Tuesday, 16 September 2025

Continued to Wednesday, 17 September 2025 — Volume 786

Sitting date: 16 September 2025

TUESDAY, 16 SEPTEMBER 2025

Te Māngai o te Whare took the Chair at 2 p.m.

karakia/PRAYERS

TEANAU TUIONO (Assistant Speaker): E te Atua kaha rawa, ka tuku whakamoemiti atu mātou, mō ngā karakia kua waihotia mai ki runga i a mātou. Ka waiho i ō mātou pānga whaiaro katoa ki te taha. Ka mihi mātou ki te Kīngi, me te inoi atu mō te ārahitanga i roto i ō mātou whakaaroarohanga, kia mōhio ai, kia whakaiti ai tā mātou whakahaere i ngā take o te Whare nei, mō te oranga, te maungārongo, me te aroha o Aotearoa. Amene.

[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 and humility, for the welfare, peace and compassion of New Zealand. Amen.]

Petitions, papers, select committee reports, and introduction of bills

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

CLERK: Petition of Mayor Weston Kirton requesting that the House urge the Government to act quickly to save the Chateau Tongariro Hotel.

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

CLERK:

Outcome of the Prime Minister’s consultation with the Intelligence and Security Committee on the reappointment of the Inspector-General of Intelligence and Security

Ministry of Transport, long-term insights briefing 2025

Government Superannuation Fund Authority, statement of performance expectations 2025-26.

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

CLERK:

Report of the Education and Workforce Committee on the briefing on the multi-agency approach to injury prevention and rehabilitation

report of the Environment Committee on the report of the Parliamentary Commissioner for the Environment, Going with the grain: Changing land uses to fit a changing landscape

reports of the Petitions Committee on the

briefing on the Petition of Holly Brooker

petition of Eugene Greendrake

petition of Ponsonby Chambers

another petition of Ponsonby Chambers, and

petition of Te Pāti Māori.

SPEAKER: The briefings and reports are set down for consideration. No bills have been introduced.

Urgent Debates Declined

Māori Ward Candidates—Omission of Profiles

SPEAKER: Members, I have received a letter from Rawiri Waititi seeking to debate under Standing Order 399 the omission of profiles for Māori ward candidates from local body election voting packs in some areas. While this is a matter of concern and an appalling omission, the provisions of Standing Order 399 are not met. There is no ministerial responsibility for the operational activities or decision making of local authorities—Speakers’ Ruling 183/1. The application is declined.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

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

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

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes.

Hon Marama Davidson: He aha ngā mahi a tōna Kāwanatanga hei tautoko i te kaupapa o tēnei Wiki o te Reo, “Āke Āke Āke”, kia manawaroa ai, kia arotau ai, kia toitū ai te reo Māori?

[What actions is his Government taking to support the theme of this te Wiki o te Reo, “Āke Āke Āke”, to ensure the resilience, adaptability, and endurance of te reo Māori?]

SPEAKER: The interpretation’s taking a while to come through. It’s important we get the question to the Prime Minister correctly. The Prime Minister will just take a minute to hear the question through his earpiece, which is playing up a bit.

Rt Hon CHRISTOPHER LUXON: Well, I mean, firstly, this is a Government that is spending a huge amount of money—$142 million—with the four Māori language entities. It’s a Government that I am very proud of spending money on teaching resources in te reo, and I’m very proud of that.

Hon Marama Davidson: E māharahara ana ia i te whakatūpato a Te Taura Whiri i te Reo Māori ki ngā panonitanga a tōna Kāwanatanga o te Ture Mātauranga, arā ka “Undermine the status of te reo Māori as a taonga and as an official language of Aotearoa”, ā, ki te kore, he aha e kore ai?

[Is he concerned that the Māori Language Commission has warned that his Government’s changes to the Education and Training Act “Undermine the status of te reo Māori as a taonga and as an official language of Aotearoa”, and, if not, why not?]

Rt Hon CHRISTOPHER LUXON: Well, I totally disagree. This is a Government that is spending money on resources to make sure that they are available in te reo and English.

Hon Marama Davidson: E whakaae ana ia ki tā Te Taura Whiri i te Reo Māori, arā ko te hāpainga ake o te reo Ingarihi ki runga ake i te reo Māori hei reo kawe kōrero matua mō ngā hinonga tūmatanui ehara i te hinonga Māori, he whakawhāiti kē i te kitea o te reo, he whakawhāiti hoki i te whai wāhi ōna hei reo o ia rā?

[Does he agree with the Māori Language Commission that prioritising English over te reo Māori as the primary language of communication in non-Māori public entities reduces visibility of te reo and makes it less accessible as an everyday language?]

Rt Hon CHRISTOPHER LUXON: If I understand the question correctly, we want to be able to make sure that our Government agencies are navigable by all New Zealanders, and, as a result, having their names in both English and te reo. If you’re a fluent English speaker—of which 95 percent of New Zealanders is their first language in the last census—they can navigate their Government in English; and if you’re a fluent te reo speaker, you can navigate your Government in te reo.

Hon Marama Davidson: Kei te māharahara rānei ia ka whāiti kē atu te āheinga ki te whakaako, ki te tautoko hoki i te reo Māori nā runga i ngā poronga pūtea e marohitia nei, he pūtea mā ngā kaiako rauemi o te reo matatini me te reo Māori mā te 174 tūranga mahi?

[Is he concerned that proposed cuts to funding for resource teachers of literacy and Māori by 174 roles—affecting Māori-medium education and bilingual learning support—will reduce the capacity to teach and support te reo Māori?]

Rt Hon CHRISTOPHER LUXON: No, I’m very proud of the resources being made available in te reo and English, as I’ve said before. I’m more proud of the fact that we’re teaching our kids structured literacy, structured numeracy, encouraging them to get to school so they actually have a greater future—Māori or non-Māori.

Hon Marama Davidson: I whakaaro rānei ia he hāpai tāna mahi i te reo Māori i te whakaurunga a tōna Kāwanatanga i te Pire Mātāpono Tiriti o Waitangi—me te whakaari anō i tētahi whakamārama hē o te reo Māori hei whakaiwikore i ā te iwi Māori mōtika?

[Did he consider he was uplifting te reo Māori when his Government introduced the Principles of the Treaty of Waitangi Bill—demonstrating an incorrect interpretation of te reo Māori to weaken Māori rights?]

Rt Hon CHRISTOPHER LUXON: The Treaty principles bill has been discussed and resolved.

Question No. 2—Prime Minister

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

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes.

Rt Hon Chris Hipkins: Why does he claim to have the cost of living under control, when administered inflation—the component of inflation that Government can most directly influence—hit 10.8 percent last month, the steepest rise in at least 35 years?

Rt Hon CHRISTOPHER LUXON: Well, I’m very proud of this Government’s focus on reducing inflation. This is a Government that has put inflation back under 3 percent again. There are items like rates running at 12.5 percent. That’s why we support a rate cap, and I encourage that member to support it too.

Rt Hon Chris Hipkins: Does he accept that the Government’s decision to increase transmission charges is driving up power bills, its decision to increase natural disaster levies is driving up insurance premiums, its decision to hike civil aviation levies is driving up the price of airfares, and that increased Government charges are now one of the biggest contributors to the cost of living pressure that Kiwi families are facing?

Rt Hon CHRISTOPHER LUXON: In light of the first part of that question, I’d say to the member that the energy prices are a function of his administration’s banning of oil and gas and the fact that we do not have a supply of gas in this country, which has led to elevated electricity prices. Again, I would say to that member: think about the position, and support reversing the oil and gas ban.

Rt Hon Chris Hipkins: Did his Government’s decision to cut funding for public transport, forcing some commuters and families to pay up to 50 percent more just to get to work or school, increase or decrease the cost of living pressure that Kiwi families currently face?

Rt Hon CHRISTOPHER LUXON: Well, I can say to the member: what is helping those families deal with the cost of living is our expanded role for FamilyBoost. What is helping and supporting those families in a cost of living crisis is the tax relief that we have offered them. What is supporting them is, actually, rental stability—that is a good thing—and also making sure that we give people tax, inflation, and interest rate relief, which is what this Government is delivering.

Rt Hon Chris Hipkins: Speaking of FamilyBoost, has he found one single family that has received the full $250 a fortnight that he promised Kiwi families with kids during the last election campaign?

Rt Hon CHRISTOPHER LUXON: Well, look, I want to thank the member for his question, because I really do appreciate answering this and bringing the attention of all New Zealanders who may be watching this to the fact that FamilyBoost rebates have been expanded, the thresholds have been extended, and, as a result, there is even more money. Actually, for the last 13 weeks, you can now access and get more support from this Government, which is absolutely fantastic. We think, actually, another 22,000 families will receive some support, and isn’t that a great thing?

Hon David Seymour: Can the Prime Minister confirm that this Government is carefully managing its own finances so that New Zealanders face a lower rate of inflation and falling interest rates as a result?

Rt Hon CHRISTOPHER LUXON: I can. What I can confirm is that this is a Government that won’t be looking to increase prices for New Zealanders by increasing the inflation-band target, as that member proposes.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. The claim that the Prime Minister has just made is totally and utterly incorrect, and it is an exact example of what you have said the Government shouldn’t do, which is use patsy questions from the people sitting right beside them in order to attack the Opposition and to make false claims about the Opposition.

SPEAKER: The question itself was in order; the answer was most certainly not, and I think the last comment should be withdrawn.

Rt Hon CHRISTOPHER LUXON: Withdrawn.

Rt Hon Chris Hipkins: Did his Government’s decision to increase car registration fees by $50 increase or decrease the cost of living pressure that Kiwi families are currently facing?

Rt Hon CHRISTOPHER LUXON: Well, again, I’d just say to the member that we are proud of the fact that we have lowered inflation. In this Government, yes, we have food inflation running at 5 percent, but that’s a lot lower than 12.5 percent under his Government. You know, 2.7 percent inflation is lower than 7.5 percent under his Government. Interest rates have been cut multiple times. Rents are stable. This is a Government that is focused on economic growth. Why? So that we can get New Zealanders getting more money in their back pocket, and that’s how they get ahead.

Hon Nicola Willis: Can the Prime Minister confirm that one of the first actions of his Government was to stop the petrol tax increases which had been scheduled by the last Government—

SPEAKER: OK, that’s an out-of-order question.

Rt Hon Chris Hipkins: If his Government has inflation under control, as he is now claiming, why is the price of food continuing to increase, with statistics released today showing butter is up 32 percent, milk is up by almost $1, and the price of mince is now $22 a kilo, all under his leadership?

Rt Hon CHRISTOPHER LUXON: Well, I’d just remind the member that when he was Prime Minister, food inflation hit 12.5 percent. It is 5 percent today. Yes, we have elevated prices for red meat and for dairy products. That’s due to global commodity prices, and that’s why our farmers are having record years and record levels of farmer confidence in this country. This is a Government that is focused on lowering inflation, and I’d just say to the member that that’s why you’ve seen us fast track supermarket entrants so that we can actually do everything we can to make it as easy as possible to open up the supermarket sector. But, again, the answer is not to increase the inflation target and increase prices for Kiwis, as his finance spokesperson has suggested.

Hon Nicola Willis: Has the Government increased petrol taxes since being elected?

Rt Hon CHRISTOPHER LUXON: No.

Rt Hon Chris Hipkins: Does the Government plan to increase petrol taxes by 12c a litre?

Rt Hon CHRISTOPHER LUXON: The Government has had no discussions about increasing fuel taxes at this time, but what we are very focused on is lowering inflation and making sure we lower interest rates, we get our economy growing, and we lower unemployment.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. Given that the documents the Government has tabled in this House indicate that it is intending to increase petrol taxes by 12c a litre, will the Prime Minister be required to correct that answer?

SPEAKER: Well, if the Prime Minister chooses to correct an answer, then that’s his prerogative to do so. If you knew the answer, why ask the question—but, anyway.

Hon Shane Jones: A question to the Prime Minister: is he proposing to introduce a wealth tax or a capital gains tax, and has he taken any advice as to what impact that might have on the economy?

Rt Hon CHRISTOPHER LUXON: Well, I don’t think that taxing more, borrowing more, and spending more is the way that we move this economy forward. I think that’s what’s put us in the almighty mess that we’ve actually seen. A capital gains tax, a wealth tax, an inheritance tax, a death tax—God knows what’s being proposed; I just know that that’s not the answer.

Question No. 3—Regional Development

3. JENNY MARCROFT (NZ First) to the Minister for Regional Development: What reports has he seen regarding the West Coast?

Hon SHANE JONES (Minister for Regional Development): Last Friday, I had the privilege of being in Reefton, down on the West Coast—otherwise known as “Mining-opolis”—where, previously, there were over 59 mines. I had the pleasure, along with the district council and the local development corporation, of opening new accommodation to cope with the flood of employees that are coming to the West Coast to fulfil a famous saying of this party that I belong to: “Dig, baby, dig.”

Jenny Marcroft: What else can he tell us about economic development on the West Coast?

Hon SHANE JONES: So much and so little time. We are rekindling the golden age of the coast. Mining is now driving the coast. Not only are people expressing more confidence to invest there but money is flowing. There is a pipeline of production projects. It will stimulate the economy for many years to come. It’s only disappointing that it has taken this long—in particular, with those who derive their heritage from such industries abandoning, demonising, and tainting such an industry, and I’m glad to be rid of them.

Jenny Marcroft: How does this help the regional economy?

Hon SHANE JONES: Coal—I’ll have more to say about that within a week—oil, gas, and metal ore mining represent a key positive development in terms of those families and those employees who enjoy earnings beyond the median salary of $100,000. We are in a period of the world’s trajectory where minerals are more important. New Zealand has a high position of influence in creating not only more jobs but boosting our minerals production.

Steve Abel: And more floods.

Hon SHANE JONES: Not only will it enable finance, engineering—

Steve Abel: And droughts.

Hon SHANE JONES: No, we don’t need any more luddite contributions. That’ll happen at the final speech at the end of the week. Not only will we see more realistic appreciation of the natural resource sector, you will find that those in Opposition will be pushed to the margins of society because they’re only interested in the dole.

SPEAKER: I might take this opportunity to remind Ministers that answers should mirror the concise nature of questions. Standing Order 396(2) particularly directs that.

Jenny Marcroft: Why are regional economies important to New Zealand?

Hon SHANE JONES: Regional economies are thriving. There is an acceptance that legacy industries—including farming, forestry, mining, fisheries—are doing the heavy lifting. It is very disappointing that these particular industries of a regional character have not been respected. As we grow in the regions, I hope to spread that good story by encouraging appropriate levels of mining around our capital city, Wellington.

Question No. 4—Economic Growth

4. CAMERON BREWER (National—Upper Harbour) to the Minister for Economic Growth: What recent announcements has she made on competition?

Hon NICOLA WILLIS (Minister for Economic Growth): Today, alongside Minister Simpson and Minister Seymour, I announced the most significant package of competition law reforms in nearly 20 years. The changes to the Commerce Act that we announced are about fostering healthy competition in the economy. Competition empowers consumers with greater choices and ensures efficiency in the use of resources. Competitive markets are good for consumers, good for business, and good for the economy. They drive innovation, productivity, and growth.

Cameron Brewer: What changes are being made to the Commerce Act?

Hon NICOLA WILLIS: A number. Key changes include stopping unfair tactics, like creeping acquisitions and predatory pricing, to allow genuine competitors to thrive; introducing clearer merger rules to give businesses certainty while keeping markets fair; establishing a stronger, better structured Commerce Commission to deliver faster, more transparent decisions; streamlining approval for beneficial collaboration, making it easier for businesses to work together where it helps the public; and allowing businesses to make voluntary behavioural undertakings to limit their market power as part of merger applications.

Cameron Brewer: What do these changes mean for businesses?

Hon NICOLA WILLIS: The changes will give small and medium enterprises in particular more confidence to invest, hire, and innovate knowing they won’t be shut out by unfair practices. For larger businesses, the changes mean clear rules and faster decisions, so they can pursue growth with certainty. For the wider economy, they mean a more dynamic, competitive environment that drives productivity, attracts investment, and, ultimately, delivers for Kiwis.

Cameron Brewer: How do these reforms fit within the Government’s wider economic strategy?

Hon NICOLA WILLIS: These reforms are part of the Government’s Going For Growth agenda, which is the work we’re doing to shift New Zealand to a faster growth track. Growing the economy requires competitive, dynamic markets that reward innovation and reward investment. By modernising the Commerce Act, we’re making sure New Zealand is an attractive place to do business and that consumers are being protected. The initiatives we announced this morning are one part of an ongoing suite of measures that will help lift productivity and, therefore, contribute to rising incomes, more jobs, and a stronger economy.

Question No. 5—Finance

5. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Tēnā koe, Mr Speaker. 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): Once again, in context, yes.

Hon Barbara Edmonds: On what date did the Treasury Secretary inform her of the letter the board chair wrote on 27 February?

Hon NICOLA WILLIS: On 27 February, I received a text from Iain Rennie informing me that the Reserve Bank Board had written to Adrian Orr about its concerns.

Hon Barbara Edmonds: Was she aware or informed about the contents of the letter on 27 February?

Hon NICOLA WILLIS: No. The public record shows what I was informed of via the text message from Iain Rennie.

Hon Barbara Edmonds: Did she seek any advice from Treasury, the Public Service Commission, or Crown Law about her ability to correct the Reserve Bank Chair’s statement, or the public record, about the real reasons the Governor resigned?

Hon NICOLA WILLIS: I relied on the judgment of the Reserve Bank Chair at the time, that that was as much as he could say, subject to the legal agreements he was a party to.

Hon Barbara Edmonds: How can she stand by her statement that “I relied on the judgment of the Reserve Bank chair, that … he was saying as much as he could say”, when she knew his words were misleading and she failed to seek advice on what her responsibilities were, given the serious nature of the resignation?

Hon NICOLA WILLIS: Quite simply, because I knew that he was subject to an exit agreement, the terms of which I was not aware of. I was also not aware of the specific concerns the bank had raised with Mr Orr. I was not aware of how Mr Orr had responded to those concerns, and the legal disputes that may or may not have occurred. I was not aware of the details of the agreement the bank had entered into with Mr Orr.

Hon Barbara Edmonds: Does she agree with Heather du Plessis-Allan, who says, “It just looks like a giant cover up, doesn’t it?”

Hon NICOLA WILLIS: No, although I have made clear that I’m very disappointed with the way the Reserve Bank has handled this matter, as Neil Quigley’s resignation shows.

Rawiri Waititi: Was the Minister negligent in her oversight of the Reserve Bank resignations, or are these resignations a case of ministerial interference?

Hon NICOLA WILLIS: No, and no.

Rawiri Waititi: Is the Minister concerned about her Government’s management of the Public Service, given the number of high profile senior resignations that have occurred since she took office?

Hon NICOLA WILLIS: I’d simply observe that, in some cases, resignations would be better for the reputation of organisations than people not resigning, staying on, defying their leadership, and saying very racist things.

Rawiri Waititi: Supplementary. [Interruption]

SPEAKER: Wait—just wait for the House to calm itself.

Rawiri Waititi: When will she meet with the priests that drove past the Reserve Bank, where both the former Reserve Bank Chair and Governor formerly worked, and meet with the protesters on the Government’s refusal to impose sanctions on Israel for genocide in Gaza?

SPEAKER: I’m inclined to rule that question out, despite the creativity in trying to bring it into order.

Question No. 6—Infrastructure

6. CATHERINE WEDD (National—Tukituki) to the Minister for Infrastructure: What reports has he seen on New Zealand’s infrastructure pipeline?

Hon CHRIS BISHOP (Minister for Infrastructure): Last month, the Infrastructure Commission released a quarterly snapshot of the infrastructure pipeline for the quarter ending 30 June. It shows the value of infrastructure initiatives in the pipeline grew to $237 billion—an increase of $30 billion from the previous quarter. It’s great news for the construction sector and for growth. The value of initiatives with a confirmed funding source also increased, up by $13.5 billion to over $125 billion. Overall, the pipeline now contains 9,200 projects that are under way or being planned.

Catherine Wedd: Why is the National Infrastructure Pipeline important?

Hon CHRIS BISHOP: The pipeline is important for sending a signal to the market about upcoming activity. I want to acknowledge the hard work of the previous Government in setting up the commission in a bipartisan way to make sure that we get this very important independent assessment of what is happening. It allows construction firms to plan ahead for major projects. We do need to improve the quality of information in the pipeline; there are some laggard councils who are not participating. It is important that we have as much data from the private and public sector, including local government, in the pipeline as possible. The more accurate and complete it is, the more useful it is for decision makers.

Catherine Wedd: How many infrastructure projects are under construction?

Hon CHRIS BISHOP: The pipeline shows that there are 2,500 infrastructure projects under construction right now, with 483 in procurement that will begin shortly. In the June 2025 quarter, we were building, as a country, 560 water projects, 600 transport projects, 75 school projects, and over 30 health and hospital projects—280 initiatives under construction are valued at over $25 million each. Many more projects are likely to come to market in the forthcoming weeks and months.

Catherine Wedd: How many infrastructure projects are under construction in Hawke’s Bay?

Hon CHRIS BISHOP: I’m very pleased—as I’m sure that member is—to know there are 126 projects currently being delivered in the Hawke’s Bay, with around 60 projects in procurement that will begin shortly. Of course, the big mother within those projects under construction is the fantastic Hawke’s Bay Expressway.

Catherine Wedd: Is the National Infrastructure Pipeline growing?

Hon CHRIS BISHOP: Yes, indeed it is. We are looking forward to the September updates that will be published towards the end of the year, and indeed, more participants in the pipeline so we can get this economy growing and building again.

