woods and Chlöe Swarbrick put questions around oil and gas, which I think he will be happy to address, and it is appropriate that he probably does so at the appropriate juncture. In terms of funding for health and education, I’d note that the health funding that we provided in this Budget increases health spending as a proportion of GDP and, I understand, goes beyond demographic pressures. In terms of education, of course, that relates not just to the overall population but demographics in the age group of those going to school.
Hon BARBARA EDMONDS (Labour—Mana): In summary of the Minister’s response, is it correct, therefore, that she is not committing to increasing health funding by inflation and age demographics?
Hon NICOLA WILLIS (Minister of Finance): No, that is not correct. I’m saying that there are different ways of measuring that, and I’m not going to be held to the member’s way of measuring it. She’s the one who’d measure inflation by making it go higher.
Hon BARBARA EDMONDS (Labour—Mana): Therefore—because the Minister, again, likes to spin it and turn it around to attack members on this side of the House, as to comments that we’ve made, which is not her responsibility—will she confirm one more time for the record, for everybody else who is outside of this House, who are asking the same question, that while she is the Minister of Finance, she will not be increasing health funding for both inflation and age demographics?
Hon NICOLA WILLIS (Minister of Finance): I have literally just addressed that question.
Hon Dr Megan Woods: Madam Chair?
CHAIRPERSON (Barbara Kuriger): Is this a new question, because is Minister Bishop going to answer the previous question?
Hon Dr Megan Woods: It’s a new question.
CHAIRPERSON (Barbara Kuriger): OK, well, we’ll take the Hon Megan Woods first because it’s probably on the same thing.
Hon Dr MEGAN WOODS (Labour—Wigram): No, it’s not. I’d like to ask the Minister of Finance some questions around Working for Families and FamilyBoost. Minister, when you came to select committee, we heard that 153 families to date had received the maximum $75 that they were eligible for under FamilyBoost. What is the updated figure?
Hon NICOLA WILLIS (Minister of Finance): I can confirm that every family who has applied for FamilyBoost has got the full entitlement to which they are entitled, which was based on the campaign commitments made by the National Party during the campaign.
Hon Dr MEGAN WOODS (Labour—Wigram): I asked the Minister what the updated number was. We heard at select committee that 153 families had received that number. What is the number as of today?
Hon NICOLA WILLIS (Minister of Finance): Well, the member misses the point. I missed the characterisation in her question which is that the full entitlement is as she characterises it.
Hon Barbara Edmonds: Check your notes.
Hon NICOLA WILLIS: Actually, the policy has always been very clear—Barbara Edmonds—that the amount of rebate depends on how much people spend on childcare fees each fortnight. So they have to spend $300 a week to get the maximum a fortnight, and they have to earn under the maximum income threshold. So all families who meet those criteria have indeed got a rebate of $250. So the member’s question is misleading in that it’s claiming that it’s only a full rebate if it is that amount, when, in fact, we were always clear that the rebate related to how much had been spent on childcare fees and the income level, and IRD have worked tirelessly—tirelessly—to ensure that people get the correct rebate according to their circumstances.
CHAIRPERSON (Barbara Kuriger): Can I just clarify, because I’m not sure that the member asked about the full rebate, so—
Hon Dr MEGAN WOODS (Labour—Wigram): Speaking to your point, Madam Chair—not off our time—you're absolutely correct. I wasn't asking about the elusive $250 FamilyBoost; I was asking about how many families who had received up to the maximum of the FamilyBoost payment—
CHAIRPERSON (Barbara Kuriger): Up to their maximum?
Hon Dr MEGAN WOODS: Yeah, their maximum; 153 was the number that the Minister of Finance reported at select committee, and was the updated number as of today. If the Minister doesn't have that number, that's fine; we'll put the question in writing.
Hon NICOLA WILLIS (Minister of Finance): Well, when you go back and check the Hansard, you'll see that the word “maximum” wasn't used in her earlier questions; she's inserted that later. I can confirm that more than 60,000 families have received their full entitlement for the FamilyBoost payment.
Hon CHRIS BISHOP (Associate Minister of Finance): I do want to—I understand that—
Hon Dr Megan Woods: The cavalry, huh?
Hon CHRIS BISHOP: Well, I understand—well, you asked some questions, which I’m now here to answer. I wasn’t here. So I’m happy to—[Interruptions] Well, you literally asked some questions. I’m now here to answer those questions. And we’re now getting complaints about answering questions. [Interruption]
CHAIRPERSON (Barbara Kuriger): Order! Order! I understand Minister Bishop’s come to answer some questions around the gas—
Hon CHRIS BISHOP: Yeah. My understanding is there were some questions around the oil and gas contribution in the Budget in the Estimates. I’m happy to answer those questions and actually hear them, but I suspect I know what they are. From Chlöe Swarbrick there’ll be the allegation it’s a subsidy and possibly the same line of questioning from the Hon Megan Woods. The Government has set aside a contingency in Budget 20—
Hon Dr Megan Woods: How can he answer questions when he doesn’t even know what they are?
CHAIRPERSON (Barbara Kuriger): Well, he’s referred to the fact that the questions were: is it a subsidy and the other question talked about the opportunity cost compared to energy and resilience. So if we make that the starting point.
Hon CHRIS BISHOP: Oh, so having asked questions, you now don’t want answers. Righto. Well, we now have an understanding of the Labour Party approach to everything, which is—[Interruption]
CHAIRPERSON (Barbara Kuriger):
Quiet! Order!
Hon CHRIS BISHOP: —just speculate and fulminate wildly and then not actually want questions. A bit like their approach to inflation.
Hon Dr Megan Woods: It’s not the vibe of the thing; it’s actually a question and answer.
Hon CHRIS BISHOP: Ah, the vibe of the thing. Yes, a bit like the vibe of KiwiBuild building 100,000 houses, which that member was responsible for and was a disaster.
So the Government has set aside $200 million in the Budget as a—[Interruption]
CHAIRPERSON (Barbara Kuriger): : Order, please! I can’t hear!
Hon CHRIS BISHOP: —contingency which will be drawn down upon the publication of a business case by the Minister for Resources. The reason the Government has set aside that money is because of the disastrous policies between 2018 and 2023. And it’s a good faith attempt to deal with the lack of security of supply for gas in the New Zealand energy system. The simple reality is we need gas and we need people exploring for gas. Every member, I think, is familiar with the challenges around the insecurity of gas supply. So the Government has put $200 million aside so that Government can take a stake—
Hon Dr Megan Woods: This is ridiculous. Are National so desperate they had to soak up time like this?
Hon CHRIS BISHOP: The member literally asked questions.
Hon DAVID SEYMOUR (Acting Prime Minister): Point of order. Madam Chair, I apologise for interrupting my colleague, but the Standing Orders and Speakers’ rulings are very clear that interjections are supposed to be rare, reasonable and, preferably, witty. A running commentary and barrage like that is making it hard for me to understand what is being said and I sit right beside the member speaking.
CHAIRPERSON (Barbara Kuriger): Thank you to the member for the point of order. I have heard the interjections, and they are too loud, but I understand that the Minister started answering the questions of Chlöe Swarbrick, if there are further questions—I’m just going to let the Minister finish answering questions.
Hon CHRIS BISHOP (Associate Minister of Finance): Which is that the Government has set aside this money so that we can become a potential co-investor in new gasfields to try and reduce the sovereign risk that has occurred to New Zealand because of the disastrous policies of the previous Government. Now, having repealed the oil and gas ban, we’ve got that into place, but there are clearly people out there in the world who look at New Zealand and say, “Well, hang on a minute, if the cowboys on the other side get back in, what are we going to do?” So we need an ability to make sure that people have some of their investments de-risked, and one way of doing that—and, frankly, if it was over to me, in a personal sense, we wouldn’t be doing it, but one way of de-risking that investment is for the Crown to take a stake in oil- and gasfields, gasfields being the major focus, obviously; that being the cause of concern. So we are working our way through that between the Minister for Resources and myself, as Associate Minister of Finance, and when we have announcements to make, we will do that. It is not a subsidy, and it cannot be a subsidy if the Government has a commercial stake in a field. It’s just—
Chlöe Swarbrick: Yes, you can—yes, you can.
Hon CHRIS BISHOP: Well, you’re wrong about that, with respect—it’s just an investment.
CHLÖE SWARBRICK (Co-Leader—Green): I’m really glad that the Minister is here now and engaging directly with this, because I would like to know and to understand what specific advice he has had with regard to the Agreement on Climate Change, Trade, and Sustainability (ACCTS), with regards to its definition of a subsidy. This is what I’ve been trying to get answers to over a series of months, in direct questions to the trade Minister, to the Prime Minister, in Official Information Act requests, and in parliamentary written questions—just to understand what the evidential basis is that allows the Minister to make those assertions that this is not a subsidy. Because the World Trade Organization defines a “subsidy”, effectively, as a form of investment, whether that be co-investment or just taxpayer money being used and put into something that the private sector would not do by itself. By that definition, this is a subsidy.
I would like to ask the Minister—I know that he’s been dismissing, as many other Ministers in this Cabinet have been, the advice that we commissioned, because we have been unable to get access to anything that this Government has used to make its decision—whether he’s engaged in or looked at the independent King’s Counsel advice that we commissioned, in order to get some clarity around this definition of subsidy?
Hon CHRIS BISHOP (Associate Minister of Finance): Sure, I’m happy to address that. It’s a good question from the member. As I think the member well knows, the Government doesn’t release privileged legal advice as a matter of course, so we won’t be doing that. But let me just reason it for the member in this way: the Government owns 51 percent of Meridian Energy—it is a listed company, but the Government owns 51 percent of it—Meridian investing in a new wind farm, that is not a subsidy; that is just an investment. So if the Government sets up a separate company on the Crown balance sheet, as a Schedule 4 company, for example, or through another vehicle that’s owned by the Crown, and the Crown takes a stake in a gasfield—say a 10 percent stake with a co-investment from a range of private sector partners—that is not a subsidy; that that’s just an investment.
It’s the same as Meridian investing in a wind farm or Genesis investing in a particular type of power station or Kānoa investing in a range of infrastructure investments through the Regional Infrastructure Fund up and down the country, for example. The Crown investing in something is not a subsidy; it’s just an investment. I know the member doesn’t like gas, but she needs to divorce her views on gas from the basic—
Ryan Hamilton: Maths.
Hon CHRIS BISHOP: Yeah—basic maths and basic economics.
CHLÖE SWARBRICK (Co-Leader—Green): Just further to that point, if I may, Madam Chair, I just want to be crystal clear with the Minister that this is not a matter of my personal opinion. This is about the definition of what is considered a fossil fuel subsidy under the Agreement on Climate Change, Trade, and Sustainability (ACCTS). All of my personal opinions about the need for us to act with pace to address the climate crisis aside, this is about, very literally, the words in a trade agreement which this Government championed signing, after five years of negotiation, with a press release from Minister Todd McClay in November of last year.
In the advice that we have received—because, again, we are yet to get any insight into the evidentiary basis on which the Government is standing and consistently declaring this is not a subsidy—and the information that we have is that this is a subsidy per article 4.3(2)(b)(i), because, firstly, “the financial contribution”—that being the subsidy under the definition of the Agreement on Climate Change, Trade, and Sustainability—“is primarily targeting the … exploration, extraction, refining, [and] processing … of fossil fuels”, which the Minister would not disagree with. And, secondly, because it “reduces the costs of such activities or increases revenues retained by [the co-investors, who are the] actors engaged therein”. Based on those two premises, on those principles, this meets the definition of a subsidy under the Agreement on Climate Change, Trade, and Sustainability. So I’d just really like to understand how the Minister can consistently say the opposite, when he has not addressed the definition and the ACCTS.
Hon CHRIS BISHOP (Associate Minister of Finance): Well, I don’t have a huge amount more to add to what I’ve already said, which is, respectfully—and I appreciate that the member is engaging in this in good faith, and it is a complicated issue—the Government, via an investment vehicle that is owned by the Crown, investing in a new gasfield, alongside private sector co-investment, is just an investment. It would be different if the Government was going along and saying, “We are going to pay you money in order to do something.” We’re not doing that. It’s a co-investment on commercial terms, and that’s the way—I mean, it’s subject to detailed design, and we haven’t yet drawn down the contingency, so I caveat my remarks by saying that, and Minister Jones is leading on this, alongside me, and working hard on that. But that’s not the intention of the policy design and, therefore, it is not a subsidy. The Government remains really confident in its view that it is not. I know the member has legal advice to the contrary, but, respectfully, we disagree.
RAWIRI WAITITI (Co-Leader—Te Pāti Māori): Thank you, Madam Chair. I’ll take a call on this particular issue. I want to talk about funding to Māori. We’ve seen Māori statistics really deteriorate under this particular Government. We’ve got mortality rates—and I heard about health, but specifically in Māori health. The closure of the Māori Health Authority has been detrimental in regard to—Māori mortality rates here have increased from seven years to 8.5 years between non-Māori and Māori. But also, you know, lowering the cancer screening, all those types of things—that particular funding going into Māori health has really affected the 20 percent of the population here in Aotearoa that I’m talking about.
You’ve got a $110 million cut to Māori development, which only now receives 0.2 percent of the total Budget—0.2 percent. How are we supposed to improve Māori lives here in Aotearoa, and a commitment to Te Tiriti o Waitangi, if it’s only getting 0.2 percent of the total Budget, that’s in Māori development, if we make up 20 percent of the population? No wonder the Māori stats are dire—no wonder they’re dire.
Not only that, Māori unemployment is double that of non-Māori here in Aotearoa. It’s now on 10 percent—Māori unemployment rates. We’ve discussed the different changes and the different issues facing Māori within the Finance and Expenditure Committee, but I want to ask, what are the settings that this Government is doing that were set in the last Government that are going to improve the lives of Māori, whether it be health, whether it be across Vote Māori? Because the problem is you’ve wound back—you’ve even done two Budgets demonstrating a $757 million reduction in Māori funding. Because, if anything, we’ve seen the need for support increase in our communities.
The stats don’t lie. Unemployment has increased. The mortality rates have increased. That is all due to the rewinding and the taking of Budgets that were specific to improving Māori lives—to live with some integrity, to live with some dignity. But this Government continues to wind back many of the legislative stuff that was worked hard for in the last Government, with the pressure from Te Pāti Māori in Opposition. We make up 20 percent. And again, you know, we’d receive at least $40 billion if we were on 20 percent. We’re not asking for everybody else’s share; we just want our bit to be able to improve the lives of Māori, so we don’t see the increase of these statistics—health statistics, mortality statistics, justice statistics. We need to be able to have solutions that are by Māori, for Māori, to Māori. So we need to do that.
I just want to ask the Government: have you got specific, targeted funding to improve these statistics? Because, at this particular time, they’re actually getting worse. They’re actually getting worse. You’ve gone up 2 percent in unemployment since 2004. You’ve gone up a percentage point in terms of mortality rates. That goes to show you that winding back Māori health initiatives has been fatal for te iwi Māori.
So I want to know whether this Government, and you as the Minister of Finance, are going to have these fiscal settings to ensure that Māori can live with dignity, and with some hope. But, unfortunately, the current situation is that you rewound all of those solutions that were put in place to ensure that we can live with some dignity. So I just wanted to ask that question. What are your settings? What are you going to do to improve the statistics? They’re getting worse.
Hon NICOLA WILLIS (Minister of Finance): I would hope that the member and I can agree that we share an aspiration to see all Māori doing better in New Zealand. Whether that is Māori children in our education system, who I wish to see achieving far higher rates of numeracy and literacy achievement, which is being delivered through our structured literacy and numeracy programme. Whether that’s more support for children with additional learning needs in our schools, which is being supported through our record boost to learning support in this Budget. Whether that is people in the health system, who I wish to see getting more timely elective surgery and better treatment in the emergency room, which is being delivered by funding uplifts in the health system and clear targets for the achievement of those things.
In this Budget, there are many initiatives which will lead to better outcomes for Māori. The Investment Boost policy will be taken up by many Māori-led businesses who will make investments that will make their businesses more productive for the future. The KiwiSaver policy will ensure that more Māori have greater savings in retirement and that more KiwiSaver funds are available to be deployed into New Zealand investments.
So the answer to the member’s questions is yes, this Budget is absolutely about delivering better outcomes for Māori, alongside all New Zealanders.
Hon GINNY ANDERSEN (Labour): Thank you very much, Madam Chair. I have a couple of questions around jobs and economic growth in that space. According to the quarterly business employment data, there has been no job growth since the Minister took office. I’m just wondering if she’s got any idea why there are 10,560 fewer jobs in the past three months?
Hon NICOLA WILLIS (Minister of Finance): I’m very happy to take the member back to the Pre-election Economic and Fiscal Update, which forecast what unemployment would be at this time in the economy under the settings left by the last Government, and I’m happy to confirm that those numbers are higher than what has occurred under this Government.
Hon GINNY ANDERSEN (Labour): Specifically, what is her plan for the 19,842 more 15- to 24-year-olds who no longer are in work? Is there any specific plan for that demographic, which seems to be disproportionately represented in the unemployment statistics that have been coming out month on month? I would also like to highlight that there have been 15 consecutive months now where jobs have fallen every quarter—and that is five quarters now—but my question is specific to the 19,842 more young people who no longer have work.
Hon NICOLA WILLIS (Minister of Finance): It’s of concern to this Government to see any young person unemployed and on a benefit, because it’s our view that every young person who cannot find a job should take up the State’s generous provision of taxpayer-funded education that is available to them in the tertiary education system. When it comes to those aged 15, 16, and 17, they should be at school. When they are older, they are able to enter State-subsidised tertiary education of a range of different types, and that’s why, in this Budget, we’ve advanced a policy for 18- and 19-year-olds where we’ve said, look, actually, we’d prefer that young people were either in work, training, or education and, if they’re not, we actually want their parents ensuring that they take up those options. That is why we have put forward a policy to ensure that 18- and 19-year-olds don’t automatically get a Jobseeker benefit but that their circumstances are tested against the income of their parents.
Hon GINNY ANDERSEN (Labour): I’m just interested in her views on workers falling behind in terms of the cost of living. We know that there has been about a 1.5 percent increase in wages—that’s not, clearly, keeping up with the 2.7 percent of inflation. On top of that, we have approximately a 10 percent increase in administrative inflation, which is all those additional fees and costs that Kiwis now have to bear, such as road-user charges, such as being able to go to tertiary institutions, such as going to a doctor—even the Government’s commitment to help out and co-fund water infrastructure, which they’ve now backed out on, which is causing rates to go up. There’s been all of these administrative charges on top of the fact that wages are only increasing at 1.5 percent. What is her response to working Kiwi families who find their weekly costs going up and up, and they do not have that extra money in their back pocket that she promised them?
Hon NICOLA WILLIS (Minister of Finance): My response to those families is that this Government is working hard every day to get on top of the cost of living for you. That is why we are so focused on strengthening the fundamentals of this economy, because we understand that, when inflation is allowed to get out of control, that drives price increases across the economy that affect every family. That’s why we target an inflation rate of 2 percent—between 1 and 3 percent, with 2 percent at the midpoint—and why we reject those who argue for a higher inflation rate that would lead to faster price increases and a higher cost of living. That is why, in this Budget, we advanced the Investment Boost policy, which we were advised would increase wage growth and increase growth in the economy, because we wish to see that. That’s why we are on the side of businesses who wish to create jobs and who wish to lift incomes, and why we are so intent on reforms that will allow that to happen.
Hon GINNY ANDERSEN (Labour): Does she accept that administered inflation last month hitting 10.8 percent has been done under her watch? Under her Government, we have seen increases to road-user charges, to all of those weekly fees that come into Kiwis’ bank accounts. Will she accept that it is the cuts in Government spending, and pushing those costs out into the community for the weekly budget to pick up, that has actually made the cost of living crisis worse for those New Zealand families, and does she accept that all of those increased fees and levies have gone up under her watch?
Hon NICOLA WILLIS (Minister of Finance): As I traversed in question time today, the biggest rise in administered costs is rates rises, and, actually, the decisions that individual councils make to increase their rates are their decisions. So, no, I don’t take responsibility, for example, for Wellington City Council’s rates increase, because, if I were leading that council, it would be a lot more careful with its money, which is why the Government is looking into our ability to, through legislation and policy, have a little bit more influence on the rates that councils levy. It is the case that, when rates go up as fast as they have in recent times, it has a very profound impact on the cost of living for New Zealanders. That’s of great concern to this Government. It is that member’s side of the House that have outright rejected doing anything to control rates rises.
Hon GINNY ANDERSEN (Labour): Does she stand by her pre-election promise that National will co-invest in water infrastructure?
Hon NICOLA WILLIS (Minister of Finance): Well, we already are. The Regional Infrastructure Fund, under Shane Jones’ watch, is investing in stopbanks and all sorts of protections for flooding and the like.
CAMILLA BELICH (Labour): The Minister hasn’t made any comments about pay equity yet, so I wanted to ask her: some recent documents have been made public on the pay equity changes. In those documents, officials said that, on their analysis of the proposals because of the short time frame, they raised concerns about unintended consequences. Today, we’ve only seen one union raise a pay equity claim. I want to ask her: was that an unintended consequence or an intended consequence, given that David Seymour has said that these pay equity changes saved her Budget?
Hon NICOLA WILLIS (Minister of Finance): Well, we fully expect and expected that there will be claims made under the new pay equity regime, and such was the completeness of that expectation that I, in this Budget, have put aside funds in contingency needed to address future claims.
CAMILLA BELICH (Labour): How much money has she put aside in contingency to address future claims?
Hon NICOLA WILLIS (Minister of Finance): Well, I would hope that that member would be informed enough to know that revealing that quantum would prejudice the Crown’s negotiating position.
Hon MARK PATTERSON (NZ First): Minister, I note that, in one of your early answers, you referenced the increase to the KiwiSaver contributions that you brought in during Budget 2025. I’ve heard some other supportive commentary around that during the week and taking that even further, but could you give us your thinking behind why it’s important that we grow our savings pool in this country?
Hon NICOLA WILLIS (Minister of Finance): Thank you, Mr Chair, for the question. Yes, that’s right: this Budget supports a lift to 8 percent for KiwiSaver contributions from employers and employees. I’m aware that the leader of the member’s own party has advocated for that to go further in future.
It is the case that, when people contribute more to their KiwiSaver fund, that accumulates massively over time and can afford them a high living standard in retirement. It’s also the case that countries that have private pension schemes of that sort have more capital available to be deployed in those economies. In New Zealand’s case, with around 30 percent of KiwiSaver funds currently invested here in New Zealand, growing pools of KiwiSaver savings means that there could be more options in future for New Zealand - based investment in New Zealand - based jobs, growth, industry, and activity. I think that’s a very good thing.
Hon BARBARA EDMONDS (Labour—Mana): Thank you, Mr Chair. I have just a quick question for the Minister. On page 5 of Vote Finance, the actual report from the select committee, it quotes that the Minister said she was advised on 24 February, by the Secretary to the Treasury, that employment discussions had commenced between Adrian Orr and the Reserve Bank. Does she stand by those statements?
Hon NICOLA WILLIS (Minister of Finance): That doesn’t relate to the Estimates debate, so I haven’t come with the appropriate material to respond to that question.
INGRID LEARY (Labour—Taieri): Just some quick back and forth, if I may, Mr Chair. Does she accept that the cost pressures of the mental health sector are likely to be the same whether directly funded through Health New Zealand or in the funded sector; if so, how?
Hon NICOLA WILLIS (Minister of Finance): Sorry, can the member repeat the question?
INGRID LEARY (Labour—Taieri): Does she accept that the cost pressures of the mental health sector are likely to be the same whether they are funded directly through Health New Zealand or whether they are funded as the funded sector, and, if so, how does she justify that there could be a difference in those cost pressures?
Hon NICOLA WILLIS (Minister of Finance): Well, it is simply the case that when the Government negotiates contracts with service providers, all sorts of factors go into the final price that the Government pays.
INGRID LEARY (Labour—Taieri): Would she then expect that there would be modelling to be able to show—and evidence—what the difference in the cost pressures would be to justify the difference in uplifts?
Hon NICOLA WILLIS (Minister of Finance): Well, look, I think that these questions relate more specifically to Vote health, which the member in this Estimates debate will have the opportunity to address with the appropriate Minister. But what I’d say is that it’s been the practice of successive Governments that we don’t reveal information that would prejudice the Crown’s commercial position.
INGRID LEARY (Labour—Taieri): Would it be her expectation that the Minister in charge would have access to that modelling? I say these comments because we do have burnt out mental health sectors and we have people going to Australia; we have pay equity claims that have been cut in 33 sectors including mental health, so it’s important to understand what level of evidence and modelling the Minister would find acceptable when approving the budgets from the health Minister.
Hon NICOLA WILLIS (Minister of Finance): Well, I don’t know what modelling the member is referring to; what I can say is that the overall funding uplift we provided for health was based on Treasury modelling about demographics and inflation. That was the modelling that informed Labour’s commitments in their fiscal plan prior to the election. We exceeded those commitments and built on them further in this Budget—so we increased them even further. That despite that fact that forecast inflation is lower than was expected.
Hon BARBARA EDMONDS (Labour—Mana): Thank you, Mr Chair. Just going back to the Minister of Finance’s response in relation to my question of whether she stands by her statement that she was advised on 24 February by the Secretary to the Treasury that employment discussions had commenced between Adrian Orr and the Reserve Bank board, I just want to confirm from the Minister: is it that she’s not prepared to answer that question or she has not prepared to answer that question, given that this is on page 5 of the select committee report? So, again, I’ll ask the question: does she stand by that statement?