Question No. 7—Health

7. Hon Dr AYESHA VERRALL (Labour) to the Minister of Health: Tēnā koe, Mr Speaker. What is the impact of delayed allogeneic stem cell transplants on patients with blood cancers, and how is that harm being measured at New Zealand’s three transplant centres?

Hon SIMEON BROWN (Minister of Health): I’m advised that, for some patients, disease recurs while they are waiting for a transplant, leading to them no longer being suitable for transplant. For some patients, this means additional rounds of chemotherapy while they await their transplant; for others, unfortunately, it means being referred for palliative care. This is deeply concerning for me. I understand how stressful this is for patients and their families. That is why, in addition to existing investment, Health New Zealand has allocated over $6 million this year to increase capacity, support recruitment, and improve the model of care. Health New Zealand is also working closely with clinicians to deliver further investment across all three transplant centres this financial year and in future years. I expect Health New Zealand to act with urgency on this. I’m advised that harm is measured and monitored differently across the country and that Health New Zealand is working to implement a standard national data monitoring system to ensure patients receive timely quality care.

Hon Dr Ayesha Verrall: Why hasn’t this improved already when it is the very first action listed in the Government’s health targets implementation plan?

Hon SIMEON BROWN: Well, there has been an improvement in the number of stem cell transplants that have been done. Between April 2024 and March 2025, the total number of stem cell transplants in New Zealand rose to 363 from 336 the previous year. Nationally, 219 patients were waiting for transplants in March 2025—down slightly from 225 in 2024. I understand that this is not good enough, and that is why I have asked Health New Zealand to work with urgency. This is a problem which has developed over a number of years, including the time that that member was the Minister. It is my expectation that Health New Zealand works urgently, with clinicians, to increase investment to reduce the wait-list.

Hon Dr Ayesha Verrall: Is it correct that failure to implement their very own plan in the first year that it was put down for means patients like Liz Barnes, whose cancer was curable, now have incurable cancer?

Hon SIMEON BROWN: Well, as I said in my previous answer, there has been an increase in the number of transplants being completed. There is still significantly more work to be done. That work is under way so that we can reduce that wait-list, and it’s my expectation that Health New Zealand works incredibly close with the clinicians on the front line to do just that.

Hon Dr Ayesha Verrall: Will he commit to appropriate rooms for bone marrow transplants at Wellington Hospital this financial year?

Hon SIMEON BROWN: One of the issues, in relation to the capacity at Wellington Hospital, is the amount of space. Work is under way to create more room and increase staff as part of regional service planning in Wellington.

Hon Dr Ayesha Verrall: Is it acceptable that patients, like Tawhai Reti, have to go to Australia for treatment because the Government excluded blood cancer patients from their cancer medicine initiative?

Hon SIMEON BROWN: That member may not be aware, but the $604 million increase in cancer medicines that we provided in Budget 2025 funded 33 new cancer medicines, including six for blood cancers. We are very proud of the investment. We are always aware there is more work to do, but we also had to fill in the hole in the Pharmac budget left behind by the last Government.

Hon David Seymour: Can the Minister confirm that the approximately $1.7 billion being spent on medicines through Pharmac, by this Government, is approximately $600 million more than was budgeted when we first came to office?

Hon SIMEON BROWN: That is correct. We were left behind a fiscal hole in the Pharmac budget, which we’ve had to fill, plus we have funded an additional $600 million for new cancer medicines. There are now thousands of New Zealanders receiving access to cancer medicines and hundreds of thousands of New Zealanders receiving access to treatments, which they would otherwise not have had if the other party had been re-elected.

Hon Dr Ayesha Verrall: Does he stand by the Government’s promise to blood cancer patients, “You are not forgotten”, when that is exactly what has happened with respect to their exclusion from the cancer medicines funding?

Hon SIMEON BROWN: As I said in my previous answer, of the $604 million increase in Pharmac’s budget that this Government delivered—and the 33 new cancer medicines—six of those have been for blood cancer medicines. Those cancer medicines would not have been provided if Labour had been re-elected.

Question No. 8—Prime Minister

Hon MARAMA DAVIDSON (Co-Leader—Green): Ki te Pirīmia—

Hon Shane Jones: Double dip.

SPEAKER: Hang on. Wait on. Questions are heard in silence.

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

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

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes.

Hon Marama Davidson: Ka whakarongo tōna Kāwanatanga ki ngā kaitautohe neke i te tekau mano i hīkoitia i Tāmaki Makaurau, mō te Kāwanatanga kia whakatau mēnā he motu motuhake a Paretīnia, me te mahi hāmene i te teitei ki a Iharaia?

[Will his Government listen to the more than 10,000 protesters who marched in Auckland over the weekend, calling on the Government to recognise Palestinian statehood and sanction Israel?]

Rt Hon CHRISTOPHER LUXON: Well, as the member will be aware, we have a longstanding bipartisan position on support for a two-State solution in Israel and Palestine, as was imagined in 1947. It’s a very complex issue. There are strongly held views across New Zealand society—probably across this Parliament—and we are carefully considering our position on that statement about recognition. I would just say to the member that this is also a Government that has imposed sanctions on Israel, and we continually look to see what more we can do as well.

Hon Marama Davidson: He aha tāna whakahoki kōrero—[Interruption]

[What is his response—]

SPEAKER: Start again.

Hon Marama Davidson: He aha tāna whakahoki kōrero ki ngā pirīhi Karaitiana i waho i te tari a Nicola Willis, nā rātou i kī atu “it is clear New Zealand is not doing all it can to intervene and put pressure on Israel to uphold international law”?

[What is his response to the Christian priests protesting outside Nicola Willis’s office, who say, “it is clear New Zealand is not doing all it can to intervene and put pressure on Israel to uphold international law”?]

Hon Shane Jones: Point of order. It should be completely evident to you, sir, that the Prime Minister has no responsibility for randoms holding signs up outside a list member’s office.

SPEAKER: No, but the question was “What would he say?”, and the assumption is that Prime Ministers do have opinions.

Rt Hon CHRISTOPHER LUXON: Well, I disagree completely with the assertion that there have been no sanctions applied to Israel. We have placed travel bans on extremist politicians and senior Ministers because of extremist rhetoric that has been used. We have placed travel bans on Israeli extremist settlers in the West Bank, and we have very limited trade. We’ve had no records of approval under our export controls regime since 2003. What I would love to hear from the member is calling out Hamas as a terrorist organisation for 7 October, where 1,200 innocent Israelis were killed and 251 hostages were taken, and calling for an immediate release of those hostages, as much as we call for Israel to make sure it looks after civilians and it gives unfettered, unhindered access and humanitarian assistance and aid.

Hon Marama Davidson: Ka whakatau te Kāwanatanga i te motuhaketanga o Paretīnia, ki te kore, he aha e kore ai?

[Will the Government recognise Palestinian Statehood, and if not, why not?]

Rt Hon CHRISTOPHER LUXON: Well, as the member is aware—we have been very transparent—we are working our way through a Cabinet process to arrive at a final decision about our position on that. Some of our friends around the world have moved forward with recognition; others have not. We will make our own independent decision and work our way through this issue carefully, considering all the different factors and the complexities involved. But I’ll just say to the member, irrespective of a decision on the recognition of a Palestinian State, what is very important is that Hamas releases hostages, Israel makes sure it protects civilians and allows unhindered humanitarian assistance and aid, and everyone gets to a ceasefire so peace and stability can come out in the Middle East.

Hon Marama Davidson: He aha te Kāwanatanga e kore nei e whakamōhio atu ki ngā tāngata o Aotearoa i te kōwhiringa a te Kāwanatanga me te tūranga e kawe atu a Winston Peters ki te Rūnanga Whakakotahi i ngā Iwi o te Ao?

[Why isn’t the Government informing New Zealanders what decision the Government has taken and what position Winston Peters is taking to the United Nations?]

Rt Hon CHRISTOPHER LUXON: Well, we will when we have a final Cabinet decision.

: Hon Marama DavidsonHon Marama Davidson: Ki te whai painga ngā rauna toru tekau mā rua a te Kāwanatanga i ngā hāmene ōhanga ki a Rūhia, ka whai hoki te Kāwanatanga i tētahi rauna ake o ngā hāmene ki a Iharaia kei tua atu o ngā hāmene ki ngā Minitia e rua anake?

[If the 32 rounds of the Government’s economic sanctions on Russia have been effective, will the Government finally implement a round of sanctions on Israel beyond sanctions on only two Ministers?]

Rt Hon CHRISTOPHER LUXON: I think the member is misunderstanding, or not understanding, what actions have already been taken. We have issued travel bans on two extremists and senior Ministers in the Netanyahu Government. We have called out illegal settlements on the West Bank and, likewise, put bans around travel associated with extremist Israeli settlers. We have very little trade with Israel ourselves. Importantly, we’ve made sure, with our regime, that we haven’t sent products to the Israel Defense Force since 2006, 2003—as far as records go back. So I just put it to the member that we have had sanctions on Israel. We are consistently calling out actions that we disagree with, but I would ask that member to take a balanced view and actually call out the unacceptable, abhorrent behaviour of Hamas as well.

Question No. 9—Tourism and Hospitality

9. Dr CARLOS CHEUNG (National—Mt Roskill) to the Minister for Tourism and Hospitality: What recent announcements has she made about boosting major events and tourism across New Zealand?

Hon LOUISE UPSTON (Minister for Tourism and Hospitality): I was pleased to announce a next-level boost for major events and tourism with the Prime Minister on Sunday. The $70 million package will increase the Government’s investment in events and open New Zealand up to a wider range of opportunities, including concerts, which haven’t previously been eligible for Government funding. Major events are an absolute bonanza for our cities and regions and support local jobs, boost incomes, and grow our economy. This investment will allow us to compete with Australia to host big acts and to give international visitors even more reasons to come and explore what New Zealand has to offer.

Dr Carlos Cheung: What does this package mean for events and tourism across regional New Zealand?

Hon LOUISE UPSTON: Our boost for major events and tourism is significant for our regions and for our communities. Communities up and down New Zealand benefit hugely from regional events, and our $10 million Regional Tourism Boost Campaign will incentivise international visitors to come and see what our regions have on offer. Our first round of regional tourism boost drove large economic opportunities into our regions that don’t traditionally see as many visitors. This is good for jobs and lifts incomes across our communities. I’d encourage any MPs from across the House to talk to their local tourism operators and ask how they can get involved. New Zealand is open for business, where we welcome visitors from anywhere at any time.

SPEAKER: Just be mindful of Standing Order 396.

Dr Carlos Cheung: What other announcements has she made to encourage major events in New Zealand?

Hon LOUISE UPSTON: Our Government also wants to boost Eden Park’s status as a major events venue, and my colleague the Hon Chris Bishop is starting an investigation to change the local rules to ensure it’s no longer held back from its full potential. Last summer alone, Auckland’s economy received a boost of nearly $33.7 million from several big concerts. These events created jobs, supported local businesses, and meant more bookings in our restaurants, accommodations, and local tourism providers. Our Government is keen to see more major events in Auckland, and we need to ensure our venues are fit for purpose. The investigation will look into where the rules around events at Eden Park are negatively impacting economic growth, and Minister Bishop will announce further details in coming weeks.

SPEAKER: Standing Order 396 requires concise answers.

Dr Carlos Cheung: What feedback has she received on this announcement?

Hon LOUISE UPSTON: The feedback’s been fantastic, so I’ll speak fast to get it in. The Restaurant Association of New Zealand has called this a “much-needed injection into New Zealand’s economy and a vital boost for … hospitality” providers. Brent Eccles, an event promoter, has stated “New Zealand is now back in the game for ‘showstopper events’ ”, and the Dunedin mayor has said that this “ ‘really put[s] some flesh on the bones’ of Dunedin’s existing plans to attract events to the city.” Tourism Industry Aotearoa chief executive Rebecca Ingram has said, “This level of investment puts us back in the game, supporting events of even greater scale and providing reasons for both domestic and international visitors to travel around New Zealand.”

Question No. 10—Commerce and Consumer Affairs

10. ARENA WILLIAMS (Labour—Manurewa) to the Minister of Commerce and Consumer Affairs: Ngā mihi o te Wiki o te Reo Māori e te Māngai o te Whare. What, if anything, in his reforms announced today will bring prices of essentials down now for Kiwi consumers?

Hon NICOLA WILLIS (Acting Minister of Commerce and Consumer Affairs (Grocery Sector)) on behalf of the Minister of Commerce and Consumer Affairs: The reforms announced today tackle some of the root causes of high prices by fixing outdated competition law. They stop dominant firms from quietly buying up rivals, crack down on predatory conduct, and protect information confidentially that is disclosed to the commission. Our goal is that Kiwis see more firms competing for their business when they go to buy groceries, fuel, building supplies, and other essentials. The Minister was pleased to provide a briefing to the member yesterday and trusts she supports these measures. As she well knows, not everything in life is a quick fix. But substantive reforms of this sort do make a difference.

Arena Williams: What measures in his proposed bill prevent overcharging and excess profits at the expense of consumers and small businesses?

Hon NICOLA WILLIS: I’m not sure what measures the member is proposing, but if she’s got a policy announcement to make on behalf of Labour and it’s as good as Barbara Edmonds’ one—

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

SPEAKER: You need not make the point of order. That sort of answer is just out of order. The member can take an extra question.

Arena Williams: Why is he willing to punish businesses that lower prices of groceries, airline tickets, building supplies, and other essentials while doing nothing about businesses raising prices month on month and year on year?

Hon NICOLA WILLIS: I utterly reject the substance of that question. The Government is doing no such thing.

Arena Williams: Well, will any of the inclusions in the announcement today reduce food prices, which are up 5 percent this year and driving up inflation?

Hon NICOLA WILLIS: I hope that the member understands the fundamental nature of competition law, which is that if we wish to prevent the sorts of consolidation in sectors and industry that has occurred and allowed, for example, the significant dominance of two supermarkets in New Zealand’s grocery sector, then we need to ensure that our commerce law keeps up to date with both international and regulatory development. The changes the Government has proposed today will ensure that that sort of market consolidation can’t occur in future. As I said in the answer to my primary question, not everything in life is a quick fix but that doesn’t mean that we should ignore the opportunities for substantive reform.

Arena Williams: Is it National’s fundamental approach to competition that it will be illegal to slash the price of butter but perfectly OK for it to rise 32 percent year on year?

Hon NICOLA WILLIS: No.

Arena Williams: Why is he willing to talk tough with market controls to stop businesses lowering prices but doing nothing about the price of broccoli, which is up 75 percent in a year; or cabbage, up 85 percent in a year?

Hon NICOLA WILLIS: Because, unlike that member, I don’t want to take a leaf out of Willie Jackson’s book and propose price fixing. It’s been tried in quite a few countries and it doesn’t work.

Arena Williams: Why is this Government putting prices up, adding to the cost of living, from car registrations to increasing prescription costs, instead of taking action to reduce them?

Hon NICOLA WILLIS: If the member wishes to come and have a briefing about how prices are set by independent businesses, then I’m happy to provide such a briefing, because last time I checked, there is no law in New Zealand that sets the prices for retail products. But if the member has a member’s bill she wishes to discuss with me along those lines, I’d be fascinated indeed and I’ll file it with the suggestion on inflation that member Edmonds made last week.

Question No. 11—Agriculture

11. SUZE REDMAYNE (National—Rangitīkei) to the Associate Minister of Agriculture: What recent reports has she seen on farmer confidence?

Hon NICOLA GRIGG (Associate Minister of Agriculture): Nothing but great news for the primary sector. After the overwhelmingly positive survey from Federated Farmers a couple of months back, the latest Rabobank Rural Confidence Survey shows farmer confidence remains at near-record highs, with our farmers feeling really good about the next 12 months ahead. The results show a positive 46 percent confidence level, with four consecutive quarters’ elevated sentiment, which proves that when a Government backs its primary sector, great things can happen.

Suze Redmayne: What did the survey show about farmer sentiment?

Hon NICOLA GRIGG: Now, after six long years under the Labour Government, farmers—

SPEAKER: No, start again. That’s just not part of the question and answer regime that we have in here.

Hon NICOLA GRIGG: Farmers now have a positive outlook on the agri-economy, with higher commodity prices a major source of optimism, alongside improved access to overseas markets and economies. The survey shows dairy and red meat farmers are particularly optimistic, reflecting record mince and beef prices alongside historically high lamb returns. Confidence in these sectors is also translating into stronger investment intentions, which is great for our rural communities and towns across the country.

Suze Redmayne: What actions has the Government taken to support the primary industry to increase farmer confidence?

Hon NICOLA GRIGG: The Government is committed to doubling the value of New Zealand’s exports in the coming 10 years. We’re going to do that by removing unnecessary regulation, winding back costly red tape, and overhauling the Resource Management Act. We intend to create a system that enables enterprise and recognises food and fibre as a strategic asset.

Suze Redmayne: What are the benefits of increased farmer confidence to the New Zealand economy?

Hon NICOLA GRIGG: New Zealand’s success very much depends on our farmers’ success, and these confidence levels show the sector is in a strong position, and the Government is determined to keep building on that momentum. When farmers are confident, they invest, they employ more people, and they contribute to stronger regional economies. For anyone at home listening—including my mum—this Government will continue to back our food and fibre sector, giving them the tools and support they need to succeed not just today but well into the future.

SPEAKER: I’m sure that Mrs Grigg appreciates the message.

Question No. 12—Education

12. LAURA McCLURE (ACT) to the Associate Minister of Education: What recent reports has he seen on education?

Hon DAVID SEYMOUR (Associate Minister of Education): Thank you, Mr Speaker. I have seen a number of reports recently which add up to charter schools building momentum—the large number of applicants, both of new schools and those wishing to convert existing schools to charter status. Also, there have been a number of touching stories of students who have been totally alienated from education now feeling that they can indeed do it—very much the kind of story that we should all want for New Zealand children.

Laura McClure: Is the demand for charter schools growing?

Hon DAVID SEYMOUR: Yes, indeed, and in the words of Nathan Durie, “Māori people have always indicated a desire for their kids to have access to education that will enable them, and so we’ve put our hand up to say we want to be one of those options.” Meanwhile, this year, 52 different applicants have approached the Charter School Authorisation Board wishing to begin new charter schools. There have been eight formal applications from State schools to convert, with another two already converted and about a dozen actively considering it and in contact with the Charter School Authorisation Board in relation to conversion. What I’d say to those members opposite who are yap-yap-yapping over there is, if you’ve got a question, get up and ask it.

Laura McClure: What feedback has he seen from students about their experience of moving to a charter school?

Hon DAVID SEYMOUR: Much of it is quite touching: students that have said, “I wasn’t really a school person” saying that, actually, their experience has been life changing; students whose attendance was abysmal—in fact, sadly, they weren’t really attending—are now some of the best-attending students in the district. I’ve seen a trades-focused school—BUSY charter, in central Auckland—which is supporting students into vocational education through work placements and apprenticeships. These are the kinds of options that New Zealand children have been thirsting for, but, for too long, the providers and the suppliers of education have had their interests advanced before the interests of students by successive Government policies.

Laura McClure: What other comments has he seen about charter schools?

Hon DAVID SEYMOUR: I’ve seen quite a number—for example, a little-known broadcaster from a radio station called 1ZB has said that Northland College’s possible conversion is “driven by the realisation that what they currently do doesn’t work for their kids, [and] that’s the genesis of the charter school thinking … The basic premise [is] one size does not fit all, and a lot of kids may well benefit from different styles and approaches to learning. … What we have demonstrably doesn’t work for everyone”, and the unions’ “myopic view that there can only be one way [is] a very large part of the overall handbrake that has prevented real change and [achievement] in education.” It is a little idea that can, and whose idea has come, and is making an enormous difference for children’s success that all of us in this House should want to celebrate. Ka pai.

Intelligence and Security Committee

Inspector-General

Hon CHRIS BISHOP (Leader of the House): I seek leave to move a motion without notice or debate on the reappointment of the Inspector of the Inspector-General of Intelligence and Security.

SPEAKER: Leave is sought for that purpose. Is there any objection? There appears to be none.

Hon CHRIS BISHOP: I move, That, under section 157 of the Intelligence and Security Act 2017, this House recommend to Her Excellency the Governor-General the reappointment of Brendan John Horsley as the Inspector-General of Intelligence and Security for a term expiring on 7 June 2028.

Motion agreed to.

Urgency

Hon CHRIS BISHOP (Leader of the House): I move, That urgency be accorded—the introduction and passing through all stages of the Adoption Amendment Bill; the first reading and referral to select committee of: the Defence (Workforce) Amendment Bill; the Local Government (Auckland Council) (Transport Governance) Amendment Bill; the introduction, first reading, and referral to select committee of: the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill; the introduction and passing through all stages of the Income Tax (FamilyBoost) Amendment Bill; and the remaining stages of: the Customs (Levies and Other Matters) Amendment Bill; and the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill.

The House is proposing to go into urgency this week for several bills. The Adoption Amendment Bill must be passed through all stages to prevent adoptions from proceeding where the safety of children could be at risk, and to ensure no new applications are lodged between the bill’s introduction and Royal assent, as applications would otherwise take a significant time to process once the legislation is enacted. I hope and trust that all members of the Parliament will agree with the need for urgency in relation to this bill, and I understand other parties have been briefed by the responsible Minister, as is appropriate.

There are three bills going to select committee: the Defence (Workforce) Amendment Bill, the Auckland Transport governance bill, and the retail payment systems bill. The Government’s desire is to get those bills to a committee for further consideration as soon as possible.

We’re also passing through all stages of the Income Tax (FamilyBoost) Amendment Bill. It’s a short bill. It’s been flagged by the Government previously to put more money in the pockets of new families. It takes effect on 1 October, so it does need to be passed by that point. It’s a tax bill being dealt with through all stages.

The Customs (Levies and Other Matters) Amendment Bill has to be passed by the end of September to allow the Customs Service to make necessary adjustments before the changes come into force.

The Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill needs to be passed as soon as practicable to allow Government departments to set up the systems needed for the new regime.

So urgency, I think, is more than justified on these occasions.

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

Ayes 68

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

Noes 54

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

Motion agreed to.

Introduction of Bills

SPEAKER: I understand that it’s the Government’s intention to introduce three bills.

CLERK:

Adoption Amendment Bill, introduction

Retail Payment System (Ban on Merchant Surcharges) Amendment Bill, introduction

Income Tax (FamilyBoost) Amendment Bill, introduction.

SPEAKER: The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill and the Income Tax (FamilyBoost) Amendment Bill are set down for first reading presently. The Adoption Amendment Bill is set down for first reading immediately.

Bills

Adoption Amendment Bill

First Reading

Hon NICOLE McKEE (Associate Minister of Justice): I present a legislative statement on the Adoption Amendment Bill.

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

Hon NICOLE McKEE: I move, That the Adoption Amendment Bill be now read a first time.

Every year, about a thousand children and young people are brought to New Zealand after being adopted overseas. Most of these children join loving families who care deeply for them and who provide for their needs, but, sadly, our international adoption laws don’t have enough protections in place. Because of this, some children and young people adopted from overseas end up facing neglect, abuse, or exploitation here in New Zealand. It is difficult to know the scale of this problem, but I am aware that serious harm has happened in some cases. We have heard reports of children and young people being sexually, physically, or psychologically abused. They’ve been exploited for labour, enslaved, or trafficked. This is simply unacceptable. Our existing international adoption settings should not be allowing this to happen. That is why we are introducing the Adoption Amendment Bill. This is the first step towards fixing our international adoption system to make sure it includes adequate safeguards for children and young people adopted overseas.

Right now, children adopted by New Zealand citizens or residents may be eligible for citizenship by descent, or they can apply to access immigration pathways. We have discovered that recognition of these adoptions does not always involve safety checks on the adoptive parents, and sometimes, the adoptive process itself may not involve thorough safety checks. I am not prepared to risk the safety and wellbeing of these children because we do not have the legislative arm to do suitable safety and background checks of adoptive parents of overseas children.

The amendments in the bill will immediately suspend New Zealand from recognising overseas adoptions for the purpose of citizenship or immigration, unless the adoption comes from countries we trust to have strong safeguards in place. The suspension is temporary and will prevent harm coming to more children while we work on an enduring solution to this problem. I plan to introduce lasting reforms before this parliamentary term ends.

The amendments in the bill will make two substantive changes. Firstly, as previously stated, the bill will temporarily suspend the recognition for the purpose of New Zealand citizenship and immigration adoptions made in overseas courts where the adoptive parents are New Zealand citizens and residents. This suspension has some exceptions. The bill includes a list of countries that are exempt from this suspension. This is where we have been able to establish that the arrangements for adoptions include adequate safeguards for the children and the young people involved.

I am satisfied that the countries on the exempt list have sufficient safeguards in place to protect children and young people who are being adopted—for example, most of these countries are parties to the Hague convention on intercountry adoption. These changes mean that while the suspension is in place, only the adoptions made in exempt countries will be recognised while we work on the longer-term solution to our legislative conundrum. Let me be clear: these are adoptions by New Zealand citizens, or residents, of children residing in other countries, adopted under those countries’ laws.

To allow for a timely change to the list of exempt countries, if needed, the bill provides that the list can be amended by the Governor-General through Order in Council upon recommendation from the Minister of Justice. While this is an unusual power, it is necessary so that we can swiftly move to revoke a country’s exempt status if risks arise in its adoption system. It also allows a country to be added if we become satisfied that their adoption systems include adequate safeguards.

The second substantive change in the bill is to the jurisdiction of the New Zealand Family Court. Right now, the court can make adoption orders for applicants and children anywhere in the world. We’re going to limit that power so that the court, generally, only makes adoption orders where both the child and the adoptive parents live in New Zealand. There will still be exceptions such as international surrogacy cases or exceptional circumstances—for example, where a child overseas is an orphan and a New Zealand family member is best placed to care for them.

Finally, the bill will make consequential amendments to make sure that everything works smoothly. Because these rules are temporary, they are set to expire on 1 July 2027. However, the expiry date can be brought forward if an enduring solution is found earlier. This would be done by way of an Order in Council, which would need to be made by the Governor-General. This approach has been taken as the amendments present a significant departure from the current system for international adoption, and I want to ensure that the changes are in place for no longer than is absolutely necessary. However, I anticipate that enduring reform will be made before the expiry date.

We are progressing this bill under urgency because we cannot, in good conscience, stand by while children are at risk. We do need to act now. I acknowledge that this change won’t be easy news for some families and that they will be disappointed, but keeping children safe is our top priority.

It is not acceptable that our adoption laws have been used in ways that harm children adopted from overseas. We must close this legislative enabler. I commend this bill to the House.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe e te Mana Whakawā. This is an important bill, and I will say straight away, at this stage, that we are supporting it. It is disappointing that the bill has been introduced and it is going to go through all stages and there hasn’t been any collaboration prior to the bill, essentially, being introduced—no real opportunity.

The other thing, I guess, is this: this bill does appear to be a relatively blunt tool. We know that adoption is misused and that as a consequence of that misuse, there are children and young people who have been exploited, and there are documented cases of that. But this bill will preclude legitimate adoptions from countries that aren’t exempt, and it must be said that amongst those are some of our Pacific neighbours. That will raise real concerns for people who have been embarking on an adoption process because it’s the right thing to do in that family’s situation, and they will, tomorrow, be barred from doing that.

I also note that this bill is, essentially, a band-aid—a temporary fix—whilst further work is done. This issue is not new; let’s face it. I’m not going to shy away from the fact that work was being done under previous Governments on this, and the fact that we’ve got this very short-term fix is perhaps a little disappointing. Had it been higher up in the Government’s priorities, perhaps more resources could have been put into a much more comprehensive and much more nuanced fix.

It is urgency. We are going to do this in all stages today, essentially, if we get that far. We will be asking some of those questions at the committee stage, and the Minister, I’m sure, will be happy to give fulsome explanations. But the list of exempted countries does not track the Hague convention countries. There are countries who have acceded to the Hague convention on cross-border adoption that are not on that list, and that seems odd. It seems to be saying that we don’t accept that those countries will adhere to their international obligations. There are also countries who have not acceded to the Hague convention who are on the exempt list, and that also seems odd, because it seems to be that there are countries which the Minister assumes will engage in appropriate adoption practices, but they haven’t acceded to the critical international convention which is the cornerstone of that. So there is a lot to be done here.

The other thing is this: this bill addresses the proposition that New Zealand recognises the legal acts of foreign States. There is an important international convention, if you like, that we will respect the orders legally and properly made in foreign States, whether that be marriage or adoption or civil decisions in courts or criminal convictions in courts. What this is doing is, essentially, stepping back from that and saying that for these purposes—for immigration and citizenship purposes—we do not recognise adoptions in, essentially, these listed foreign States.

It may be that for some, it’s fully justified, and if we think of Afghanistan and other countries with tenuous Governments, then you can accept that adoptions there may not meet basic civil rights and human rights standards. But in many of those other countries—and Georgia springs to mind, in the Caucasus, that is. It’s a country on the brink of EU membership, but it’s not on the exempted list. Why is that? That needs explanation.

This bill will have a real impact on many New Zealanders. I think that they will be alarmed to find out that plans that they have made about their family, and perhaps, almost in train, will be stopped today, and so there’s a lot of work to do.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Speaker. I rise on behalf of the Green Party of Aotearoa New Zealand to speak on the Adoption Amendment Bill. Now, noting that this bill is coming to this House under urgency for all stages, and this is also the first time that, as Opposition, we have had the chance to look at the bill, so there are a couple of things I want to pick up on.

Just from the general policy statement, I think it is understandable, as we are discussing this bill today through the stages, that we maintain that the safety and wellbeing of our tamariki is the focus of this bill when we are discussing it. Although we are seeing roughly about 1,000 overseas adoptions recognised in Aotearoa each year under section 17 of the Act, which is one of the things we are going to be addressing here, we do see safety concerns and exploitation that needs to be addressed.

I echo the previous speaker’s sentiment that there is a question whether this bill is something that is a blunt tool that is being used where other things could have been considered in the meantime.

A couple of things I want to address—and these are things that I want to signal to the Minister ahead of time that we are going to be asking as part of the committee of the whole House stage, because, again, we won’t have access to the officials, or even allow for public consultations in the meantime—are that this issue, in many ways, was originally recorded in May. The Government had signalled very early on in May that this was something that they were going to be taking seriously. Understanding that there is a process that needs to be done, I’m really keen to hear from the Minister later on as to why, then, is this bill now being introduced in October; and if the wait from May to October was sufficient, why not allow for even a shortened select committee process so that way we are able to have a chance to engage with the public and engage with officials on this, and at least hear from both officials as well as key stakeholders in this field? That’s one of the questions I think it is really important to get some clarity on.

Also, when we’re introducing this, I understand the need when we’re looking at sunset clauses—in this case, I appreciate the fact that this is an interim measure and there is something that, hopefully, will be coming in in 2027 or earlier, and it will be by Order in Council. But the question that remains is: what are some of the transitional processes in terms of the reassurance for the current things that are going through, as well as potential monitoring? Now, that is in Schedule 1 of this bill, just from a cursory reading. There are definitely more questions to be asked around the monitoring aspect, which I think is really, really important, because we can use this as a transitional measure to stop something from happening, but what about the existing ones that are currently going through the process? That’s, again, something that we would like to have some clarity on from the Minister.

Now, just finally, I’m just going to pick up on—again, from a very cursory reading—the departmental disclosure statement. Again, I appreciate and understand what the Minister is saying, that this is being brought under urgency because even though there’s been a delay since the cases were first reported, we don’t want to see the potentiality of tamariki being harmed. But it’s also systematic of the way that secret bills—because this is the first time we’re seeing it—and also urgent bills have been introduced in the House, and not having the full package that has been expected of a bill like this if we are to have informed decision and debate and discussion on this.

We are looking at, just simply, the department disclosure statement. I have not yet seen the regulatory impact statement; at least, it’s not available immediately. There is no evidence that there has been a child impact statement conducted as part of this as well. It would be really good to engage with the Minister on this. Also—and I pointed this out over and over again the last time we had a secret bill—the New Zealand Bill of Rights Act consistency report is still not available on the Ministry of Justice website, despite what it says over here, that it should be available on the website.

In my second reading, I’ll talk more about the bill, but I think that’s where we are at in terms of the first reading.

Hon JAMES MEAGER (Minister for Youth): Thank you, Mr Speaker. I am speaking on behalf of the Minister of Immigration in support of this bill, which we intend to pass through all stages today. This bill addresses inadequate safeguards in New Zealand’s international adoption settings. These settings require immediate legislative change to address the risk of harm to children and to young people, and to maintain the integrity of our immigration system.

I want to draw the House’s attention to a recent case highlighted in the media that underscores the serious gaps in our international adoption regime that we are attempting to address: a 17-year-old girl was granted a Dependent Child Resident Visa to live with her adopted family in New Zealand. Officials at Immigration New Zealand had flagged the case as being high risk; they were aware that the adoptive parents had been previously investigated by the police for trafficking. Concerns had been raised about the number of children that they had adopted. Interviews then revealed that the girl would be expected to hand over her earnings to the adoptive family once she started working. Despite these serious concerns, Immigration New Zealand’s hands were tied, and the visa was approved.

Under current legislation, our officials simply have no power to decline. The current system offers no grounds to intervene when an application meets those requirements, even when clear red flags are present. Unfortunately, this is not an isolated case; there have been many other cases of concern, where children and young people applying for a visa are at risk of exposure to an unsafe environment within the home of their adoptive parents.

Other examples include allowing children to come to New Zealand when the adoptive father has been convicted of a string of offences, including violent offences, or where the adoptive father is known to officials for family harm incidents against his partner. There are also further cases involving multiple adoptions of unrelated children and young people to adoptive parents with insufficient income or rooms to house the children that they have adopted. These children have since become subject to exploitation, servitude, and abuse. These children have been adopted into families, in several cases, which cannot, and have no intention to, support them and provide them with the life that they deserve.

Our current laws do not allow officials to intervene, and we cannot stand by and watch it happen. It is simply not acceptable, in 2025, to have a law that enables child trafficking and bringing children to New Zealand to be harmed or neglected. Our adoption legislation is dangerously outdated. The Adoption Act 1955—now 70 years old—was written in a time when international adoption, child trafficking, and modern safeguarding standards were not well understood. It does not reflect the contemporary risks or expectations. As soon as this Government was briefed on the scope and scale of the gaps in our current law, which were resulting in children being adopted into households where they were being harmed due to a lack of proper checks on adoptive parents, we set to work urgently.

Officials across agencies have worked at pace to stand up an interim solution, which this bill provides. We could not sit around and wait for further harm and further work to occur before we took action. With children coming into harm’s way, we need to act urgently. Amendments to the Act will enable safer and stronger safeguards for overseas adoptions, to prevent non-genuine or exploitative arrangements. This bill demonstrates the Government’s commitment to the safety of children and young people and to maintain our strong relationships with our Australian and Pacific partners. The decision to proceed under urgency reflects the time-sensitive nature of this issue. Delaying change would risk New Zealand citizens or residents attempting to expedite adoptions in overseas courts, or an influx of visa applications, to avoid the new rules, which could put children in harm’s way.

These amendments are intended to be temporary—with a sunset date—in order to allow officials to develop a solution for permanent legislative changes in the interim. While we acknowledge the importance of select committee scrutiny, in this case, we must act quickly. Acting under urgency now means that the focus can shift quickly to developing that permanent solution for a safe pathway for recognising overseas adoption. That next phase of work on long-term, enduring options will go through a select committee process. We acknowledge that these changes will stop recognition of overseas adoptions that were made with adequate safeguards and were in the best interest of children. We therefore propose to exempt specific countries.

This is a necessary and a timely piece of legislation, so, on behalf of the Minister of Immigration, I commend the bill to the House, and I invite all members to support its swift passage today.

JAMIE ARBUCKLE (NZ First): Thank you, Mr Speaker. I rise on behalf of New Zealand First to support the Adoption Amendment Bill in its first reading. This bill is about protecting the most vulnerable children. For far too long, gaps in our adoption laws have allowed overseas adoptions to be recognised here without the safeguards New Zealanders would expect. That has meant some children have been brought into situations of abuse, neglect, and exploitation. This is unacceptable, and I commend this bill to the House.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Tēnā koe e te Pīka. I also stand, on behalf of Te Pāti Māori, to make a short call in support of the aim of this bill. We understand that it has been prompted because there have been cases where people with convictions for violence or sexual abuse were able to adopt children overseas and bring them into Aotearoa New Zealand. They have been able to bring them into our country in recognition of the adoption, and in some of those cases, they’ve been able to use that position to offend the children’s mana and tapu. They have created serious abuse, neglect, and exploitation of these children, who are taonga. There are cases that are already approaching or in the courts, and therefore, we acknowledge the immediacy of the legal change that this bill with enact. Based on that alone, Te Pāti Māori will support this bill at first reading. To be honest, we are horrifically shocked that we didn’t have stringent laws in place already. Kia ora rā.

CARL BATES (National—Whanganui): Thank you, Mr Speaker. Most overseas adoptions into New Zealand are into loving families, but some children have been brought here by people with violent or abusive histories, and then neglected, abused, or exploited. This bill is intended on addressing that issue. I commend it to the House.

Hon CARMEL SEPULONI (Deputy Leader—Labour): As has been mentioned already by our justice spokesperson, Duncan Webb, we will be supporting this bill, but we do have a lot of questions. Our primary concern with respect to this bill is, of course, the wellbeing and safety of the children; it is making sure that we do have the safeguards in place, that they are protected, that they are not adopted under circumstances where they enter into servitude or they come here and they are abused or they are exploited in some way or another. There have been far too many cases that we have all seen through the media where that has occurred. However, this has come to us in urgency, and we’re going to have a lot of questions that we will be putting to the Minister at the committee of the whole House stage to understand the rationale for some of the decision making behind what really is a temporary piece of legislation.

I—and there may be others in this House—have family members who have adopted from overseas. The instance that I’m calling on is where the country from which they were adopted was also a member or had signed up to the Hague convention; the child protection services were involved on that side as well as in this country; the oversight and safeguards were there. I’ve often wondered why countries have chosen not to sign up with the Hague convention—that is a matter for them, of course, but it has also led me to have concern for the kids that have been adopted from countries where we don’t have those protections and oversight in place. But I’ve also wondered why we couldn’t have those protections and oversights in place regardless of whether or not they come from a country that’s signed up to the Hague convention or not, and I guess that will be something that we can traverse, or at least have a discussion on, later on.

There will be some communities that are really concerned at the pace in which this is coming through. We’ve heard the rationale for that. But there will be some families who will be highly disappointed because they would have started down the pathway of adoption for family members—usually family members—overseas and are going to be hit with this suddenly and now, all of a sudden, will be unable to continue on that pathway. The Minister has said, in her opening remarks, that she is looking to have permanent fixes or legislation in place before the end of the term for this Government. I would hope that would be the case, because, as the months pass by, there will be children in other countries who are awaiting being united with people that are meant to be their new family, and parents, here, waiting for their children but unable to continue along that trajectory because of the urgency and changes that have been pushed through today.

I’m also wanting to know, at a later stage, from the Minister, what consultation has taken place through the ministry of foreign affairs. This is a huge decision to make and there will be clearly some viewpoints and, perhaps, some concern expressed by the countries that have not been exempted in this particular list that’s in the legislation we’ve been presented with.

Finally, we are very curious about the list of countries that will be allowed to continue adoption during this interim period. We assumed that they would be countries that were all aligned with the Hague convention, but that’s not the case; in fact, there are some countries on this list that haven’t signed up to the Hague convention. There are some countries left off this list who have signed up with the Hague convention. So we’re going to want a really good rationale from the Minister, to provide us with assurance that there are good reasons for why countries have been excluded from this list. I think the Minister knows that there will be communities that are wanting that particular answer and wanting assurance that they haven’t been treated unfairly or discriminated against in any way. So the substance of the answer she provides on that particular topic will be very important to the rest of this debate, particularly in the committee of the whole House stage.

As I said earlier, at this point, we do support this legislation. We’re a little bit disappointed at the way in which it was brought here. I know that the Minister did reach out to certain members of political parties, but that was fairly recently. I think this is one of those pieces of legislation that we could have worked in a more bipartisan way if she had reached out earlier; however, that time has passed—and so has the time for my speech.

PAULO GARCIA (National—New Lynn): Thank you, Mr Speaker. The Adoption Amendment Bill seeks to prevent harm to children and young people who are adopted overseas and brought to New Zealand to live. I commend this bill to the House.

VANUSHI WALTERS (Labour): Thank you, Mr Speaker. As colleagues have said, we will be supporting the bill at this reading.

Colleagues across the House will know that I often push back when urgency is accorded to bills, particularly on all stages. I do think there are valid exceptions to that, and, for me, that is when we see children in a position of potential harm, which is, again, why we’re supporting the bill at this stage. But I would echo the comments made in terms of those conversations that haven’t happened, that could have at the time when this issue was in the media earlier this year, and also the comment that Dr Duncan Webb made, that it appears this could be a blunt tool in terms of addressing the issues in front of us. I acknowledge, as others have, that we have seen some very serious cases, including this year, that of a 13-year-old girl, in April, and a 12-year-old boy, as well, who were found in absolutely appalling situations. I think the reality of the fact is that once they are here, it can be very difficult, when they’re unmonitored, to be able to ensure they are kept safe.

Just going back to the point about the conversations across the House, I do acknowledge that this is, of course, in many ways, a temporary pause. I know, on this side of the House, we would absolutely welcome a longer conversation as those permanent solutions are developed. For the time being, we currently have a system that is split into two, where signatories to the Hague convention have one passage and then we have section 17 under the Citizenship Act, where there is a different passage in terms of adoptions being made. For the time being, that’s going to be split into three, which are those exempted categories, the non-exempted, and the non-exempted with exceptions. There are, indeed, a lot of children who will fall into those three categories: a thousand overseas adoptions recognised in New Zealand every year.

I would also say that it’s good to see the Government acknowledging the issue of children who are at risk in this space, and also good to see that there has been some movement in thinking on the definition of trafficking, which is a connected issue in this space. There is another, in terms of ensuring that we’re protecting children against harm, and that is the broader modern slavery framework that we have had conversations about across the House as well. My view is that, yes, we do have an obligation to children coming to New Zealand, but we also do have that obligation in terms of our supply chains coming into New Zealand, and that is another area that I hope the Government will be turning its mind to.

In terms of the Hague convention and the reason why I think many countries afford it this place of priority and, if you like, trust is that it is a fairly robust regime and it requires countries to put in place specific measures, which we’ve done through domestic legislation as well, that require an entity to oversee and coordinate—which, for us, is Oranga Tamariki—where a number of checks have to be made in terms of those adoptions happening. Interestingly, there are principles like the subsidiarity test, which is a test that says that when an adoption happens under the convention, you must first make sure there isn’t family in the home country that the child could be placed with. There have been some human rights critiques of the extent to which the Hague convention, as it stands now, reflects an adequate human rights position. That might be something for international discussions going forward, but I certainly acknowledge that the Hague convention provisions do provide a robust framework for analysis.