Hon NICOLA WILLIS (Minister of Finance): Look, it’s simply that I want to give an accurate answer. The member’s put the question on notice, and I’m happy to address it when I can do so accurately.
CAMILLA BELICH (Labour): Does the Minister have any plans to address the pay for care and support workers, given that she cancelled their claim and made it so they are unable to raise another claim until 2026, given that many of them are on the minimum wage now during a cost of living crisis?
Hon NICOLA WILLIS (Minister of Finance): Well, care and support workers, as with any workforce group, if they meet the criteria of the pay equity regime—which is a legal judgment and not a judgment for me to make—would be able to put forward a pay equity claim.
INGRID LEARY (Labour—Taieri): Thank you—just a supplementary to that question from my colleague Camilla Belich. Has the Minister done any modelling on how many care and support workers from New Zealand, out of the 60,000 that have had their pay equity claim cut, have gone to Australia, given that a level 4 pay equity worker in New Zealand gets between $26 and $28 and in Australia can earn between $33 and $44, and given that the Australians gave an uplift of 30 percent over the last three years, compared to New Zealand?
Hon NICOLA WILLIS (Minister of Finance): No, but I would observe that, across the economy, Australia is a wealthier economy that has grown faster than New Zealand for some years, which means it is in a position to pay its people more across many professions. That’s why I have an aspiration to grow this economy faster, to have a more productive economy that can afford to pay its workers more. It’s simply the case that wealthier countries pay their workers more. That’s exactly why I want this to be a wealthier country.
Hon BARBARA EDMONDS (Labour—Mana): So, therefore, in relation to that response and in relation to her response during question time where she said that New Zealand’s growth will outstrip Australia, will she therefore revisit her decision and ensure that if care and support workers—because the Government does the funding; an element of that funding—will she ensure that it’s above the Australian growth?
Hon NICOLA WILLIS (Minister of Finance): I’d hope that that member would understand that it’s going to take more than a year or two of faster growth than Australia for us to make up for the around 30 percent gap between Australia and New Zealand. We’re going to need successive years of that. The best way to achieve that would be for Labour to never get elected ever again.
Hon Dr DEBORAH RUSSELL (Labour): In light of the Minister’s comments about Australia being a richer economy, would she attribute that to the fact that, in Australia, they have a strongly unionised workforce and fair pay agreements?
Hon NICOLA WILLIS (Minister of Finance): No. They dig a lot of wealth out of the ground, and that party doesn’t seem to like mining very much. I would say it’s also about a succession of policies. I wouldn’t put it down to the ones the member chose to mention.
CAMILLA BELICH (Labour): Given the Minister’s answer in relation to pay equity claims, has she done any analysis about the value that giving low-paid workers pay equity claims would give back to the economy in terms of increased spending and how that may impact New Zealand’s economic position?
Hon NICOLA WILLIS (Minister of Finance): You can do whatever model you like, but if a country can’t afford something and borrows for ever to deliver it, then, ultimately, that country goes bankrupt.
INGRID LEARY (Labour—Taieri): How does the Minister intend to fill the sector gaps in care and support work for an aging population when we already have a burnt-out workforce, we have workers going to Australia for higher pay, and we do not have immigration policies that will meet the demand and, in fact, are competing with Australia, which is why Australia have given a 30 percent uplift to their workers? How does the Minister plan to address that gap? Can she tell us how that is at all value for money and cost effective? And what immigration policies and other levers is she using given that we are not going to be able to get the workforce in our own country?
Hon NICOLA WILLIS (Minister of Finance): Similar to this member’s previous questions, she is asking what I think are important questions about the aged care sector and its workforce. Those are questions that are more appropriately put to the relevant health Ministers in their Estimates debate.
CHAIRPERSON (Greg O’Connor): Members, the Minister of Finance’s time in the chair has come to an end. We now have the Minister of Commerce and Consumer Affairs. The Minister is available to speak to that portfolio from 4.13 p.m. until 5.13 p.m. I call Dr Parmjeet Parmar, but we’ll just wait until the Minister is ensconced in his seat before we start our time. Thank you, Minister.
Commerce and Consumer Affairs
Dr PARMJEET PARMAR (Chairperson of the Economic Development, Science and Innovation Committee): Thank you, Mr Chair. As the chair of the Economic Development, Science and Innovation Committee, it’s a pleasure to take the committee of the whole House through the hearing that we held with the Hon Scott Simpson, the Minister of Commerce and Consumer Affairs, and the Ministry of Business, Innovation and Employment (MBIE).
I’ll just go through the main points that we discussed in the select committee. The select committee noted that the Government is seeking $303.3 million for the Commerce and Consumer Affairs appropriation, which is slightly below the previous year’s estimated actual expenditure of $304.2 million.
We focused on the Minister’s strategic intention and it was quite clear that the Minister is quite focused on encouraging a lot of commercial activity, encouraging competition in commercial activity, so that our economy could grow. The Minister also mentioned that he is quite keen on seeing that we are able to provide easier access to capital. Along with these things, we also discussed various legislations which are in progress, some of which have been already passed, like the Contracts of Insurance Act 2024. We discussed the Customer and Product Data Act 2025, the Credit Contracts and Consumer Finance Amendment Bill, and the review of the Companies Act, as well.
In the review of the Commerce Commission discussion, questions were asked about the review that has been done, including the external review, and the Minister noted that the work that the Commerce Commission does is good, but it needs to be fit for purpose. Open banking was another topic where there was a lot of support from members on the committee, and there was a lot of interest to see how it’s going to work. We heard that MBIE is actually formalising the regulatory system to enable open banking to happen.
Charging fees for access to customer data was an issue that came up, and we noted in the committee that process is still under consideration. Changes to the Credit Contracts and Consumer Finance Act came up. There was quite a bit of focus on retrospective changes there, and the Minister presented his side—the advice that the Minister had received—which led to that decision.
Finally, in the short call, I would just like to highlight that another important issue that was discussed in the committee was about scams. This was to understand what the Minister is doing to reduce scam activities that happen which target people in all age groups, especially elderly people, as well. The Minister told the committee that this is something that needs to be looked at an international level and the Minister is keeping a very close eye on what’s happening internationally so that we can see how we can also strengthen our anti-scam provisions here in New Zealand.
So, overall, I would say that it was a really great hearing and I want to acknowledge the Minister, I want to acknowledge MBIE officials, and I also want to acknowledge all the members on the committee for really good scrutiny of the Minister and the officials. Thank you, Mr Chair.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. This is a great opportunity to ask the Government about their record in commerce and consumer affairs. This is an important portfolio, because, at a time when the Government is defunding two of the most important regulators who could make a difference to Kiwis’ rising costs of living, New Zealanders need to know why those choices have been made and what other tools the Government is going to prioritise in this round of Estimates to make sure that help is, in fact, on the way. This is a Government that was elected at the election on promises to help with the rising cost of living, whereas, in fact, under their watch, costs continue to rise and in some cases are getting worse.
The questions that I’m going to ask are not about abstract theories of competition or about the tough talk from New Zealand First about the woke banks; it’s about those things that the families who sit at the kitchen table planning to balance their weekly budget are focused on. They’re not thinking about tough talk from the Government about banking competition, but they do know that New Zealand’s economy has a crisis of affordability that is only getting worse. They’re thinking about the price of butter that has risen up to 50 percent, the price of mince that’s now around $22 a kilo, and their power bills going up again and again, and whether they can afford to get the kids to school, whether they can afford to get around their region.
That mum and that dad, they know that at the heart of their household worries lies a simple truth that the New Zealand economy is in a chokehold of the monopolies that are gaining share under this Minister’s watch. When markets lack competition, consumers pay more; that’s why. It’s this Government that is making things worse because of the monopoly power that exists and is continuing to rise under this Government’s hands-off approach to the markets that are failing in New Zealand.
This Minister of Finance said she’d prioritise the cost of living and that she’d be an inflation-fighting Minister. But it’s sellers’ inflation and market monopoly power that is continuing to go unchecked under this Government’s watch. From groceries to banking, from energy to transport, those concentrated markets are letting a few firms set prices that are higher than they would be in a competitive market in New Zealand and that they are in fact in most OECD countries we’d like to compare ourselves to. Minister, why is this Government slow to act on the cost of living and why is it not a priority that has lived up to the promises that National made in the election?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): The Government is not slow and it is living up to its promises. This is a Government that is absolutely, completely focused on getting the economy growing, making New Zealanders richer, and repairing the damage of six years of a laissez-faire, borrow, hope, and spend approach. Now, that’s going to take a little bit of time.
I absolutely accept that for many New Zealanders, they’re doing it tough, but this is a Government that is firmly focused on getting the basics right and getting competition into the marketplace, and we’re doing that. So I completely reject the premise of the way that the member who’s just resumed her seat has characterised the state of play.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. I have seven areas I wish to concentrate on with the Minister in this debate. They are banking, groceries, electricity and power, ports and airports, airlines, and labour market competition. I’d also ask him to comment on his Commerce Act review of which much has been made in the media by this Government, and there are a number of stakeholders who would be interested in that.
But first to groceries. I understand that the Minister has not had the delegation for groceries, but I want to ask him particularly about his comments on mergers and this Government’s comments on mergers as a focus for them at the beginning of this term, because he will agree, I’m sure, that concentrated markets should not get more concentrated. Can the Minister give us an update which was left out of his speech to, as I understand it, the commerce lawyers at a conference in the last month where he declined to give an update on the mergers decisions that he has taken? Can he give us an update about what we can expect to make sure that mergers which concentrate market power will not proceed under this Government’s watch?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Well, issues relating to mergers and takeovers, or what have you, are the purview of a couple of organisations that have distance and independence from Government, and rightly so. So the Takeovers Panel and also the Commerce Commission are responsible for good judgment and guidance on those matters, and, as Minister, I’m not about to instruct the Commerce Commission on how to do their job.
But what I can say to the member is that the Commerce Commission does a very good job. We have had a review led by Dame Paula Rebstock into the Commerce Commission’s governance, and I will be giving more information about that review and the Government’s response to it in due course.
CHAIRPERSON (Greg O’Connor): Members, back and forth, so Arena Williams. Give each member the opportunity to exhaust some speeches since we have a participating Minister in the chair.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair, and I do acknowledge the Minister’s fulsome answers. That is helpful. So how does he compare his performance, then, to that of Australian Labor Minister Andrew Leigh, who has turned the goodwill from the public about competition reform, and, similar to his rhetoric about competition, has also prioritised that as economic reform into concrete action. He’s chosen mergers as his number one target, also alongside worker mobility, but when it comes to the mergers rules in Australia and New Zealand, surely we can agree that those are from a bygone era where there was less market concentration in our market, and we’re seeing fewer issues where mergers have arisen in particularly concentrated markets.
The issue of Manawa Energy, the issue of the supermarkets is one which the Minister could surely be accountable to the public to, instead of brushing this off to regulators who he is defunding. This is in the context of regulators that have had their funding cut in two successive years. Surely the Minister is responsible to the New Zealanders who are looking at these concentrated markets where they are paying more than they know they should be and he’s saying, “Well, there’s somebody else who’s responsible for that and I am taking away their funding, but there’s nothing to see here.”
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Well, again, the member, I think, misinterprets what I said, but I do have some good news for the member, and I’m sure that she’ll be delighted to know that the changes to the Commerce Act re merger settings are going to be announced very shortly and that Cabinet has made some decisions, and they’ll be announced in due course.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Just a couple of brief points, if I may. First of all, I’d be interested to know whether the Minister will be reinstituting the Consumer Advocacy Council that has been disbanded under this Government, which is a watchdog for consumers in the electricity market, given that electricity prices are skyrocketing and this Government isn’t doing anything about it.
I’d also be interested to know whether the Minister is going to correct his statement in the House when he said that there was “overwhelmingly positive feedback” about his PayWave initiative and whether, in fact, he is taking into account the three positive pieces of feedback or the 30 negative pieces of feedback about that. I’d be particularly interested to know whether he is reconsidering his position or what he is doing to ensure that the PayWave increases are not passed on to consumers.
Does he agree with the feedback given to him that this is one of the most stupid moves any Government could make, or the feedback that said, “less choice”, “less personal responsibility”, “more cost for me”, a “badly thought-out populist policy”? The point being that many consumers that he said were positive are, in fact, concerned that this current Government initiative will see PayWave fees pushed into the price of goods that all consumers will have to bear, and, in fact, it will be the opposite of transparent pricing; it will hide PayWave fees in prices.
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): In answer to the member’s first question: no. But, look, on this side of the House, we take a range of feedback and balanced feedback from a range of sources. The member is referring to, I think, 30 pieces of interaction that I had received. Now, usually, in situations where there is going to be a positive change, there are sometimes those who are detractors, and I noticed that in his party, they are often detractors for positive change.
So the short answer to his question is no, we’re going to push on with the surcharge ban. We’ve said that it will be in place by May next year at the latest, but certainly earlier if we can do it, because New Zealanders deserve to have a regime and the confidence that the price they see for something on the shelf should be the price they pay at the checkout and at the till.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. I want to ask a few questions about groceries, which I think the Minister of Commerce and Consumer Affairs has responsibility for, but you’ll forgive me, Minister, if I have got this wrong. Firstly, there’s a bill coming in November that will allegedly speed up the consenting and the land use arrangements for supermarkets. Will he be in charge of it?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Mr Chair, I’m not 100 percent sure which bill the member is referring to. Maybe she could be a bit more specific.
ARENA WILLIAMS (Labour—Manurewa): It has been reported that the Government’s groceries announcement includes a bill to be progressed by this House and for its first reading to be in November. The question is which Minister will be in charge of it: will it be the Minister of Commerce and Consumer Affairs or will it be the Minister for resource management? I ask because there are a number of things which New Zealanders are interested in in making sure that a third-entrant supermarket in our market is something that we can all have. That’s really important to the Labour Party as well, and we want to understand what sort of arrangements will be made for the progress of that legislation.
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): The member well knows that in matters related to grocery issues, I have a personal conflict, and so I’m not at all comfortable about answering that question. But maybe the Acting Minister responsible for the groceries delegation would make a comment.
Hon NICOLA WILLIS (Acting Minister of Commerce and Consumer Affairs (Grocery Sector)): Mr Chair, can I ask the member to repeat the question?
Arena Williams: Whose bill is the November bill to facilitate land use arrangements for new supermarkets?
Hon NICOLA WILLIS: As is the tradition of this House, the member will find out at the time.
ARENA WILLIAMS (Labour—Manurewa): I’m interested in the progression of that legislation because it is something that is likely to be broadly supported in the House. It is something that is well understood as a market intervention because it was first mooted in the Commerce Commission’s study. There have been other thinktanks and commentators who have commented that these kinds of changes would be sensible, and so I’m hoping to understand a little bit the scope of that bill, but I’m also interested in whether there will be anything in the legislative process for that bill that might address the market power imbalance between supermarkets and farm-gate producers. When I ask about this question, that is something that other jurisdictions that we like to compare ourselves to—particularly, those jurisdictions in Europe, and Australia—have focused on at the same time as they have made it easier for new supermarkets to build new premises and to take over existing ones. That is because those things that make it easier for supermarkets to build are pro-industry—they are good for industry—and that is something which is useful if it brings down the supermarket prices for ordinary consumers. It’s also helpful to consider suppliers, who need to also be supported by the Government to bring prices down in the long run, and it’s important that those legislative changes in those other jurisdictions who remain sticky were done at the same time.
Hon NICOLA WILLIS (Acting Minister of Commerce and Consumer Affairs (Grocery Sector)): I welcome the member’s new-found support for the Fast-track Approvals Act, which is the Act that enables this—and I agree with you—important amendment to fast track more supermarket competition. The way that the amendment bill will work is it will take the existing fast-track Act and it will make an amendment to make it explicitly clear that where someone is seeking consent and permissions across a range of legislation to open a new supermarket or to undertake a development which would have the effect of increasing regional or national competition, that supermarket would be able to be referred through the fast-track regime.
There are a couple of things about that. The first is that an entity could refer multiple projects at the same time under one fast-track application, and the second thing about that is that the fast-track legislation is very clever in that it allows underlying zoning rules to be discarded. What that means, in effect, is that someone could apply for permission to build a supermarket on land that has previously not been zoned for that purpose, which frees up significantly more developable land for supermarkets across the country, and is a very positive thing indeed. The third thing that I’d just mention about the amendment bill is that it will allow the Government to publish a Government policy statement specific, in this case, to supermarket competition to provide guidance to decision makers as they’re judging whether or not a supermarket will, in fact, add to regional and national competition.
As I say, it’s not too late for Labour to get on board with fast track. It’s going to create a lot of jobs, a lot of competition, and a lot of growth in this country.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. Radio New Zealand reports that New Zealand grocery prices are higher than the OECD average and are still rising at 4.4 percent this year. Minister, will you name this as price gouging in the New Zealand market for groceries, and will this regime that the Minister has spoken about make a blind dot of difference to price rises next month, next year, or the year after?
CHAIRPERSON (Greg O'ConnorThe Hon Nicola Willis—and just while we’ve got a three-way transaction going on here, I will call the name so that the technical people can keep up.
Hon NICOLA WILLIS (Acting Minister of Commerce and Consumer Affairs (Grocery Sector)): Fair enough, Mr Chair. Look, there are a couple of points there, which is simply to say that we do watch food price inflation across the economy carefully, and while it’s no longer in the double-digit percentage increases that it was under the member’s party in Government, we have noted that it has tracked a little higher. In terms of what we describe supermarket margins as—and whether describing it as price gouging will make a blind bit of difference to a single New Zealander is a fair question—what I have focused on in my role as Acting Minister in this area is the fact that we have had a series of incidents which make it clear that there has been misleading pricing from supermarkets, in which they have either undertaken misleading promotions or the price that a consumer pays at the checkout is different from that advertised to them in the aisle, and I can confirm that I am taking advice on amendments to the Fair Trading Act to ensure that going forward, there are better incentives to supermarkets to sort that out. It is never acceptable to price New Zealanders in a way that is misleading.
ARENA WILLIAMS (Labour—Manurewa): Thank you to the Minister, and we look forward to seeing some intervention in misleading prices. That’s what Consumer New Zealand has called for from this Government and it is an easy addition to the grocery code which Labour brought in in 2022, and there have been a number of prosecutions under that which have significantly improved consumer protection in New Zealand to date.
But I wanted to ask the Minister this. In light of a number of producers who are New Zealand - based for their regional family-owned companies, because of pricing dynamics which are going on in the New Zealand grocery sector at the moment, they are facing closures. There are, in fact, three cheese producers who have either closed or who are looking at closures because of conduct with the supermarkets, and recently there was reporting on Pic Picot, of Pic’s Peanut Butter from Nelson, who was saying that the supermarkets were so bad to deal with that he had had to seek overseas investment in his company in order to grow. What will the Minister do to improve the lot of suppliers and growers when it comes to the supermarkets’ monopsony buying power?
Hon NICOLA WILLIS (Acting Minister of Commerce and Consumer Affairs (Grocery Sector)): Well, I’m sure that the member will join me in congratulating the spokespeople from Pic’s Peanut Butter for having the courage to say out loud things that many suppliers have only felt comfortable saying to me in quiet corridors, because it is the case that many suppliers in New Zealand do feel that they are not treated fairly by the supermarkets and that in some cases they are exerting market power in ways which potentially breach a range of Acts. That is why it is important that the Grocery Commissioner and the Commerce Commission are able to, one, take anonymous complaints; two, conduct significant investigations; and, three, take prosecutions. My message to the supermarkets is a very clear one, which is: do not use your market power to abuse New Zealand suppliers. That is not allowed, and if you do it, this Government will come after you.
ARENA WILLIAMS (Labour—Manurewa): I thank the Minister for that and I congratulate her on her hard stance on that kind of action, which brings me to my first question to the Minister about mergers. Why, Minister, have you not progressed the changes to the mergers and acquisitions regime in New Zealand which would prevent further concentration in an industry like this, which would surely impact on the monopsony buying power of the regulated and non-regulated businesses in New Zealand that have either used the buyers as small banks to lend from or have subjected them to higher and higher margins, which are pushing them to the brink and, in some cases, closure? If New Zealand had kept up with Australia, we would have already had new legislation around our mergers to make sure that this wasn’t happening in our market and that our suppliers were getting a fairer deal.
CHAIRPERSON (Greg O'Connor): The Hon—[Both Minister Simpson and Minister Willis stand to take a call, and then Minister Simpson sits down again] The Hon Nicola Willis would appear to be taking this call.
Hon NICOLA WILLIS (Acting Minister of Commerce and Consumer Affairs (Grocery Sector)): Well, Mr Chair, I think that if the Minister was to jump to his feet—and he probably isn’t actually conflicted out of this one at all, so forgive me, Minister Simpson.
CHAIRPERSON (Greg O'Connor): We’ll just call it over-ranking, shall we?
Hon NICOLA WILLIS: Look, unlike the previous member Arena Williams’ Government, this Government does have both the willpower, the intelligence, and the commitment to address this issue of mergers in the Commerce Act, which your party and your Government left unaddressed. I can confirm for the member that the Minister of Commerce and Consumer Affairs has made an awful lot of progress in this area, and she should await future announcements.
ARENA WILLIAMS (Labour—Manurewa): Then let’s talk about the rule of law.
Hon Scott Simpson: Sorry, which?
ARENA WILLIAMS: The rule of law. Let’s move to questions about the banking sector, which the Minister of Commerce and Consumer Affairs is clearly responsible for and has the delegation for, even though he was not able to answer those simple questions on his mergers announcement and the speech that he gave in August which parked those mergers decisions that he has taken. Why is the Minister still progressing a bill to forgive the debts owed by ANZ and ASB to their customers when this is being met with significant public disapproval and protest at the National Party conference and is clearly something that most New Zealanders do not want to see? Has he had any advice in what are 20 confidential briefings to him—20, I think, out of the 50 in the month of July—that gave him any confidence whatsoever that New Zealand’s reputation as a country which honours its institutions and follows the rule of law will not be damaged by the actions that he is taking here for two large Australian banks, to forgive them their debts that are currently legally owed to thousands of New Zealanders?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): The member’s referring to the legislation that’s currently before the Finance and Expenditure Committee relating to the Credit Contracts and Consumer Finance Act, and there is an aspect that relates to retrospectivity in regard to legislation that is still in effect for incidents that occurred between 2015 and 2019. Now, it’s widely recognised that that 2015 legislation was too harsh in terms of the strict liability provisions that it provided in terms of a court’s inability to provide discretion in terms of setting penalties no matter how minor or how significant the errors or omissions were. So I think it’s worthwhile testing that.
The legislation was actually fixed, if I can put it that way, in 2019 by the then Labour Government, who recognised that it had gone too far. So the proposal that is currently before the Finance and Expenditure Committee seeks to ensure that the law currently, from 2019 until today’s present date, is the same for the period between 2015 and 2019.
Now, what the member fails to point out in her question is that there is no suggestion that the current litigation needs to be changed or dropped or is somehow letting the players—the banks—off. What is actually happening is that this piece of legislation is designed to give the courts an ability to come to a fair and equitable decision, and I think it’s right and proper that our courts should have that discretion. I think it’s right and proper that our courts should be the right arbiters of what is a fair and equitable penalty should a case have occurred that warrants litigation.
So that’s the reason for it, that’s the rationale for it, but I’m very much looking forward to the response from the Finance and Expenditure Committee and then progressing it and making further decisions in due course.
ARENA WILLIAMS (Labour—Manurewa): Is the Minister considering an amendment to make that clear?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Well, as I said to the member just a minute ago, I’m looking forward to seeing what the select committee has to say, and then, as is the process and the procedure in this House, we’ll make decisions based on the select committee report-back.
ARENA WILLIAMS (Labour—Manurewa): In light of that “Kumbaya” happy answer for all members of this House getting to have a say on that important legislation, can I ask him: the inquiry into banking competition outlined a number of things which have broad cross-partisan support in this House, and I want him to give us an indication of what he would prioritise as areas for reform that are those things which are broadly agreed on to increase competition from the banking inquiry.
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): So the banking inquiry that was presented from the Finance and Expenditure Committee has just recently received back a number of recommendations. We have yet to make final decisions on those recommendations, but what I can tell the member is that back in December of 2024, this Government accepted all of the Commerce Commission’s recommendations made in terms of competition and their market study into personal banking and banking services. So the member should just bide her time a little bit longer. Progress is coming, and the banks are aware that change is coming and those recommendations from the Commerce Commission will be adopted, and we’ll consider very seriously the suggestions made by the Finance and Expenditure Committee.
ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Chair. The consumer data rights implementation will make a big difference in banking, particularly around open banking, but that has been slow and encumbered by the governance arrangements of Payments New Zealand broadly—I think that would be a fair characterisation, although I invite the Minister to comment on that. When can New Zealanders expect to see a sort of proliferation of services, of apps, that allow New Zealanders to switch easily and to bring down the costs of personal banking services because of those consumer data rights?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Well, the member’s referring to what is commonly known, colloquially known, as open banking, and we passed the framework legislation, customer data legislation, in March of this year. The legislation itself provides a framework, a platform from which to create bespoke regulatory regimes for certain sectors of the economy. We’ve made it very clear that the first sector will be banking. That’s partly why it’s called open banking. Those regulations are due to be promulgated very soon, and the intention is that open banking, in terms of what is commonly known as open banking, should be available from early December this year.