One of the provisions that I’m particularly drawn to is the one that requires accredited agencies to be used in terms of the adoption process and for a number of steps to happen for those agencies to get accreditation. The second is the follow-up for the young people. Unlike the section 17 pathway, under the Hague convention, the Government entity must go back and ensure that that young person is doing well.

I understand the directive. I do look forward to a robust conversation at the committee of the whole House stage, and, beyond that, a conversation once that time period has lapsed and we do need to revert to a longer-term system.

RIMA NAKHLE (National—Takanini): Thank you, Madam Speaker. We’re in the first reading of the Adoption Amendment Bill, a bill which temporarily addresses a very dangerous and alarming void in our adoption process, and I commend this bill to the House.

Motion agreed to.

Bill read a first time.

DEPUTY SPEAKER: This bill is set down for second reading immediately.

Second Reading

Hon KAREN CHHOUR (Minister for Children): on behalf of the Associate Minister of Justice: I move, That the Adoption Amendment Bill be now read a second time.

All children have a right to be in safe, loving homes. Any case where that isn’t happening and children are being exploited is a tragedy. Sadly, the current New Zealand Adoption Act 1955 has not sufficiently kept up and protected children from the global tragedy that is child trafficking and sexual exploitation.

I’d like to personally thank, at this time, the International Child Protection Unit at Oranga Tamariki for stepping up and working incredibly hard on this serious issue with myself and other agencies. Your work in protecting the vulnerable is nothing short of heroic. As staff at Oranga Tamariki, an agency that is often scrutinised, you do not always get the credit that you deserve, and I would like to thank you on behalf of myself and also a grateful nation for the work that you do in the background on complex and challenging issues such as this.

Evidence has shown the absence of strong safeguarding measures has resulted in some adopted children being moved from their home countries into harmful home environments, both within New Zealand and other nations via New Zealand, where they’re open to being abused, neglected; slavery is an issue—and open for sexual assault and physical assault. This is just unacceptable. Our current legal protections currently fail to avert that tragedy and we just cannot allow this to continue.

This is why we find ourselves here, under urgency, urgently resolving the risk of harm to children and young people adopted overseas and sometimes brought to New Zealand and sometimes elsewhere. While most adopted children are thought to be safe and secure in their adoptive family environment, we cannot in good conscience allow any level of child exploitation to occur or allow any risk for that to occur.

I acknowledge that the temporary suspension of section 17, which recognises adoptions made overseas for the purposes of citizenship and immigration, may be disappointing for some families, but please be aware that we do not make this decision lightly. We make this decision only with the thoughts of the safety of young people in our minds.

There are people seeking to be great parents, but whose pathway to adoption may be lengthened by this. We will find an enduring solution as quickly as we possibly can, but preventing the risk of harm to children and young people is what matters most now. That is our responsibility, whether they are our child or not. As a nation, we need to work together to make sure that our children are safe. I put my hand up to enter Parliament on the sole purpose of caring for and protecting children and young people in New Zealand. Whether that harm through adoption is happening on our soil or overseas soil, we have a responsibility to make sure that they are protected from those heinous crimes.

I am grateful for the hard work across Government agencies to make sure that this has happened in a way where we can make sure that no one is rushing for adoptions right now and we can make sure that our young people are safe.

The other area I would just like to point out is I can truly never understand how hard it would have been for some of these officials with absolutely no pathway to interfere, even when they knew that what they were signing off meant that those children may not be safe. So this is also a shout out to those staff who every day have to sign off these adoptions—we are making sure that they can make sure that young people are safe when they’re signing those documents. So I commend this bill to the House.

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

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora e te Mana Whakawā. I want to, first of all, request that the Minister provide to the House the Attorney-General’s report. It appears to exist. The disclosure statement refers to it and says that advice has been prepared. There would appear to be no reason why this House shouldn’t be informed of that. I would absolutely request that that happen.

Having just had some opportunity to read the disclosure statement, which was tabled less than an hour ago, it does raise some concerns. I note that no regulatory impact statement whatsoever has been prepared, and I accept that, in cases where matters are pressing, sometimes the process is somewhat truncated, but this is not a bill that has been cobbled together in a couple of weeks. It’s a bill that has been months in the making. I’m very surprised that there’s no regulatory impact statement whatsoever. What we’ve got to go on in terms of official advice is this disclosure statement, which is pretty thin, and the Attorney-General’s report if and when we see it.

This is a very significant bill that is going to affect a number of quite discrete communities. If the problem is adoptions being used to exploit young people—and I think that’s the problem—then, in terms of what is the right solution, the only people who appear to have been consulted on this were the Family Court judiciary and the people in Government who will operationalise this bill, whatever that exactly means. It seems that it’s only been an extremely narrow consultation.

The fix, it appears, is not to address some of the root causes of that exploitation, and it’s not to carve out or have some kind of test as to whether or not we recognise an adoption by testing that adoption. It’s been this blanket ban.

I also took the opportunity to just look at our international obligations. Look, I’ll be quite clear: I’m no expert on international law or the law of adoption. It’s interesting that the disclosure statement says that we’ve worked closely with the Ministry of Foreign Affairs and Trade on the proposals on the bill, in particular those that relate to specific countries. What they don’t say, in response to the question “Is this consistent with our international obligations?” is that it is. I took the opportunity to just run out and print off the UN Convention on the Rights of the Child, which is all about the rights of the child. It’s important to note that children have a right to adoption. You can understand that a child who, for whatever reason, doesn’t have one or two parents has a right to have the law recognise that relationship. In article 21 of the UN Convention on the Rights to the Child, it says that the “States Parties”—and we’re one of them—“… [must] Recognise that intercountry adoption may be considered as an alternative means of child’s care, if the child can’t be placed in … an adoptive family”. Intercountry adoption is part of the international law framework, and we’re peeling that back.

I’m saying this because I want the Minister and her officials, who I have no doubt will be watching, to be on notice that we intend to raise so that they can give us the most fulsome answers in the committee of the whole House stage. Whilst my study has been cursory, it does throw up some issues.

The other thing that’s noted is that this does significantly limit the jurisdiction of the Family Court in respect of adoptions. That’s quite unusual, right? Whilst the Family Court is a creature of statute, it’s a division of the District Court, and it gets its power from this House, it’s unusual to start curtailing the jurisdiction of the court. I note that there’s kind of a safety net when it says that the Family Court no longer has jurisdiction to make these orders—I think that’s the amendment to section 3—except, and I think it uses the phrase, “in exceptional circumstances”. Then it gives a couple of examples. I was almost concerned with the examples because they were so extreme. I mean, one was a child with one parent dead and the other terminally ill, with the only remaining relative being a person in New Zealand. That is truly extraordinary.

I do think, in this House, we need to probe what is meant by “exceptional circumstances”. In my view, the bar of exceptionality should be relatively low. We’ve sent a very strong signal to the courts about this, but you’ve got to remember that the court will be examining the particular case. They are not simply recognising an overseas order; they are making an order, and they can put the interests of the child first. I’m very cautious about saying to a Family Court judge, “We are taking away your exercise of judgment unless it reaches a threshold way up here.” This is why we consult on these things. Is that the right phrase? Perhaps, in that clause, the phrase should be “clearly in the best interests of the child”, because that’s actually the guiding light for most of our legislation in the family law sphere.

What we could get is a situation where it is clearly in the best interests of the child that the Family Court judge make the order, but it’s not exceptional, so we’ve got a judge whose hands are tied and must decline to act in the best interests of the child. That’s not a good outcome. It’s unfortunate that these comments are being made on the hoof because that’s what urgency does, but I hope the Minister and her officials will carefully consider anything that comes up in the committee stage. It is possible to come in and out of committee, and it is possible to not hear all of the stages consecutively in this period of urgency. It may be that some time for deliberation is needed.

I’ve listened to several of these speeches, and some people are saying that the reason is to have immediate protection of children from exploitation, but the Minister, in her speech, pointed out the reason for this urgency is to stop any adoptions that are currently under way so that no further adoptions will be recognised. It’s not about an immediate protection; it’s about making sure that we don’t have a rush to the courtroom for adoption orders—whether that be in New Zealand or in an overseas jurisdiction—to all of a sudden sneak in before the door closes. That’s why we’re in urgency now.

I am deeply concerned that this bill is a low-quality bill because people with expertise haven’t been consulted. Lawyers, psychologists, social workers, communities affected, and people who have families overseas and who are leaders of the communities that might know about adoption practices in different countries and cultures haven’t been consulted. This is going to come as a sharp jolt to some of these communities who have been under the impression that we recognised the decisions of foreign courts and jurisdictions. There are some of my concerns, but I’m sure there will be more in the next hour or two. Kia ora, Madam Speaker.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Speaker. I rise on behalf of the Green Party of Aotearoa to speak on the second reading of this bill. Now, following on from the first reading, I apologise that I didn’t indicate our position in the speech itself. We do support this bill, but we still have some serious concerns and questions around this bill.

I think, to start with, we did hear that there has been very limited consultation around this bill. I think it’s important to understand—with all of this, what I will be saying is pivoting and also signalling to the Minister the kind of questions that we’ll be asking the Minister during the committee stage—that what we’re not seeing is the engagement with the affected communities. Now, this bill does disproportionately impact some communities over others. I think it shouldn’t be out of the question, and it should within reason, for the Minister to be able to say which key stakeholders the Minister has engaged with during the formulation of this bill or, in fact, what communities the relevant agencies have communicated with as part of this bill.

I signalled in my first reading speech that I would be talking more about the bill itself. Let’s start with Part 1 and some of the questions I have around the new section 17. Now, I find that to be a peculiar aspect of this bill in the sense that different children, depending on their country’s exemption status, will have different visas and access to citizenship here in Aotearoa New Zealand—at least that’s based on my cursory reading of page 4 of this bill. What I really want to focus on here is the fact that, if the adoption occurs in a country that is not an exempt country, then the adoptive person—in this case, most likely the child—as a result of that adoption will be able to acquire citizenship by descent. Normally, they would they be granted a visa or entry permit under the Immigration Act 2009. If that is correct, then if you are adopting a child from a country that’s not in the exemption list in Schedule 1AAB, even though you have adopted them, that person cannot come to Aotearoa New Zealand unless there is another form of immigration visa or temporary visa status that they can apply for.

I really want to know the rationale around this—particularly in light of what the Minister said in their first and second readings—and whether this is to ensure that no, I guess, potential harm or exploitation would happen to the child here in Aotearoa. On the land, within the jurisdiction of Aotearoa, I guess that makes sense, but that seems to be a really extreme way of mitigating some of these issues, especially when it sounds like you are allowing the person to be adopted but they just can’t come here. I think that has serious implications for some of the families, and I will be keen to hear from the Minister about this.

The other thing, which is interesting, that is going on under the part of the bill—if you’re looking at Part 2—is around amendments to the Family Court Rules. I will be really interested to know—and I know that consultation has happened with the Family Court—what sort of public awareness, but also in terms of function within the Family Court itself, was provided as a result of the changes we’re seeing. In particular, we’re looking at providing evidence of the applications and the child’s ordinary place of residence or other evidence of the circumstances in which the application is made. If that is the case, it would be interesting to hear from the Minister if this is an existing provision or if this is a new provision that has been introduced. What would that, potentially, serve?

While I understand the main purpose of this bill is to place the safety and wellbeing of the child, or any child that is adopted, into consideration, there are definitely some unanswered questions where I don’t know if the bill is drafted in a way that meets the best interests of the child. Potentially it does, and the Minister has considered a lot of these, so we would be happy to engage with the Minister during the committee stage on that.

I also want to pick up on what the previous speaker, the Hon Dr Duncan Webb, mentioned in terms of the Hague convention on overseas adoption and surrogacy arrangements, and in the broader context of what this bill would mean in terms of our relationship under the Convention on the Rights of the Child and, obviously, in terms of our interactions and consultation within the international community. There are definitely a number of agencies that I would be interested to check in terms of the Minister’s or the officials’ engagement.

Previously, we mentioned some of the communities that are most affected as a result of this bill, particularly the Pacific community. What was the level of engagement with the Ministry for Pacific Peoples? What was the level of engagement with Mana Mokopuna - Children’s Commissioner? What is the level of engagement with the Ministry of Foreign Affairs and Trade, in particular, in terms of our international relations and standings?

I am incredibly grateful that, following on from my first reading speech, the New Zealand Bill of Rights Act (BORA) report is now available on the Ministry of Justice website. This is a luxury that we didn’t have the last time we had a bill, which was the Outer Space and High-altitude Activities Amendment Bill. The BORA report wasn’t available until the bill passed its third reading. Now, we do have the BORA report, and I do thank the Minister of Justice or the powers that be or, potentially, the Minister for nudging the Ministry of Justice to upload the BORA report. It is now available, and it is another tool that we are able to use during the committee stage and as part of the discussions that we will be having after the second reading. The BORA report is a really good resource because we don’t have any of the other resources like the regulatory impact statement or a supplementary analysis report or even a child impact statement.

We will be interested to hear, during the committee stage, whether the Minister would consider waiving some of the legal privileges around this piece. I find it fascinating that there are large sections of the BORA report that have been redacted. Now, most of the sections that have been redacted have been redacted under the Official Information Act section 6(a) and section 6(b). I think it’s important for us to consider what the reasons were for those redactions and how that fits in the broader context of international relations when we’re looking at this bill.

Under the Official Information Act section 6(a), “Conclusive reasons for withholding official information”, official information may be withheld if “that information would be likely—(a) to prejudice the security or defence of New Zealand or the international relations of the Government of New Zealand; or, (b)”—which is something else that has been used to redact certain sections of the BORA report—“to prejudice the entrusting of information to the Government of New Zealand on a basis of confidence by—(i) the Government of any other country or any other agency of such a Government;” I think, it is important for us to highlight what some of the information that has been provided in the BORA report would mean when we are discussing it during the committee stage and why those specific sections are being redacted. It will be really nice for the Minister to highlight that to us in the committee stage. With that, again, we do support the bill, but we have lots more questions.

CARL BATES (National—Whanganui): There are more than 80 countries that will be exempt from the suspension, including the US and the UK, which means adoptions from those countries will be able to continue. So I commend this bill to the House.

Hon CASEY COSTELLO (Minister of Customs): I rise to take the second call on behalf of New Zealand First on the Adoption Amendment Bill. I acknowledge the hard work of the Hon Nicole McKee, the responsible Minister, for bringing this bill to the House. It’s a difficult process of work. It is a practical and immediate step to prevent further harm to children, who are vulnerable, and therefore New Zealand First continues to commend this bill to the House.

DEPUTY SPEAKER: The next call is a split call. I call Debbie Ngarewa-Packer.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori): Tēnā koe e te Pīka. We stand, again, for the second reading, in support of this bill. Now, as we listen and have had a bit more time to look at what the information is in front of us, there are some questions that we look forward to asking at the next stage—and that will be around how the Government is going to determine which overseas countries have the appropriate or sufficient safeguards and how that will be applied.

Again, the principle of what the bill is out to do is critical; we understand that. I guess one of the other things that we’d like to raise is how—and we see this bill, and it’s a bill that has hit a bit of a vein for Māori in the fact that our whāngaitanga—our tikanga—is often captured in this particular bill, so we would like to have seen changes that reflect us. We know that the timing is not right, given the immediacy that the Government says it is addressing, but I did bring to rise how these changes will affect those nations that have w’akapapa, that have strong alliances here in Aotearoa, in that context, and whether the reforms undertaken will be culturally appropriate and adjusted, as those connections are obviously different for some places here in Aotearoa than in other nations, other countries.

We did hear the Ministers earlier mihi to the officials and to Oranga Tamariki, but, you know, we have a situation now where we have tamariki that have been unmonitored, their wellbeing hasn’t been able to rise to any of the existing framework that we have. In fact, we understand there’s a heavy reliance on our NGOs. I think it’s really important to take the expertise of our NGOs in this space, and how and whether those agencies that are stepping up, whether it be Oranga Tamariki, Justice, the Ministry of Business, Employment and Innovation—whoever—are going to be resourced and able to monitor the wellbeing and the continued wellbeing of the tamariki and the families concerned

I think the issue that we’re trying to address and support here is that lack of child-protection framework in Aotearoa. We also acknowledge that this is more of a—I’m trying to think of the right word—you’re doing something and halting it on the understanding that we are going to be able to have all the necessary mechanisms set up. I guess, as we’re suspending things and acknowledging the tension and the anxiety from the good families, and how we are able to make sure that that isn’t put on hold. Adopting children—for us, as Māori, whāngai—has actually been a really important part of keeping our families and our tamariki protected and safe as well.

We acknowledge that there will be key mechanisms that the Minister will need to assure us have been worked through. In short, we do look forward to listening to the other questions that are coming out in the next phase and appreciate that the Minister has been open about what it is that this bill is intended to do. Nō reira, kia ora koutou.

KAHURANGI CARTER (Green): Thank you, Madam Speaker. Children are our most precious taonga, and they must have stable, safe, and loving homes. We have an obligation as lawmakers to ensure that all children, no matter where in the world they are, have their rights and mana upheld.

There are questions around the implications this bill will have, and the onus is on the Minister to show that the harm prevented is balanced with the harm that this bill will cause. Both having and not having this bill will cause harm because there are littlies with genuine need who will no longer be coming to New Zealand for a safe, loving home. We need to ensure that this is the right solution.

The Green Party will be supporting this bill, introduced today under urgency. The bill closes loopholes in our adoption laws that have allowed the exploitation and trafficking of young children to occur, and we’ve heard about some appalling cases. Though we will be supporting this legislation today, I also want to put on record our wider concerns and expectations for the long-term reform that must follow, and how the use of the select committee would have strengthened this legislation.

As the Minister and my colleagues in the House have outlined, this bill addresses two key problems in the Adoption Act 1955. Firstly, section 7, which allows New Zealanders to adopt children from non - Hague convention countries; and secondly, section 3, which allows anyone overseas to attempt to use the New Zealand adoption law to adopt a child regardless of their connection to Aotearoa, enabling people to bypass stricter laws in their own countries. This bill does not permanently resolve those issues, but instead creates an interim solution. It suspends all adoptions enabled under sections 3 and 17, where there are no adequate safeguards, until either a long-term reform is passed or until 1 July 2027 at the latest.

Urgency means this bill has not had the benefit of select committee scrutiny, because it was only released at 1 p.m. today, and will pass through all stages this afternoon. We know that the last time the Government put something through under urgency was the pay equity bill, so of course we are sceptical as to the actual harm prevention and whether this bill will actually do what it intends to do. Without that select committee, we are debating without community input, expert input, and, so far, no regulatory impact statement or child impact assessment—and a New Zealand Bill of Rights Act report that is heavily redacted and that I’m sure would have helped answer some of the questions that we have.

We have heard from our trusted stakeholders, like those at ECPAT (Child Alert Trust), that the way this bill is currently drafted does have issues like those. In the Ministry of Justice public consultation in 2022, Samoan, Tongan, Tuvaluan, and Kiribati communities told the Government that adoption in Aotearoa can be a pathway for children to remain connected to whānau, to access education, and to build a better life.

Further, it must be noted that there has been work already undertaken by Oranga Tamariki with Samoa to arrange bespoke safeguarding, and we must be sure that this bill doesn’t undermine that work; noting that there are significant numbers of adoptions from Samoa each year, and there will be children with genuine need for a safe, stable, and loving home in New Zealand who will be adversely affected by this bill. This is a point I will be raising with the Minister directly in the committee of the whole House stage, to seek to understand what impact this will have on the current work that is being undertaken. Those voices matter; young people’s voices matter, and reform must not erase them.

We remain concerned that, without comprehensive reform, temporary fixes risk delaying the real work. The Adoption Act is nearly 70 years old, and it reflects outdated ideas about children, family, and consent. It must be replaced, not patched over. Thank you.

PAULO GARCIA (National—New Lynn): Thank you, Madam Speaker. The Adoption Amendment Bill proposes urgent interim amendments to the Adoption Act 1995 to tighten up New Zealand law on international adoptions and ensure the safety of the children who are adopted overseas to be brought into New Zealand to live. I commend this bill to the House.

Hon CARMEL SEPULONI (Deputy Leader—Labour): I want to respond to some of the points that have been made on the other side of the House. Really, they just lead me to having more questions for the Associate Minister of Justice, which we can traverse more fulsomely in the committee stage.

The member Carl Bates pointed out that there are more than 80 countries that are exempt, and he said that for that reason he supports the bill. The issue that we have is that we haven’t yet got the rationale for why some countries are included and why some countries are excluded. I’m our spokesperson for Pacific peoples, and I’m certainly not suggesting that this is targeted to Pacific peoples, because there are a number of countries that are not Pacific regional countries that have been excluded, as well. However, on the list of countries that are not exempt for adoption are Samoa, Tuvalu, Kiribati, Vanuatu, the Solomon Islands, Papua New Guinea, and Nauru, I believe—and those are the only the ones that I could count up at this point. Of course, there are countries that are not exempt, from other parts of the world, including, from what I can see, Japan, Venezuela, Ghana, Kenya, and a number of others. But us asking the question is quite a legitimate question to be putting to the House.

I do need to make the point that there will be questions asked about this from our Pacific community, and rightly so, because, as has been pointed out by other members of this House, culturally, adoption within family, regardless of whether we live in the motherland or not, is quite a normal, everyday thing for us to do. In fact, many of us grew up with uncles and aunties that we knew weren’t just our uncles and aunties; they were our mums and dads, and we weren’t just their nieces and nephews; we were their daughters and sons. The closeness of whānau in the cultural side to adoption is going to mean there will inevitably be questions raised from our Pacific community about the particular countries here from the Pacific that have been excluded, and so I think that it’s important—with my Pacific peoples spokesperson hat—that I am asking some of these questions.

I do need to put on record—particularly, given there’s a number of Ministers that are involved in the decision that is being made here—that earlier this year in May, on behalf of the Pacific caucus, our Pacific caucus chair, Jennifer Salesa, wrote to the Minister of Foreign Affairs expressing our concerns with what we were seeing with respect to the exploitation and abuse of children who were being adopted. Now, it’s important I put on record that the vast majority of adoptions—and I think the Minister has stated this earlier in the House—are safe adoptions. They are children being adopted by whānau who care for them and love them, and they are safe in those circumstances. But we’ve all seen the media stories.

Off the back of that, our Pacific caucus wrote to the Minister of Foreign Affairs asking a few different questions, and we will want to know during the committee stage whether or not some of these things were traversed. One of the questions was just whether or not the New Zealand Government and the Government of Samoa had had any conversations about Samoa signing up to the Hague convention, and whether or not the Government has any plans to review the systems New Zealand has in place to ensure compliance with our obligations under the Hague convention on intercountry adoption, specifically in regards to the vetting of individuals wishing to adopt—which touches on an issue raised earlier in the House by the Minister for Children.

We also put on record in that letter that we wanted to know from the Minister whether the Ministry of Foreign Affairs and Trade was working alongside Oranga Tamariki and the Ministry of Justice to support regional adoption safeguards, and we also asked in that letter if the Government of New Zealand is offering diplomatic, legal, or technical assistance in this instance to Samoa to consider the Hague convention and strengthen their own protection measures for children. Now, that is just one particular country, but they were questions we put to the Minister of Foreign Affairs because of the concern that we have on this side of the House, and I know that’s a shared concern across the House.

The response that we got from the Minister of Foreign Affairs was that the Hague convention is a matter for the Samoan Government, although there is an acknowledgment that the New Zealand Government officials can talk to them about those things, that the Ministry of Foreign Affairs and Trade have been working closely with Oranga Tamariki, the Ministry of Justice, the Department of Internal Affairs, the Ministry of Business, Innovation and Employment, and the New Zealand Police to develop approaches to introducing safeguards for children who are the subject of those particular adoption processes, and that—because we were talking about one particular case from Samoa—officials in New Zealand and Samoa have been cooperating on improving safeguards for adopted children, from the point of the adoption in the Family Court through to their movement to reside permanently in New Zealand. With that in mind, we were given a lot of information in that particular letter from the Minister of Foreign Affairs about work that was under way, that discussions were taking place between New Zealand and, in this particular instance, Samoa on safeguards for the protection of children who may be adopted in New Zealand by a New Zealand family. But we haven’t actually got any feedback about where those conversations have landed.

Samoa is just one example, but what do other countries want to see New Zealand do? What advice have we received from our officials and from Pacific regional counterparts with regards to how we could strengthen those safeguards? I think that’s where we feel like we’re missing a whole lot of information on this side of the House.

We’ve gone from zero to a hundred, effectively, with interim legislation being brought to the House in urgency saying that all adoptions will be paused, but we haven’t seen what may be coming on the other side of that pausing, that suspension of adoptions, and we haven’t got any feedback on those conversations that have been taking place to ensure the protection and safeguards are in place at a Pacific regional level for children. Now, this doesn’t just apply to the Pacific region because, obviously, adoptions happen with other countries as well. But, as I said earlier, I’m really here with my Pacific spokesperson hat, and so I do need to turn my mind specifically to the considerations for our Pacific region and those countries that have been excluded from the list of countries here, and to who will, basically, have like this full cut with regard to any ability to have adoptions from their countries to New Zealand whilst this is being considered and the new legislation is being drafted.

I also want to know from the Minister: what are exceptional circumstances going to extend to? I mentioned earlier there will be some families that are highly disappointed because they would have had the process under way already with respect to adopting a family member, now only to be cut off. There will be a high level of disappointment for the family from whence the child comes, but there will be a high level of disappointment here for those awaiting parents who were awaiting their children. Will that be included in the exceptional circumstances that the Minister is considering?

Also, there is another scenario I’ve thought of. Quite often, family will adopt siblings, but they can’t always bring them all over at once. They have a staged approach to bringing over the nephews and nieces that they are adopting from elsewhere, and so they may have brought over one or two of the siblings and there may be others where there was a clear intention that they would come. I’m wondering—from the Minister—whether that will be considered in the exceptional circumstances category whilst this interim legislation is in place.

Finally, my question—which the Minister can’t necessarily answer in the second reading. However, I’m giving clear notice of what the questions will be during the committee stage. It is about the precedent. What do other countries do? Has New Zealand had far more flexible adoption rules than comparable countries like, say, the UK, Canada, Australia, or the US? Is it the case that, actually, those countries that we’re excluding here have not been able to adopt their children to family members in those countries because they had a much tighter system with respect to adoption? Or are we going to be in a regime which is a lot stricter than other countries whom we would consider to be comparable countries when it comes to international adoption, and, in particular, with reference to these countries that have been excluded?

RIMA NAKHLE (National—Takanini): Thank you, Madam Speaker. We’re in the second reading of the Adoption Amendment Bill. Just a friendly reminder to the person that just sat: this is a temporary situation and there are exceptional circumstances to mitigate some of the factors that she was suggesting. I commend this bill to the House.

Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Speaker. I’ll just point out to the member who resumed her seat, Rima Nakhle, that we can all read; we know that this is both the second reading and that this is temporary. Yet it is a piece of legislation that has significant ramifications. It is an important piece of legislation. This is a rushed process; we are hearing all stages of this bill through urgency. Usually, during a second reading speech we would be referencing what we’ve heard during the select committee process, but we are not able to do that today because of urgency. Yet we do have some significant questions on this side of the House.

I mean, just going back to the point that I made about this being rushed: the fact that the bill was introduced just before we had the first reading of this bill, the fact that we’ve just got the New Zealand Bill of Rights Act vet to be able to look through that, I think my colleagues on this side of the House have made the point—and I agree—that given the Minister knew that this was an issue quite some time back, we would have preferred that the entirety of the bill, that the long-term solution to this issue, was actually worked on in the time that we’ve had, and that we were here today discussing that bill. That being said, the Minister has outlined that there is serious harm to many children who are adopted into New Zealand as a result of our legislative settings. We have read stories of that harm that has been laid out in the media as well. That’s why we are supporting, at this stage, the legislation.

I do have a couple of questions that I also will signal in advance of the committee stage of this bill. My colleague the Hon Carmel Sepuloni has pointed to the list in Schedule 1AAB. My question is around who’s in and who’s out when it comes to the countries that are captured in this bill. It does seem rather arbitrary, and it’s particularly confusing, I guess, because within the explanatory note, within the general policy statement, it does state that the bill does not apply to overseas adoptions within the scope of the Hague convention on protection of children and cooperation in respect of intercountry adoptions.

Yet the list seems to kind of be neither here nor there, given that it includes most of the countries that are signatories to the Hague convention, but not all. It includes Tonga, which is exempt under the list but not a signatory to the Hague convention. I would have understood that if all of the countries that are signatory to the Hague convention were automatically exempted, but that doesn’t seem to be the case here either. So I’m keen to get a little bit of clarification from the Minister during the committee stage on that.

That being said, some of the changes that this bill makes, on a temporary basis, will reduce the risk of people—so the changes appear to be a temporary suspension of both section 3 and section 17 of the Adoption Act to restrict, essentially, the Family Court jurisdiction to domestic adoptions for the time being, and to restrict the recognition of some overseas adoptions under the Act.

The other question that I had was around clause 8 inserting new section 27E of the bill that empowers the justice Minister—in consultation with a number of other Ministers—to recommend the changes to Schedule 1AAB, which is, of course, the list of exemption countries. It allows the Governor-General to add or remove countries from the list, and I would want to know, further down in this process, what the criteria for that would be as well. Thank you, Madam Speaker.

CATHERINE WEDD (National—Tukituki): Look, the Adoption Amendment Bill is about tightening up our international adoption laws so we protect our children; we protect our most vulnerable from abuse, from sex trafficking, and from exploitation. This is a critical piece of legislation so I commend it to the House.

VANUSHI WALTERS (Labour): Thank you, Madam Speaker. I might start where I started in my first reading contribution, which was just a very quick reflection on the use of urgency. The reason for that is there’s been a little bit of banter across the House on that. I think what we’ve recognised is there can be good reason for the use of urgency. However, when it’s used, it would be best practice for there to be some dialogue between the parties as far ahead of time as is possible to ensure that we have really sound legislation that can hold, even if it’s temporary. Colleagues have pointed to some of the temporary impacts that this might have on children—I’ll speak to some later.

I look across at my bench and I wonder whether this is representative of good lawmaking. That’s the sole reason why we raise that issue. We want to be across all the documents, including the New Zealand Bill of Rights Act reports, and my urge to Government members would be, not only for the continued process with this work, but for future bills that if the Government does choose to introduce urgency, that there are those cross-party conversations and that the documents are with us so we can all do our best for the people of New Zealand.

I wanted to start with a bit of reflection on the process that adoption laws go through in our country, because there is reference in the disclosure statement to work that the Ministry of Justice has done in this space over a number of years. I recall that Tāmati Coffey actually had a member’s bill, mostly focused on surrogacy provisions, but that member’s bill was paused when the Law Commission embarked on a broader piece of work. The bill is now with, I think, the Health Committee and it’s gone through a few iterations. The point I’m making is that I think there’s a difference between identifying a problem or an issue that I think we should be briefed on and aware of and issues escalating to the point where we need to take urgent action. So, again, just a general observation about the fact that where issues concern children especially, I do think that there’s an especially important role for us to work across the House and ensure we get it right at the point of those first red flags.

I just wanted to make a comment about what comes next, because there is a question about how much we can do in relation to those countries that are not signatory to the Hague convention or that are not approved in other ways. I looked at section 17 of the Citizenship Act, which has a clear gap in terms of a lack of protection or a lack of reflection of the need for the best interests of the child to be considered or a lack of the need for the adequacy of potential adopter parents to be considered, which is why we’ve ended up with people with serious convictions in that space. The other interesting gap is the issue of identifying a genetic connection between the proposed adoptee and the proposed adopter. What has happened in the past is that people have claimed a familial relationship, but there is no requirement in the Act at present in terms of testing for that relationship. So there are certainly things that we can do within the scope of our legislative framework and our protective framework, outside the Hague convention, which I’m sure will come next as well.

In terms of the identification of exempt countries, I just have been looking up countries that have been deemed to be non-compliant with the Hague convention. I’ve come up with a report in 2020 on Japan, Austria, Mexico, Turkey, all of whom are on that list, I believe, so there are absolutely questions that I think we need to talk through in terms of understanding the assessment that’s been made in determining that list and whether considerations like independent reports on those countries’ compliance has been taken into consideration or not.

Dr Duncan Webb made some excellent points about questions in terms of compliance with the Convention on the Rights of the Child. Again, I was listening as the Hon Carmel Sepuloni made points about some children being adopted earlier, others potentially being left behind for another year. There are quite nuanced circumstances which might also need to be considered. But here’s the interesting point: they should not be considered as a matter of exemption, but a matter of international human rights, which is something else. So if the child holds those rights, then it shouldn’t be necessarily a case of exemption that we’re looking to.

The other, I guess, issue that I will have some questions around is the decision to create what looks to me to be a Henry VIII power in terms of the Order in Council that allows a change to the list of countries or a revocation of the countries who are currently on the regulatory impact statement. I would question whether that is an appropriate function to be made given the huge implications for children but also given my glance at the section 7 New Zealand Bill of Rights Act report, which I don’t want to say, “hums and ha’s”, but it kind of hums and ha’s about whether certain rights are engaged, including the right to be free from discrimination. When you put that alongside a rather extraordinary power, it does conflate that sense that we are creating this rather bold extraordinary power that could breach a right to be free from being discriminated against as well. So I’ll certainly have some questions there.

My colleague Dr Lawrence Xu-Nan raised some questions about the recognition of an adoption and separating that from a right to a visa or to citizenship, which I thought was fascinating. I wondered about the impact for young people who may be inheriting property for example, and who may have the passing away of a loved one in New Zealand, and how that would impact what a year would look like. Perhaps unusual circumstances, but in the context of the rights of the child, we must consider all these factors as well.

Now, the Minister perhaps has done this in terms of the discretion that’s there, so allowing the exception for surrogacy circumstances, but also Family Court Associates or Family Courts to make an exception. Again, colleagues have pointed to the fact that there’s not a lot of guidance in terms of what those exceptions should be, and perhaps concerningly, there’s a rather high bar threshold set by the two examples that have been included in the legislation. Now, we’re looking at a one-year period in which Family Court Associates, even—who were created in the last Parliament, in terms of their role—will be expected to provide this quite different sort of decision making in my view, in terms of assessing this function with a child who’s based overseas. So the question is: is the guidance sufficient? Is the bar too high? As a practical measure, what steps will be taken to support Family Court Associates to be making this very important decision in terms of young people?

Now, the other thing I did want to raise was in terms of transition measures. It looks to me on my first read that if someone has made an application, that that application will still be considered, but a decision in terms of the second deadline in terms of their rights on citizenship versus a visa would be separate. I haven’t quite gotten my head around how that would impact people for the second deadline, so when this initial period is removed, what that would mean for the right to have a visa, whether that would be reinstated for someone who had a live application or whether that would not be.

Finally, just a general point about children’s rights. I’ve practised for a number of years in this area and one thing that the former Children’s Commissioner used to argue for was something akin to what’s called the Welsh measure, where when legislation was passing through the House, it was an obligation of parliamentarians to actively consider the UN Convention on the Rights of the Child. It was rather world-leading when it was first done, but it’s proved to be rather successful. My view is that, of course, we should turn a robust mind and analysis to all of our international human rights frameworks. However, if we were to highlight one, I do think that children’s rights is deserving of something like the Welsh measure, and as we go forward through this process, I would just urge the Minister and Government colleagues to sit down and have a robust assessment on whether the future changes, as well as these temporary measures, are compliant with those rights.

Dr VANESSA WEENINK (National—Banks Peninsula): Tēnā koe e te Māngai o te Whare. Ka tautoko te pire ki te Whare.

[I commend the bill to the House.]

Motion agreed to.

Bill read a second time.

DEPUTY SPEAKER: This bill is set down for committee stage immediately. I declare the House in committee for consideration of the Adoption Amendment Bill.

In Committee

Part 1 Amendments to Adoption Act 1955

CHAIRPERSON (Greg O’Connor): Members, the House is in committee on the Adoption Amendment Bill. We come first to Part 1, the debate on clauses 3 to 14—“Amendments to Adoption Act 1955”—and Schedule 1. The question is that Part 1 stand part.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair. Thank you to the members of the committee who are joining me for the committee of the whole House stage of the Adoption Amendment Bill. Members, it is unacceptable that there are children and young people who have been adopted overseas, brought into New Zealand, and then found to be subjected to physical, sexual, and psychological abuse; there is neglect and exploitation. It is enabled by our current international adoption settings. We will reform these settings and immediately protect more kids through two phases of work.

Today, we begin phase one, a time-limited temporary suspension, followed by phase two, a permanent solution that ensures the protection, safety, and wellbeing of those adopted children. Today, in phase one, we will temporarily suspend recognition of unsafe overseas adoptions where section 17 of the Adoption Act has been used, which, in turn, provides access to immigration and citizenship pathways for the child.

An exemption list of countries who have sufficient safeguards in their adoption system has been established. Those countries demonstrate their ability to protect children and young people from harm without reports of concerns from others. What is also essential is that we temporarily limit the power of the Family Court to make adoption orders where adoptive parents or children do not live in New Zealand. The reason why we need to make this change is because the Family Court has an extraordinary broad power to grant adoption orders for prospective adoptive parents or children anywhere in the world. It could be used to circumvent the temporary suspension of section 17 that we are making. It’s a potential back door, and I want to make sure that it’s shut—at least until a permanent fix is established.

It is important that the Family Court retains the ability to grant some adoptions where at least one party does not ordinarily live in New Zealand. A scenario here would be international surrogacy, where the formalisation of parent-child relationships is needed or where there are exceptional circumstances which justify an adoption order being made.

I’m confident that today’s amendments will prevent harm coming to children and young people adopted overseas into New Zealand, and I look forward to hearing the views and answering the questions of my colleagues across the Chamber as we move through this stage.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora, Mr Chair, and kia ora to the Minister, the Hon Nicole McKee. Thanks for expressing willingness to engage in some exchange on this. It is an apparently simple bill but it’s actually quite tricky to read, so my first question is around the statement in the explanatory note: “The Bill does not apply to overseas adoptions within the scope of the Hague Convention”. That’s what the explanatory note says, but then, if you go to clause 4, “Section 2 amended (Interpretation)”, it defines a Hague convention adoption as “an adoption to which the Hague convention applies … that took place in a contracting State … in respect of which the adopted child was habitually resident overseas; and in respect of which the adopted parent is, or both adopted parents are, habitually resident in New Zealand”.

In terms of the recognition of overseas adoption, I’m just a little confused. Basically, does it mean that we do or don’t recognise adoptions where all of the parties at the time of the adoption were resident overseas? I mean, I’m sure I could work through it eventually, but I haven’t had that opportunity, right? That really is my question: whether, when we’re talking about overseas adoptions, what we really mean—or another way to express it—is “New Zealanders going overseas to adopt”. If that’s what we mean, it’s a different thing to what most people, in ordinary language, would say an overseas adoption is, where it’s an adoption that happens overseas where all the parties are overseas parties. That kind of changes it if New Zealand citizens are overseas and enter into an adoption. Here’s a case: if two New Zealand citizens are overseas and adopt a child but they are habitually resident overseas, is that child, then, a citizen or not? It’s simply not clear to me at the moment whether that would be the case or not. We’ve got the Hague convention, and we could have used that, but we haven’t used it; we’ve actually used this Schedule 1AAB as the critical tool here.

I guess I’ll just leave that there, and the Minister might want to respond, or another member might want to take a call.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. Again, I’m just going to focus on Part 1. I’m looking at clause 4(1), “Section 2 amended”, and some of the definitions. I want to focus on a couple of things around the exempt countries. I know that others may have more questions around this, but just checking that while we are talking about exempt countries—and the Minister mentioned numerous times the Hague convention, and the Hague convention adoption is a core feature of determining what countries are exempt and what countries are not exempt—I’m also interested to know for some of the countries that I keep seeing here, that there are some countries that are part of the Hague convention but are not listed in the list over here. I just wanted to check whether a specific process was used to determine some of these countries and whether there is a rationale of why some of the countries that are part of the Hague convention were missed or even why some of the countries who are part of the UN Convention on the Rights of the Child were also missed out of the new Schedule 1AAB as a result.

Now, I guess, on a similar line to what the previous speaker, Hon Dr Duncan Webb, was saying, my second question is around the idea of habitually resident—so when an adopted child was habitually residing overseas. Now, it’s a very specific distinction because what we are looking at is residing-based as opposed to nationality-based. So the reading of that line which is on the Hague convention adoption (b) with how we’re looking in terms of overseas adoption (a) “was in accordance with the law of that place and is legally valid;”. I guess the question is: let’s say we have a child whose nationality is from Angola, but the child habitually resides in Portugal. Does the Minister have any information, or through the officials, on what, then, happens in terms of adoption process of that place? Because, technically, under this legislation, the child residing in Portugal would meet the requirement, but if the child’s nationality is Angolan or is not Portuguese, then would that, then, matter to the law of that particular place when you are looking at adoption? Would the law of that country—i.e., in this example, Portugal—allow for the adoption by an overseas parent of a child in Portugal but who is not Portuguese? Would that be something that is allowed?

I guess some of the examples that I will be using as part of the committee stage are just to mainly understand some of the processes around the decisions that have been made and making sure that we have, in Hansard, some of the Minister’s intentions. I know that the Minister in the chair is one of the most thorough Ministers when it comes to responding to questions, so I would really appreciate the Minister’s response to that.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair. Thank you to the members for your questions. I’m going to try and attempt to answer your questions and maybe give a bit more, because some other members had asked questions through the second reading, and the first reading as well.

When I was asked about overseas adoptions and the process undertaken for the exemption list and queries, I’ll answer now about how we got to that list, and why some are off and some are on. The officials had gone through the list of those that had signed up to the Hague convention, and so they automatically go on. But then, we have to have a look at whether or not certain countries had had concerns raised about their adoption processes; and there are a number of them—not a lot, but there are a number of them—where other countries have said, “We have concerns about how they are doing their adoptions.”, so we’ve left them off the list.

There are also a number of countries signed up to the Hague convention who have a self-imposed moratorium on adoptions, and that could be for reasons such as war or some other reason where they don’t want to see their children adopted overseas. So they too have been left off the list of exemptions.

A comment was made that there were countries who had not signed up to the Hague convention who were on the list. There is one country on the exemption list that is not signed up to the Hague convention, and that is Tonga. The reason why we have signed them up is because they have a Supreme Court process in place and information-sharing agreements with Oranga Tamariki and New Zealand Police to make sure or ensure that the potential adoptive parents are fit to adopt these children and don’t have some of the heinous crimes behind them that we have been made aware of. So that’s how we got to that list that you currently have of 86 countries.

I will also note—in case you ask—why, when you look at India, it refers to a certain piece of legislation that we would exempt. That is because India has two pathways for adoption. One is recognised as being robust, and that’s the one that we will exempt adoptions from. But the other one has had concerns raised about it. So instead of saying we don’t want to exempt India, we are saying that we will exempt them if the pathway used is one that we can verify; but we cannot accept the pathway where it’s not. I can answer more questions, if I have not fully addressed that for you.