Now, I’m not sure exactly how many new fintech entities will be up and running by that period of time, but I am excited by the prospect of the indications that we’ve had, the positive indications. So, early December, and then we’ve made it very clear that the second sector of the economy that we want to open up to under that piece of legislation is electricity. Then, the member might like to make bids on what the third sector should be after that, but let’s see how we go. I’m very excited by the prospect of it, and I think it will bring a range of new transactional and informational opportunities for New Zealanders that unless people have lived overseas or maybe travelled overseas and maybe seen some of this stuff operating in other jurisdictions, they won’t yet be aware of or familiar with, the exciting opportunities that are actually coming to us very soon.
ARENA WILLIAMS (Labour—Manurewa): I want to get the Minister’s steer on this. When will he be concerned, if there aren’t new fintechs open to offering these services, that it is in fact Payments New Zealand’s governance arrangements which are holding things back? I ask that because you would expect a number of fintechs to be out in the market already—some overseas, some homegrown. They have raised with him and with me that the Payments New Zealand operational framework is difficult for them to work with, that they are subject to a number of rules which their competitors, the larger banks, are not. Have we got this balance right, or are we going to see a bit of a flop in open banking and a missed opportunity?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): No, I think the member is being overly pessimistic. I think that the indications we’ve had so far have been very positive and that there are a number of fintechs that are already operating, and a number have made it very clear that they are just dying to get into the space and create some opportunities. Those are the domestic operators, but there are also some international ones that have been in touch that want to bring their platforms to New Zealand, entities that are already working well and at pace in other jurisdictions. New Zealand’s relatively late to the open banking area, and so we’ve been able to learn, I think, from some of the mistakes but also to gain some of the benefits from other jurisdictions who have been a bit ahead of us. So I think the member needs to be a little bit more optimistic. We’ll look forward to seeing what comes. In terms of Payments New Zealand, I have confidence in their ability to scale up and provide the services that are required behind the scenes to make the system work.
REUBEN DAVIDSON (Labour—Christchurch East): Thank you, Mr Chair. On 20 May, the Minister quietly announced that the Government had decided to discharge the Digital Services Tax Bill from the legislative programme. As a result of taking this action, the forecast revenues from the introduction of a digital services tax no longer meet the criteria for inclusion in the Crown accounts. Reporting states that financial statements filed by tech firms including Google, Facebook, and Amazon show how they’re moving their local profits to tax havens like Ireland, allowing them to declare little or no taxable revenue in New Zealand. Treasury’s own Estimates were that a digital services tax would have pulled in $479 million from these firms over the next four years. Because of the Minister’s decision, these firms will now continue paying minimal tax. Why, during a cost of living crisis and in the face of ongoing cuts to public services, is the Minister happy to write off $500 million in tax revenue?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): With the greatest respect, the member just resuming his seat is a new member. He has entirely the wrong portfolio. These are questions to be put to the Minister of Revenue.
ARENA WILLIAMS (Labour—Manurewa): Why is the Minister not progressing the work that is available to him, and why hasn't he had advice on increasing, say, interventions to stop the charging of fees in digital services and make it easier to leave subscriptions for digital services that plague consumers online? This has been a focus of the Australian federal Government and also the European jurisdictions that we would compare ourselves to, where New Zealanders, when booking concert tickets to airline tickets are paying service charges, card fees, a phone charge in some cases, a joining fee when they are already in fact joined. Why are those fees still a part of New Zealand's landscape for fees and charges and why hasn't he used his advice to be able to progress those issues?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Well, again, the member is being a little bit pessimistic and should just wait a little while. I take the point that is sometimes raised about exiting from subscriptions—it can be challenging, it can be difficult, but we already have a significant range of options available to people who feel that they are being shortchanged in that regard. Look, it's an area that has not fallen off my work schedule, but it is an area that I do need to prioritise, as with other work programmes, but it hasn't fallen off my work schedule.
ARENA WILLIAMS (Labour—Manurewa): I'll move on to electricity and power. Minister, is there price gouging in the New Zealand electricity sector?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Well, again, this is probably a matter that is better put to the appropriate Minister. Look, I'm interested, as Minister of Commerce and Consumer Affairs, in ensuring that New Zealanders have access to a range of options. My interest is ensuring that there is competition in the electricity sector, that the rules and regulations and legislation that we have in place is being adhered to in every possible way. I think, again, the member would be best to address that question to the Minister for electricity at the appropriate time.
ARENA WILLIAMS (Labour—Manurewa): I would guess that that answer might be, “Well, perhaps there is, but it's nothing to do with me.” Can I ask him: why is Powerswitch being defunded when it is one of the few tools that consumers can compare, contrast, and make sure we have a competitive market for those services?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Sorry, which entity was it?
Arena Williams: Powerswitch.
Hon SCOTT SIMPSON: Powerswitch. There are a range of entities of the sort that the member is referring to. One of the opportunities that arises when we have these new fintechs will be, as I've said, an opportunity to look at the whole electricity sector. That will mean that entities that are providing a similar service to Powerswitch will be available in a way that, I think, will provide probably better, more timely, and more useful information to consumers.
ARENA WILLIAMS (Labour—Manurewa): I guess the point is that they're not available yet and this was one of the very few things in the electricity sector which helped consumers to not only advocate for their rights with the prices continuing to go up for them, but to also get a better picture of what plans they might be able to use. The same is true of many of those things which have helped New Zealanders better understand their power prices, and there is not a suite of changes that the Minister is proposing to protect consumers who have rising energy bills. What is the Government’s plan? I mean, we've heard that I need to wait and I'm being too pessimistic, but that is, in fact, the point, Minister; as power bills are rising for New Zealanders, this Government continues to shrug its shoulders and say, “Well, there'll be something in the pipeline.”, when that was one of its key election promises.
Why, if Powerswitch is out of the system, has the Electricity Authority also dropped the power price dashboard? That was one of the few things that manufacturers and large employers could use to compare the price competitiveness and the price margins of those electricity providers in the New Zealand market.
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Governments need to be careful and prudent with the allocation of taxpayers’ money, and when entities and organisations that are funded with taxpayers’ money are not producing the impacts and the positive outcomes that were expected, then that's a good reason not to continue throwing good money after bad.
ARENA WILLIAMS (Labour—Manurewa): OK. I'm happy to know that the Minister considers that money badly spent when those were the two things that the Government had on its books to increase competitiveness in the electricity market.
I'll move on, then, to transport and airlines. The effective monopoly in New Zealand's aviation sector allows for conditions that lead to higher prices than would be in a competitive sector. I've noticed that his Government has made some announcements around regional airline connectivity, which seems sensible on the face of them. What will that mean for smaller airlines in relation to the larger ones, where those—particularly Air New Zealand—aren’t running some of those regional routes? Will this Government use its power, as Air New Zealand's largest shareholder, to ensure that regional connectivity and that route competitiveness is a priority?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Well, unlike the member's colleague who was a new member, this member's been around a bit longer and would certainly, I would think, know that, actually, this is a matter that needs to be referred to the appropriate Minister, the Hon James Meager.
ARENA WILLIAMS (Labour—Manurewa): The Minister is responsible for the $73 million appropriation to the Commerce Commission, which is the regulator. Is he saying that he is considering stripping the Commerce Commission of that responsibility, or is it just him that's not responsible for the rising cost of living?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): No.
ARENA WILLIAMS (Labour—Manurewa): Considering his regulatory responsibilities, of which he is responsible for the $73 million appropriation, which has in fact been cut twice, has he given any consideration to the natural monopolies in the ports and airports? Why is it his Government is at once increasing costs on Dunedin Airport to resume international travel while at the same time increasing costs on airlines that hope to fly into Auckland Airport? Wouldn't it be sensible for him to have a joined-up competition strategy on the regulation of airports so that they could accept as many international travellers as possible and not push Dunedin Airport to such high costs that they cannot afford to resume functioning?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): Again, for the benefit of the member, the appropriate Minister is the Hon James Meager, and she should, at the appropriate time, address those questions to that Minister.
ARENA WILLIAMS (Labour—Manurewa): Is the Minister responsible for any competition at all in airlines or airports?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): There is a Minister with delegated responsibility for those matters, and that is the Hon James Meager.
ARENA WILLIAMS (Labour—Manurewa): Is the Minister getting used to his delegation for groceries not being his responsibility, and so would he like all the other Ministers to take responsibility for commerce in these sectors?
In terms of labour market competition, new evidence has shown that one in five Australian workers is under a restraint of trade. It would be useful to have similar data for New Zealand, and yet we don't collect that. Is the Minister interested in labour market restraints that suppress wages and non-compete clauses and similar restraints which are reducing job switching in the current market? Is the Minister going to seek any advice on essentially the monopsony situation that's created by this reducing dynamism and innovation in the New Zealand economy?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): This is a debate on the Estimates of the commerce and consumer affairs portfolio. The member has asked a series of questions that relate to other portfolios, not the least of which is her last one; the Minister for Workplace Relations and Safety is the Hon Brooke van Velden.
CHAIRPERSON (Greg O'Connor): I might say that because this is a timed debate, how the members use their time is a liberal approach from the Chair.
ARENA WILLIAMS (Labour—Manurewa): I am out of time, but I would like to ask the Minister the first question that I asked him: why have his responses been that there is something always coming in the pipeline? Why did it take 18 months for this Government to even request information about what they should do about rising grocery prices? Why is this Government slow to act on the cost of living when they said it was a priority at the election?
Hon SCOTT SIMPSON (Minister of Commerce and Consumer Affairs): That question was answered the first time the member asked it. There are three bills before the Finance and Expenditure Committee at the moment designed exactly to help achieve those matters, and more legislation in the pipeline.
CHAIRPERSON (Greg O’Connor): It would appear that there are no further questions. The next Minister is actually not in the House, currently. What I can do is I believe the chairperson—I don’t want to disadvantage the Minister if they’re here.
Arena Williams: Mr Chair?
CHAIRPERSON (Greg O’Connor): We haven’t closed yet, so, Arena Williams, I believe you have some more questions.
ARENA WILLIAMS (Labour—Manurewa): I seek leave for a special allocation of five minutes to give a call about the Government’s record on the cost of living.
CHAIRPERSON (Greg O’Connor): You were seeking leave? Sorry, just speak a bit slower; what were you seeking leave on?
ARENA WILLIAMS: I seek leave for a 10-minute call so that the total allocation will be 11 hours and 10 minutes, on the Government’s record on the cost of living.
CHAIRPERSON (Greg O’Connor): Leave is sought. Is there any objection. There is objection.
CHAIRPERSON (Greg O’Connor): If there are no further questions on this, the Minister can leave the chair. The Minister’s time in the chair has come to an end. Well, I do invite him to remain here until the Minister of Transport arrives, who I don’t want to put under undue pressure. I will, however, invite the chair of the Transport and Infrastructure Committee to address—and we may hope that the whips may get the next Minister down here in the next couple of minutes.
Transport
ANDY FOSTER (Chairperson of the Transport and Infrastructure Committee): Clearly, Mr Chair, you’re asking for things to be done slightly slower—and even the Opposition were quite keen for things to be done slightly slower!
CHAIRPERSON (Greg O’Connor): We are nothing if not flexible, Andy Foster.
ANDY FOSTER: To await the arrival of the new Minister in the chair, as opposed to the current Minister, because, obviously, this was expected to go a little bit longer.
CHAIRPERSON (Greg O’Connor): Well, if there’s no Minister, and it comes to the end of the five minutes, and he seeks an extension to his call, he is likely to get a very liberal approach.
ANDY FOSTER: I might have to do that! I just wanted to start off by saying I wanted to thank all of the members of the Transport and Infrastructure Committee for the diligent work that was done during the Estimates process. I think it’s a committee that works very, very well together. My deputy chair here, Dan Bidois, is endorsing that. But I think that is the case, because what happens is that every member of that committee, regardless of which party they’re in, asks good questions—and here is the Minister himself! I shall carry on, Mr Chair—and we ask questions of Minister Bishop, as Minister of Transport; Minister Meager, as Associate Minister of Transport, in charge of aviation and the maritime sector; and Minister Peters, as Minister for Rail. We also spent time with agencies like the Ministry of Transport, New Zealand Transport Agency (NZTA), KiwiRail, and a little bit with Civil Aviation Authority.
I’m not going to go through the scale of Vote Transport, but I did want to touch on some of the areas which are the most critical ones. The first one of those we touched on—and probably this is the area I would ask a question—is the National Land Transport Programme. The forecast over the next 10 years, and our report back shows this, says that over the next 10 years, to 2033-34—so nine years now—that “expenditure intentions far outstrip revenue”. The challenge here that we have is the aspirations both for the vital maintenance of infrastructure and for building new infrastructure are way in excess of what the revenue that’s there to pay for them.
Look, we know that there’s work being done on new revenue sources, but we know also, and the Minister said this to the committee, that those revenue sources are not going to bridge that gap. Because, essentially, it’s something like a $110 billion or a $120 billion worth of aspiration, and only about $50 billion or $60 billion worth of money available to spend for them. So the question I ask all of us, and I get this question put to me occasionally, is when people say, “I want a new road.”, you say, “Where does that fit in the priority list?” Because there are a lot of other people around the country who want a new road. And iIf we go and promise to everybody, “Hey, we will build your bright new shiny road.”, then somebody else misses out. That’s the reality, that we have to prioritise between these things, because we don’t have enough money to do all of these things. In the real world, which most parties occupy, money doesn’t grow on trees. I don’t think anybody would like us doubling fed fuel excise duty or road-user charges, so we’ve got to prioritise.
We could also do things to get more out of what we’ve got and get more value for money, and we explored some of those things: public-private partnerships, we talked about. We talked about how we build things faster, because one of the things that is there, that we’ve been doing a lot of work on, is the consenting area—fast track is an example of that. So one of the things that holds back the delivery of infrastructure, but also makes it more expensive, is the cost of the resource management process.
Second part of that, of course—and we got some derision from the Opposition bench—is about the focus on road cones, traffic management. But, in fact, NZTA told us that its cost used to be 9 percent of its projects overall. We’ve had a review of the way in which this is done. That was $215 million. That’s now down to 6.6 percent. That’s $158 million, which is a saving of $57 million—and that’s just NZTA. That is just the start of the process. Local government will be a significant amount more. So there’s a significant amount of saving from doing things more efficiently. Also, I wanted to say that we’ve also contemplated the advice from the Infrastructure Commission, and they said that we are at the top 10 percent of the OECD in terms of the amount of money we invest. We’re at the bottom 10 percent in terms of results, so we do need to get more for less.
Just in the brief time I’ve got left, and I do want to come back at some later stage and talk about the rail side of things, because there’re some messages there—what they told us is that we need to look after what we’ve got first, so there’s a good asset management plan before we start building new stuff. We want to be clear about what the outcome is that we want, whether we actually need to build something in the first place, and we’re doing all this work on, for example, time-of-use charging and so on. We need to pick the best way of achieving the required outcomes and, perhaps, the best project, and we need to stop giving a cost at the front end, because we never meet those costs.
TANGI UTIKERE (Labour—Palmerston North): Kia orana, Mr Chair. I have a number of questions for the Minister of Transport. The first one I want to touch on is the issue of the ferries, which is alluded to in the committee’s report for the Estimates for this Vote. We’re becoming very familiar with the context around this, which is Nicola Willis cancelled the ferries via text message and, basically, incurred costs of $671 million that has been spent as a result for nothing to see.
My question to the Minister is: what provision exists for procurement for new ferries; and of the $300 million that was originally set aside around cancellation costs, is that total figure that we now know of—$144 million—just for cancellation being offset by the South Korean shipyards being awarded the contract, therefore that being at a lower rate?
Dr TRACEY McLELLAN (Labour): Thank you, Mr Chair. Minister, Christchurch has been short-changed in this Budget, fair to say, with nearly a billion dollars’ worth of transport investment lost—funding that was meant for mass rapid transit, cycleways, walking connections, and, of course, the infamous $78 million for public transport infrastructure that quietly, if somewhat befuddledly, was reallocated last year.
The interesting thing about this, Minister, is that we now know what happened. We now know that Mayor Phil Mauger admitted on stage at The Pressa press debate the other night that he simply phoned then Minister Simeon Brown and told him that Christchurch didn’t, in fact, need the money, and, in the same breath, admitted that he accepted some quid pro quo arrangement funding for Pages Road Bridge in exchange for giving up the wider Christchurch transport portfolios.
So my question to you, Minister, is: do you think this is an acceptable way for business to be conducted—that Christchurch long-term transport needs were simply traded away in a political phone call? And will you, given that you are now the Minister, restore that funding that has been lost, instead of allowing a mayor’s quid pro quo deal to dictate, ultimately, what happens to funding in Christchurch?
Hon CHRIS BISHOP (Minister of Transport): Well, speaking briefly to that, it’s difficult for me to comment on conversations involving phone calls that I wasn’t privy to. There is a substantial investment in Christchurch through the National Land Transport Fund, which is part of the Budget, obviously, through the Estimates. Most recently, of course, we announced the Brougham Street upgrade, and construction has started on that. It’s a welcome project for Christchurch. There is a range of other improvements that are being undertaken, all of which are publicly available, and the member can see that. But I can’t comment on a conversation that I wasn’t privy to. Actually, many of these decisions are not made by Ministers or mayors; they are made by the Transport Agency board independently of Ministers.
Dr TRACEY McLELLAN (Labour): Thank you for that, Minister. I appreciate the fact that you can’t comment on conversations that you weren’t privy to, but my question was more aligned to—
CHAIRPERSON (Teanau Tuiono): Excuse me. If you could just refer through the Chair, not directly to the Minister.
Dr TRACEY McLELLAN: Oh, sorry, Mr Chair.
CHAIRPERSON (Teanau Tuiono): Thank you.
Dr TRACEY McLELLAN: Minister, I appreciate the fact that you can’t comment on questions that you weren’t privy to, but do you agree that that is not ideal? In lieu of the fact that you are now the Minister, I’m assuming we can have some sort of guarantee going forward that the mayor’s phone calls won’t be dictating Christchurch funding going forward. Or are you saying the mayor’s phone call didn’t have any impact on the decision that was made?
Hon CHRIS BISHOP (Minister of Transport): I don’t know what happened in the phone call, because I wasn’t on the other end of it. It’s sort of difficult for me to comment on that. All I would say is that there’s a really thorough process that many members will be familiar with because they lobby the New Zealand Transport Agency for particular projects in their local patch or, indeed, they lobby the council or both, which is we go through this convoluted process of setting up the National Land Transport Fund and then the plan for three years. Councils go through an equivalent process at their end to look at what their priority projects are. That feeds into a funding process. At the end of the day, projects get funded. Is the process of that cumbersome? Yes. Could it be more streamlined? Absolutely. Should it be more long term? Absolutely. I agree with all of those things and, actually, the Government’s got a series of reforms under way. [Phone rings] It sounds like someone on the phone agrees with me!
Tangi Utikere: Could be the Mayor of Christchurch!
Hon Penny Simmonds: Getting ready to repeal something!
Hon CHRIS BISHOP: There’s so many jokes I could make about that, but I’m going to let discretion be the better part of valour. I’m in a good mood. The system could be better, and we are going to change it over time, but I think people are pretty familiar with it, and decisions are made by officials 99 percent of the time.
Hon JULIE ANNE GENTER (Green—Rongotai): Kia orana, Mr Chair. I have a series of questions for the Minister, which I’m sure he’ll be delighted to answer. In the interests of back and forth, I’ll just ask my question and sit down. That’s how I’d like to approach it, if the Minister’s amenable.
Hon Chris Bishop: Fine.
Hon JULIE ANNE GENTER: The chair of the Transport and Infrastructure Committee mentioned the gap between spending intentions and revenue, which was highlighted in the National Land Transport Plan (NLTP) that was released by the New Zealand Transport Agency earlier. Is the major driver of that spending intentions the list of roads of national and regional significance that are included in the most recent Government policy statement (GPS)?
Hon CHRIS BISHOP (Minister of Transport): Well, there’s a range of funding pressures on the National Land Transport Fund. Fuel tax has not been adjusted since 2019, from memory. So iIn real terms, the fund has decreased at the same time as construction cost inflation has increased at pace. So there’s a range of pressures around rail, around public transport, both infrastructure and operating, and also roads and road maintenance.
Now, this Government has the Government policy statement (GPS) placing a real emphasis on road maintenance. All of the evidence that I think most members will be familiar with—particularly on the Transport and Infrastructure Committee—has indicated that, as a country, we do maintenance of our infrastructure poorly; roads would be included within that. So the GPS signals a very strong focus on looking after what we’ve got, . Sso does the pothole prevention fund, which is now rolling out really successfully around the country and I get very positive feedback about the amount of work being done on our State highways and our local roads. Money is fungible, and there are pressures on the fund across a range of different activity classes that I know the member’s very familiar with.
Hon JULIE ANNE GENTER (Green—Rongotai): Is there more money allocated to new capital, especially new State highways, or to road maintenance?
Hon CHRIS BISHOP (Minister of Transport): Well, there’s an increase across the National Land Transport Plan (NLTP) period compared to 2021 to 2024. The activity classes are all publicly available in terms of the operating ranges that the member will be familiar with. We have placed a real priority on road maintenance and the member can see all the rest of it for herself.
Hon JULIE ANNE GENTER (Green—Rongotai): But if the Government’s serious about prioritising taking care of what we have, why is there so much money being allocated to new projects relative to preserving what we already have?
Hon CHRIS BISHOP (Minister of Transport): Well, the Government came to office with a mandate to build a range of projects around the country, a long-term pipeline of major roading upgrades, and also a range of major public transport projects. I’d point the member to the Northwest Busway, which we’re making good progress on, which will be a transformational project for north-west Auckland and, indeed, the wider Auckland region.
We are getting on with the job of the level crossing removal project in Auckland. It is a real frustration to me, frankly, that having started the City Rail Link (CRL) in 2015 or 2016—and I know the member campaigned hard for that. I acknowledge her mahi in that area. Having started that project 10 or so years ago, only now are we beginning to tackle the operational upgrades at a rail level to make sure that we can take advantage of the benefits of the City Rail Link.
It baffles me that the last Government spent five years farting around on an underground, overground, at grade metro fantasy project which was going to be both simultaneously an underground rail to the North Shore and going to the airport and down a corridor down Dominion Road. So much time and money and effort and energy was wasted on a fantasy project that would never be built. Meanwhile, getting ready for the opening of a project that was actually under way—the City Rail Link—and is going to open next year, not enough energy and time was spent focusing on that.
City Rail Link will open. We will have to spend the next five to seven years at vast expense sorting out the level crossings on the southern line and eventually we will have to get on to the western line. Those are going to be very expensive projects, but they are critical to enable the capacity that CRL unlocks.
At the same time, we are also going to have to deal with the zoning around Mount Eden and the land parcels around Maungawhau / Mount Eden Station where, again, only now are we getting on with the job of unlocking the development around that station. So City Rail Link will open and it will be a giant car park around the station. That is ridiculous. We should have been spending the last six years getting that really important part of Auckland ready, so that when the City Rail Link station opened, there was stuff under way—, capacity, housing, business, mixed use facilities—, so that people could see what it was like. I really worry that the station will open and people will say, “What have we been doing for the last six years?” Frankly, those people will be right. Again, only now are we getting on with the upzoning around those stations.
I see the member for Mount Albert is here—desperate to say something—and I’ll let her have a go in 15 seconds. We should have been planning for the development uplift that those stations will provide those communities from a housing and business perspective years ago. But it’s OK. Help is on the way. This National-led Government, focused on delivering better results for Auckland, is here to help and we’re getting on with it.
Hon JULIE ANNE GENTER (Green—Rongotai): Well, I’m very keen to ask the Minister about level crossings in Auckland. If I could just come back to my original question, which was around the intentions in the Government policy statementGPS laid out for roads of national and regional significance and the tens of billions of dollars that they are likely to cost and the gap between those spending intentions and revenue. I do want to know: does the Minister think that the process set up by the Infrastructure Commission—the Infrastructure Priorities Programme—is a useful way to ensure there is a long-term pipeline that has agreement broadly across the House?
Hon CHRIS BISHOP (Minister of Transport): Yeah. Look, I’m conscious other people want to say things, and I want to make sure I leave enough time for other portfolios. The member makes a really good point around that stuff, and I want to acknowledge that. The New Zealand Transport Agency (NZTA) has its own prioritisation processes around its roads and its investment intentions and which roads should be funded and which shouldn’t be.
The Infrastructure Priorities Programme is a nascent programme being run by the Infrastructure Commission, separate to the NZTA and separate to actually existing frameworks. There is a challenge that we are looking at at the moment around how to integrate the IPP—Infrastructure Priorities Programme—into the existing kind of business case framework that the Treasury runs or the investment management system that exists, and we’re having a good look at how we integrate that right now. It’s not intended to duplicate the NZTA processes.
On a broader level, the member makes a really good point, which is that some of the projects that we have inherited—the roads of regional significance projects and the major capital NZUP projects, which used to be called New Zealand Upgrade Programme projects—are very expensive and, frankly, were not scoped properly. So back in 2020, when many of these projects were committed to, they were committed to on the back of an envelope. There was no actual business casing or scope estimates done. Someone was asked in a matter of weeks to turn around a generic cost estimate for a range of projects.