The member Duncan Webb also asked about the new definitions, and it is confusing—it is confusing. I’ve spent a little bit of time myself trying to get it into my head about how this will operate, but, effectively, the suspension is going to apply to New Zealand citizens living and habitually resident overseas. Now, there’s a thing here about the wording. I originally had wanted to use those that were “ordinarily resident” but actually got told I can’t use that word—or I shouldn’t use that word—because “habitually resident” works better and there is a definition for that in other legislation, so we have used habitually resident.

We’ve also looked to put in a definition of what overseas adoption means, to clarify this for those that will get confused, so the overseas adoption means an adoption, in any place outside of New Zealand, that—(a) [is made] in accordance with the law of that place”—so not here in New Zealand but in that country, overseas. It gives the adoptive parents a greater right than the birth parents to day-to-day care of the child, or would have if the adopted person was a child; and is made either by the order of a court or judicial or public authority in a country specified in the bill or prescribed in regulations or gives the adoptive parents rights to the adopted person’s property equal to or greater than the rights of the birth parents, if the adopted person dies without a will. So we’re trying to make a definition on what overseas adoption means, in an effort to make it clearer. I think I’ve answered it.

Hon CARMEL SEPULONI (Deputy Leader—Labour): My questions follow on from the first and second reading, and some of them, I think, I traversed in some way. I’m specifically wanting to know from the Associate Minister of Justice—because this is a serious decision to preclude countries from adoption, even if it is just for an interim period of time—whether or not the New Zealand Government has had discussions particularly with the Pacific countries that are impacted by this legislation and what the nature of those conversations were.

I also want to return to the question that I asked in the second reading, which was around exceptions. For those families that clearly have had adoptions under way in advance to this bill coming to the House—will they be considered for exception, despite the fact that they are not coming from the exempted list of countries?

Alongside that, I’m wanting to know whether or not the Minister will be including in her exception list those that may have siblings where the intention was clear that they would also be adopted by a family member here in New Zealand.

My third question is just around the precedent. Because this has come to the House so quickly, and we haven’t had a chance to do our own research on this, I’m wanting to know what the precedent is in comparable countries. For the countries that we have specifically excluded in this operation—whether or not there are strict measures in place where they can’t actually adopt in between countries, so I’m talking about the US, Canada, and Australia; or whether or not this will be much more stringent than what we see in other places. I’m wanting to understand what the international landscape here is for adoption in light of the legislation that we have had brought to us in urgency.

Hon NICOLE McKEE (Associate Minister of Justice): I thank the member for her questions. In answer to the first one, about discussions with Pacific countries, there has been ongoing discussions with Samoa. We have ensured that we have been able to work with them to try and find a solution. It has not been fast, and the reason why is we’ve had Samoa have a change of Government and try and get their feet under the table. We have been there, trying to support them and offer them assistance so that we can help them get on to the exempt list.

I had mentioned Tonga had a Supreme Court ability and information sharing that is really robust. Officials are trying to work with Samoa to work through the issues that they have so that we can open up a pathway, again, for Samoa to come through. We have not gone out and done extensive consultation with all Pacific countries for a couple of reasons. One is that there are over 1,000 children that are adopted into New Zealand using the international adoptions pathway every year. We had concerns that those with heinous thoughts or intent would then find out what we’re doing and start applications for adoption.

In answer to the member’s second question, about those that are already under way and in process that are not from exempted countries, they will not be affected. If they have already started their process, their process will continue. There is no intent for this to be retrospective. It’s about moving forward. I understand concerns about the other countries, but this is our country and our problem with section 17. We’re actually enabling New Zealanders, with residency or citizenship, with criminal intent and criminal backgrounds to adopt these children. I’m stopping and fixing, hopefully, section 17 to immediately address that and stop that from occurring.

Part of the reason why we wanted to ensure that we make some of these subtle changes to the Family Court process, which is section 3, is so that the Family Court also did not get flooded with applications. Once those applications are under way, they will continue, which is part of the reason for going under urgency.

When looking for precedents in comparable countries, I was actually more focused on what we as a country were enabling and how we fix that. When it comes to a long-term solution and what we land on there, I don’t know what that long-term solution is yet, but my expectation is that we will go through a select committee process; we will have those robust discussions; and we should make sure that we have clarity, because, with our Pacific brethren, we share our whānau backwards and forwards. We want to make sure that we can continue to do that but that the children are safe.

VANUSHI WALTERS (Labour): Thank you, Mr Chair, and thank you to the Associate Minister of Justice for your answers thus far. I am looking at clause 4, so I’m still on the definitions, just trying to understand the scope of “overseas adoption”, for a start. Under the definition of “overseas adoption”, we have, in (b), in the last sentence, I’m just trying to understand the intent behind why the use of words “or would have afforded such a right if the adopted person were a young child;”, and whether that is to include 16- to 18-year-olds who might have different rights in respect of their natural parent in a home country, and attached to that, just a question about what impact the Minister understands that a pause for a year might have on that older cohort of potential adoptees on the basis of data that we have for previous years—so whether that’s likely to impact a particularly sizable group or not. I must admit I don’t know the rules around cut-offs here, so I haven’t checked against the primary legislation to see if there are already restrictions in terms of who counts.

The second question was in regards to the whole part of (c)(ii), under the definition of “overseas adoption”. I’m just trying to understand in which scenario you wouldn’t have an order of the court judicial authority in one of those countries, including a prescribed overseas country, and you would need to rely on that second option, which is whether the adoptive parent immediately gets this “legal right over the adopted person’s property equal to or greater than the right to the property of [the] natural parent or the person,” in certain circumstances. I would have thought that (c)(i) would cover precisely what we needed to cover.

The last question is not the same question as Lawrence Xu-Nan asked, but it’s attached, and it’s about the understanding of what we mean by “ordinarily resident”, which is used in different places in the bill—so just whether the intention is that there will be one common understanding of what that means for children overseas but also what that means for New Zealand residents. One example of that is in clause 6, but if the Minister could speak to that as well.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair. To the member: I’ll get some advice on the later part of those questions that you asked. But for the first one, I’m advised it is because they might be an adult at the time that they seek to have the adoption recognised in New Zealand. I’ve also just been made aware, to member Carmel Sepuloni, of other countries—the comparative. I’ve just been told that Australia do not automatically allow children adopted overseas by Australians to enter into Australia. Also, in relation to habitually resident, I’ve been told I need to correct myself. We are using “habitually resident” only in relation to Hague convention adoptions, and those Hague convention adoptions that Oranga Tamariki supports will continue. “Ordinarily resident” is used in the context of the jurisdiction of the Family Court.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Chair. A couple of things: in the Attorney-General’s report—I know Lawrence Xu-Nan mentioned this—there are a number of redactions, and one of their redactions is the evidence underpinning the bill. It’s redacted under section 6(a) of the Official Information Act, which is defence and security, which seems a little odd because child adoptions—there are other redactions which I can understand, which are to protect confidentiality with foreign States. I’m just wondering, in terms of the evidence—and presumably, it’s evidence about overseas countries—whether the Minister can give further information. I also see the Cabinet papers referred to in that document, and, of course, we haven’t seen the Cabinet paper—another document we haven’t seen—and it would have been good to see that.

The other point I’d like—actually, I’ll go straight to the transitional provisions, which are new section 2A, which then refer to page 12—in my notes—which is going to be in the Schedule. You know, another great Parliamentary Counsel Office innovation: to have to run between different parts of the legislation! You’ve referred to situations where people in New Zealand have an application and said, “That’s OK. They’ve got their foot in the door; they can proceed with that.” But my note here is: what about where an application for adoption overseas has been made? Will we be treating overseas adoptions—because, as I read the transitional provisions, if you’ve made an application for adoption in New Zealand, you can see it through and get the rights of citizenship as if the law hadn’t been changed, but if you have made an application for adoption overseas, that’s only going to be effective if the order is made before this Act comes into force. So you’ve got a mismatch between an adoption within this jurisdiction and an adoption in another jurisdiction. I guess I just want to ask: is that what you’re doing, and, if so, is that justifiable? That’s my first question, and I will go to my next one.

You might have seen that there’re a couple of Amendment Papers on the table, and I guess I’m concerned that—and I say this with respect—you have taken an offender-focused approach here and said, “Let’s crack down on these bad people who are exploiting children”—and I understand that—rather than taking a child-centric approach. That’s why, in terms of in clause 6—the extraordinary circumstances test—I put in an Amendment Paper that says, “Let’s not say there are exceptional circumstances that justify the make of the order; let’s just say it’s clearly in the interests of the child to make the order.”

Now, had this been in select committee, you know, we would have nutted this out around the table, and we would have talked about the words and whether “clearly” is the right word or just “in the interests of the child”, or whether that just doesn’t work at all and some other formulation is needed or, in fact, whether “exceptional circumstances” is best. But the problem with “exceptional circumstances” is that it doesn’t recognise the centrality of the child. I do think that if there’s an adoption order being made, the real question should be: is this child safe here? Is this situation appropriate and legitimate and, in fact, better than the situation they’re currently in? If we can meet that test and say it’s clearly in the interests of the child, then we’ve kind of met the kaupapa of the Convention on the Rights of the Child. So that’s my suggestion.

It may be that the Minister, or her officials, accept the principle that the child’s interests should be paramount, which is straight out of the Care of Children Act, but they think they should be expressed differently. It may be that you want to cross reference other legislation, but I do think that the threshold of “exceptional circumstances” is both unclear and kind of expressly putting the bar not just high, but very high. That’s the whole thing about exceptional; it’s very high. I’m not sure that that’s what we want to do. Now, this will create work for judges, and I know the Minister for Courts wouldn’t want that to happen, but it’s an important point, and I would invite the Minister to consider that.

Hon NICOLE McKEE (Associate Minister of Justice): I’d like to thank the member for his thoughts on this and, also, for presenting Amendment Papers for what he feels will be in the best interest of the child, and doing it under urgency. I do appreciate that, and I thank you for that. However, we won’t be supporting it, and I’ll outline the reasons why.

When we’re looking at exceptional circumstances, it’s really important that they are able to be determined on a case by case basis and by the judiciary. If we start putting too much around what is exceptional, we then take away the ability for the judiciary to be able to make those decisions themselves. An exceptional circumstance has to be determined on that case by case basis. The bill itself provides examples of what would indicate exceptional circumstances in this situation—for example, where both parents of a child have passed away and the only family member that’s alive is here.

So we’re wanting to make sure that it’s a deliberately high threshold so that the Family Court can make the adoption orders when the parents are anywhere in the world or the child is anywhere in the world for those legitimate types of adoptions. It’d be unusual for the court to make orders that apply to children who don’t live in New Zealand. As New Zealanders, we wouldn’t take it quite lightly if overseas jurisdictions were trying to tell us what to do, either. I consider it’s entirely appropriate to limit the Family Court’s jurisdiction but also give them the ability to be able to see or determine themselves what those exceptional circumstances might be. So that’s why we are going to not—well, I don’t intend to support what you have in there, and that is the reason why.

Also, you asked about the New Zealand Bill of Rights Act content being redacted. The changes that we’re making do have an impact on foreign affairs, and we’ve been very mindful of these impacts—how they are and who they affect—as we start to develop the bill. So it’s really important that I don’t comment on what’s been redacted; it’s been redacted for a reason, and, therefore, I’m just unable to speak to what it is that you can’t see.

Hon CARMEL SEPULONI (Deputy Leader—Labour): I asked earlier whether or not children who were on the verge of being adopted, if that was on track, would be considered in exceptional circumstances. I’m wanting clarity from the Minister. There will be some families who are, perhaps, going through the process of it being considered by the Family Court but for whom it hasn’t yet crossed the line. As soon as this passes, if it hasn’t crossed the line, does that mean that their case is shut and that they will not have an opportunity to relitigate their adoption case until new legislation is put in place? That’s my first question.

My second one is in relation to something that the Minister for Children said earlier which is quite concerning. Again, it would have been something that we could have fleshed out in more detail in the select committee process, but we haven’t had an opportunity to do this. She mentioned that even when Oranga Tamariki were aware that the adoptive parents were a risk—perhaps they had a criminal record or a record of child abuse, in some instances—they could not influence the adoption. I want to know if that was indeed the case, because that’s something for us to all be concerned about. But I also want to know from that Minister: did that also mean that if the adoption went ahead, Oranga Tamariki were not able to provide some oversight or protection or care for those children?

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair, and thank you to the member Carmel Sepuloni for her questions. In answer to your first question, if there is a process already under way and if the adoption process has been filed in the court, it will not stop. It’s going to continue. All of those that are under way or are in process will continue, and none of those will be stopped. This is about new applications for the immigration and residency pathway using international overseas adoptions.

The member also asked about Oranga Tamariki (OT) and their inability to influence. The reality is that when the adoptions are taking place in these overseas countries that are not signed up to Hague convention or information-sharing arrangements, OT have no idea that it’s even happened. If these children are being adopted in the overseas countries, OT are not aware of it until the children are applying for citizenship through Immigration New Zealand, and that’s the first time they’re being told that this individual has adopted these children. So the adoption has already taken place.

That’s why we have these exempted countries—the 86 on the list—because they do have approved pathways to ensure that the children are safe when they are adopted. But also some of them will have those information-sharing agreements, like with Tonga and New Zealand, where we can ensure that the right people are adopting these kids.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): I’m just going to note before I start that you gave a good explanation of Tonga. But I do note that both Japan and Singapore are not exempt, and it might be useful—both of which are highly developed nations with a good rule-of-law framework, and I’d be interested in an explanation as to why those countries are not exempt.

The other thing I’ll say here is that since you’re not going to support the amendment and you’re going to stick with the exceptional circumstances test, I think it’s really important that Parliament makes clear what is meant by that. I mean, I would have thought that a court approaching that question would absolutely say that, well, we should be addressing that in a way that’s consistent with the New Zealand Bill of Rights Act and also consistent with the international human rights of the child. It’s all very nice to have a couple of—and the Parliamentary Counsel Office always do this—blindingly obvious examples, right? What we need are hard cases, where it’s a tricky decision.

I mean, I can imagine a situation where a child is orphaned in an overseas country—perhaps a Pacific nation—and they’ve got a good number of family members in the UK and some family members in California, but also a knot of them here in New Zealand, perhaps in Auckland, where there’s a strong Pacific community. You might say that it’s not exceptional, but it’s pretty clear that the options before this child are best served by that child being in a place where that child can grow up closest to the community into which it was born. Now, is that exceptional? I think that’s a genuinely good question, because it’s not that there are no other family members, but it is clearly the best option.

What if there are family members in the home country, but there is evidence that there is abuse going on in that setting? Are those exceptional circumstances? Because if it’s not, we’re doing a bizarre thing in, essentially, not rescuing a child from an abusive setting when we could. Or what about a child that is, sadly, orphaned in a dangerous country, a country where there’s conflict—and we know of far too many of those. Now, there may be other family members even in that country who could look after the child, but you’re leaving them in a terrible and tenuous situation.

These are hard cases, and all of those, I think, are cases that could be framed as exceptional. So I would really invite the Minister to address those particular examples I’ve given you, but to also be quite expansive on what is intended in this bill by exceptional circumstances.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair. I would like to address the member’s first question, which is specifically about Japan and Singapore. What we have done is made sure that those that have signed up to the Hague convention that don’t have issues are on the exempt list; neither Japan nor Singapore are signed up to the Hague convention, so that is why they’re not on the list, but I think I’ve traversed that. I’ll make it really clear: we can pick countries left, right, and centre but the exempt list is a list of 86 countries who have shown that they put the wellbeing of their children first.

When it comes to—and I understand, as well, the member’s frustration about me not standing up here and giving you examples of exceptional circumstance. It is not for me to pre-empt what a judge may hear and then determine. If I start making comments on what I think exceptional circumstance could be, I may end up leading a judge to make a decision, and that’s not for me. I want them to be able to have the freeway to be able to determine, themselves, what will be exceptional.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): I’m just going invite the Associate Minister of Justice then, if she won’t respond to “What about these examples?”—and I get it—will she give a non-exhaustive list of considerations that she thinks might be relevant to be weighed in the balance, either pro or con in terms of exceptional circumstances? I do think that we’re doing a disservice if we don’t give all of the guidance we can to the courts, who will be tasked with this job.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair. I’ve just been reminded about thoughts we need to have about countries in conflict. Often, countries where there is conflict, they don’t want their children to be adopted, and they may be on the Hague convention list. During conflict, there can also be additional risks, that adoptions are unsafe. There could also be the ability where something or someone needs to be moved quickly. So it’s really imperative that we allow our justice system and our judiciary to make the ascertainments and decisions of what will ultimately be in the best interests of the child, because that’s really what we all want to see.

VANUSHI WALTERS (Labour): Thank you, Mr Chair. I’m at around about the same place as my colleague—so on paragraph (1A). But my first question was about clause 6, section 3 amended, paragraph (1A)(a), which references international surrogacy arrangements as one of the carve-outs. The question is really in the context of something I mentioned earlier, which was the broader adoption review—so the bill that’s currently with the Health Committee. I had a very quick flick through the Law Society’s submission, which was looking at the definition of surrogacy and whether agreements needed to be signed off in terms of new artificial technology that’s been used before a surrogacy agreement was entered into. So my question is really around whether the Minister is satisfied that the current definitions are suitable or whether we’re taking this interim step and we’re really having to manage with the existing definitions that we have until those changes are made in the more substantive, longer-term adoption bill.

The second one—just touching on something that Dr Duncan Webb raised in terms of exceptional circumstances—I wonder whether the Minister considers that regardless of not specifying particular things to take into account, the principles of the Hague convention none the less apply. The reason I ask is because the legislation seems to be using the Hague convention as a benchmark of accountability. One of the principles within the convention is that principle of subsidiarity, which I mentioned earlier. That is the idea that, of course, a child’s country of origin must be given due consideration. So whether there would be an expectation that judges and Family Court Associates were turning their minds to that set of principles that the Hague convention is built on.

The final question is around the decision maker themselves. So it’s clear it’s a drafting decision and its principal decision in terms of including Family Court Associates as those decision makers or not. I wonder whether the Minister had considered the current powers of the Family Court Associates and whether, as an extraordinary power, this, kind of, sits outside the scope of what we would be asking them to do ordinarily, and, given the temporary nature of these changes, whether that should have been restricted to a judge’s power or whether there are time demands, or capacity demands, that would make sense to include Family Court Associates as well. Thank you.

Hon NICOLE McKEE (Associate Minister of Justice): Mr Chair, thank you. Thank you to the member Vanushi Walters for her questions. I’ll reiterate that surrogacy will not be affected through this temporary change that we’re making. This bill refers to the existing definition of surrogacy that we have. It’s used to exclude the international surrogacy from this suspension. So by using what we currently have, it means that we can exclude those overseas ones so that they can continue on their pathway without being affected. I’m satisfied that we do that there.

The member mentioned the Hague convention and the principles of the Hague convention, because we refer to the Hague convention. We’re referring to the Hague convention to enable us to get a list of exempted countries; otherwise, it would have been a blanket “no” to the world. We recognise that most adoptions that occur in New Zealand are adoptions where children are going to safe and loving homes, so we don’t want to put a big stop on everybody when we can use the convention to tell us and show us that countries are already abiding by what will be in the best interests of a child. So the Hague convention is being used for that aspect while we do work on that longer term. I hope my answer satisfies the surrogacy question.

KAHURANGI CARTER (Green): I have just had a look at the disclosure statement, and I just had a query around Part 1, clause 4, amending section 2. I know that we have been talking about the Hague convention, but I just have a short call just asking the Associate Minister of Justice to clarify. We know that the reason that this bill is coming in, which, as the Minister has said, is to close the dangerous loophole that allows adoption by New Zealanders who may have criminal convictions, particularly around sexual abuse and child endangerment. In the departmental disclosure statement on page 3, under “Part One: General Policy Statement”, in paragraph two, it says, “In practice, adoptive parents with criminal convictions and histories of abusing and exploiting children and young people have been able to adopt children and young people overseas and bring them to live in New Zealand.” So does that mean that Hague countries don’t do that? Because, obviously, if this is happening in New Zealand, then, potentially, it is happening in Hague countries as well. So I’m really interested to understand that so that we are making sure that we’re using a benchmark that actually is fit for purpose when we’re looking at these Hague countries.

So, yeah, if the Minister could just explain: do Hague countries already do this? Because, looking at the reasoning, it seems that New Zealand has not been able to do this. So, yeah, that would be great. Thank you.

Hon NICOLE McKEE (Associate Minister of Justice): I thank the member for her question, because it is quite a confusing topic. The Hague convention is probably what I would call our protector, and so it’s not that countries with the Hague convention are doing this. If we’re signed up to the Hague convention and the UK are signed up to the Hague convention, and if we were to do adoptions between our two countries, we have all these checks and balances in place because we’ve both signed up. But there are some countries that are not signed up, and because they’re not signed up and we can’t tell them how to do their adoptions, that’s where we have the issue. So the Hague convention has been used for the benefit of these 86 countries because that tells us that they are working appropriately and they do have the best interests of the child at heart when they consider the adoptions and then grant them.

I mentioned earlier that there are a couple of countries who are signed up to the Hague convention, but other countries have suggested that there might be an issue with their adoption process, and so we’ve left them off the list because other countries have identified that there could be potential issues. It’s part of the reason why we want that ability, and, actually, this was mentioned by, I think, Carmel Sepuloni earlier, about taking countries on and taking countries off and should we be doing that—what message does that send to those countries?