I’ll give you a classic example: Ōtaki to north of Levin was costed at $817 million in 2020. Well, it’s now going to be the thick end of $2 billion. That’s because the cost estimates were not done properly but the funding was committed to, as if that was going to be the amount that the road cost. Well, it’s actually now more than double that. And tThere are’s a whole range of projects in that list that are like that. Frankly, that’s on the last Government. We’ve inherited it; we’re grappling with it. I’m determined to drive down the cost of new construction of roads and, indeed, other infrastructure.
Now, there’s a whole range of things which we probably don’t have time to get into today about how we do that, but the chair of the committee makes a really good point in his opening remarks to this debate, which is that we’re in the top 10 percent for spend and we’re in the bottom 10 percent for efficiency. So we’ve got to get better at it as a country. That’s not a particularly political point. It affects all of us, because every dollar we can drive to its highest value use is a dollar that drives growth; not a dollar that’s been wasted.
HELEN WHITE (Labour—Mt Albert): Thank you. I hear with alarm that we're looking at the level crossings in the area that we're proposing to build a lot more housing in for many years to come. It looks like it's the South first and then it would be the Western Line, and yet we're putting in buildings right now, or we're making plans to put in a lot more housing in that area. What I want to know is: why would we not do that now? Isn't that an absolutely false economy when we could unlock the ability to build in that area and for people to commute from that area if we deal with the level crossings, which cause congestion and they're also really unsafe? If we're going to build up, as is proposed by the Minister of Transport, then, surely, given the portfolios he holds, there would be an attempt to align those projects and unlock that potential by making sure that those level crossings got some attention immediately. That is absolutely within the Minister's capacity in the role to unlock.
Hon CHRIS BISHOP (Minister of Transport): Yeah, the member makes a really good point, and I appreciate her advocacy for her constituency. We're doing the Southern Line first because that's the highest-priority need, and I'm happy to arrange a briefing for the member if she'd like one on this.
Helen White: I would.
Hon CHRIS BISHOP: Sure, I’m happy to arrange that. That's the highest priority. There are eight level crossings in Takanini and Glen Innes, three new grade-separated road bridges, three new pedestrian overpasses, and the closure of two unsafe crossings. Auckland Transport’s (AT’s) leading that work, but it's co-funded by the Crown through the National Land Transport Fund and Auckland Transport through council. That's just a down payment; like, the actual amount is going to end up being more than that and we're going to have to keep investing, and I want people to be cognisant about that. So the highest priority is the Southern Line stuff. There's a programme business case being done—PBC—for the Western Line, and I just want to reassure the member, yep, we're upzoning around these stations, many of which are in her electorate, but zoning capacity doesn't equal immediate housing growth, particularly with the way the construction market is at the moment. You know, we need an economic recovery under way before you're going to see some of that action.
One thing we can do is unclog the planning system so that when interest rates have fallen to a point and the economic climate is such that people are willing to invest and build some of these stations and build some of these developments, they'll get them away. The last thing you want to have happen at that point is the planning system to say you can't, or the building consent system. So we can do that, and we are doing that. You know, there are going to be new apartments and new mixed-use facilities along the Western Line, but that's going to take a long period of time, and it will depend on demand. It will depend on the economy of the day. It will depend on how Aucklanders choose to live their lives. There'll be a whole lot of things that go into that, not all of which the Government can control, by the way, and, frankly, you wouldn't want to control it.
I appreciate what the member’s saying, but we have time to sequence up the level crossing work alongside the development of housing and business capacity along the Western Line. I’m happy to keep the member informed around that. So there’s the PBC under way, there's 35 level crossings remaining in the Auckland network after we've done the Takanini and Glen Innes level crossings, but it's a sizeable chunk of money that we're going to have to commit to get this right, and, frankly, not all of them will ever be done. You know, there's some that it's just not worth doing—like, just really expensive to do, not worth the safety or the travel time savings or the congestion benefits. So we don't have to do all of them, and we probably won't end up doing all of them; that would actually be a misallocation of money, money that should go to other highest-value uses. But there's a programme business case which will examine all of that stuff under way right now between the New Zealand Transport Agency and AT.
TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. I want to return to the Cook Strait—just two questions. The first is around how regional economies and exporters can rely on what are ageing ships for another four years. The issue around ongoing maintenance, which was raised in the select committee’s report, outside of the dry-docking opportunities, which are around $20 to $30 million annually as a cost. So how can there be some reliance on those ageing ships to meet the needs of exporters and others?
The other question I have is around the Interislander contingency vessel. There has been some provision previously, but not to the extent that perhaps some members would like. My question to the Minister is: why is there no provision for an Interislander contingency vessel to provide ongoing resilience for the Cook Strait?
Hon CHRIS BISHOP (Minister of Transport): Let me deal with the second question first. We’ve been calling it the emergency ocean response capability. We’re just giving some consideration to that right now, and will have more to say about that in due course. It is not perhaps quite as simple as people think. It’s not clear that having—well, it’s not immediately clear that having a vessel available will actually deliver the type of benefits that I think people maybe think it will. Maritime New Zealand has done a business case, and we’ve had a pretty good assessment to have a look at it. Of course, we haven’t had an emergency ocean response capability, and, you know, the system has coped. Any system we did adopt has to be paid for by someone, and, ultimately, it should be paid for by users. I heard the member’s colleague in the House saying that the Government keeps loading up users with new charges and that’s what’s driving up the cost of living, so I’m not necessarily sure everyone would be in favour of users paying for emergency ocean response capability. Anyway, we’re having a good look at it.
On the issue of the ferries, the member should talk to the Minister for Rail, who is responsible—
Tangi Utikere: Come on—Vote Transport.
Hon CHRIS BISHOP: Well, it’s not actually in Vote Transport—I’m a shareholding Minister in Ferry Holdings Ltd. But I’d just direct the member to the public announcements around the ferry procurement recently made by the Minister for Rail, who’s been leading that process.
Hon JULIE ANNE GENTER (Green—Rongotai): Thanks. Going back to the answers from the Minister to my previous questions—I acknowledge and take on board his critique of some of those highways that were included in the New Zealand Upgrade Programme. Even as an Associate Minister in that Government, I authored an op-ed at the time criticising the Government for prioritising this. I was never a fan of those roads. I didn't think they were a good idea. Arguably, the same risks apply to the Minister's own Government's priorities, because, as he has acknowledged, there are not business cases for all of the roads of national significance. Those have not been and were not thoroughly assessed before they were committed to. What steps is the Minister taking to make sure that we're spending money on the highest-value projects that are actually going to deliver the outcomes we want? Why haven't those projects been submitted to the Infrastructure Commission's Infrastructure Priorities Programme, if the Minister is certain that they are the best value for money and the best investment the country can make?
Hon CHRIS BISHOP (Minister of Transport): Well, I've dealt with the Infrastructure Priorities Programme (IPP) issue. It's a separate process, and the IPP process, as you know—we've only just done stage one, and stage two is under way now. It's not a mature process yet. We've still got a way to run, and we've got to work out how it integrates into the rest of the system, creates value, and doesn't duplicate. We're working our way through that, through Vote—well, not Vote Infrastructure but my infrastructure portfolio. The New Zealand Transport Agency has got an investment prioritisation framework, which the member will be well familiar with. She's right that the roads are expensive, and it's important that investment flies to its highest-value use, and I'm confident that that is the case at the moment.
Hon JULIE ANNE GENTER (Green—Rongotai): Thank you. What steps will the Minister take to make sure that the next stage of the Northland Expressway, which is Warkworth to Te Hana, is in a good position to actually start construction? My understanding from what we've heard from people in the industry is that they're extremely concerned about that project. Literally, people bidding on the project and the consortium are, like, “This is bad news.”, because the Government's asked them to accelerate the proposal to be able to sign something before 2026. Is that what he considers to be a good process for delivering a good outcome?
Related to that, did the Minister read the independent economic advice provided to the Transport and Infrastructure Committee on the NZIER report on the Northland Expressway?
Finally, given that—oh, yeah, actually, as long as I'm up here, Transmission Gully public-private partnership (PPP): —obviously, it's been announced that there's going to be resurfacing work undertaken. Do we know what the total cost is and who will be paying for those? Is it the Government that'll be covering those costs or is it the operator of the road, who we are currently paying an annual PPP concession to? Is it the Government that will pay and taxpayers that will pay for that resurfacing, or is it the operator?
Oh, and finally, on the Northland Expressway, how will Warkworth to Te Hana address the issues of severance at the Brynderwyns, if at all? Obviously, Te Hana is south of the Brynderwyns.
Hon CHRIS BISHOP (Minister of Transport): Dealing with that interesting series of issues in reverse order, I'm advised that the settlement that the Crown's entered into over Transmission Gully is paying for the resurfacing. That has been well canvassed, the settlement in relation to that. The issues with that project, I think, have been well canvassed. There have been two independent reviews into it. There's been a variety of wild claims made about Transmission Gully over the years, but the point I'll just make for Wellingtonians is it's open, it's fantastic, it's been a game-changer, and—
Grant McCallum: Just like the Northland Expressway will.
Hon CHRIS BISHOP: Yeah, well, I'm coming to that.
On the second one—going in reverse order—I've skimmed the independent economic advice in relation to the NZIER report on the Northland Expressway. Procurement is under way right now for that. The Government's view is that this is a game-changer project to unlock the North, akin to the Waikato Expressway and the benefits it's provided for the broader Hamilton and Waikato region. It's obviously not all going to be built straight away. It is a long-term project to better connect this rich and vibrant, abundant region to Auckland and Hamilton. It's a long-term project, and we'll get on with it and make progress in due course.
Hon JULIE ANNE GENTER (Green—Rongotai): Why not focus on the alternative to the current alignment in the Brynderwyns, because that is the part of State Highway 1 that gets shut down? Why is that not the priority over work with Te Hana?
TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. I want to return to the funding sort of side of things. What's clear is that the forecast expenditure for projects is—well, it basically exceeds the revenue. So the question to the Minister is: what is his plan to address his $6 6 billion fiscal hole that he has in his transport plan? I appreciate he may have inherited that from the former transport Minister, but first question is: what is his plan to address that?
Hon CHRIS BISHOP (Minister of Transport): Well, I'm not sure that a $6 billion hole is an accurate reading of the situation, but if I could just deal with the Hon Julie Anne Genter’s point, I'm advised that Warkworth to Te Hana is ready, or at least more ready than the Brynderwyns, and, as my colleague the MP for Northland points out, Dome Valley closes just as much as the Brynderwyns. So it's not to say that the Brynderwyns isn't important; it is. We've now got a route which I think is broadly supported—actually, quite widely supported, I'd say—by the MP for Northland and the MP for Whangārei. And, oOf course, it's worth reflecting on the fact that the previous Government actually campaigned on the Northland expressway as well, so it does enjoy cross-party support, so that's good news.
In relation to Mr Utikere’s point, I mean, I'm not sure the $6 billion figure is correct, but—
Tangi Utikere: Is it more?
Hon CHRIS BISHOP: Well, I was going to say he is right in the sense that the system is under pressure. There's no question around that. That is why we are seeking to broaden funding sources. So as the member’s aware, fuel tax and road-user charges (RUC) rise on 1 January 2027 in staged increments. Now, the reality is RUC and the fuel tax have not risen since 2019, so in real terms, it has significantly diminished. People don't necessarily like hearing this, but we have a user-pays system, or at least we are meant to have a user-pays system in which what people pay into the land transport fund goes out and funds all of the transport services, whether that be road or rail or public transport that people rely on, and we have seen a diminution in the fund.
That's partly why the Government bought electric vehicles into the realm of RUC, because for a long period of time, electric vehicle users like myself were not paying any anything to use the roads, which was ridiculous—absolutely ridiculous. So they now do and I now pay, which is good.
We've had a discussion around this publicly. In time, we will transition all vehicles to electronic road-user charges, which will be a much more efficient way of paying for use of the roads, but we're not, we're not there yet. So we are looking at tolling as an alternative revenue source. We are looking at infrastructure funding and financing (IFF) charges. We will soon introduce legislation to allow IFF charges to be levied on land owners next to State highway projects, but also public transport projects. I’m not pretending that that is a silver bullet to our funding challenge, but it is certainly part of the mix and something that we should have been doing, for example, with the City Rail Link.
Without belabouring the point over and over again, the City Rail Link has unlocked enormous value in CBD Auckland and in the surrounding suburbs and those land owners next to it. For example, SkyCity, who now have a train station underneath it, have paid nothing for that. They've just got a free train station delivering thousands of people next to the casino. Now, that's an extreme example, but my view is we need to be much more innovative and forward-thinking around how we help beneficiaries of infrastructure projects pay for the infrastructure that they enjoy the benefits of. So tThe beneficiaries-pays principle is something that we are trying to bed in through transport funding but also more broadly in infrastructure funding.
TANGI UTIKERE (Labour—Palmerston North): Thank you, sir. I want to thank the Minister of Transport for acknowledging, if not the financial hole, the deficit that exists in the Budget for transport. Is one of the ways in which he is seeking to fill that void around tolls? Mr Chair, you yourself know that this was something that the Government sought to impose on Te Ahu a Turanga with no success whatsoever. Why is the Government seeking to potentially toll the Woodend Bypass, a particular project that didn’t even talk about tolling? Is it simply because they’re wanting to fill the revenue needs that they’re in want of?
Hon CHRIS BISHOP (Minister of Transport): Well, the Government’s got a well-traversed view when it comes to tolling, which is that all new roads—the starting point would be tolling. There’s There are a couple of reasons for that: one is that it’s an additional form of user-pays funding, so in the sense that people who use the road pay for it through the toll, they pay for it through fuel tax, but they also pay for it through the use of the road. The member seems to think—and he kept repeating this argument during the debate about the Manawatū Gorge replacement with the new highway, which is a fantastic road. The member kept saying, “Well, the road’s paid for.” Roads aren’t built—
Tangi Utikere: But you said it’s a replacement road. Exactly the point.
Hon CHRIS BISHOP: Yeah, yeah, but let me finish the point. You build a road and then it’s not just like, “Well, the road’s there, and, great, we can just walk away.” You have to maintain the road. So tolling provides a revenue source to help maintain the roads. If you toll it as part of a public-private partnership, you can actually build that into the contract, . Sso you make sure the tolling revenue helps maintain the roads. Everything has to be paid for. There’s no free lunch out there. Once you build something, you have to maintain it, and that involves spending money, and that’s what we’ve done really badly in New Zealand.
So I appreciate the member doesn’t like tolls—
Tangi Utikere: No, no, no; the people of Woodend don’t like tolls because your Government said that you weren’t going to toll them.
Hon CHRIS BISHOP: Sure, sure, people don’t necessarily—well, I’ll tell you who gets really aggravated about tolls is are the people of Tauranga, who currently have three, and go, “Well, hang on a minute,”—
Grant McCallum: And the people of Far North.
Hon CHRIS BISHOP: —and the people of Far North—“why have we got tolls and you don’t?”
Tangi Utikere: Right. So that’s the justification for whacking it on.
Hon CHRIS BISHOP: No, no, no; I’m just—
Tangi Utikere: OK, understood.
Hon CHRIS BISHOP: Well, the member’s colleague has spent quite a bit of time, over the last 18 months or so, having a go at the Government for not taking a more bipartisan approach to infrastructure investment and trying to build a better system that focuses on evidence. All the evidence when it comes to land transport funding is that tolling can make a difference in terms of bringing projects forward, providing an alternative revenue source, making sure that users pay for the infrastructure if they are the ones who enjoy, and making sure that we can lock in the maintenance. Like, the evidence is just really clear around that. We’ve taken, I think, a pretty moderate approach to that. We’ve said that the starting point for all new roads where there’s an alternative route will be tolled. The member now wants to have a swing at that—well, that’s fine, but he might need to talk to his colleague about taking a more mature and bipartisan approach to these things.
Tolling makes sense. I appreciate the people of Woodend won’t necessarily want to do it, and there’ll be a debate around that;, that’s why there’s consultation under way right now. Actually, some of the feedback I get from the people of Woodend is like, “If it brings the project forward, build it, baby! Get on with it! I’m prepared to pay $1.25 each way.” Clearly, there will be a variety of views either way, but our view is that tolling makes sense and asking people to pay for something that they enjoy the benefits of, I don’t think is actually that radical a proposition; I think it’s pretty sensible, frankly.
CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Chair. While not on this Government's list of roads of national significance, State Highway 35 is, in fact, a significant trunk line for industry and, of course, a lifeline for people who need to travel vast distances to access healthcare. What plans, if any, does this Government have for the rebuild or upgrade of State Highway 35?
Hon CHRIS BISHOP (Minister of Transport): Very briefly—and I fully accept the member is more familiar with that area of the country than I am—there is quite a bit of money going in there, particularly as part of the North Island's severe weather events recovery. I know it's not exactly via State Highway 35, but we are replacing the Waikare Gorge, which is much further south, which is a really important connector road. Construction on that starts soon, which is happy days. There's quite a bit of money going into that whole area, through the North Island weather event recovery fund.
CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti): To clarify: are there any plans for the upgrade or rebuild of State Highway 35? Great news about Waikare Gorge—that's also in Ikaroa-Rāwhiti—but I'm asking specifically about State Highway 35.
Hon CHRIS BISHOP (Minister of Transport): Yes, well, I'm advised that there is still funding there from the recovery from the 2023 events through the TREC—the Transport Rebuild East Coast—and in particular, we're doing the Hikuwai Bridge. If the member wants a full briefing about all the work that's under way, I’m really happy to give her one. Just send me a letter, and I can get that right back to you.
Dr TRACEY McLELLAN (Labour): I have a couple of quick questions, Minister, on public transport. Why were the half-price fares and free travel for children scrapped during a cost of living crisis, and do you know, or are you aware—
CHAIRPERSON (Teanau Tuiono): Do they know.
Dr TRACEY McLELLAN: Minister, not Mr Chair: what analysis was done on the impact of increasing public transport usage?
Hon CHRIS BISHOP (Minister of Transport): From memory, they were delivered as part of Budget savings—part of the savings drive. My general perspective is that, ultimately, the thing that drives public transport patronage is actually not fears; the thing that drives patronage is reliability and efficiency. You could make public transport free tomorrow, and it wouldn’t necessarily drive an enormous uptake in patronage.
What actually drives it is service. If people know that the bus turns up on time, they’ll take it. If something is a dollar cheaper or something doesn’t necessarily help—that’s our perspective. There’s quite a lot of economic evidence around that, to be honest. Does it make a difference on the margins? Yes, sure, of course it does. So, yes, that’s that perspective there.
Hon JULIE ANNE GENTER (Green—Rongotai): Is the Minister of Transport aware that a number of public transport authorities have had to make cuts to their growth plans and service expansion plans as a result of his Government's Government policy statement (GPS), which does actually impose some spending constraints on public transport going forward? I acknowledge the Minister will cite, like, one or two examples, because there's probably, like, four public transport projects that are actually specified in the GPS, and those are being funded, but a lot of other local authorities like Otago Regional Council, Greater Wellington Regional Council—a whole number. If it's not the Northern Busway or the Eastern Busway or the City Rail Link, there's not really much funding capacity for expansion of public transport. What is he doing, if anything, to address that issue and ensure that public transport authorities can plan for growth in public transport services? Will he be amending the GPS, or what other steps might he take to ensure that, aside from the specified big projects, public transport services can be expanded?
Hon CHRIS BISHOP (Minister of Transport): Well, the Government's made a heavy investment through the Government policy statement (GPS) 2024 in public transport. There's another GPS coming for 2027, obviously. Public transport authorities always have bigger ambitions than necessarily would be the funding case. The member rolls her eyes, but that was true when she was the Associate Minister, and it's true now. Everyone's got a wish list, and part of being a Government is you can't fund everything. You've got to prioritise, and there is more money, and there's a range of projects being rolled out, including the national ticketing system—somewhat—
Hon James Meager: Motu Move.
Hon CHRIS BISHOP: —Motu Move—that's right, yes—benighted project, but we're now making progress, and I can tell the House that, in early November, it will roll out in Christchurch: you'll be able to tag on and tag off with your Visa card. Hamish Campbell will be getting on his bus in Ilam to the airport.
Grant McCallum: His three-wheeled bike.
Hon CHRIS BISHOP: Well, that's right. Soon it will roll out—slightly later than what everyone wanted, but this is life—around the country. We're making heavy investment in the national ticketing system, heavy investment in public transport, and, of course, just yesterday, new trains for the Manawatū and—
Hon Member: Wairarapa.
Hon CHRIS BISHOP: —the Wairarapa, yeah, thank you very much. Had to sharpen it up a bit over the last couple of years; it was left fairly loose, but, anyway, we got on with that. That'll be great. Now, we've got to make sure we drive the patronage growth on the Manawatū train line, and Mr Utikere can help play a role in that—encourage people to take the train. We're buying these very expensive new trains for the Manawatū and the Wairarapa. What's that?
Tangi Utikere: You’ve got an advocate right next to you.
Hon CHRIS BISHOP: Well, that's right. Well, I'm looking forward to seeing you coming down on the train.
Tangi Utikere: Don’t worry, I do.
Hon CHRIS BISHOP: Oh, very good. No, no, good, OK.
Tangi Utikere: I look forward to seeing you on it.
Hon CHRIS BISHOP: Well, I'll have you know I bought my first car when I was 28, and I grew up taking the train to and from school every day, and in Auckland. Anyway, that was in Wellington; then I moved to Auckland and took the train. I don't want to digress and take up time.
CHAIRPERSON (Teanau Tuiono): I'm convinced; I'll take that train.
TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. I want to move from trains to buses—in particular, school buses. What funding provision has he advocated for with ministerial colleagues for school buses?
Grant McCallum: It’s not yours.
TANGI UTIKERE: This is a real issue for rural communities, Mr McCallum—a real issue.
Grant McCallum: Yeah, I know. But that’s not his responsibility.
TANGI UTIKERE: Actually, I note that the Minister of Education was visiting the Rangitīkei electorate just last week. I wonder if she bothered to visit Ashhurst, given there’s a huge level of concern about this from that community.
My question is around what provision has he advocated for, or has he been in receipt of advocacy from colleagues, to secure bus services for rural communities? We’re receiving a lot of correspondence, which is being directed to the Minister of Education—it would have been good to see if she had visited them. What advocacy has he been involved in?
Hon CHRIS BISHOP (Minister of Transport): The reason they are writing to the Minister of Education is that the Minister of Education, through Vote Education, has responsibility for it. I don’t have any responsibility for school buses. The Minister, I’m sure, is dealing with that. I think we’ve got Vote Education Estimates later tonight or maybe tomorrow, so I’d encourage you to put that to the Minister.
Dr TRACEY McLELLAN (Labour): Going from buses, trains, and back to public transport, because in Christchurch we can only wish—we can only be envious about having trains and fancy things like that. And wWhen $800 million worth of mass rapid transit funding goes begging, it just makes us feel a little bit more envious as well—in June this year.
But anyhow, Minister, if we have to console ourselves by talking about buses, and given that the $78 million in public PT Futures funding was for upgrading bus routes and things like that in preparation for mass rapid transport, how does a 50 percent fare increase in Canterbury specifically, align with the Government's claim of supporting regional New Zealand?
TANGI UTIKERE (Labour—Palmerston North): Thank you, Mr Chair. I want to move from trains and buses and public transport to aviation. I see Mr Meager’s here. He might want to take this; I don't know.
Look, one of the issues that the select committee heard about was regional connectivity as being a priority. I want to ask why there is no funding provision in the Budget around the monitoring of regional cancellations. I know the Government took moves to report on frequency of arrivals and what have you. However, there is a lot of concern out in the community about the level of cancellations without that information being made available. My question to a Minister is: why is there no provision to provide for airlines to report on the specific reasons as to why flights are cancelled, to provide a level of accountability to consumers?
Hon JAMES MEAGER (Associate Minister of Transport): Well, there is provision in the Budget for the Ministry of Transport to undertake on-time performance reporting, and they do that. I think the next report is due out in a matter of weeks.
Tangi Utikere: Cancellations.
Hon JAMES MEAGER: And, yYes, the on-time performance reporting includes delays, cancellations, along with reasons from airlines as to why some of the routes are at higher cancellation rates than others.
I think the question the member is asking is: why is there no funding to force airlines to provide reasons for cancellations? I'm not sure if you would appropriate funding for that. I'm sure you could write politely to airlines or use some of the other regulatory mechanisms that would be provided for under the Civil Aviation Act to do so, but I'm not sure it requires a funding mechanism to provide that information.
TANGI UTIKERE (Labour—Palmerston North): I thank the Minister for that. Is the Minister suggesting that consumers should write politely to airlines, as opposed to the Government having an ability within any frequency reporting tool to require airlines to identify the specific reason for cancellations?
Hon JAMES MEAGER (Associate Minister of Transport): No, I'm not suggesting individuals write to the airlines to ask for that information. Airlines already provide on-time reporting performance information to the Ministry of Transport that is published every month, including now, for the first time, all regional routes and regional airlines so that every person who is flying in and out of the regions can understand the reliability of their flights.
The Government does have the ability under the Civil Aviation Act to require that information, but at this stage, we haven't had to, because airlines are providing that voluntarily. Most airlines, as part of good customer service, will provide the reasons why a flight is cancelled. In fact, when you get your cancellation or delay notice via email, it will often provide those reasons.