The intent is not to play whack-a-mole with any country; the intent is if another Hague convention country raises issues about someone else, we’d want to be able to take them off the list. If there is something that occurs that needs an immediate fix, or perhaps we get to a position relatively quickly with Samoa, we’d want to be able to put them on to the list so that we can reinitiate the adoption pathway for some of these children. The Hague convention is helping us to understand who’s got it right so that we can focus on those that we think we need to.

Hon CARMEL SEPULONI (Labour—Kelston): Kia ora. A very quick question: I’m noting that in the bill, the Minister has set out that there are around a thousand overseas adoptions that are recognised in New Zealand each year under section 17 of the Adoption Act. I’m wanting to still understand who’s mostly affected here. Of those thousand in most recent years, or even the most recent years, where did they come from? I’m wanting to understand the proportion of those adoptions that came from Pacific countries—Samoa—as granularly as the Minister can get so that we can understand the relationship and where these children have been coming from.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you. I’ll answer that one—just because I was meant to answer the member Vanushi Walters’ question—about the subsidiary. When considering adoption applications, the Family Court will consider it in accordance with the law in our Adoption Act. The judiciary, in practice, often considers Hague principles when the cases do have an international element.

To the member Carmel Sepuloni, yes, there are over a thousand international adoptions that come through New Zealand every year. The majority of them come from our Pacific nations, and just over 700 of them come from Samoa. The rest are scattered around the Pacific, and that’s not the only area, though. They are from other countries around the world. I don’t want to spend time focusing on those countries. I think it’s more important that we fix the legislative enabler that we currently have so that we don’t allow those that are not signed up to the Hague convention to continue until we find, at least, that permanent fix so that we can still continue to adopt our extended whānau from the Pacific into New Zealand.

Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Chair. I have a very specific question for the Minister, and that is in regard to one of the countries listed in Schedule 1AAB, and that’s India. The Minister confirmed—as I’m aware as well—that India is a signatory to the Hague convention, but that the specified piece of legislation under the exemptions list is the Hindu Adoptions and Maintenance Act 1956. I just wanted to clarify: this says that “India, if the adoption is not made under the Hindu Adoptions and Maintenance Act”.

So the exemption is relating to that piece of legislation or is it to the other one, which is the Juvenile Justice (Care and Protection of Children) Act, 2015, which is India’s other piece of legislation that governs adoptions, which is, I understand, a secular piece of legislation compared to the Hindu Adoption Act, which only relates to the adoptive parent being Hindu and the adopted child being Hindu? So can the Minister clarify whether this exemption is only for adoptions under the Juvenile Justice (Care and Protection of Children) Act, 2015 and the rationale or the difference between the two? I think the Minister mentioned that one is more robust than the other.

Hon NICOLE McKEE (Associate Minister of Justice): I thank the member for seeking clarification on those two pieces of legislation for India and which one’s exempt and which is not. You quite rightly mentioned that India has two adoption systems, and I’m satisfied that the Juvenile Justice (Care and Protection of Children) Act, which is India’s Hague convention implementation framework, provides the adequate safeguards that we’re looking for, for the care and protection of children.

Unfortunately, I don’t feel that the other system, the Hindu Adoptions and Maintenance Act, has the same safeguards to adequately protect the children and young people from harm. So that’s why, instead of just saying no to India, we’re going, “Actually, this pathway looks pretty good. We can see that care and protection there, so we’ll accept those.” But I cannot, hand on heart, accept the other without knowing that the care and protection is in place.

Hon JENNY SALESA (Labour—Panmure-Ōtāhuhu): Kia ora and ngā mihi Te Wiki o te Reo Māori—happy Māori Language Week, everyone. Thank you so much, Mr Chair, for the call on this, which is a really important bill. Can I first begin by thanking the Minister for all the work that she has put into this issue, because it is actually a big issue that should be addressed: the fact that the Adoption Amendment Bill is being used by too many people to traffic children. In some cases, as has been described in the media, children are treated like slaves in some of these homes and that is not a good thing for Aotearoa New Zealand.

My question, Minister, is with regards to clause 8, new section 27E(3), where it states that “Before making a recommendation under subsection (1), the Minister of Justice must—(a) consult” with a number of Ministers: the Minister of Foreign Affairs, the Minister for Children, the Minister of Internal Affairs, and the Minister of Immigration. Then, it goes on under paragraph (b) to say that you also have to have regard to the following matters: to a country’s regulatory regime to ensure that safeguards to prevent harm to adopted persons, and then, it lists various other points. My question, though, Minister, is: would this new system that’s being proposed under this new bill provide multiple loopholes or multiple categories that may create more confusion in the future? That’s my first question.

My second question—and you have traversed this and answered this for many other members of Parliament, but I’d like to ask, because there are not that many times that you hear your country of birth, Tonga, being talked about in an overseas Parliament in such positive terms. So if I can just go back to clause 4(1), which actually lists Tonga as one of the exempt countries in new Schedule 1AAB. You’ve explained that it is because of their Supreme Court system actually has a good way of ensuring that you feel that they actually have the safeguards that are appropriate for New Zealand adoptions. You also gave the numbers—that of the thousand or so adoptions per year, about 700 of those adoptees are from Samoa.

But if I can refer back to something that our deputy leader covered when she, I think, gave either her first speech or her second reading speech, where she discussed the fact that a few months ago, our Pacific caucus—actually, we have a few MPs, and I chair it for Labour, and one of these cases came through. I wrote to the Minister of Foreign Affairs and, basically, asked, “What is it that we can do as a country to ensure that we address issues?” I thank you, because you actually came in and had a couple of conversations with me to assure me that this work is actually happening behind the scenes. You, of course, didn’t tell me what the actual work was, but you just said that it is, in part, to address one of the questions that we asked, which was, if I can just reiterate: does the New Zealand Government have any plans to review our systems to ensure compliance with our own obligations under the Hague convention on adoption?

Because here’s the thing: the bill that we’re discussing right now is under urgency. We actually haven’t had the time to really get through and read the details and see exactly how it affects not just now but in the future. I can see that you’re wanting to ensure that you’re futureproofing, that adoptions in the future place our children in a much safer environment, but my question is: of the thousand or so children that have already been adopted, that have already come into Aotearoa New Zealand—I don’t know how many thousands that is over the many, many years—what about them? How are we as a country going to ensure that we don’t see these cases coming through the media? Because these children are already here. So I really commend you for the work you’re doing to futureproof the future, but my question is more about: how do we ensure that the children that are already here, that we don’t see so many more of them come through the system?

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair, and I thank the Hon Jenny Salesa for her constant work and for bringing this to the attention of Government as well. I know that it was brought to the attention of that member’s Government and successive Governments before. It’s a privilege to be able to stand here and say we’re finally going to be doing something. It’s overdue, and we’re determined to try and make sure that the care and protection of those kids is ultimate. It’s fantastic what Tonga have done with New Zealand to enable these international adoptions to occur between Tonga and New Zealand, and I commend both the New Zealand and Tongan Governments for getting to a situation where, under urgency, when we have a bill like this going through, we can exempt Tonga because of the exceptional work that’s been done there. I commend them for that.

The member asked me about clause 8. When the Governor-General is given advice to either put a country on or amend the exemption list, there are a lot of different Ministers that will be spoken to when deciding whether or not that country should be exempted or taken off the exemption list. I don’t believe that that’s going to create any loopholes at all. What’s become quite apparent to me is that different agencies over many years have heard different scenarios or different understandings about what’s happening, and it’s been very hard to pull everybody together to get a whole, holistic view of what is occurring. This has occurred now. It’s occurred, and so in order to make sure we don’t exempt someone or take somebody off when another agency may have information that we’re not aware of, that’s why we’re going to make sure that they are all involved when we make decisions on who is on the exempt list. So I don’t think it will create loopholes. I think it’s a really good safety measure.

I think that I have answered everything that the member asked. Please ask me again if I have not.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Chair. The heavy lifting here is done by new Schedule 1AAB, with the list of countries, and whilst this bill, it appears, will be in force only for, really, a couple of years, I think it’s good that we can have a much better approach to it. It’s still going to be possible to add to that list or, presumably, to remove, and that’s one question: can we remove countries from that list? If Parliament has put it there, can the Governor-General, by Order in Council, remove it from the list?

I see in new section 27E, in clause 8, that you’ve got the basis upon which the considerations are made, including an open-ended “any other matter the Minister considers relevant.”, and then there’s a list of people with whom the Minister must consult. I’ve got an amendment on this because I think we should add, there, the Children’s Commissioner, and I say that because Ministers are wise and all that sort of thing, but they’re not independent. Sometimes, they need to be told things they don’t want to hear, and Ministers tend to agree with each other a little bit too much, sometimes.

I would be interested as well to know whether the Children’s Commissioner was consulted about this bill, because she and her predecessors have been great advocates and great voices for children. I would have hoped that the Children’s Commissioner would have been consulted as to this proposed solution, and I certainly hope as we go forward that her office is closely involved.

But in terms of adding another country to the list, I would have thought that including the Children’s Commissioner, with her knowledge of the rights of children and the international framework, would have been a good addition to that list. The idea of having someone outside the executive, or a watchdog, if you will, being at least consulted—it doesn’t have any decision-making rights—would be a very useful addition. I’d be interested to hear if the Minister would consider that amendment.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair. In answer to the member’s question about the Governor-General being able to remove a country from the list or put a country on to the list: yes, the Governor-General will be able to do that by way of Order in Council upon receiving a recommendation from the Minister of Justice. This is why we have all of those other agencies or the Ministers involved, to make sure that if we do add or subtract from that list that we’re doing so with the fullest information that we have and not just one agency’s information.

The member has placed a tabled amendment on the Table about the Children’s Commissioner. I’m not supportive of having the Children’s Commissioner on that list. In some of these situations, the decisions may need to be made very quickly. If there is time, we expect to consult with others, if it’s appropriate, but where there may be a need for speed, we are not involving the Children’s Commissioner. I can also confirm that the Children’s Commissioner was not consulted on what we’re doing here; however, this has been happening for, actually, quite a number of years, and there has been extensive consultation papers that were developed in 2021 and 2022 that didn’t go anywhere. So there is consultation that has been developed in the past.

We are moving at speed here to stop any more children from being exploited, abused, or trafficked. We’re doing it as a temporary solution, not as a permanent one, but we have to say: this has got to stop now.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. I just want to say thank you to the Minister for your engagement, and I really appreciate your explanations around this. It has reassured, I think, a lot of us in terms of, particularly, the Hague convention. It’s been a great learning experience for me, from the Minister—thank you—as well as the Chair!

I have just two questions around overseas adoption. One of them is around the drafting and the other one is around a particular wording, before I move on to clause 7. So this is still clause 4, “Section 2 amended (Interpretation)”. I guess the drafting thing is around: under (1)(c)(i) there is a list of countries or public authorities, including “(A) a Commonwealth country;”, “(B) Austria;”, “(C) Denmark;”, etc. Noting that they are not the entirety of the countries, there is (I), which is “a prescribed overseas country;”. Can I check with the Minister on why those particular countries were explicitly named, as opposed to just having a blanket “please refer to Schedule 1AAB”, because all of the countries are there? It’s more of a drafting question. Or are there any specific reasons why it’s listed in that particular way?

The second question is around clause 4(1)(ii)(B), which is in terms of adoptive parents and also in terms of the adopted person’s property, “or greater than the right to the property of any natural parent of the person—”. In (B), it didn’t use the term that we have been referring to in terms of “habitually resident” or “of a particular country”, but is specified as “a national of the country”. I want to check with the Minister on whether the choice of “national” in that case—and, again, I might be answering my own question, so please just tell me if I’m answering my own question—is to do with the property right, and hence that’s why “national” is used as opposed to “habitually resident”. So those are my two questions. Thank you.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair. In answer to the question “Why do we have different rules for Commonwealth countries and some European countries?” The Adoption Act provides a similar process for recognising adoptions for some specified countries, such as Commonwealth countries and the United States of America. So it carries over existing law, but it has not been modernised. Due to the urgent nature of this work, these are continued within the bill. When we look to do that long-term solution or further work, we may look at whether or not these distinctions are still going to be needed. But at this stage, that is why we are distinguishing. I will sit down and find the answer to the second question.

VANUSHI WALTERS (Labour): Thank you, Mr Chair. My question is really on new section 27E. It’s a different suggestion than my colleague Dr Duncan Webb had, which in my view was actually a good suggestion, given the knowledge of the Children’s Commissioner.

I had wondered, firstly, whether the Minister had considered including a required consultation of the Attorney-General, just in light of the section 7 report that we’ve seen and the issues that do touch on discrimination or non-discrimination, that that is a useful check to have before there are changes that are made to the list.

The second question is in regards to new section 27E(3)(b), inserted by clause 8, where there are a number of considerations that are to be taken into account before there are any changes to the list. Under (b)(ii), it specifies “international adoption agreements, and the country’s record of compliance with those agreements”. In my view, given the subject matter that we’re looking at, it would be prudent to specifically include a reference to the UN Convention on the Rights of the Child, and it would just include a separate sentence at the end of that section on that.

I’m hoping to get you some amendments on both of those two proposals, Minister, if you would consider them. I think it will make what is quite an extraordinary power just one that is subject to reasonable yet robust checks in terms of the decision maker, in that case, turning their minds to the relevant things, but also the relevant risks in terms of the Attorney-General checks.

The final question I had was whether the Minister had considered limiting the powers. So regulatory-making powers are, of course, not unusual—they’re extremely common; fairly common in terms of adding new criteria, new things to be considered; and fairly unusual in terms of repealing or replacing things that were agreed through primary legislation. So I ask whether, at any stage, there was consideration of the Governor-General being able to do this by Order in Council, but only in terms of additions and not removals or any variation of that, or any further checks in terms of agreeing those Orders in Council.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair. I’ve been given a flurry of notes, so, hopefully, I will be answering all of these questions that have been placed to me. I’ve just been advised that the Children’s Commissioner has issued a press release, where she welcomes the changes and said that it is crucial that further work takes a child’s rights approach. Of course, that’s why we’re doing this in the first place: because of the children’s rights.

Again, we are using “habitually resident” only in relation to Hague convention adoptions, and those Hague convention adoptions that Oranga Tamariki supports will continue. “Ordinarily resident” is used in the context of the jurisdiction of the Family Court, so that’s why we’ve gone to “habitually resident”; there is actually a definition of habitually resident, which is also a reason why we’re using it.

The Attorney-General has considered justified limitations and does not consider it necessary to specifically consult. I do note, though, that the Attorney-General does put an eye over all legislation. Although the question was about the Attorney-General being part of the group of Ministers, I don’t feel that that’s necessary at that stage, because that’s actually bringing together all the agencies to determine whether or not a country is up to standard or not up to standard.

The Attorney-General will look at any proposals that we make in law and legislation; hence, the BORA vet that came out. My apologies for that being late, but the Attorney-General was overseas and was not able to look at it, so that’s why it’s come up on to the website at late notice.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. Thank you for that, Minister. I also just want to acknowledge the fact that I really appreciate the Minister for your statement before, about the New Zealand Bill of Rights (BORA) report and the BORA report being late. Even though it was late, I still very much appreciate the fact that we got it right after first reading. Again, I was referring to a previous bill, where we didn’t get it until after the third reading, despite having gone through committee stage. So it’s incredibly welcome, and I think it really helped us to have that kind of clarity and transparency, so I want to thank the Minister for that.

I also want to pick up on one thing. I understand the Minister in terms of the definition between “habitually resident” and “ordinarily resident”. I guess my question was, then, in clause 4, “Section 2 amended (Interpretation)”, in the definition of “overseas adoption”, the term was neither; it was “a national of the country”. So I was more wondering why “national” was used in that particular instance.

Moving on to clause 7, so “Section 17 replaced (Effect of overseas adoption)”, which is something I have signalled in my second reading that I want to ask the Minister around in terms of the changes to both the citizenship by descent but also in terms of some of the visas. I guess the first question around that is: this, I guess, applies where it is not a Hague convention adoption—I’m assuming this applies to a list of countries that are not in Schedule 1AAB. So, in those cases, then, someone from Aotearoa New Zealand can still adopt, but they just can’t come in or receive a visa to come in. I guess I just want to get that really basic clarification from the Minister that it doesn’t prevent adoption, just prevents arrival?

In those sorts of situations, what is the Minister’s intention around still allowing for that adoption but not for arrival? Is it still looking at it in terms of the protection of the child? I guess, by not physically being here, it makes sense, because then they’re not being subject to potential exploitation and etc., but where does that leave their adoption process and where does that leave that child in the country that they are habitually residing in? I just want to kind of get an idea from the Minister in terms of that thinking.

My next question, and it’s still around this—I want to refer to Schedule 1: that’s the transitional, savings, and related provisions. When we are looking at clause 4, subclauses (2) to (4) of that—and that’s to do with when we are in this in-between stage—subclauses (2) to (4) make a lot of sense. But there’s one part I want to check with the Minister. When we are looking at subclause (3) of that, which is when you have an application for a visa that’s been made before the first commencement date—so the child, then, for example, in that transitional phase, will receive a visa to come here, which means that the new section 17(3)(b) doesn’t apply, but because of what we see in subclause 1AA(4)(2) of Schedule 1AA, they are not eligible for citizenship by descent.

So I just want to check with the Minister: in those situations, you have a child being able to come in on a visa, but they have no citizenship pathway, or—potentially—the only limitation to that child is citizenship by descent, but that child may still have access to, for example, citizenship by grant. Would that be a correct assumption? Those are my three questions.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair. I’ll take this opportunity to say that what also should be up on the Ministry of Justice website now are a couple of flowcharts [holds up flowcharts], because it is quite complicated, and I found that these really help to understand where you may be within the adoption process and what it means for you. I encourage the members to download these from the Ministry of Justice website, because it may just help to understand some of the complication. Because we have several different avenues for recognising the adoption: it can be done through citizenship, it can be done through immigration, and it can be done through the adoption process itself. We have so many sections within the adoption law that it makes it quite difficult to be able to answer to specific scenarios when they could incorporate different avenues.

People will still be able to go overseas and adopt children overseas in those overseas countries, but if they are not on the exempt list, they will not be able to bring those children back here to New Zealand with them. It’s the other countries’ courts that make the decisions on the adoption, and we often have no idea that it’s even occurring, so that’s why we’re temporarily stopping section 17 of the Adoption Act, which would allow these children to be brought into New Zealand. It would be worse to bring a child to New Zealand and into an unsafe family than to leave them where they are, in our humble opinion. Also, when it comes to the amended section 2 definition of the “overseas adoption”, the Adoption Act 1955 has that wording and we carried that over. We’re not going in to make changes in the Adoption Act; we’re just trying to do this very quick, urgent, temporary fix and utilise what’s already there in the legislation.

Dr LAWRENCE XU-NAN (Green): Thank you for those clarifications, Minister. Thank you for that—I’ll go and have a look at the Ministry of Justice website, and maybe, once I’ve checked the flow chart, I may have a question coming back, in terms of the question I have around section 7. But just checking—sorry, I stand corrected; I think the Minister actually answered all of my questions. Thank you.

Hon NICOLE McKEE (Associate Minister of Justice): I’ve just been advised that those flowcharts are not going to be up on the Ministry of Justice website until tomorrow. I’ve just asked officials if they could get some copies down and hand some to yourself and also to the Labour Party.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Just a short question. There’s been a lot of discussion about “habitual residents”, and then, in clause 11 of the bill, section 3 of the Act is amended, and it gives us the word “domiciled”, which is kind of an old-fashioned way of being habitually resident. I’m just wondering whether that’s intentional because it’s part of another framework or whether, in fact, it would be better to say, in that setting, “the child is habitually resident”, for consistency across the legislation. “Domiciled” is sort of a 1950s terms and has a fair bit of law around it, including being a little bit more than just resident; it’s about, kind of, your centre of gravity. It’s actually quite a hard question to answer. It’s where your family are, where your property interests are, where you pay tax, as well as where you live. It’s actually, I think, quite important in matters of things like cross-border taxation. So I’d be interested for the Minister to explain why we’ve got “habitually resident” in some parts of the bill and “domiciled” in other parts of the bill.

Hon NICOLE McKEE (Associate Minister of Justice): Thank you, Mr Chair, and thank you to the member for his question. This is reverting to the original 1955 wording. So we’re using “habitually resident” in the areas we are utilising or changing tonight, but then, when the suspension ends, it will go back to the original wording, which is “domiciled”.

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

Motion agreed to.

CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 6(1), new subsection (1A)(b), to replace subparagraph (ii) be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that the Hon Dr Duncan Webb’s tabled amendment to clause 8, new section 27E(3)(a), to insert subparagraph (v) be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

Part 1 agreed to.

CHAIRPERSON (Greg O’Connor): The time has come for me to leave the Chair for the dinner break. The House will resume at 7.30.

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

Part 2 Consequential amendments and revocation

CHAIRPERSON (Teanau Tuiono): The House is resumed. Members, when we rose for the dinner break, we had finished debating Part 1; we now come to Part 2. Part 2 is the debate on clauses 15 to 32—“Consequential amendments and revocation”—and Schedule 2. The question is that Part 2 stand part.

Part 2 agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

Clauses 1 and 2

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

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Teanau Tuiono): Madam Speaker, the committee has considered the Adoption Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Maureen Pugh): This bill is set down for third reading immediately.

Third Reading

Hon NICOLE McKEE (Associate Minister of Justice): I move, That the Adoption Amendment Bill be now read a third time.

At its core, this bill is about preventing the risk of significant harm to children and young people. While most children and young people adopted overseas and brought to New Zealand are adopted by loving families, some are subjected to neglect, abuse, or exploitation by those who should be caring for them. That our adoption legislation can be used in this way is unacceptable, and I cannot allow it to continue.