Now, yes, it might be that airlines could provide more detail as to that. Some airlines provide an exceptional amount of detail, including the one that flew trans-Tasman recently and informed the passengers as to why airspace may or may not be open. Sometimes they provide information around why flights are delayed and cancelled, and I'm sure they could do much more of that. The Government is very satisfied with the information that's being provided for on-time performance as it is.
Dr TRACEY McLELLAN (Labour): Thank you, Mr Chair. As well as identifying that there’s been a 50 percent increase in fares in the Canterbury region due to the decisions of this Government and the impact that that has, particularly on low-income families, does the Minister have any long-term plans to ensure that public transport as a mode of transport remains viable for people all over this country, particularly for low-income families, particularly because of the impacts that that has on productivity and all of the other aspirational things that the Government talks about but, at the same time, is putting barriers in the way of?
Hon CHRIS BISHOP (Minister of Transport): Yes, indeed we do. I only have five minutes; I’ll just keep it brief. I mean, the single best thing we can do for public transport is make sure it’s reliable and actually exists. In Auckland, we’ve got an extensive programme of work under way across the Northwest and the Eastern Busway, City Rail Link opening, and all the rest of it. Wellington:, we’re investing in the trains and the buses—new trains most recently announced.
I may say, in relation to both Auckland and Wellington, one major challenge is the overdue renewals that are required on the rail network. There is hundreds of millions of dollars’ of work required on both networks in Auckland and Wellington to upgrade them, so that is a cost that is coming down the line.
I appreciate the member’s advocacy for public transport in Christchurch, and as I understand it, Christchurch City Council is looking at developing a business case for mass rapid transit. I’m sure that will be considered in due course.
Dr Tracey McLellan: $800 million.
Hon CHRIS BISHOP: I don’t know where this $800 million came from. I mean, it’s like a fantasy figure, like much of what the Opposition talks about, to be honest. I don’t know—
Dr Tracey McLellan: Check the reports back in June this year. Check all the reporting on it.
Hon CHRIS BISHOP: There’s $800 million set aside for that? Well, I’ll invite the member to comment. Explain a bit further. I don’t know what you’re talking about.
Dr TRACEY McLELLAN (Labour): Mr Chair—OK. Thank you for the opportunity. As has been reported, and, again, it is murky, because we’ve been through the situation of the $78 million in relation to PT Futures, whereby it was a tagged contingency for PT Futures awaiting a business case. That was Labour funding; there was a change of Government; there was the Government policy statement released, which gave the impression that public transport wasn’t going to be highly favoured by this Government—rightly so; and, based on that, therefore, the Christchurch City Council was under the wrong impression that that money had been rescinded. The Government did nothing to remedy that situation by clarifying the situation.
That was the first step. The second step was the contingency—I don’t know if it was a tagged contingency, but there was money for the mass rapid transport. In June this year, it was reported in The Pressthe press and by Stuff, talking about the fact that “Government yanks $800 million pegged for mass rapid transit this decade”. That was in June. So if the Minister’s not aware of that, it would be really surprising to the people of Christchurch and to the people of Canterbury, and another example of being overlooked in terms of even just being able to provide some clarity. So that essentially—
Tangi Utikere: It’s a lot of money.
Dr TRACEY McLELLAN: It is a lot of money, and so whilst we’re talking about trains and upgrades in Auckland and Wellington, I can only listen with envy about those sort of systems. But if the Minister—it would be good to understand a little bit more and I could can see that you’re getting some advice.
Hon CHRIS BISHOP (Minister of Transport): I mean, there’s never been $800 million tagged in contingency, either through the New Zealand Transport Agency (NZTA) or through Vote Transport for mass rapid transit in Christchurch. I mean, I invite them to write to me. It might be an estimate of future funding required or it might be a year-by-year analysis topped up after 10 years. There’s never been $800 million in funding appropriated for mass rapid transit in Christchurch.
Dr Tracey McLellan: It was the next decade’s worth of funding that’s been pulled.
Hon CHRIS BISHOP: Well, that will be dependent on the business case, which no -one’s done. The reason it wasn’t done is because the Christchurch City Council indicated the money should be returned and it should go into other priorities.
: Because you took away the first $78 million, which was the first stepDr Tracey McLellan, .
Dr Tracey McLellan: Tthrough the phone call.
Hon CHRIS BISHOP: Look, I wasn’t the Minister of Transport at the time and I’m also not an official at NZTA or the Christchurch City Council, who’s responsible for all this stuff. I know that the member’s cooked up every conspiracy theory under the sun, but the reality is—
Dr Tracey McLellan: It was the phone call!
Hon CHRIS BISHOP: Look, maybe that’s true, I don’t know. The money has been returned. I mean, I realise that people are a bit frustrated by it, and, actually, to be honest, their ire is best directed at the council rather than anyone else. I’m sure that will play out. But the people who are worked up about it should direct it at the council rather than, well, certainly me and certainly other colleagues, because I just sit above it all.
So, anyway, if the council wants to advance the mass rapid transit business case, I’m really happy to have a look at it. Maybe they’ll do that in due course. Let’s see.
TANGI UTIKERE (Labour—Palmerston North): Thank you. There’s just one more question from me on “pothole patrol”—these pothole little vans that go around and deal with the potholes. Now, what accountability exists for the contractors whose repairs fail within a matter of days? I mean, people expect these $4 billion—you do it once, you do it right. Where is the accountability, given that this is a Government that doesn’t want to waste any money as part of its pothole patrol?
While the Minister checks on that patrol option, it would be good to get a response, because this is a significant amount of money that has been set aside—in the billions. It would be good to get an understanding as to why the public should not be able to expect that when the pothole patrol goes out and fixes these potholes, that they’re done once and they’re done right?
Hon CHRIS BISHOP (Minister of Transport): Yes, well, I’m reminded that the funding activity class is called the pothole prevention fund, but, actually, it’s a sizable sum of money for State highway renewals and other maintenance. It’s not just all on potholes—trust me on that one. I mean, there are a lot of potholes in New Zealand, but there aren’t that many. I’m advised that there’s ordinary monitoring that goes on through the New Zealand Transport Agency (NZTA) around repairs and maintenance on all contracts. We’d monitor the 24-hour and 48-hour cut- offs, as has been widely reported, and it’s monitored by the staff at NZTA, and it’s reported quarterly.
CHAIRPERSON (Teanau Tuiono): Any more questions for transport? Members, the time has come for the dinner break. We will resume the debate at 7.30.
Sitting suspended from 5.55 p.m. to 7.30 p.m.
Housing
CHAIRPERSON (Maureen Pugh): Members, the committee is resumed. We now have the Minister of Housing. The Minister is available to speak to that portfolio from 7.30 p.m. to 8.30 p.m.
JOSEPH MOONEY (Chairperson of the Social Services and Community Committee): Thank you very much, Madam Chair. I rise to speak as the chairperson of the Social Services and Community Committee—we heard Vote Housing and Urban Development, and we discussed the Vote with the Minister of Housing, the Hon Chris Bishop, and the Associate Minister of Housing, the Hon Tama Potaka on 17 June.
The appropriations sought in 2025-26 total $7.179 billion, and the largest appropriations of the Vote were $2.198 billion for social housing and associated support services; $1.684 billion for housing infrastructure; $1.152 billion for loans of Kāinga Ora; $365 million for transitional housing places and associate support services; $300 million for the Tamaki Regeneration Programme; $210 million for the facilitation, acquisition, and development of land and residential property through Kāinga Ora.
Hon KIERAN McANULTY (Labour): Thank you very much, Madam Chair. I appreciate the opportunity to take part in this debate and ask some questions of the Minister. The first question I have is related to a press release that was issued before the Budget, indicating that the changes to entry criteria for emergency housing, which was essentially tightening the criteria, and a change that many front-line providers have connected to what they deemed to be an unprecedented rise in homelessness. This press release indicated that the Government had made savings of a billion dollars as a result of that change, and I would like to ask the Minister: how much additional savings, on top of that billion dollars, has he made as a result of tightening the criteria to emergency housing?
TAMATHA PAUL (Green—Wellington Central): Continuing on the same line around homelessness—obviously, it's increasing around the country. The first lot of questions I'm going to ask are around data, because we know that the statistics from the national insights briefing that the Salvation Army and others put together, based on disparate pieces of data, has given us a bit of an idea of what's happening across the country. We're able to understand what's happening in terms of rough sleeping and homelessness based on the front-line providers that we meet with in our roles as MPs. But we're largely relying on their feedback to understand the scale of the issue of homelessness and rough sleeping.
My first questions are about data, because if you can't measure it, you can't have any evidence-based ground to actually make good decisions around it. So my questions are: what is the Government doing to measure homeless, with the census disappearing and the homelessness crisis clearly worsening? What is the Government going to do to improve data and reporting on rising homelessness? And what is the Government doing to understand the way that women experience homelessness? The Government doesn't collect that information, but they need to because women and young people experience homelessness very differently.
While I've got time, I also wanted to ask some questions on emergency housing and access to that. I know that's partially the Minister for Social Development and Employment’s responsibility, but it has resulted in emergency housing declines jumping from 4 percent to 32 percent since 2024. So my questions in regard to emergency housing are: does the Minister accept that there is not enough funding for emergency housing need in these Estimates, given the increase of homelessness across New Zealand? Is the Government seeing an increase in demand for other Government social services, like demand for hardship grants due to the tightened access for emergency housing, and what is the cost of that? And what new initiatives exist in the 2025 Budget that are targeted at addressing the growing homelessness happening up and down the country—is there anything at all?
Which leads me to questions around Housing First places as well. Obviously, Housing First is a really important part of the housing-support offerings to help people take that first step towards permanent housing and help to provide that wraparound care. The latest Homelessness insights report that went across the Minister's desk showed that, in March, there were 985 Housing First clients waiting to be housed. So are the 2,735 places funded in this Budget enough to meet the queue in that briefing that the Minister received, given there's a queue that is over a third of the size of the number of places that have been budgeted for?
My questions in relation to Housing First are: how many places are forecast to be contracted under the Housing First initiative for each year of the forecast period; and how does that compare with projected demand? And how does the ministry calculate or estimate how many Housing First places to fund?
Hon CHRIS BISHOP (Minister of Housing): Some of those I’ll have to get on notice and put them in writing—particularly that last question. In relation to the Housing First wait-list—which is related to and not actually a subset of the broader social housing wait-list—the advice we received in putting together the rough sleeper package, which we announced last Friday, is that roughly around 300 of the 900 or so people who are on the Housing First wait-list are rough sleepers, which is where we got the 300 Housing First places from. The ring-fenced funding is, essentially, for rough sleepers.
So the immediate priority is to focus on getting those rough sleepers into Housing First, get them enrolled properly, and make sure that they’ve got a provider that they’re working with to get them into a house. So we’ve brought forward that funding and made it available for what’s called “redirects”. So rather than going out and contracting a new house to be built—which, as the member will appreciate, takes some time—we will, essentially, fund the provider to lease or rent from the private rental market. Then—the clue’s in the name—Housing First gets someone into a house and then wrap the support around them.
Now, it’d be fair to say that historically—including under the previous Government, to be fair—there have been concerns around the use of redirects because, clearly, by taking up a private rental spot you are, on the margins, diminishing the private rental supply. So that pushes up rents and could be seen as counter-productive, because rental affordability is obviously the driver of much of the housing wait-list.
Now, the advice we’ve received is that, actually, very happily, rents are falling. In fact, there were some numbers out today or yesterday—
Ingrid Leary: Not in Invercargill they haven’t.
Hon CHRIS BISHOP: What’s that?
Ingrid Leary: Not in Invercargill—they’re up 8 percent.
Hon CHRIS BISHOP: Yes, well, that’s—yup. So the regional picture is different—that’s true. I absolutely accept that. But nationally, new private sector rentals are falling. And that’s a good thing after we saw quite striking rent increases over the last five or six years. So the advice we’ve received is that using redirects in the short term won’t have much, if any, effect on the rental market, which is a good thing. So it means that we can bring those places forward and get support for those people.
There’s a whole range of other initiatives that we announced on Friday around better supporting rough sleepers. Minister Potaka may wish to go into them, but greater utilisation of transitional housing spaces, for example. We don’t want a situation where on any given month there are a range of transitional housing spaces that aren’t being used—we’re paying for a bed that isn’t occupied by someone when it could be being occupied, particularly by someone who’s in housing need. So we want to make absolutely sure that we’re utilising as much capacity as possible. I said the same thing to Kāinga Ora, by the way, when it comes to making sure that as few beds and houses are left vacant for as little time as possible. To be fair to Kāinga Ora, they have made real progress on that in the last 18 months or so since the turn-round plan.
In terms of emergency—well, the member asked about new initiatives, and I’ve just outlined a couple, and the member can see the announcements on Friday in relation to that. Emergency housing is a demand-driven tool. So there’s a top-down process of appropriations. Every year, the Ministry of Social Development forecast the demand and then it goes into the appropriations. But it’s a demand-driven scheme. That also, I think, deals with the issue that Mr McAnulty raised around savings. So the forecasts were, essentially, that emergency housing would continue on the kind of free-for-all which it was on, which was up to—at one point—$1 million a day. Because of the Government’s changes, both through the priority 1 scheme to make sure that families with kids get to the top of the wait-list for social housing and can get out of emergency housing, and with the gateway moves that have been well canvassed, there have been savings generated through that which has been able to be generated as savings. So I think that’s been well canvassed as well.
Hon WILLIE JACKSON (Labour): Thank you, Madam Chair. I would like to ask both Ministers on their views in terms of where we are in terms of the current state of Māori housing. I think it should be a priority for this Government, particularly given the fact that when we were in Government, we established the Whai Kāinga Whai Oranga programme, which, basically, as the Ministers know, is a by Māori, for Māori programme, and which was embraced very much by iwi all around the country. I just want to get a steer from both Ministers in terms of what's the current state, what's the current position with regards to Māori, given that the Waitangi Tribunal has been very clear that we're in, well, basically, a catastrophic state, they said, some years ago. Is this a priority still? Is a by Māori, for Māori solution still on the table? Is that something they would embrace, or do they agree more with the Deputy Prime Minister's view, which is that this type of funding is in fact racist funding? Is that the view of Minister Bishop and Minister Potaka? Will they still be engaging, in terms of a targeted-type strategy?
TAMATHA PAUL (Green—Wellington Central): Thank you. Just to follow on from some of those Housing First questions, I also had some questions around the Sustaining Tenancies programme and the Rapid Rehousing programme. Obviously, the Sustaining Tenancies one is about allowing people to stay in their homes, because part of solving homelessness is not just getting people into housing but making sure people at risk can sustain those tenancies and stay in that housing. So my question is: how many places are forecast to be contracted under the Sustaining Tenancies programme for each year of the forecast period? How do Sustaining Tenancies programmes in this Budget compare with projected demand? And why do Sustaining Tenancies places reduce from 2,537 that were delivered in 2024-25, to 2,290 in the 2025-26 Budget performance standard—does that reflect a change in demand from homeless households?
On the Rapid Rehousing programme, obviously that does a similar thing to Sustaining Tenancies, and I wanted to ask: why do Rapid Rehousing places reduce from the 671 that were delivered in 2024-25 to 565 in the 2025-26 Budget performance standard, and does that also reflect a change in demand from households at risk of homelessness? If we look at the data that’s come in the Minister of Housing’s own briefings and also the national insights briefing prepared by a group of NGOs, we can see demand is increasing, so why are we not seeing that demand increase reflected in this Budget?
The Minister in his answer also mentioned transitional housing, which is obviously a big part of the housing continuum. So I wanted to ask: how does the Government intend to continue providing 5,800 transitional housing places while the funding for transitional housing is being reduced in the 2025 Budget? I want to particularly focus on youth homelessness and youth transitional housing. There’s been some incredible advocacy that we’ve seen over the last few months, at least, from Aaron Hendry, who’s done work with homeless youth through Kick Back for homeless youth in Tāmaki-makau-rau, but there’s also been a lot of advocacy from Manaaki Rangatahi and Māhera Maihi, who leads He Pā Piringa, which is the first kaupapa Māori youth transitional housing kaupapa in New Zealand for homeless rangatahi.
So I wanted to ask: how many of the transitional housing places funded in Budget 2025 are for youth transitional housing places, and how does that compare to the previous year? How is the Government tracking or measuring demand for transitional housing? Is it increasing, and, if so, how does reducing the transitional housing budget help to address the demand for transitional housing? How are we staying in touch with the needs of rangatahi when there is no legislative duty to assist rangatahi into stable, affordable, and safe kāinga?
Hon KIERAN McANULTY (Labour): Thank you, Madam Chair. It's interesting that the Minister didn't quite answer the question, which was pretty straightforward. He's quite happy to issue a press release to say, “Look at us. We've saved a billion dollars.” It's been a few months since then, and I do wonder if the hesitancy to answer the question is because—I do wonder if there's a bit of regret that that press release was issued. It was certainly in bad faith, when front-line providers are saying that homelessness is the highest or the worst it's ever been and that it's increasing at unprecedented rates, and the Government's response was “Look how much money we have saved.”
My follow-up question is in response to an answer that the Minister gave saying that emergency housing is demand-driven. Does he believe that the demand for emergency housing is being met?
TAMATHA PAUL (Green—Wellington Central): I really do hope that those questions about transitional housing are able to be answered—particularly around the use of transitional housing, given how dominant that has been in the media—and I’m happy for either of the Ministers to answer that. I do have some specifically Wellington housing questions that I’d really love to get an answer to, as well. Obviously, in Wellington, rough sleeping has increased by 24 percent, a hundred homes in the east have been cancelled, 300 public homes are still on hold at the Arlington housing development—despite the Minister’s assurances over the last year that we would get a decision about Arlington, which I’ve been patiently waiting for—and only 51 social housing places have been contracted to community housing providers in Wellington.
So my questions are: does having 250 fewer new social homes in Wellington realistically reflect the need for social housing in Wellington City ? When is a decision being made about Arlington, and how much is the Government saving just by continuously kicking that down the road? I know from written parliamentary questions that there has been $2 million spent on Arlington in the last year alone, despite there being literally no movement on that site—I know that because I walk past it every day.
With single-site supported housing like Te Ō in Mount Cook in Wellington and also Te Mātāwai in Greys Avenue in Tāmaki-makau-rau , were their services funded through the single-site supported housing component of the social housing multi-category appropriation which expired in 2025? Going forward, how will Te Ō and Te Mātāwai be funded and from what appropriation? I know that with regard to those communities where that single-site supported housing is, a big part of convincing them to allow that housing in their neighbourhoods was the promise of wraparound care and the ongoing support for that. But that has expired in 2025, and so is there going to be funding for that, going forward, in order to give that wraparound care to those tenants?
Hon CHRIS BISHOP (Minister of Housing): There's quite a lot there. I’ll deal with what I can. Arlington: we continue to work on that. It's a tricky issue. It was actually paused or put on hold or cancelled, whichever way you wish to choose to use it, by the previous Government, as I pointed out to the member a number of times. Back in 2021-22 there was a commitment around that. It's tied up through the Wellington—well, the site is council-owned, leased by Kāinga Ora. It's a complicated funding arrangement. The business case was expensive then, and then the final business case that was presented in mid-2023 was extremely expensive—over $1 million per apartment in terms of capital for social housing. Of course, the ongoing operating costs of that are high as well, so the previous Government put that on pause.
The site is quite a challenging one, as I think the member is familiar with. It's not necessarily, I think, true that over 300 social housing units on the one site would be that good, and I think quite a few people would agree, and that's certainly not the preference of quite a few people I've talked to. So we are continuing to look at the site. As I said to the member multiple times, I would like to see development there, but we are not in a position to fund social housing units at over $1 million per unit. That is not a tolerable cost situation for the Government.
More generally, when it comes to Kāinga Ora, we are driving down the cost of new social housing construction—and the member will see, when the Kāinga Ora annual report comes out in a few weeks, that we're making good progress on that. We are not in the days of $10,000, $11,000 per square meter social housing units; that is not a cost-effective way to deliver warm, dry housing to people in need. So we're making good progress on that. It's part of the Kāinga Ora turn-around plan, which will be presented to the House in due course.
In relation to social housing in Wellington, of course there is big need in Wellington, but the solution to social housing in Wellington isn't, you know—it's too reductive a view to take a look at the wait-list and say, “Well, the wait-list is X, therefore the social housing solution is Y”. That's too binary a way of looking at it. Many things go into the wait-list. Affordable rentals has an important part of meeting some of that need, and the Government's doing quite a bit of work at the moment around how we facilitate greater affordable rentals, which plays a part in meeting housing need, particularly for our senior citizens. We'll have more to say about that in due course.
Of course, the ultimate way to affect the wait-list over time is to free up the planning system so that more people can build houses in the places that people need them. The social housing system is affected by planning laws in the same way that everybody else is. I'll point the member to the example of the Dwell Housing Trust development in Kilbirnie where they waited 14 months for resource consent for social housing because they were arguing with the council about rubbish bins and, you know, where the planter boxes were—well, actually, that's a different example. But anyway, they ended up arguing about all sorts of different things. That's another example as to why we need a Resource Management Act reform. So there's plenty of stuff happening in Wellington. The allocation of the Budget 2024 1,500 places are continuing, and many are allocated to Wellington.
In relation to transitional housing savings and transitional housing more generally, the Government continues to invest quite significantly into transitional housing—over $350 million per year. As I said just before, we are trying to get greater use of the utilisation of transitional housing. It's an important option, but we should be up front about the fact that both emergency housing and transitional housing are not the answer to our housing process. They are, by design, short-term measures designed to tide people over and make sure they can have a warm, dry roof over their heads before they move into more permanent housing. That's ultimately what we've got to fix.
On Rapid Rehousing: Rapid Rehousing is Housing First, except just a different name. It's for people who are not quite as badly homeless as people in Housing First, which I know sounds like a ridiculous thing to say but it's actually true and it's how the system is designed. Part of the problem in this space, if we're honest about it, is we have too many programmes, too many contracts, too much complexity. So we have Housing First and we have Rapid Rehousing. They are largely the same programme. They have different Budget appropriations, different funding lines, different contracts, different providers. And then, you know, there's all these other different initiatives out there as well, including in the youth homeless space that the member talks about, and I acknowledge the hard mahi of Mr Hendry in that space, who is a good advocate and continues to be one. But over time, we've got to get the system simpler and more effective at funding people in need.
Hon TAMA POTAKA (Associate Minister of Housing): Yeah, just in relation to some of the queries that have been asked and also some of the statements made, certainly in relation with data gathering, we're very happy that we’re being really more relentless around data than probably ever before around housing. A great example is the data that we have of where people go after they exit emergency housing. We have a really good grip on more people than a couple of years ago where we knew where 50 percent of people exiting emergency housing go to. Now, we know where 80 percent or more go to. That's a good step that's been undertaken by the officials and we're really appreciative of that.
In relation to the next Homelessness insights report, we expect that to be delivered in December, and the teams are working with Statistics about how we can ensure an ongoing measurement of various stats within that report. In fact, I understand that the most recent Homelessness insights report had a very, very clear focus on rough sleepers and those living without shelter in cars and tents. That's actually a good step in the right direction.
In relation to the Whai Kāinga Whai Oranga programme which the member asked about, in terms of house building under the previous Government there are about 1,080 houses contracted to be built, and of those there are about 680 that have been built up until the end of July this year. There are about 1,000 places that have been allocated under the coalition Government, of which about 750 have been contracted and about 75 have been delivered. We've still got some houses who are contracted under the previous Government that are continuing to be delivered. There might be about 30 percent or 35 percent that are yet to be delivered. Under the coalition Government, we're heading in the right direction—just about delivered 10 percent. Of course, with people like Willie Te Aho and others, there's some serious ballast and an intention to deploy those additional homes in a very timely manner.
In terms of future funding, this matter was covered off at the select committee recently. We have commented on how that's been reinvested. The announcement that was made at Waitangi earlier this year—$200 million for 400 homes, and it's expected or anticipated that actually, given the diligence of those organisations that are involved in delivering these homes, there may be actually more homes than the 400 that were proposed and announced at Waitangi. We’ve been able to get some better pricing in the current economic conditions, and, of course, enabling some better cost-proofing of transitional housing, which captures a lot of Māori households who live in that transitional space.
Finally, the Flexible Fund, which we have acknowledged previously can enable some Māori organisations who are not community housing providers to potentially consider the ability to access affordable rental support and also income-related rent subsidy support.
The other matter I'd mention is the papa kāinga kaupapa, one of which is the funding, some of which continues at Te Puni Kōkiri, but also the National Environmental Standards for Papakāinga, which has been foreshadowed and articulated by the Hon Minister Bishop—an important step in the right direction to better enable the building of up to 10 homes on Māori land or general land that came into the general land title as a result of the Māori Affairs Amendment Act 1967, where there was a change of status overnight for land with four owners or less. We believe that that's another step being taken in the right direction to enable more building of homes on Māori land by Māori, and particularly with that type of scaffolding and support that surrounds the building of papa kāinga.
The recent announcement on Friday included reference to $10 million over the next few months to enable a bit more working together of those that are in the transitional housing space, and I'd expect that there'd be some liaison between the officials with some of the more well-known transitional housing providers, and hopefully the likes of Aaron and Mahera Maihi at Mā Te Huruhuru, and others like Mahia Joyce in Hamilton that are working with the youths. But there are around 300 youth transitional housing places that are funded in the current Budget, and there are also some youth supported housing places. I'll get that number in short course or by written question.
Hon WILLIE JACKSON (Labour): Thank you, Madam Chair. I thank the Minister for that response. In terms of the flexi-fund, recently, we visited Rotorua, and one of the complaints from Māori providers—to the Ministers—is that they are getting lost within that flexi-fund. Given that they now have to compete against—when I said lost, I meant they are competing with mainstream providers and they don't have the same opportunities that they've had before, particularly under Whai Kāinga Whai Oranga. I say to the Minister, again, how are Māori interests being placated within the flexi-fund? Are Māori interests being recognised? Is it correct, in terms of how we viewed the Budget last year, that $400 million was transferred out of Māori-targeted funding to cover the flexi-fund, and is it fair for money that was originally set up for Māori providers to now be set up for everyone? I would ask the Ministers, is that a fair way to address some of the needs of Māori, given that we all know that we're at crisis point in terms of Māori? When we look at the deprivation levels, they are very, very high. When you look at Māori ownership, I think Māori ownership is 31, 32 percent in terms of homes, compared to our Pākehā brothers and sisters, who are up around 52 percent. I'm asking the Ministers, again, is the current strategy placating Māori needs?
Hon CHRIS BISHOP (Minister of Housing): The Flexible Fund is being designed at the moment, and I am cautiously excited about it. What we’re trying to do is simplify the system, OK? I’m not blaming particular Governments, but, over time, we’ve built up all of these different funding blocks, right? We’ve got Whai Kāinga Whai Oranga; we’ve got the affordable housing fund; we’ve got income-related rent; we’ve got progressive home ownership—
Stuart Smith: Kāinga Whenua home loan.
Hon CHRIS BISHOP: What’s that? Kāinga Whenua. There’re all of these different funding buckets, and what’s ended up happening is providers have ended up redesigning what they want to build to try and find whatever happens to be lying around through the appropriations, which is the wrong way of going about it. What we should be doing is taking a step back and going, “OK, where do we want to build new social houses?” As in, where’s the greatest need? And that hasn’t always been the guiding principle, to be honest; we’ve just kind of built where there happened to be some sophisticated providers who’ve been able to get their foot in the door. Are we building the right sort of houses? Again, we haven’t been doing that either, because, as I said in the House today, and a number of people have heard me say publicly, 50 percent of people on the register just need a one-beddy. Twelve percent of Kāinga Ora’s stock are one-bedroom units. Fifty percent of people on the register—I repeat that; it’s quite striking actually—
Shanan Halbert: That’s nothing new.
Hon CHRIS BISHOP: What’s that?
Shanan Halbert: That’s what we learnt under the last Government.
Hon CHRIS BISHOP: Well, yes—and what was done about that? Respectfully, not a lot. So we’ve actually changed the funding settings for Kāinga Ora through—I mean, it’s complicated—the provision of the funding through to Kāinga Ora. We’ve changed it so that they are now more incentivised to build more one-bedroom units, and their build plans show that into the future, which is a good thing.
But we’ve also done it through the appropriation, through the Budget 2024 and 2025 places, where, as I said in the House today, 89 percent of those new places are one- and two-bedroom units. And we’re driving the cost down through the borrowing by backing the Community Housing Funding Agency (CHFA), which we announced last week. It got very little attention because it’s complicated to explain, and I won’t bother to do it now because it takes five minutes. But it is going to drive down the cost of debt for community housing providers, which will drive down the cost of the provision for them. And ultimately, it drives down the cost for the Crown as well, because we’re the ultimate backer of all of this, which means we can do more.
In fact, the early indications are—if all of the 1,500 places that have been contracted through Budget 2024 roll on to new income-related rent contracts that use the Community Housing Funding Agency or cheaper debt—we could actually end up with around 1,750 houses rather than the 1,500 initially estimated, because of that lower cost of borrowing that we’ve provided through the CHFA $150 million Crown lending facility. It is actually, to be honest, complicated and technical, and I get why people don’t get it, but it’s actually quite transformational.
Anyway, on the Flexible Fund: we build in the wrong place, we don’t necessarily build the right sort of houses, and we don’t also focus on the right people. So people who are in the most need on the wait-list, A20s and A19s, wait a long time for social housing, and they should be in the highest need and they should be the first in line; this is what’s meant to happen for social housing. So the Flexible Fund is designed to move away from a system where it’s reactive to what providers can do in terms of chasing the different funding buckets and the Government actually saying, “OK, here’s where the need is in a particular region,”—and we’ll take a place-by-place approach, region by region—“here’s the type of housing we need, and here’s the prioritisation.”
Now, in answer to Mr Jackson’s questions—and I acknowledge his leadership in the past in relation to Māori housing—they will be an important part of the solution, because in many parts of the country, they are the people with land and with skills and expertise and with the capital of their own to partner with the Crown to build more houses. Now, affordable rentals is a space that many providers that he’s talking about play in already. We’ve backed some of them already, and we’ll continue to back them. Because the cost to the Government of backing them through capital funding—which is why the Flexible Fund’s got a huge amount of capital attached to it, along with the operating—mixed with iwi capital or trust capital is actually really cheap for Government. They utilise their own land—or their own whenua—and we can get those houses built and provide for whānau in need.
There’s not ring-fenced funding anymore, but they’re going to be a really important part of the solution. My full anticipation is that, in many parts of the country, those are the first people we’ll go and talk to and partner with, because it’s cost-effective, we know they can deliver, they have the experience, and it backs on-the-ground solutions tailored to specific whānau in specific communities. That’s the system we’re trying to build. That’s not what we have at the moment. It’s going to take a while, but I’m really proud of the mahi that Tama and I are taking on that.
CHAIRPERSON (Maureen Pugh): Can I just say before we move on that the casual conversations make it really difficult for the timers, so when you’re asking questions, backwards and forwards, without a formal call, it makes it a bit difficult. Thank you.
Hon TAMA POTAKA (Associate Minister of Housing): Kia ora, Madam Chair. Just to scaffold a couple of comments made by Minister Bishop, I think there’s a need just to carefully delineate between the actual residents, or those that may be on a social housing wait-list or need for a home, compared with those who are actually developing and deploying the homes. I think it’s important to have a bit of clarity around that conversation.
Around half of all those that are on the social housing wait-list are Māori. We know that. We’ve been really keen to make sure that there’s absolute support for community housing providers to deliver 1,500 new income-related rent subsidy - funded places over the next couple of years, one of which is actually an iwi-owned provider, being Te Āhuru Mōwai, Ngāti Toa rangatira, out at Porirua, but we anticipate that many of those that are moving into the homes to be deployed by the community housing providers, the 1,500, many of the residents of those homes to be built will be Māori—ditto the 550 homes in Auckland as part of the indicatives or the commitments made around the builds in Auckland. So I think it’s important to understand that the ultimate end-users of the social housing that is being funded, that is being built, will—maybe not in majority, but a very large group of those users—will be Māori families, whether or not they are one- or two- or three- or five-bedroom homes.
The other matter that I thought I’d just comment on briefly is that there was a comment that Māori will be competing with mainstream providers. I think what the member is meaning by that is the availability of funding for community housing providers or organisations to actually deploy that housing, that there’s a competition or there’s a lot more contestability for Māori providers that were potentially under former settings more aligned to be recipients of that funding.
In the context of how I described it earlier, the deployment of housing per the funding that was made available by the previous Government and this Government is going reasonably well, but it’s not massively expedited. The previous Government contracted 1,080; 685 have been built and delivered, and that’s nearly two years on past the time of the most recent election. So that is still going to go out over the next few years, particularly in places like Te Kao and up North where there are many houses that are yet to be deployed, although they have been contracted; ditto the 1,000 houses that have had funding allocated under this Government, of which about 750 have been contracted, and about 75 have been built. Now, those are the stats and it will take several years before all of that tails out.
So we’re comfortable with the pace. We’d like to see more houses built quicker but we’re also mindful that in some places there is only sufficient capacity to build a sufficient number of houses in any one year. We’re very aware of that. That’s why we’ve taken steps to enable more products, through the work of Minister Penk, and to try and remove or sideline some of the overbearing regulation that is making it harder to build, hence the national environmental standards for papakāinga, which we think will have a positive and constructive impact on the number of houses being built on Māori-owned land.
TAMATHA PAUL (Green—Wellington Central): A lot of the Minister of Housing’s responses, in this debate and in the media and in the House, are around zoning and the potential to build housing. Generally, we support the general thrust of building more housing—he knows this—but we need people to build those houses. In the last year alone, there has been no industry impacted greater by job losses than the construction industry: over 10,000 jobs gone.
My final question to the Minister is: why does this Budget continue to cut Kāinga Ora’s project budget, and is there anything in this Budget that will stem the loss of work in the construction industry fuelled by the cuts to Kāinga Ora? If building social housing is not the answer to stimulate construction jobs and construction across the country, then what is?
Hon CHRIS BISHOP (Minister of Housing): Look, we need to be up front about the fact that Kāinga Ora (KO) is about 4 to 5 percent of the residential market, so this idea that they’re kind of the answer to all of life’s problems is not true. They’re, roughly, 5 to 6 percent—or maybe 7 percent on a good day—of the build market, and so in the grand scheme of life, it’s not a huge amount. They’re an important part of it and they play a very important role for thousands of New Zealanders, but the biggest thing we can do for construction is get interest rates down. Now, I know that the member Tamatha Paul doesn’t necessarily agree with that, but it is the truth, and interest rates are coming down.
Now, the good news is that post the global financial crisis (GFC), we hit 13,000 to 14,000 building consents per year. It absolutely plummeted—it fell through the floor. Most reasonable commentators accept that we are at the bottom of the cycle, and we’ve bottomed out at about 33,000. That’s treble where we were post the GFC, which was a disaster, and we’re now starting to see upswings in some regional markets, which is a good thing. Most commentators are picking that we’ve hit the bottom and we’re now going to start to see an upswing. It’s cyclical, and the biggest driver of it is interest rates, because the economics of development don’t work when you’re borrowing at 7.5 percent. First-home buyers can’t get finance. They can’t borrow, because they can’t afford it, and so the biggest thing is interest rates.
Now, we’ve done some things through the Residential Development Underwrite, which is a targeted scheme to try and support the construction industry through the downturn. We put that in place 14 or 15 months ago, and it’s been pretty successful. We’ve had a range of projects—and we can give the member the data on that, if she would like—and Kāinga Ora is continuing to build. Net new is around 500 in this year; gross is around 2,650, plus a huge number of retrofits in the financial year that we are in. That is, of course, on top of the 1,500 social housing places funded in Budget 2024 —which is rolling out in this year through to 2027—and an additional 550 that we’d put in last year’s Budget for this year to roll out in Auckland. Then, of course, we’ve got the Flexible Fund starting on 21 July 2027, and, of course, there’s another Budget next year.
This idea that Kāinga Ora has stopped building is just complete nonsense. There are developments all around the country that—
Hon Rachel Brooking: No, not on Carroll Street .
Hon CHRIS BISHOP: Well, not all of them are continuing. Some of them are in the wrong place, and they were uneconomic to build. I—
Hon Rachel Brooking: Carroll Street is not the wrong place.
Hon CHRIS BISHOP: Well, I don’t know Carroll Street, and you do, and we can have a debate about that. But, ultimately, these are operational calls for them.
We have deliberately tried to strip some cost out, because the idea that we could build social housing units at $10,000 per square metre is not effective. If you get the cost of a Kāinga Ora home down to around $2,500 or $3,000 per square metre, you can build three times as many units for the same amount as a $10,000-per-square-metre unit. It’s just simple numbers.
Some of the stuff that was being undertaken by KO was, frankly, nuts, and they had a huge amount of land that they were never going to develop—and it’s very well for members to say, “Well, something was planned here.” Kāinga Ora owns land that they bought in 2017 and 2018 and that they have sat on and done nothing with. That is not an effective use of Crown capital, and it is not an effective use for the community, either. Not all situations are like that, but there is a huge amount of land that KO owns that has been like that, and there would any number of examples that people could point to.
We have refocused them. Some of the early numbers coming through as part of the turnaround plan are really good in terms of driving down build cost and stripping out costs, and—as I said to the member in the House a few months ago—despite a decline in Kāinga Ora staff, tenancy satisfaction numbers are actually up, which tells you that the plan is working. What we don’t want to do is put it all at risk and throw it all away. We’re making really good progress.
SHANAN HALBERT (Labour): Thank you, Madam Chair. The idea that the Minister thinks that it’s nonsense that we say that they've stopped building—I only look at Māngere or Mount Roskill as examples in Auckland where they, in fact, have done exactly that: they have stopped building. Ten thousand people have been unemployed in the construction sector as a result, and they're training 9,000 less apprentices year on year. It’s incredible that he would have the ignorance to say that in the Chamber tonight.
I also want to come back to Minister Potaka and ask for a follow-up response to his point around the 550 homes in Auckland, and ask him the question: have those been built? If they haven't been built, when does he expect that they will be built?
Hon KIERAN McANULTY (Labour): Thank you, Madam Chair. It's extraordinary, on a day where the finance Minister claimed in question time that they had fixed emergency housing—“We’ve fixed it”—that the Ministers don't want to talk about it. They don't want to talk about homelessness, despite all the questions, and they don't want to talk about emergency housing. I wonder why that might be.
It's possible that when you've got the likes of Jill Hawkey from the Christchurch Methodist Mission, who says that “Minister Bishop's claim that those in genuine need can get help is simply not true.” —you know, if you make a claim and those on the front line that actually know what's happening say that's not true, essentially calling you a liar, I'd be embarrassed. The Minister isn't. He thinks that he can answer all questions about homelessness and about emergency housing with Resource Management Act reform and all is well. It doesn't stack up.
It's not just their policy of keeping people out of emergency housing that has led to unprecedented levels of homelessness. It is also the fact that the funding that was provided to community housing providers is a fraction of what they were getting under the previous Government, and, essentially, Kāinga Ora are funding new builds by selling houses.
My question is very simple: can the Minister guarantee that where Kāinga Ora homes are being sold is where the houses that will be built are being built, or is it the case like in Invercargill, where houses are being sold but none are being built?
Hon CHRIS BISHOP (Minister of Housing): We spent half an hour talking about emergency housing. I’m happy to keep talking—
Ingrid Leary: We haven’t talked about Invercargill, though.
Hon CHRIS BISHOP: Well, reasonable people can disagree about that. We have answered the questions. You don’t like the answers, but—
Hon Kieran McAnulty: It wasn’t answered.
Hon CHRIS BISHOP: Well, OK. The member is factually incorrect when he says that CHP funding—or community housing provider funding—has declined. What used to happen—and this happened under the previous Government—is Budget 2023 put around 3,000 new social housing places in place. Basically, the bulk of those would go to Kāinga Ora and the CHPs would get the crumbs. There was never any particularly sophisticated way of working this out, which is partially why we’re changing it. I don’t want to repeat what I said about the new investment system, but it used to, basically, be 80 percent to Kāinga Ora and 20 percent to the CHPs.
Well, we put in place 1,500 new places guaranteed for CHPs only—Kāinga Ora got none of those places in Budget 2024—and an additional 550. So that’s 2,000. This idea that they’ve had a funding cut is wrong. Actually, the officials said to us, “We’re a bit unsure that the CHPs can actually deliver on the funding you’ve given them.” And that’s partly why we’ve done the Community Housing Funding Agency guarantee and that’s why we’ve done the strategic partnerships to work with the ones that have got scale and give them greater operational support. We’re continuing to work hard on that.
We will continue to try and change the system in a way that, as I say, is centred around building the right houses in the right places for the right people. When it comes to KO’s sales: yes, it’s true they are selling some houses and they’ve got quite an ambitious sales programme over the next few years. That is really important, because they own houses in the wrong place, where the land could be better utilised, redeveloped by a private sector player with greater density—assuming we get the density rules changes—and where the houses are worth millions of dollars. So Kāinga Ora owns houses all over Auckland that are worth $1 million, $2 million, $3 million, often occupied by one or two people at best, and in places where the money could be sold and the proceeds reinvested. Generally, that will be in the communities from which those houses have been sold, but not always, because, again, what we want to try and do is build in the right place. The reality is there’s no magic money tree. We have limited resources.
Shanan Halbert: Only for landlords!
Hon CHRIS BISHOP: We need to make sure that we are building in the right places. Shanan Halbert asked about Māngere . The Māngere large-scale project has never started. We’re having a good look at the large-scale projects right now. Some of them have been quite successful. Northcote, which the member will know about obviously, is actually, I think, a pretty good example of where the large-scale project has worked pretty effectively.
Hon Rachel Brooking: Do more!
Hon CHRIS BISHOP: Well, part of the issue with the large-scale—
Shanan Halbert: You stopped Māngere.
Hon CHRIS BISHOP: Well, Māngere’s been paused while we have a look at the programme. Part of the issue with the large-scale projects is that the business cases—this is a genuine point—were done in 2021 to 2022 when the economy was very different and the construction market was very different and the costs for construction were very different. We’re having a good look at reviewing all of those business cases now, in the context of 2025. We’ll work our way through that process in a rigorous way. I think the Northcote Point example’s been pretty good. I’ve seen it, I’ve been out to have a look at it, and some of the work that’s been done there has been pretty effective. It’s a good example of how you can do social and market affordable housing in an integrated way and you make good use of land.
Frankly, Kāinga Ora doesn’t make particularly effective use of its land right now.
Ingrid Leary: How’s Invercargill?
Hon CHRIS BISHOP: You know far more about Invercargill than I do. I’m sure on your regular sojourns there from Waiheke Island you engage pretty regularly with it! I’m looking forward to hearing more about that.
CHAIRPERSON (Maureen Pugh): Are you going to answer to that? OK.
Hon TAMA POTAKA (Associate Minister of Housing): There have been a number of assertions—I'd call them hearsay—around people being able to access emergency housing through approaching the Ministry of Social Development and taking genuine need. I can assure the members of this committee, those who are actually listening to the answers, that there are a number of people that are right in the middle of community housing provision that are absolutely over the moon with the commitment that we have undertaken and executed to get kids out of motels.
Whether or not you want to have a name-by-name trade-off—I could do that all day, every day; Paul Gilberd and Ali Hamlin-Paenga are absolutely stoked with the work that we've done, ditto Julie Nelson from the Wise group and Barbara Brown from Kāhui Tū Kaha. I could name 20 people right here and now who are absolutely thrilled with the action that we've taken to get kids out of motels, but all we get is abuse from the other side.
Now, in relation to the fast track—which, I'd also mention, a number of iwi and hapū groups are absolutely stoked that we've enabled fast tracking of their housing developments—whilst there is a lot of commentary that iwi and hapū do not like the fast-track legislation, I can assure you that Tainui Group Holdings, Ngāti Koata, Ngāi Takoto, and Ngāti Waewae in Arahura, who have fast-track housing projects—
Hon Willie Jackson: All Shane Jones’ relations.
Hon TAMA POTAKA: —that have been put through—I don't think Shane is from the West Coast in Poutini, but thank you.
Joseph Mooney: Or the Waikato.
Hon TAMA POTAKA: Or Waikato. I didn't see that the last time I checked his Dalmatian whakapapa, but they are absolutely thrilled that they have been given the green light to be on Schedule 2 of the fast track to enable more housing on their land.
Hon KIERAN McANULTY (Labour): It’s interesting, eh? All they want talk about when it comes to emergency housing is the people that have left—into homes that were paid for by the previous Government—they never want to talk about the people that can't get in. The questions were always about that, and this is Minister Potaka’s response: “They don't focus on the people that have left”. No, we focus on the people on the street, which is what these Ministers never want to talk about.
Homelessness has increased at unprecedented levels. Every single front-line provider has told Minister Potaka and Minister Bishop that their policies have increased homelessness, and everybody believes them because they're on the front line, except those two Ministers. Like I said earlier, Jill Hawkey has basically said their claims are a lie, and they still refuse to accept that their policies have increased homelessness.
Instead of actually answering a pretty simple question about Invercargill, which was just one example of others around the country, yet again, the Minister decided to have a crack. I'm going to ask it again: can he assure the House that the Kāinga Ora houses being sold in Invercargill, as is the case elsewhere, are going to be used to fund additional houses in Invercargill? Or is the answer that we received in a written parliamentary question that said there are no plans to build additional houses in Kāinga Ora correct? If houses are being sold in Invercargill, like elsewhere, and there's no plans to build in Invercargill like there's no plans elsewhere, what's that money being used for?
SHANAN HALBERT (Labour): Thank you, Madam Chair. I’m still waiting for Minister Potaka to answer my question. If he can this evening, that would be good. We’ve spoken about Aaron Hendry and the work he does at Kick Back in the House tonight, but the reality is we’ve got 12-year-olds sleeping on the street in Auckland. We’re estimating that 11,000 young people are homeless in Auckland alone. I’m asking the Minister tonight: how many spaces has he offered to support 11,000 young people into housing? What’s he doing about that? My other question for him—because we’re talking about Kick Back; he’s met with the rangatahi from that group who have experienced housing—is: what were their recommendations? What did they ask him to action, and how does this address that?
JOSEPH MOONEY (National—Southland): Point of order. Just the member the Hon Kieran McAnulty has twice implied that other members of the House are liars, and I would invite him to withdraw and apologise. Speakers’ ruling 48/3 is “The offense of calling another member a liar, or implying that another member of the House is a liar, is an offense against the House”.
CHAIRPERSON (Maureen Pugh): I did listen to the comment and the member was referring to comments made by someone else—
Joseph Mooney: It’s still implying, though.
CHAIRPERSON (Maureen Pugh): Yes.
Joseph Mooney: It is still an implication, though, Madam Chair.
CHAIRPERSON (Maureen Pugh): Yes, but my understanding was that he was quoting someone else. So we don’t need to go any further.
Hon TAMA POTAKA (Associate Minister of Housing): Perhaps as a logical denouement for this conversation this evening around the Estimates, I might refer to a couple of really good indicators as to the level of commitment that Minister Bishop and I have to actually understanding the challenges and the plights of those people that actually are living on the streets or living in cars or living in tents. We haven’t just taken one stroll down in Dunedin or one of the roads in Pahīatua; we’ve actually been to a lot more deep, dark, dank motels than I’m sure any other members in this House have been.
Just to demonstrate how much the members opposite care, I’ve not received any privacy waivers from any of the members that have spoken tonight. Not one. Whilst they might talk from the hearsay of others, not one privacy waiver to demonstrate how much they actually care about the people who are living on the street, and for whom we have made an announcement recently around rough sleepers.
Now, the ongoing illogic of the pettifogging that the members opposite have made around connecting the emergency gateway to an increase in homelessness, I can refer everyone back to the actual Homelessness insights report, which all members of the opposing bench often rely on selectively. I’ll read from the sixth bullet point of the front page of the Homelessness insights report: “It is not possible to determine the extent to which changes described in this report reflect existing trends and broader economic and social contexts or are attributable to policy changes.” Actually, it is unclear the level of attribution that can be made between the gateway changes, which we think are very credible and very responsible to the reported increases in homelessness.
And, might I add, it is absolutely important for parents, whānau, grandparents, and communities to take care of their young people. In the event that we have young people hitting the streets, that is very unfortunate, and I have met some of these young people, as you have mentioned, and they have told me that they have serious disconnect from their whānau. That’s what they have told me: they have serious disconnect from their whānau. There are some people out there that are trying to help, including those Ministers who are now taking steps to ensure that transitional housing and support for rough sleepers is increased. That, my friends, is the purpose of the announcement made last Friday afternoon. Kia ora.
CHAIRPERSON (Maureen Pugh): OK, members, it seems the Minister’s time in the chair has come to an end, and we’ll now have the Minister for the Environment. The Minister is available to speak to that portfolio from now until 9.30. We’ll just have a second for them to swap places.
Environment
CATHERINE WEDD (Chairperson of the Environment Committee): Look, during our select committee process, we heard from the Minister for the Environment, the Associate Minister, and the Minister responsible for RMA Reform. In the Budget, the total appropriation sought for Vote Environment was $528.1 million. This was a budget increase for Environment from the previous year, with a 38.7 percent increase in waste minimisation. The main areas of funding for the environment include over $288 million for waste minimisation; over $128 million for improving New Zealand’s environment, including funding for the Resource Management Act (RMA) reform; over $65 million for product stewardship initiatives; and over $33 million for the Environmental Protection Authority. Key priorities include resource management reform, waste minimisation, and improving recycling, as well as freshwater management and product stewardship.
It’s always a balance between environmental protection and development. We heard how the RMA reform will strengthen the economy and improve the housing market. It will make it easier to build houses, renewable energy projects, and infrastructure, and support our farmers and growers by cutting red tape and bureaucracy.
The importance and significance of the Fast-track Approvals Bill was also discussed. We also heard that proposed amendments to the Environmental Reporting Act 2015 would support greater efficiency in measuring and monitoring data and allow for more flexible, timely, and relevant reporting.
The waste minimisation work includes increased funding from the waste disposal levy, and we discussed the new funding for the Environmental Protection Authority, hearing that under the upgraded models, the primary sector will have faster access to softer chemicals that will improve the environment and progress our agriculture sector. There is also funding for waste infrastructure and cleanups, and a further $20 million a year is available for contaminated sites and vulnerable landfills.
Hon RACHEL BROOKING (Labour—Dunedin): Thank you, Madam Chair. Given that the chair of the committee has just been speaking about the waste levy, I’d like to ask some questions about that. Of course, this was a levy that has always been hypothecated to waste, and it’s split 50 percent between the Crown and local government. At the Budget—not this year, but last year—the Government’s part was split, so it could be spent on anything to do with the environment. As a result of those decisions, the amount and the waste minimisation fund will reduce by about 49 percent. My questions are, then: what ramifications will that have? With the money from the levy being diverted to other environmental things—and we can talk about those other environmental things soon—what will it do for her action that she’s going to undertake on waste? Will circular-economy principles be reflected in any of her decisions on waste in any new legislation?
The previous Government had legislation—well, it had all the Cabinet decisions, so legislation was ready to go. The Minister has said that she’s going to do some waste minimisation legislation. Where is that at? Where does the circular economy fit in that? Will waste minimisation activities be able to be funded by the remaining waste levy? With the part of the waste levy that is going to environmental goals, what scrutiny is she putting on the environmental outcomes of that spending? Thank you.
Hon PENNY SIMMONDS (Minister for the Environment): Thank you, Madam Chair. Thank you for the question around the waste disposal levy. We are very excited about the breadth of the use of the levy and, of course, of the additional funding that is coming in through the levy over the coming years. It acts as both a disincentive for those disposing of waste in landfills—to look for other means to be recycling waste—but also it gives us an opportunity to be able to spend across a range of initiatives that are beneficial to the environment.
As the chair touched on earlier, the $30 million is still available for new initiatives via the Waste Minimisation Fund, principally geared towards organics, so that it assists us to meet our emissions reduction plans. There is $20 million each year for the new initiatives around the contaminated sites and vulnerable landfill, and that’s an important thing for us to be looking at proactively, because we all remember—and I’m sure the Chair remembers—the situation with the Fox River and the 20 kilometres of riverbank that required cleaning up after the exposure of a legacy landfill. There is $40 million over the Budget period for the remediation of Crown sites. Being able to be, again, proactive with those is really important.
Yes, we are utilising the levy across other departments—the Department of Conservation, across the Ministry for Primary Industries—for things such as the Community Conservation Fund and predator and erosion control, and I don’t think anyone would argue against those being beneficial to the environment. The one that I am probably most proud of, though, is the Environmental Protection Authority (EPA) being able to use waste levy funds of $10 million over a two-year period to update their modelling. Again, I remind the member that her Government turned the EPA down in 2022 when they sought to get $10 million to upgrade that modelling. The impact of that is that we are not getting the benefit of that more up-to-date modelling just yet, and it will be incredibly important for our farmers and our growers, in terms of being able to get softer chemicals here more easily and less conservative and faster dealing with applications. I am particularly pleased about the way in which we are using the waste levy.
In terms of the waste minimisation legislation, one of the matters that was consulted on was changing slightly the 50 percent that goes to the local authorities and enabling some of that to go as base grant, not all by population. That’s important because there are smaller local authorities that don’t have the scale, and also there are smaller local authorities that get big numbers of tourists and so it impacts upon them. We think that’s going to be a better balance and, on the whole, the submissions supported us being able to do that. At this stage, we are anticipating the waste minimisation amendment legislation going into the House in the first quarter of next year.
Hon RACHEL BROOKING (Labour—Dunedin): Quickly, and further related to the Minister’s answers, one of my questions was around decisions that are being made on what the Waste Minimisation Fund is being used on which are not related to waste minimisation. The Minister named a number of things there, and the Minister said, well, they’ve all got an environmental benefit. My question was around the analysis of that environmental benefit and what the outcomes are; what work is going into that decision-making process?
Then I had a second question about the waste minimisation amendment legislation—whether it’s going to involve anything relating to the circular economy? I ask that because when we were in select committee, the Minister told me that anything like that was “ideological”. That was also in relation to a question where I posed—or I pointed out—that a lot of the Ministry for the Environment’s documents no longer refer to “improving” the environment. There is talk of “maintaining” the environment, but not “improving” the environment. When I asked that question, the Minister said that I was being “ideological”.
If she has reviewed her opinion, is it “ideological” to ask for an improvement in the environment? Is it ideological to want a circular economy? What is her analysis of the environmental benefits or the environmental outcomes that come from the spending of the waste levy?
LAN PHAM (Green): Thank you, Madam Chair. I would really like to pick up on the Budget cuts generally, and particularly in light of this question. I’d like to hear from the Minister as to whether she actually does expect, as a result of the Budget decisions, that environmental outcomes will actually improve.
I’m asking that because the only new initiative when it comes to spending has been the resource management (RM) reforms, the third bill on that. Unfortunately, from what we’ve seen with the track record of RM bills so far, they have resulted in, essentially, a dismantling of existing environmental protections. I’m wanting to hear from the Minister what her expectation is, particularly when it comes to environmental outcomes.
I’ve got information here that, across Budget 2024 and Budget 2025, more than $650 million has actually been cut across those forecast periods, from both of those Budgets. We’ve seen that complemented in the worst way when it comes to legislative change, not only with fast track but with the RM reforms. I would really like to hear the Minister explain whether she thinks environmental improvement will occur and how that will occur given the huge cuts—given that, particularly for someone like the Ministry for the Environment, their annual budget is $528 million in total, and yet we’re seeing this immense amount of $650 million being cut across the forecast periods from Budget 2024 and Budget 2025.
Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Chair. Look, I just thought I’d grab the opportunity to ask the Minister whether she has, in her Budget, provided for money to assist small communities where the changing environment has caused them to spend a lot of money. Take Selwyn District Council—they’re spending about $5 million because they have to source lower-nitrate water because the nitrates in the aquifer are increasing, and that is a situation that is occurring in a number of areas. Some say it’s to do with the dairy farming, some may say there are other causes, but the question to the Minister is: has she provided for funding that will assist those ratepayers to find water that is drinkable, because of the changing environmental circumstances?
Hon PENNY SIMMONDS (Minister for the Environment): Thank you. I will start with the funding for small communities to source lower nitrates water. I will just note for the member that, actually, the reporting of too-high nitrates levels is very few and far between. You will, perhaps, recall that Gore District Council recorded one instance of being above the level, and Waimate District Council was the other; that was twice, in 2022 and 2024. There is no specific budget, but that is because the number of times that drinking water has exceeded the allowable nitrates level has been very, very minimal.
I will go back to the other two questions. In terms of the Budget, the departmental budget has increased in 2025-26 by $13.9 million from 2024-25. The most significant changes were, as the member suggested, around the resource management (RM) new funding required for the RM. However, there have also been quite significant increases in the non-departmental budget, primarily because of the stewardship fee distribution money coming in and going out, around the stewardship fees and also the increase of the waste disposal levy. I am not sure where the member gets the $650 million reduction from, and I will check whether my officials can give me anything on that, but there has been an increase in the departmental budget and also an increase in the non-departmental budget.
LAN PHAM (Green): Thank you for that. I think it’s the entirety of the forecast periods and the $400 million from last Budget which is very significant, hence why it looks like an increase in this Budget but, overall, it’s a ginormous decrease.
My questions are further on the resource management (RM) reform, and this is particularly as a response to considerable community concern that water conservation orders, of which there are 16 across New Zealand, which have been achieved through hard-won community, iwi, and hapū efforts put in place in order to protect these areas of outstanding and intrinsic value—will the Minister commit in this RM reform expenditure to protect and uphold these water conservation orders?
I would love to hear the Minister address that. Then, I also have 42 questions around the fast-track process, which again is funded under the Environmental Protection Authority, and I’m wanting to hear directly from the Minister whether she sees her role in this process as actually advocating for the environment.
Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Chair. I have a couple of quick questions for the Minister for the Environment, given she mentioned the importance of biodiversity and the role of Te Papa Atawhai, the Department of Conservation, in her contribution just previously, and also the importance specifically of predator control. I wanted to ask the Minister whether she sees her role, as the environment Minister, as one that would be advocating for the protection of the environment, given her comments. If so, how does she then expect Te Papa Atawhai, the Department of Conservation, to do the role that it is meant to do in terms of promoting biodiversity and promoting predator control when it has had, under her Government’s watch, 200 jobs cut and also a significant reduction in its Budget appropriation over successive years under her Government?
Hon RACHEL BROOKING (Labour—Dunedin): Following that line of questioning about the Environmental Protection Authority (EPA), we know from the EPA that they had to take a loan of $10 million or so for the fast-track consenting—to be able to provide the secretariat—and that they’d need about 25 applications a year to go through that process.
I have a couple of questions on that. Is that on track? Are they going to be able to pay back their loan? What other implications, from other policy decisions, are hitting the EPA at the moment? Will there be any consequences to what seem like changes to gene technology bills? Will that have ramifications for the EPA? I am interested in that line of questions.
Again, repeating what I have now heard two colleagues say, does the Minister believe she has a role in advocating for the environment? And, going back to my question, is wanting to improve the environment or talking about a circular economy ideological?
Hon PENNY SIMMONDS (Minister for the Environment): Thank you. The term “circular economy” is one that the previous Government enjoyed using. It is not a term that I have picked up on.
In terms of the Environmental Protection Authority (EPA), the financial performance of the EPA has been improved considerably. The EPA had a $3.55 million deficit in 2023-24, which was favourable against a forecast deficit of $3.9 million. The EPA has done considerable restructuring. The $10 million loan that the member mentioned indeed occurred for the EPA. It was a loan agreement with the Crown to support the implementation of the fast-track regime, and they made their first six-monthly interest repayment of $208,000 to Treasury. The EPA had raised sufficient levies from applicants to be able to make that repayment. Obviously, their repayments are very dependent on the speed at which the applications come in, but they are regularly assessing the rates and whether they are on track to repay the loan. It certainly, at the start, took some time for them to get the amount coming in from the applications to be able to make those repayments.
I have to say that the EPA has done a very good job of looking at their expenses, and they are budgeting for a surplus of $2.745 million in this financial year. They have undertaken a range of things to achieve that. Certainly, an organisational restructure that reduced staffing levels in some areas reduced reliance on contractors and consultants and enabled them to target or reprioritise the use of their funding to address the Hazardous Substances and New Organisms applications. They have put in place 13 additional positions, which is about 30 percent of the total team they had. They had around 40; they’ve got another 13 positions, which is going to assist them to be able to be quicker and reduce the queues.
As part of the work that was undertaken with the Ministry for Regulation’s review of agricultural and horticultural products, the 16 recommendations that came from that have all been agreed to, and a number of those have led the EPA to make the changes they have, to be able to reduce the queues; to reduce the processing times; to streamline their work; to pick up on a number of non-legislative changes, such as bringing in the sector leaders forum; to look at the prioritisation of applications and using stakeholders to assist with the prioritisation criteria; to take a further look at group—the word is going to escape just at the moment—
Hon Member: Standards.
Hon PENNY SIMMONDS: —standards—thank you very much—to see whether there may be able to be better use of the group standards. I was going to say “settings”—group “standards”. There were also a number of other changes that will require legislative change, where we are intending to make better use of the trusted jurisdictions approvals. There are a range of organisational changes within the EPA, reprioritisation of funding to ensure that they are heavily focused on being able to process applications, and then looking at some of the things that we will need to assist them with legislative changes.
In terms of the question that was asked around conservation matters, that would be better addressed to the Minister of Conservation.
Hon Dr DEBORAH RUSSELL (Labour): Thank you, Madam Chair. The Minister has referred, I suppose, in response to us a couple of times, to the term “circular economy”. She has said, variously, that it’s not a term she uses or a term she likes or a term she’s picked up on. Obviously, that implies a fair degree of knowledge about what a circular economy is. Could the Minister, please, explain what she understands by a circular economy and tell us why she doesn’t like to use that term?
Hon RACHEL BROOKING (Labour—Dunedin): Thank you. I’m looking forward to that answer to that question.
Going back to the Minister’s last answer, she was talking a lot about the Environmental Protection Authority (EPA) and making things quicker for applicants. I’m wondering if any of the reprioritisation or any emphasis on the EPA is about protecting the environment. That’s one question.
I’m also interested—second question—in knowing where the Environmental Reporting Act is at, and I’m also going to this prioritisation issue with the environmental funds. There seems to be some discussion of a reduction of environmental funds because they are not aligned to Government priorities, and I want to know what this means. What does “not aligned to Government priorities” mean when discussing funding for environmental protections and perhaps even environmental improvement? The Minister still hasn’t commented on the absence of that use of the word “improvement”.
Hon PENNY SIMMONDS (Minister for the Environment): Thank you, Madam Chair. Certainly, there is no dilution of the Environmental Protection Authority’s requirement to be protecting the environment, none whatsoever. That does not mean that they should not seek to be more efficient, to be more effective, to be able to process faster, because that, in fact, enables better protection of the environment by being able to get more environmentally difficult chemicals out of the system and bring in, more quickly, softer chemicals that are better for the environment. For the member to somehow think that doing things more efficiently, faster, and being able to process more quickly different products that might be better for the environment is somehow wrong or not protecting the environment; it is very much protecting the environment, but, certainly, there is protecting and improving the environment. Certainly, to think that throwing more money and allowing things to be less efficient and slower is somehow better for the environment is a fairly bizarre comment or notion to be putting forward.
In terms of “not aligned to environmental priorities”, the member’s quite right that some of the things that had been funded by the previous Government—and I am quickly trying to find them; for example, the Environmental Defence Society, Forest & Bird. A number of matters that I will just remind the committee of: that the previous Government and the previous Minister saw fit to make allocations two days before the last election to entities that then seemed to primarily use those funds to take legal action against ratepayer organisations. There is something bizarrely incongruent with taxpayers’ funding being used to take legal action against ratepayer-funded entities. The member is quite right, this Government did not carry on with funding a number of entities that the previous Government felt they should fund—and they should fund them two days before the election—and, in fact, we think that that was a very sensible decision to make.
LAN PHAM (Green): Thank you, Madam Chair. I’m wanting to ask very clearly, because I’m looking for clarity on the Minister for the Environment’s comments about conservation and someone asking about conservation. Presumably, she doesn’t mean water conservation orders, which is directly in her environmental remit when it comes to environmental outcomes. My question, again, is: does the Minister commit to, in some way, upholding existing water conservation orders in the resource management (RM) reforms that are directly in her expenditure environment? My other question is: what is her commitment in the freshwater space to environmental bottom lines within the RM reform?
Then, finally, I want to hear from the Minister about whether she is actually responding to new information. I’m thinking particularly about when she comes across new information, particularly in the environmental domain reporting, which is directly within her remit. Has she come across any information that has made her reconsider some of her Budget decisions? I’m thinking particularly around information that shows, for example, that our ocean is warming three times faster than the global average, that our dire biodiversity outlook is showing that, for example, hoiho populations are declining at a rate of 80 percent since 2008, or, for example, data showing that dairy cows have surged just in Canterbury by 15,000. Is she actually considering this evidence and information when it comes to her decision making?
Hon CHRIS BISHOP (Minister responsible for RMA Reform): There are a couple of questions there about the Resource Management Act reform. Let me deal with the first two in particular; I think the third one was better directed to the Minister for the Environment. As I think the member knows, we are working through water conservation orders and also fresh water in the context of a pretty comprehensive replacement regime for the Resource Management Act, so no decisions have been made. The member will have to wait and see around that.
I understand the importance of water conservation orders and also understand the importance of driving better freshwater outcomes for New Zealanders. As we’ve always said, we take a pragmatic and balanced approach to these things. At a general level, my view remains that it is possible to grow the economy and protect the environment simultaneously; in fact, they both complement each other.
STEVE ABEL (Green): Thank you, Madam Chair. Perhaps I could pick up on comments made by both my colleagues Lan Pham and Damien O’Connor around nitrates. The Minister suggested that there have only been two exceedances of the 11.3 milligram limit in the last wee while, including a town of 8,000 people in Gore, but I wonder if the Minister acknowledges that, well below that limit of 11.3 milligrams, the science indicates that there are critical health—chronic health—consequences and a hundred new cases of bowel cancer and 40 deaths per year attributable to nitrate in drinking water in New Zealand; and whether the Minister takes into account, also, the 800,000 New Zealanders, mostly in rural areas, that are exposed to excessive levels of nitrate; and how her decisions, which have seen that increase of 15,000 cows in Canterbury, the removal of the water protections, and the current proposal seeming to be to remove the cap on synthetic nitrogen fertiliser—how they will impact not only environmental health but also human health, which depends on those lakes, rivers, and aquifers for our drinking water; and how it will impact ratepayers, for example in Selwyn, where they’re looking at a cost of over $400 million to denitrify the drinking water; and where will those costs be recuperated from? Thank you.
Hon ANDREW HOGGARD (Associate Minister for the Environment): I’d just like to dispute the statement the member made around the fact that there is a proven link and the direct assertion that somehow the dairy industry is responsible for 40 deaths.
Now, I refer not to anything from the Ministry for the Environment but from Bowel Cancer New Zealand—to a statement they made in 2021. This is an independent statement they made that had no funding or support by any external organisations. The main point of their statement was: “Nitrates in drinking water are highly unlikely to increase the risk of bowel cancer in New Zealand according to the current weight of evidence.” Further, “Most of our nitrates come from food; a small amount comes from drinking water. The weight of evidence strongly suggests that nitrates in drinking water do not cause bowel cancer, and it is not currently understood how dietary nitrates could cause bowel cancer. … People can lower their risk of developing bowel cancer by minimising established risk factors such as enjoying a healthy diet, exercising regularly and minimising alcohol intake.” I might disagree with the last one. There isn’t a proven link, as the member asserts.
However, in terms of the question around removing the nitrogen cap, as I’ve explained previously, the nitrogen cap is very much an input control. In New Zealand, historically we have focused around outputs—how do we reduce the outputs. Now, to give a simple example, I could well use—actually, this is probably the number from my farm—around 110 units of nitrogen a year. That’s well below the cap. However, if I went and put that all out in May, for example, even though I’m below the so-called cap, I’m actually going to have a much bigger impact than, say, someone in Canterbury who’s using precision irrigation, soil moisture monitoring, applying nitrogen through their irrigation so that that nitrogen is only staying in that surface level; it has been absorbed by the plant. They could use much higher levels of nitrogen and have a much lower leaching impact than say someone who just applied a small amount in one big hit.
I guess, to sum up, I do refute the member’s assertion that somehow the dairy industry is responsible for bowel cancer in this country.
Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Chair. I do want to ask the Minister in the chair, the Hon Penny Simmonds, given that she did mention in her contribution the importance, within her priorities as environment Minister, of biodiversity and predator control—while I won’t make it quite as targeted as I did previously; I do accept that that’s probably more relevant to the conservation Minister rather than the environment Minister.
However, my point is that they are all linked—the fact of, in terms of what I mentioned previously, the job cuts, the significant funding cuts to Department of Conservation, alongside this Government’s decision to cut Jobs for Nature entirely, which was 14,000 jobs and over $55 million; the fact that QEII National Trust has also seen a reduction in their funding from $4.27 million per year to $4.5 million over three years, and, of course, total cuts of the $8 million over four years, from 2021 onwards. All of that, when looked at in entirety, results in a continued decline in biodiversity.
To my mind, given the Minister for the Environment’s contribution previously and the fact that she has said that improving biodiversity is part of her environmental priorities, how does she justify the continued decline in biodiversity and native species, given all of what I’ve outlined, and how does that fit within her environmental priorities and how does she justify it?
Hon PENNY SIMMONDS (Minister for the Environment): Thank you. I think if the member looks back, I haven’t mentioned biodiversity—she has. However, I will again note that, for the funding that has gone into predator control in the Department of Conservation, she will need to discuss or ask those questions of that Minister.
In terms of Jobs for Nature, she will be very aware that Jobs for Nature was short-term funding that was always going to finish. It was brought in by the previous Government as a response to COVID, and the reason why matters such as Jobs for Nature are not continuing to be funded is that we cannot continue with the spending at the level that the previous Government was—this country cannot afford that. If the member is suggesting that any reduction in spending from what the previous Government was undertaking—then she is showing herself to be as irresponsible as the previous Ministers were in that Government.
LAN PHAM (Green): Thank you, Madam Chair. I would like to hear the Minister for the Environment address her role in the fast-track process, which, again, is a very clear expenditure item. Does the Minister see her role as advocating for the environment in this process? I particularly would like to hear an answer, because there are so many communities extremely troubled by the fact that they have been sidelined, iwi and hapū have been sidelined, and environmental protections are nothing but considerations under this bill. I would love to hear the Minister address that.
Hon PENNY SIMMONDS (Minister for the Environment): Thank you, Madam Chair. Yes, indeed, I am given the opportunity to comment on the fast-track applications and make comment to the Minister for Infrastructure—and, in fact, comments that I make are then made public with the application. Yes, I do get opportunity; I do bring environmental matters in my comments to the Minister, and often they are suggesting that additional information be sought to ensure that the panel will have sufficient information.
Hon RACHEL BROOKING (Labour—Dunedin): Thank you. I want to go back to an answer the Minister for the Environment was making where she asserted that two days before the last Government ended—or something like that—some money was given to environmental groups or allocated to environmental groups, and she then asserted that that money was spent in court fighting ratepayers.
Now, I presume that, in part, the Minister is talking about the Environmental Legal Assistance Fund. That was around for—well, it felt like at least a couple of decades. It may not have been around that long, but certainly when I was in practice it was around. This was an important fund to litigate issues regarding the Resource Management Act (RMA) and what it meant and didn’t mean, and it provided an avenue for groups who wanted to advocate for the environment to test these questions in court.
Now, because the Resource Management Act sets up councils as decision makers, they were always a party to all of these cases—because they were the decision maker. Does the Minister accept my point, my statement that councils were involved as decision makers and that was because of the RMA framework and, in fact, this legal assistance fund had been around for a long, long time, including under previous National Governments? “[Bell rung] Madam Chair?
CHAIRPERSON (Barbara Kuriger): The Hon Rachel Brooking.
Hon RACHEL BROOKING: Some other questions. We’ve been talking a little bit about resource management (RM) reform and questions around whether or not the Government will rule out water conservation orders. I think this has come up because we’ve seen letters from people wanting them to be removed and recently we’ve seen a lot of text messages and the like to Ministers and then suddenly the law will change, which is why people are anxious about water conservation going away.
Hon Chris Bishop: What?
Hon RACHEL BROOKING: Oh, what? We saw the changes to section 107 of the RMA in the Resource Management (Freshwater and Other Matters) Amendment Bill coming in at the end, and we saw just the other week a number of changes to the Resource Management (Consenting and Other System Changes) Amendment Bill as well. That is why we were worried about water conservation orders.
I’ve also got some questions on nature-based solutions in the resource management reform. Is she involved in advocating for the importance of green spaces when areas will be intensified more? Does she see that as something to do in her role as Minister for the Environment, or does the Minister for RM reform see that?
We saw in the RM consenting bill—that is now an Act—that councils are not allowed to make new plans unless the Minister gives them an exemption. Is she involved in those exemptions as the Minister for the Environment, or is it just the Minister for fast track?
Hon CHRIS BISHOP (Minister responsible for RMA Reform): There‘s quite a bit there. I’m not quite sure where that reference to a text message came from, but there was quite a bit of considerable correspondence from a variety of councils and other stakeholders in relation to section 107. There almost certainly were texts as well—a bit like the last Government, Ministers in this Government do use cellphones.
In relation to green spaces, yes, that is something that Ministers are thinking about. My own sort of view of this is that, as part of the social licence for density—let’s call it that—which does tend to rark some people up, it is important that we create social licence in green spaces as something that people regard as important. We’re having a good look at that. Reasonable people can disagree about the extent of green spaces that are required, but we are having a good look at that. I’ll take the member’s comments under advisement around that as part of the policy process, because we are keen to develop a broad-based consensus around Resource Management Act (RMA) reform.
In relation to the plan stop, the Minister for RMA Reform—that’s me; I’m responsible for dealing with that. We’ve had some applications to continue, which will be analysed and dealt with as per the law. I think it’s a pragmatic step to make sure that the system stops, unless there’s good reason, while we prepare for the oncoming regime. It’s always tough, the transition from one regime to another, one legal system to another, but there’s no way through, otherwise you would never change anything.
Hon RACHEL BROOKING (Labour—Dunedin): I don’t believe we’ve had answers to questions around the Environmental Reporting Act or the Minister’s definition of circular economy.
STEVE ABEL (Green): Thank you, Madam Chair. I just want to note, responding to the Minister’s response, that Bowel Cancer New Zealand does acknowledge the World Health Organization findings in 2010 from the International Agency for Research on Cancer that nitrate ingested is a probable human carcinogen. But given that the Minister’s not concerned about the risk of bowel cancer from nitrate, I wonder if any Minister is concerned about the 47 percent increase in the risk of pre-term birth from pregnant people ingesting nitrate contaminated drinking water—
Hon Mark Patterson: What’s a “pregnant person”, Steve? Come on!
STEVE ABEL: —as found in a Californian study from 2021. Pardon me? What’s that?
Hon Mark Patterson: A “pregnant person”, Steve. I thought you were above that.
STEVE ABEL: The point is I’m talking about pre-term birth impact of nitrate in drinking water. Is the Minister concerned about the risk of a 47 percent increase in pre-term birth from nitrate in drinking water and that nitrate predominantly comes from dairy cow urine in this country?
Hon RACHEL BROOKING (Labour—Dunedin): Thank you. In some of the supplementary questions for the Estimates, there were questions about the Environmental Investment Fund, and the answer that came back was about a consolidated investment fund recognising significant public value of the environment. But then it says, “More specifically, the fund would better support economic growth, fiscal management, and public service performance by”—and then there’s some listed actions. And, again, the question is: where is the environment, and the improvement of the environment, in this Minister’s decision making?
Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Chair. I’ve just got a quick question for the Minister, and it’s around the contaminated sites funding. There was previously funding that the Department of Conservation was responsible for when it came to contaminated sites on public conservation land across New Zealand that was disestablished. I understand the Minister has brought in a new fund, which is the Contaminated Sites and Vulnerable Landfills fund, which was aimed to help councils and landowners. I just want clarification whether that includes public conservation land as well or whether it doesn’t.
Hon PENNY SIMMONDS (Minister for the Environment): Thank you, Madam Chair. There are two lots of funding available. The first amount, the $20 million per annum, is for the contaminated sites and vulnerable landfills—those with local authorities, so assisting local authorities there. Then there’s the additional $40 million over the budget period for remediation of Crown contaminated sites. They aren’t just Department of Conservation sites; there are also Defence sites and Land Information New Zealand sites. That is across Crown land with those contaminated sites. So there’s both the new initiatives for those to assist local authorities and private land and then there is the Crown land, so both funds are available there.
Also, I think there was a question asked about the Environmental Investment Fund. It covers a number of other areas that have been pulled together; for example, the Kaipara Moana Remediation, some of our environmental training programmes, and some of the emergency waste funding. They have been consolidated together.
The Hon Rachel Brooking noted that I hadn’t answered a question on the reporting Act. I’m sorry, I don’t have the question down here, but I can advise that, yes, we are intending to amend the Environmental Reporting Act (ERA). Obviously, the ERA plays a really important role in ensuring that we have good credible environmental data and research. What we want to do is increase the efficiency of the reporting to improve that quality and the accessibility of the data and the timeliness of the data, and the member will be very aware that often when environmental improvements take place they are over a relatively long period of time—to see the trends changing, getting reporting that is better able to show those trends. It is likely to be in the first quarter of next year that we’ll be introducing that amended legislation.
I apologise if there was another question that I didn’t pick up there.
LAN PHAM (Green): I would like to hear from the Minister for the Environment, given her Budget decisions, and couple that with legislative decisions, what does she see as some of the risks—or maybe, say, the top three risks—when it comes to the environmental space and her Government’s decisions on investment or lack of investment in that space?
Hon PENNY SIMMONDS (Minister for the Environment): I do not equate more spending with more efficient and more effective environmental protection. In fact, it would be very foolish of members to think that just continually throwing money at entities somehow gives better performance. It has been very enlightening to see how, with some restructuring, the Environmental Protection Authority has been able to reprioritise funding towards its core business—its core Hazardous Substances and New Organisms business—and bring in a third more highly qualified staff in that area and still turn around from having a deficit to having now a surplus. I think good fiscal discipline, good leadership, and good emphasis on efficiency and on ensuring that there is a strong customer focus on enabling our farmers and our growers to have better products available to them that are softer on the environment shows that putting more money in often isn’t the answer. Being better organised, better structured, and better focused is the answer.
Hon RACHEL BROOKING (Labour—Dunedin): Does the Minister for the Environment consider that recent changes to section 70 of the Resource Management Act (RMA) that allow for suspended materials to be a permitted activity in a waterway will lead to increased pollution or not? If not, why not? What analysis has she undertaken, and how will she follow this up?
Hon PENNY SIMMONDS (Minister for the Environment): I’m looking at the Resource Management Act (RMA) Minister to see if he wants to answer that. But if he doesn’t, I’m happy to talk about—
Hon CHRIS BISHOP (Minister responsible for RMA Reform): The member will have to put that down in writing.
Hon RACHEL BROOKING (Labour—Dunedin): This is actually a question for the Minister for the Environment, because the Minister for the Environment undertakes the environmental reporting. The question was whether these changes are going to lead to more pollution—and I suspect that they would lead to more pollution, like most of the changes that this Government has made to freshwater—and if she disagrees with that, what advice is she asking for and what monitoring will she undertake?
Hon PENNY SIMMONDS (Minister for the Environment): My understanding is that the receiving waters have to be degraded before a consent can be approved and that there must be long-term provision for improvement.
Hon RACHEL BROOKING (Labour—Dunedin): Can degraded rivers, then, in her opinion, not be polluted?
Hon PENNY SIMMONDS (Minister for the Environment): Are they beyond pollution?
Hon Dr Deborah Russell: She doesn’t know! That’s ridiculous!
Hon PENNY SIMMONDS: I’ll repeat: the answer is that the consents can only be given if the receiving waters are already degraded and there is to be long-term improvement.
Hon RACHEL BROOKING (Labour—Dunedin): Does the Minister for the Environment have a definition of “circular economy”—the phrase she doesn’t want to use?
Hon PENNY SIMMONDS (Minister for the Environment): The member can keep using the term as much as she wants to. It is not an intention that I have of using it.
CHAIRPERSON (Barbara Kuriger): Are there any further questions? It doesn’t appear at this stage that there are any further questions of the Minister in this portfolio. So members, the Minister’s time in the chair has come to an end—I should say in this portfolio. We now have the Minister for Vocational Education. The Minister is available to speak to that portfolio from 9.30 p.m.—or now, actually; we’re slightly early—until the end of the evening.
Vocational Education
CARL BATES (Deputy Chairperson of the Education and Workforce Committee): Thank you, Madam Chair. Vote Tertiary Education in Budget 2025 provides over $3.794 billion across tuition and training subsidies, support for research and research-led teaching, and services from the Tertiary Education Commission (TEC). Budget 2025 targeted funding in areas we know are critical. The targeted funding rate for certain subjects administered by the TEC included science, technology, engineering, and mathematics courses, medicine and health courses, and teacher education, which we know is critically important.
I also wish to highlight one additional area in this year’s Vote Tertiary Education that it included. It delivers on the National Party’s commitment prior to the last election to disestablish the failed experiment called Te Pūkenga. Budget 2025 is focused on—
CHAIRPERSON (Barbara Kuriger): I will actually remind the member who’s speaking that, as chairs of committees, they’re supposed to be reporting on behalf of the committee and not making political speeches.
CARL BATES: Thank you, Madam Chair, I’m simply reporting a fact that it was a National Party policy prior to the election and that the Budget is focused on restoring a system of regional polytechnics focused on delivering educational outcomes for their communities. Therefore, Vote Education includes a $40 million amount to support the establishment of the Industry Skills Boards (ISBs). Included in this funding is the transfer of functions to them for industry standards-setting from workplace development councils. Given how important vocational education is to regional and provincial New Zealand, including my own electorate of Whanganui, my question for the Minister is about how each of the 10 stand-alone polytechnics are going on their pathway to sustainability because of Budget 2025.
Hon PENNY SIMMONDS (Minister for Vocational Education): I thank the member Carl Bates for his question at the end of that introduction. I have had the pleasure over the two recess weeks of getting round to eight of the 10 individual polytechnics that will—
Hon Tama Potaka: Including Wintec.
Hon PENNY SIMMONDS: Yes, I did go to Wintec; you’re quite right, Minister Potaka.
Shanan Halbert: What about Otago?
Hon PENNY SIMMONDS: I did go to Otago as well. That was the first one I went to; the member will be very pleased. As I said, I had visits to eight of the 10 that are going to stand up and, I would have to say, it was enormously encouraging the amount of work that has been done and the enthusiasm of each of the entities. In general, I met with the senior management team, the establishment advisory groups, the community liaison person, and the mayor of the city. They were all very enthusiastic about having their polytechnics back. They had done an incredible amount of work and were well down the path with their sustainability ability. Thank you.
SHANAN HALBERT (Labour): Thank you, Madam Chair. It’s wonderful to be able to have this debate with the Minister tonight, because her leadership—she said that Te Pūkenga is getting rid of wasteful spending and getting the sector back on track. I wonder if we could just have a little bit of a quick to and fro with the Minister, of quick-fire answers. Does she still stand by her statements in that regard?
Hon PENNY SIMMONDS (Minister for Vocational Education): I definitely do. There were some polytechnics that needed to undertake significant work and they have undertaken that work and, I believe, have put their organisations in a much better position to be sustainable in the long term.
SHANAN HALBERT (Labour): In this Budget, is it more or less, in real terms, of an investment in tertiary education?
Hon PENNY SIMMONDS (Minister for Vocational Education): There has been additional spending. There has been new investment of $398.3 million. That is going to be across the tertiary sector. There has been additional funding put in for 175 additional Youth Guarantee (YG) places a year, and, of course, additional volume put in targeted subsidy increases. So considerable additional funding to support the sector right across the private training establishments (PTEs), polytechnics, and universities.
SHANAN HALBERT (Labour): What advice has she received about job cuts, campus closures, and course reductions in relation to this Budget?
Hon PENNY SIMMONDS (Minister for Vocational Education): There is no doubt that there was work that needed to be done, when there were institutions that had, for approximately eight out of 10 years, run deficits. On the other hand, there were institutions in the vocational sector that had never run a deficit until they were forced into Te Pūkenga. There were extremes within the sector.
That was one of my most significant concerns with Te Pūkenga—that, for example, WelTec Whitireia had been given a $20 million bailout in 2018-19 to ensure that they could continue to pay their bills. Once Te Pūkenga was formed, you would expect that the first thing that might have occurred was address those areas where really significant matters like that had occurred—a bailout of $20 million. Unfortunately, none of that work had been undertaken and so we were faced with having to start that financial work last year.
I’d say, over the last 18 months, considerable effort has gone on with all the polytechnics to ensure that they are going to be financially viable going into the future, and I wish to acknowledge them and thank them for the difficult work that they have done in that space. Also, it is with regret that they are having to do it now when it should have been done probably about five years ago.
FRANCISCO HERNANDEZ (Green): Thank you, Madam Chair. My knees hurt so I won’t be getting up and down—I’ll ask all my questions in one go. I hope you’ve got a notepad beside you, Minister.
Let me begin by acknowledging the students, learners, and staff who’ve had to undergo nearly a decade of disruption to this point, from the original Te Pūkenga reforms. Polytechs play a vital role in supporting regional and wider city communities. I acknowledge in particular the statements made by the Tertiary Institutes Allied Staff Association (TIASA) and the Tertiary Education Union (TEU) during the hearings for the vocational education and training bill that the current process of disestablishing Te Pūkenga has been more disruptive than the process of establishing Te Pūkenga—consolidating all the regional polytechnics into one single entity.
Does the Minister agree with that statement—with the TIASA and the TEU—that the process of disestablishing Te Pūkenga has been more disruptive than the process of establishing Te Pūkenga, and will she ease the burden by using the $197 million of total funding that the Government has put aside—$20 million in the Budget this year for strategic provision and $20 million next year, and the $157 in contingency funding? If the Government anticipates using that money, when does the Minister anticipate the decision-making criteria will be shared with the public for that funding and when does the Minister anticipate the Cabinet will make final decisions around that fund?
We know that some institutions have already received funding, and I congratulate institutions like the Southern Institute of Technology (SIT) who have been able to get $1.5 million for Telford school. Has any other institution other than SIT been allocated funding from either the $157 million contingency fund or the $40 million of funding for strategic priorities?
I want to thank the Minister for engaging with Otago Polytechnic. It’s been good to see some certainty in the community, and people in the community have been calling for you to meet with them, so thank you for finally taking the time to meet with them and assure them on the pathway forward. You’ve assured Otago Polytechnic people that if they continue their pathway to viability, which they look like they’re on track to do, they will be allowed to accept the anchor federation, but what is the legislative mechanism for doing so? My understanding of the current legislation is that the stand-alone entities are going to be published with a vocational education and training bill, so does the Minister intend to amend that for the polytechs that are successful in reaching viability, and amending that legislation later in the year, or is the Minister intending to do it by some secondary legislation?
My question now turns to the job cuts issue, which my colleague Shanan Halbert has touched on. There are around 620 jobs that are forecast to be cut by the end of this year according to advice that the Minister has received. According to information that she has released, there were 855 staff that were lost from 2023 to 2024. Is this the total amount of jobs that will be lost as a result of this reform, or has the Minister had advice that there will be further cuts made next year, and what advice, if any, has the Minister received around what the impacts of those job cuts will be around the wider communities?
I believe this hearing also relates to the Minister for universities, so I’ll quicky go through the questions for them. I just have three. What impact has the change to fees-free had so far in the completion rates? Has it led to an increase in them? Around the country, universities are cutting doctoral scholarships as a result of the continued underfunding of the university sector. Would this year’s Budget continue the trend with a drop of overall tertiary funding by around $162 million? In Otago alone, over a quarter of doctoral scholarships have been cut. So is the Minister for universities concerned that the underfunding of the tertiary sector is contributing to the exodus of our best and brightest overseas?
My last question relates to a local favourite down in Dunedin. Is the Government intending to place cost-escalation measures or provisions in whatever final agreement is signed with the Waikato medical school, so that they don’t receive further funding in the event that the cost estimates that they have provided blow out or in the event that further donations they’ve said will materialise do not materialise?
Hon PENNY SIMMONDS (Minister for Vocational Education): Well, I hope the member’s knee improves in the short term, and I think perhaps the member has now just achieved a record for how many questions they could get in in one go. I hope I have taken them all down. I will answer mine, and then I will hand over to the Minister Dr Reti.
In terms of the disruption to staff and students, yes, I absolutely recognise that since 2017 it has been an incredibly disruptive time, particularly for staff. I have to say that I think the professionalism of staff has been outstanding, inasmuch as it hasn’t impacted on students that much because the staff have taken such a professional attitude in the way in which they have continued to deliver. I absolutely acknowledge that and the work that has been undertaken by staff.
No, I don’t agree with the Tertiary Education Union (TEU) and the Tertiary Institutes Allied Staff Association (TIASA). I haven’t seen that from TIASA; I’ve certainly seen from TEU that they consider it more disruptive. That doesn't surprise me in the slightest, because TEU were particularly jubilant about the invention of Te Pūkenga. I recall Sandra Grey, the president, I think she was at that time, before she then morphed into the chief executive, saying to me, “Penny, don’t worry about anything. There will be more money and more jobs. It will be wonderful.” Yes, she was certainly very enthusiastic about Te Pūkenga, and it doesn’t surprise me at all that she is less enthusiastic about not having Te Pūkenga.
In terms of the easing of the situation for individual institutions, I did recall in the media you making a comment about how I had lobbied and got extra funding for the Southern Institute of Technology (SIT), which I was very perplexed about. SIT has not been told they have an additional $1.5 million, so I am quite perplexed that you chose to put something like that in the media when there is absolutely no evidence of that. That will be interesting to see. The polytechnics are going to be advised of what amounts they are being given from the $20 million that is available, both through the strategic investment fund, through the Tertiary Education Commission, and the ministerial “section 556” grants. That information is being finalised at the moment and will be made available.
You’re quite right that it is to address some of those areas where the funding at the moment does not enable delivery where it is needed. If you think of high-NEETs areas, such as the Far North and the East Coast, and perhaps South Taranaki, and also looking at some of the strategic delivery, such as agriculture—and you referenced Telford—but also forestry, that is exactly what that fund is for, to ease some of that concern there, because, under the current funding system, it isn’t financially viable but it is important. Therefore, we want to protect it until we can make changes to the funding system that acknowledge that difficulty.
Addressing your concerns about me not meeting with Otago, I think I’ve met with Otago more often than with any other polytechnic. I met with them first, as soon as we had appointed the Establishment Advisory Groups. They were the very first polytechnic to be met with, the day after we inducted those Establishment Advisory Group members. I was able to discuss with them the mechanism for if they achieve the changes that they are wanting to. Being able to not be part of the federation is embedded in the legislation, so I was able to draw their attention to that part of the legislation that shows them very clearly a pathway to not being part of a federation if they don’t wish to be.
Hon Dr SHANE RETI (Minister for Universities): Thank you, Madam Chair. Just to address the questions from the member: the progression of fees-free from first year to final year appears to have had no significant effect on completion rates; and, regarding the PhD scholarships, the doctoral scholarships at tertiary level, it mainly appears to affect Otago, and these are scholarships that were funded from operational funds from Otago University, not from Crown funding.
SHANAN HALBERT (Labour): Thank you, Madam Chair. The Minister for Vocational Education hasn’t answered my core questions around how many job cuts she is expecting as a result of this Budget, and campus closures and course reductions. I invite her to respond to those.
Also, she did not provide an answer to the overall investment in tertiary education, whether it was higher or lower in real terms overall. She didn’t break it down into areas that—
CHAIRPERSON (Barbara Kuriger): I thought she said it was additional in that case. I agree with you on the first part of what you’ve just asked. But when you said “more or less”, the Minister might want to clarify if “additional” means more.
Hon PENNY SIMMONDS (Minister for Vocational Education): Thank you. My apologies. I didn’t refer to the job cuts. I’ve had no update information across the whole sector in terms of the final number of job cuts because some institutions are still working through that. Also, the strategically important fund will take some of the pressure away from areas where they may have been considering cuts. I think there are still some changes that will occur over the following months in terms of areas, campuses, programmes that may or may not be—
Shanan Halbert: What about here and now?
Hon PENNY SIMMONDS: Well, they’re still working through that. It’s not something that I am involved in, but the individual institutions are involved in and—
Shanan Halbert: You haven’t had a number. Are we doing this again? You haven’t had a number.
Hon PENNY SIMMONDS: I was given the likely information which you have the figures for.
In terms of the investment, I’m happy to repeat to you: so the total budget for Vote Tertiary Education is $3.8 billion. If you include student allowances and loans, it’s $5.1 billion. New investment is $398.3 million. We have addressed volume funding, we have addressed additional Youth Guarantee places, and we have had a 3 percent targeted subsidy increase and a 1.75 percent targeted subsidy increase. So that gives you the breakdown.
SHANAN HALBERT (Labour): Thank you, Madam Chair. Our select committee chair, the Education and Workforce Committee chair, might want to correct the Minister for Vocational Education on that because we have traversed that particular funding issue with the Office of the Auditor-General—and I understand it to be $128 million less, as reported by our select committee. So I do encourage the Minister to go back and reflect on that particular answer.
I wanted to come back to a follow-up to the Green Party member’s $158 million support to the disestablishment of Te Pūkenga—
Francisco Hernandez: $156 million.
SHANAN HALBERT: $156 million—and invite the Minister to give us a breakdown of how that has been spent to date or the intention of how she will be spending that over the next 12 months.
Hon PENNY SIMMONDS (Minister for Vocational Education): It’s $157 million—so not $156 million or $158 million—but none has been spent at the moment, but it is likely that it will be spent as we recapitalise to ensure that the sector and those that are being stood up are in a position to be able to be stood up. So none has been spent to date.
SHANAN HALBERT (Labour): Thank you. A question to the Minister for Universities—if he’s accepting fiscal questions this evening? Good one. OK. Did he receive any advice that the Government’s decisions would make it more likely to lead to a reduction in provision at New Zealand universities in the build up to Budget 2025?
Hon Dr SHANE RETI (Minister for Universities): Thank you, Madam Chair. I’m not aware of any advice to that effect. In fact, what I’ve been advised is that there’s likely to be an increase in student numbers and that this is a good thing.
SHANAN HALBERT (Labour): It must have only gone to Nicola Willis. How many courses, Minister, will be cut at universities? How many jobs will be lost as a result of these course cuts? And how many students will be affected?
Hon Dr SHANE RETI (Minister for Universities): Thank you, Madam Chair. I can certainly get back to the member with courses and students, but from a job cuts perspective I’m not aware of any job cuts through Budget 2025.
SHANAN HALBERT (Labour): What does he say to 18-year-old Mars Northcroft from Taupō, who has been saving for university since she was 15, but is already just getting by, and now faces another pressure thanks to the 6 percent fee increase during a cost of living crisis?
Hon Dr SHANE RETI (Minister for Universities): What I say is that the Crown is really pleased to be able to substantively provide for her to have a tertiary education.
SHANAN HALBERT (Labour): How will a reduction in course varieties lead to more qualified graduates?
Hon Dr SHANE RETI (Minister for Universities): Thank you. The reduction in course types, if that’s what the member is asking, I would challenge particularly when we have prioritised subsidised spending across a range of science, technology, engineering, and maths subjects, particularly in Budget 2025.
SHANAN HALBERT (Labour): How will a reduction in courses provide a diverse workforce that is prepared for the challenges for the future?
Hon Dr SHANE RETI (Minister for Universities): I challenge your “reduction in courses”.
SHANAN HALBERT (Labour): Thank you. Moving back to the fiscals, I want to ask—and acknowledge Minister Reti, or Minister Brown, in terms of putting up a business case, sharing the business case for the Waikato Medical School publicly. I want to just ask the Minister for Vocational Education, why, after months, Minister Simmonds, have you not provided that information on your reforms to the public?
Hon PENNY SIMMONDS (Minister for Vocational Education): We jumped from the medical school to reforms—which questions were you wanting answered?
Shanan Halbert: I’m asking a question about your reforms of polytechnics. Why haven’t you provided public information to tell us that your plan stacks up?
Hon PENNY SIMMONDS: Each of the individual polytechnics have got a plan in terms of what will make them viable, and that information has been released over the last few weeks and has been reported on in the media. The additional funding that has been available is the $157 million of contingency funding, which hasn’t been used yet. There are still decisions to be made in terms of recapitalisation and those decisions will occur in October.
SHANAN HALBERT (Labour): Just to check, are you saying that you do not have an overall financial plan for the reforms that you’ve put in place?
Hon PENNY SIMMONDS (Minister for Vocational Education): There are individual plans for each of the individual Industry Skill Boards and each individual polytechnic, and there is the contingency fund that will be utilised in terms of the recapitalisation. In terms of the disestablishment of Te Pūkenga itself, that will occur from the funding that they are receiving. They are not going to require additional funding that I am aware of, and I’ll look to my officials now to see if there’s anything. But, at this stage, they are just quietly winding down the head office, which is down to, I think, under 60 people now.
SHANAN HALBERT (Labour): Minister, in terms of the number of apprentices that the sector has produced under your watch, what investment in this Budget is there, and why are there 9,000 fewer apprentices graduating year on year since you came into Government?
Hon PENNY SIMMONDS (Minister for Vocational Education): The apprentice area is one that, obviously, fluctuates considerably given what stage in cycles the trades are. It’s one of the reasons why we have to have that dual pathway of on-campus delivery as well as work-based learning. We know at the moment, where the construction sector is going through a difficult period, they are not taking on the number of apprentices and, therefore, there are more going into on-campus, which is why we’re getting growth in on-campus and a decline in the numbers that are doing work-based learning. That will be different when there is movement in the trades and more people are being employed as apprentices, and then we’ll see the opposite effect occur.
In terms of apprentice numbers, it is of enormous concern to me that only around 20 percent of our employers actually take on trainees or apprentices, and of those that go into an apprenticeship, less than 50 percent actually complete their apprenticeship. I think there are fewer concerns in what we see with the different cycles of more on-campus, less work-based, and then the changes that occur when employment picks up, and more concern that we need to be focused on around the actual completions of apprentices.
SHANAN HALBERT (Labour): I don’t disagree with the Minister on completions, but we’re talking about 9,000 fewer apprentices year on year under her watch, on top of 10,000 construction workers being unemployed as a result. Minister, my last question for this evening is equity funding. I acknowledge that under Minister Reti’s watch, there’s been no changes to equity funding. Under your watch, you’ve reduced equity funding for Māori and Pacific, particularly in polytechs.
Hon PENNY SIMMONDS (Minister for Vocational Education): The equity funding, in terms of the disability funding and the funding for those that have not had prior achievement in their compulsory education is still there. We consider that the equity funding based on disabilities and low prior achievement ensures that the focus on those that need it regardless of ethnicity.
SHANAN HALBERT (Labour): Why did she cut only the Māori and Pacific equity funding line?
Hon Penny Simmonds: Sorry?
SHANAN HALBERT: Why did you cut only the Māori and Pacific equity funding line in vocational education?
Hon PENNY SIMMONDS (Minister for Vocational Education): Because vocational education is my responsibility and the Minister for Universities will have whatever his intention is there. Certainly, we considered that our focus needed to be on those that most need the assistance and those that—
Shanan Halbert: Sorry, I’m talking about Māori and Pacific equity funding.
Hon PENNY SIMMONDS: Yes, which we cut, but have retained the equity funding for disabled students and students with low prior achievement. That is the focus, on those with most need, regardless of ethnicity.
CHAIRPERSON (Barbara Kuriger): Members, the time has come for me to report progress.
Progress to be reported.
House resumed.
CHAIRPERSON (Barbara Kuriger): Mr Speaker, the committee has considered the Appropriation (2025/26 Estimates) Bill and reports that it has made progress on the bill. I move, That the report be adopted.
Motion agreed to.
Report adopted.
Personal Explanations
Finance and Expenditure Committee—Correction of Statement Made
Hon NICOLA WILLIS (Minister of Finance): Point of order, Mr Speaker. I seek leave to make a personal explanation to correct a statement I made to the Finance and Expenditure Committee.
ASSISTANT SPEAKER (Teanau Tuiono): Leave is sought for that purpose. Are there any objections? There are no objections.
Hon NICOLA WILLIS: This afternoon, I was made aware that a statement I made to the committee on 18 June 2025 was incorrect. I have checked the video, and I said I received advice from the Treasury secretary relating to the Reserve Bank Board and governor on 24 February this year. Mr Speaker, I misspoke. I should have said 27 February.
ASSISTANT SPEAKER (Teanau Tuiono): The House stands adjourned until 2 p.m. tomorrow.
The House adjourned at 9.58 p.m.