As I’ve noted, the bill amends the Adoption Act to immediately suspend recognition of unsafe overseas adoptions for citizenship and immigration purposes. This will prevent further harm while we develop a permanent solution to the problem. I’m pleased to inform the House that officials are already working on a permanent legislative solution. This temporary suspension will provide the time they need to ensure that this solution is thoroughly considered and that there is time for consultation and scrutiny.

I want to thank my ministerial colleagues for their support and engagement on this issue, with particular thanks to the Ministers of Immigration, Internal Affairs, Foreign Affairs, and for Children, all of whom have been generous with their input. I also want to thank members for their time and focus during the early stages of this bill and for the keen debate during the committee of the whole House. I know urgency isn’t always welcome, but in this case it is entirely necessary. I thank members from all parties for working together to prevent the risk of future harm to children and young people. I particularly want to thank MPs from around the House who have spoken in support of this bill.

Before I close, I want to thank officials from the Ministry of Justice, the Ministry of Business, Innovation and Employment, and the Department of Internal Affairs, Oranga Tamariki, and the Ministry of Foreign Affairs and Trade for their collaborative approach to this work. I also want to acknowledge the Parliamentary Counsel Office for their work on the bill.

All children and young people deserve to grow up in a safe and loving family environment. This bill reflects the Government’s commitment to the safety of children and young people in New Zealand. I commend this bill to the House.

ASSISTANT SPEAKER (Teanau Tuiono): The question is that the motion be agreed to.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Kia orana and kia ora, e te Mana Whakawā.

We do support this bill, but I do want to just record a few reservations. First of all, in terms of process, I can understand why this bill’s been done under urgency. It’s one of those rare occasions where if you were to take a normal process with a select committee, there would be a rush for the court and the very evil that you were trying to avoid would be compounded. Having said that, having looked at the bill and understood as best I can in a short time the work that has been done to consult on it, I think more could have been done. It doesn’t appear the Children’s Commissioner was consulted. It doesn’t appear that communities were engaged, even without the detail of the bill being discussed, but in terms of how adoption works.

I do think that this is a blunt tool, and I know the Minister is working on a more permanent fix and this is a temporary fix, but I just want to recognise really that this will cause worse outcomes. It will protect a number of children and young people from genuine harm—I accept that, and I commend the Minister for that—but it will also lead to worse outcomes for other families who have been using this adoption process for entirely legitimate reasons and they’re now going to be shut out. So as a Government, you’ve chosen that path, and I’m not sure we support the overall intention. I’m not sure we’d have done it that way. I want to recognise that.

I do think that the workability of this bill, at least in terms of New Zealand adoptions, sits on the fulcrum of exceptional circumstances. It is my view that when the courts come to ask themselves whether there are exceptional circumstances, they should do that against the background of New Zealand law and our international obligations. New Zealand law and international child and human rights make it clear that the centrepiece is the interests of the child. I can understand why, in committee stage, the Minister didn’t rise to my bait, so to speak, of whether this case or that case was exceptional, but I think that the courts need to recognise that a case in which a child is worse off by an adoption order in New Zealand not being made is an exceptional thing. That if we can save a child from harm in another country or if we can put them in a family setting where their culture is recognised and they can be best nurtured, that is a good thing. To not make an adoption order in those circumstances should only be done where it must, and so I think we need to look very carefully at that.

The list in Schedule 1AAB is the other part of this legislation that really does the work. The Minister has to be careful with her words because this has international impact. There are countries which are not on that list, which we would perhaps expect to be on that list. Now, Tonga’s on that list, and we’re assured by the Minister that she is satisfied that the adoption procedures in Tonga are such that they can be relied upon. Yet there are other countries, other countries with very good rule of law, very good legal system—Singapore’s a good example, which has an Anglo-American style legal system; Japan has a civil legal system, but again, very robust, but not on that list. Now, it may be that there are international relations reasons for that and the Minister didn’t feel able to disclose those.

Certainly, in the Attorney-General’s report there are redactions there which were on grounds that you don’t see that often, which are based on protecting relationships with foreign countries and New Zealand defence and security. So I can accept that, but I do think we need to be very careful and that we should be absolutely open, Minister, if I may say, to adding to that list where we can reach a conclusion that those countries do have robust adoption systems which would be consistent with looking after children and putting them in the best family setting that we possibly can.

We do look at this bill and it is a little bit regrettable that we saw this bill in its final form because the kind of things that were raised in good faith at committee stage—but look, I’ll admit my amendments were cobbled together this afternoon because that’s when I saw the bill. Had we had, you know, either me as justice spokesperson or another of our members as an appropriate spokesperson, perhaps for children, engaged on it, that testing of ideas that happens here in this House and in select committee might at least have been mimicked in some kind of exchange. I accept that it requires a degree of trust, but I must say, I think that we can engage in those kinds of conversations. It’s perhaps a little disappointing that we didn’t.

This bill, you know—I don’t want to criticise drafting too much but—this bill is complex. It’s actually quite hard to follow the interplay between the Schedule 1AAB, the Hague convention countries. Thank you to the Minister for providing the flow chart, but I’m always a little—with respect to your officials who’ve been clearly working very hard—suspicious of materials provided by officials, which is kind of a shortcut to the legislation itself, because it’s not always actually accurate, and I’ve seen that myself. So we do need to be cautious and not take the flow chart as the final word. I do have some suspicion that once we throw this to the lawyers, and lawyers will be involved in this no doubt, that they will be looking at it and finding some inconsistencies, because even for myself, I still can’t quite reconcile all of the provisions of the bill and the interplay between overseas adoptions, Hague convention adoptions, and the provisions here in the way they’re amended. So it is yet to be seen exactly if this bill falls as it is intended.

In closing, I do want to say this: the adoptions that have led to this legislation are heinous. The suggestion that we should in any way tolerate adoptions which are intentionally exploitative of children and young people is to be abhorred. We absolutely oppose those, so I commend the Minister for taking action on it. We need to take every step in New Zealand, including in some senses reaching overseas where we can, and this is what this bill does in terms of reaching to non-recognition of overseas adoptions to stop those exploitative practices is entirely appropriate. I do think that when we come to this, and when we come to look at the further legislation that the Minister has prefaced, we must put children at the centre of the discussion. The only question is: what is in the best interests of the child? From that starting point we can answer the question of how we weed out adoptions which are illegitimate, in bad faith, and exploitative.

At the same time, we need to promote relationships and adoptions that enhance the welfare of children and that’s what this doesn’t do. It stops exploitative adoptions, but it doesn’t actually promote and allow those adoptions that do promote the interest of the child. So there is work to be done. I know the Minister said that the Children’s Commissioner was supportive of this legislation and I’m glad about that. That’s a good thing. But I’m sure the Children’s Commissioner will have much to say about how we can address this in a way that is both culturally sensitive and child-centric. So I look forward to this legislation being replaced with something that’s even better.

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Speaker. The Green Party support this bill in its third reading. I really appreciate the Minister for her engagement throughout the committee stage in clarifying a lot of the questions we had posed to the Minister during the first and second readings.

I think it is important to sum up some of the clarifications that have been provided as a part of that process, understanding that this bill came to the House under urgency in order to address a loophole in our current system that has seen harm and suffering of our tamariki as a result of the system that we have created. That is an important loophole for us to address.

But just going to some of the clarifications around the committee stage: in terms of the question that has been posed as a part of a lot of our contributions in the second reading which was around the countries that were included as a part of this, particularly around what is considered countries that have signed up to the Hague convention and countries where some of the Hague convention adoption works, and some of our collaborations and agreements within that convention. I think the Minister has explained, in terms of the reasons, why some of the countries were excluded, that may be a part of the Hague convention, due to conversations and reports of potentially problematic adoptions or concerns that have been addressed about those specific countries, so they have been left out. At the same time, there are countries—I think Tonga was the example that was given by the Minister of a country that isn’t part of the convention—that has been included as a part of this.

The big question that we’ve had during the second reading, and I think is something that was discussed at length in the committee stage, was around some of the other countries, Samoa being a really good example of that, where the Minister has assured us of the ongoing conversations and work that has been done with those jurisdictions to ensure that the adoption process is robust on both ends, to be included as a part of the list in the future. Because, again, in terms of the exemptions and the countries that are exempted under Schedule 1AAB, those countries can be added on, or hopefully not removed—but countries can definitely be added on by Order in Council.

The other key area I want to sort of draw attention to is something that we did discuss a fair bit around the definition of the terminology. I think particularly when we’re looking at the definition specifically around “habitually resident” and “ordinarily resident” as well as “national”. We are quite comfortable with the Minister’s rationale and explanation for a lot of these terminologies. I think particularly, when we’re looking at the definition of overseas adoption, I really appreciate the honesty of the Minister when it comes to that these are the terminologies that are being drawn from the existing legislation. There is bigger work—there’s more work to be done in this area, but for the interim measures, those terminologies and definitions are taken from existing legislation. So, again, really grateful for that engagement with the Minister.

The next thing that I think is worth mentioning, in terms of the conversations, is around clause 7, “Section 17 replaced”, particularly around some of the changes to the Citizenship Act 1977 and the Immigration Act 2009. I think those kinds of things, in tangent with, I believe, Schedule 1AA, do provide some clarification in terms of between the first commencement date and second commencement date. If the application is done before then, the application is done during this period and if the application is being processed after the second commencement date, i.e., as part of that bigger work that’s going to be done. Schedule 1AA does lay it out really nicely; however, I guess the encouragement now is—I understand there’s the flow chart that the Minister has helpfully provided for us, but how would that be communicated to the various communities in a culturally and linguistically appropriate way, to ensure that those communities actually understand some of those differences, in terms of the settings, between what is in the first commencement date and what is going to be in the second commencement date?

I think particularly that period in between those two commencement dates, where the ability for a child to have citizenship by dissent is being removed regardless of the commencement date. But the child having access to a particular type of visa and what potentially immigration pathways there are, going forward, that is something that we just have to wait and see how that’s developed. I think that is something—definitely if we’re going to be looking at a bigger piece of work—to consider and flesh out.

Now, there are definitely, in terms of the process, things that I would like to address and potentially recommendations as well. Noting that this bill has been presented to us in urgency, I mentioned in the committee stage that even though the consistency report with the New Zealand Bill of Rights Act (BORA) was presented after the first reading, we, nevertheless, had a copy of it by the time we went to second reading, which, again, was something that we didn’t get to see when we were looking at the Outer Space and High-altitude Activities Amendment Bill—that was a secret bill a few months ago. For that, I am impressed by the fact that we’re able to have something that’s available for this House and for the public reasonably quickly, considering the bill was only introduced at 3 p.m. this afternoon.

One of the things that is interesting within that—and I understand in terms of the magnitude and potentially legal implication—are the sections that were redacted as a part of that BORA report. Also, I think, you know, if we’re looking at—I mentioned it’s a great idea for us to be able to have access to the BORA report upfront and particularly during the committee stage. What we haven’t seen, particularly in the magnitude of a bill that is introduced under urgency that we’re seeing for the first time, are the other reports and assessments that have been done as well. In the future, if we do see a situation like this, that is an urgent bill and is unavoidable, I would really like to see a regulatory impact statement that comes along with this, and I would also like to see, when a bill affects the rights of the child, a child impact statement as well. I think that would just give the House more scope and better ability to be able to understand the full extent and the ramifications of this bill, if we have access to those documents.

I guess the other thing is that I would also like to commend the Minister on the transparency that has been provided as a part of this bill. I think the fact that we saw in the committee stage that the Minister was really open and honest about her contribution and responded to our questions diligently. Again, I want to thank the Minister for that and also for being able to proactively provide us this information, such as the flow chart, that will be available on the website tomorrow. I do appreciate the openness and transparency of the process.

The last couple of things, in terms of recommendations, in terms of the process, are—I did mention that this is something that has been alerted and the Government has commented on it back in May. If something like this does happen, where we are expecting to see something coming to the House under urgency, it would be really good to know that more consultations have been done with the relevant stakeholders—Mana Mokopuna being one of the examples that has been provided by the previous speaker, but also affected communities and ministries that are potentially being affected by this. I know there are a number of Ministers that have been named in the bill as ones that will be consulted as part of the broader project. It would be really nice to see them being consulted earlier on.

Finally, while we are putting this system in place—an interim thing in place—that will, hopefully, stop any future or further abusive or exploitative cases happening, we must always remember how we’re monitoring existing cases as well. I’m really looking forward to what’s going to happen on that front in the next step. With that, we do support the bill, and I do thank the House for their contributions.

CARL BATES (National—Whanganui): Thank you, Mr Speaker. Thank you to the House for the pace at which it has worked this evening in order to get this piece of legislation through. I thank the Minister and the officials in advance for the work that’s going to happen in the next stage of this process. I commend the bill to the House.

Hon CASEY COSTELLO (Minister of Customs): I rise on behalf of New Zealand First to speak in this third and final reading of the Adoption Amendment Bill. I think that we have summed up the perfect words earlier in the contribution, which is what is in the best interests of the child. I commend the Minister for doing exactly what was needed in the best interests of the child in the now, in the immediate. Rather than commentating and navigating the perfect solution, we have taken immediate action, and that was what needed to be done. We have been given clear assurance that not only work will be done, but work is being done to make that final position of where we need to be. It is critical at this stage that we put the child first; it is exactly what has happened. We need to put a stop to this and we’ve taken decisive action. I am proud to commend this bill to the House.

KAHURANGI CARTER (Green): I rise on behalf of the Green Party to speak at the third reading of the Adoption Amendment Bill. Let me be clear: the protection of children to be free from exploitation and harm is paramount. This bill takes urgent action to close loopholes that have, in the past, allowed exploitation, trafficking, and harm to occur. The Green Party continues to support this bill and raise concerns throughout the committee of the whole House stage. In good faith, we will continue to support this bill. I commend the Minister, for her mahi to halt these heinous crimes against children, and everybody who participated fulsomely in the committee stage.

Cases before the courts have shown that children can be brought to New Zealand through overseas and intercountry adoptions where proper safeguards are missing. We know of instances where adopted parents with prior convictions for violence or abuse were able to adopt children into New Zealand. This bill immediately suspends those intercountry adoptions.

However, urgency as a means to pass this legislation has its downfalls. This bill has moved through all stages in a single day without a select committee, public input, or an independent child impact statement. This would have given us a greater depth of knowledge and understanding into this bill. Questions do remain about whether all relevant consultations have taken place. Have Pacific Governments been properly consulted? Has the Ministry of Foreign Affairs and Trade been engaged regarding international and diplomatic implications? Have child protection experts and other agencies been able to advise on whether this is the most effective way to protect children?

While the intent is absolutely correct, the method must be assessed carefully to ensure it does not unintentionally harm children or families acting in good faith, making sure that kids that need a safe home in New Zealand are not left in crisis. Oranga Tamariki is already actively working with the Samoan officials through a cross-agency group to ensure that adoptions are in the children’s best interest. The Minister did answer those questions earnestly about how to work with Samoa to make sure that they can get on to this list and make sure that these kids do have pathways to these safe whānau here in Aotearoa. This includes developing an information-sharing system so that New Zealand courts can access relevant details on prospective adoptive parents, such as criminal histories.

We still remain concerned that the way this bill is being implemented may undermine the constructive work or the potential for safe, culturally grounded adoptions to continue where appropriate. We must also recognise the cultural significance of intercountry adoptions for Pacific whānau. Many Samoan, Tongan, Tuvaluan, and Kiribati communities have legitimate adoption practices that strengthen whānau, provide children with education and opportunity, and honour whakapapa, as the Ministry of Justice heard in 2022 during those public consultations. Stopping unsafe practices is critical, but we must be careful not to penalise families or children where safe and culturally aligned pathways exist.

This bill is an interim measure. It buys time to implement comprehensive rights-based reform of the Adoption Act 1955. The Green Party calls for, and will continue to call for, full replacement of outdated adoption laws centring children’s rights, safety, and wellbeing; strong, transparent safeguards against trafficking and exploitation, which I know the Minister is working on with her team; partnerships with Pacific nations, including robust consultation with Governments and community leaders; and recognition of Te Tiriti o Waitangi and Māori practices, including whāngai.

The Green Party supports this bill at its third reading while continuing to push for a system that keeps children safe, honours culture, and ensures their rights and wellbeing are centred.

RIMA NAKHLE (National—Takanini): Thank you, Mr Speaker. I rise to contribute to the third reading in the Adoption Amendment Bill. Indeed, there’s a lot of parents that have adopted children that are the most beautiful parents one can hope for. But for those that are not, we need bills like this—anything and everything to protect children. I commend this bill to the House.

VANUSHI WALTERS (Labour): Thank you, Mr Speaker, for the opportunity to take a final call at the third reading of this bill, a bill which we are supporting. I might just go back to where I started at the first reading in terms of why this bill is here and addressing the very serious issues in front of us. A number of us in the House spoke to cases that had presented in the media of, essentially, adolescent young people who were in the most horrific of circumstances. I think, for me, what comes to mind is that while through the diligent work of the police and others those were cases that were identified, there may well be ones that haven’t been. For me, that is really what this bill is addressing. It is putting a pause on things so that we are able to get the settings right, because we recognise that once those young people are in the country, it is very, very difficult to identify who is at risk.

I spent almost a decade as a lawyer and then manager at YouthLaw Aotearoa, and our job was to provide legal advice to children and young people under 25. One thing that was very clear through that time was that some of the most vulnerable young people, who were subject to the most abuse, were the least likely to contact us. Even if they did, even if they were interviewed, they were the least likely to present their cases and raise issues with us. So if it’s possible to take a preventative approach, which is what the Minister is doing in this case, then I absolutely support that.

Colleagues have raised, as have I, issues of process and urgency, and I think those have all been raised in entirely good faith, because we do recognise that this is an important area for us to address. Like colleagues, I’d like to thank the Minister for her diligent answering of questions in the chair earlier this evening, which was comprehensive. No doubt there will be conversations to come. I appreciated her sharing that the Children’s Commissioner has released a press release in favour of the proposed change, but also her indication that officials are already under way drafting legislation. So we look forward to seeing what those changes are.

Just prior to the dinner break, the Minister also referenced this flowchart [holds up flowchart], which is two pages long. I think what many of us on the side of the House were trying to get our heads around were the particular circumstances for people and whether they would be included or excluded. This flow chart is excellent, this is very good, and I understand it will be on the Ministry of Justice website tomorrow. One thing I did notice, just reading through it, is—quite rightly so—at the end of many boxes it says “seek expert legal advice”. I did just want to acknowledge the many families out there who are wonderful potential adoptive parents who are diligently going through the process, who will be faced with this tomorrow and just getting their heads around what their position is. Hopefully, this will be somewhat of a support.

I indicated, in terms of the potential legislation that’s being drafted, some of the gaps that I saw in section 17 of the Citizenship Act. Dr Duncan Webb has referenced some of this as well. This is the best interests of the child test. I hope that there’s opportunity to include that in further legislation, along with an examination of the suitability of the parents and potential DNA testing where there is an assertion that the child is a blood relative of the potential adoptive family.

Through committee stage, I also asked whether the principles of the Hague convention—one in particular—would be involved when a Family Court judge or an associate makes a decision in terms of the exemptions. I would just suggest that there are other provisions that the New Zealand Central Authority is subject to under the Hague convention, that could also be useful, either to weave directly into legislation or into policy and practice. Just looking at a few in particular, there’s one around the exchange of reports from both sides where there isn’t a central agency present or perhaps one that’s not quite well set up yet. There is the specific decision by the child’s country to entrust a child to specific adoptive parents—so, obviously, quite a detailed agreement. There are assurances from both sides about permanent residence. There is something I mentioned earlier, which is the obligation to continually keep countries informed about post-placement wellbeing. The reason I mention that one is that I think there’s also an opportunity to bring some of these other countries who may not yet be signatories to the Hague convention into best practice procedure. This may be a way of doing that.

The last one is when the child is placed with prospective adoptive parents in New Zealand before it’s finalised, but it appears to Oranga Tamariki (OT) that the continued placement of the child with those parents is not in the child’s best interest. There’s an obligation, then, on OT to take measures as well. Having those sorts of agreements separately within legislation that none the less echo the methodology of the Hague convention seems to me to be a best-practice way to approach things, and, potentially, also just grow that best practice with countries that haven’t yet been in that space.

Over the dinner break, I did take a second look at the New Zealand Bill of Rights Act (BORA) a bit, and I really appreciated looking at it a second time because it actually really did reassure me, I think, in terms of identifying whether discrimination exists or not. The conclusion, although it could go either way, seems to be that it doesn’t touch the grounds of race or nationality and that it doesn’t touch the ground of familial connection. I can understand the argument as to why. Part of the benefit of reading at post-committee stage was I reflected on comments by Lawrence Xu-Nan, who asked specific questions about the location of the child and to what extent that was important in decision making, and said that it didn’t appear to him to be a question of nationality. I did think that was important.

There’s an interesting point in the New Zealand Bill of Rights Act, for those who are interested, about whether the Act actually applies to a child who’s outside of New Zealand. This is probably a broader question, but certainly some commentary has stretched into this space to say it does in certain circumstances, for example when our military are operating overseas. In my view, this would be a legitimate circumstance as well, because we would be recognising an overseas adoption of a child to New Zealand - based parents. So, potentially, there is some jurisdiction there, but I do think that those were fair conclusions for the BORA vet to draw. Probably the one comment I would have in terms of the vet is on page 7, where they look at the Order in Council provisions and suggest that is part of that reasonable limitation, essentially—that you’re asking for additional people to be consulted as part of that decision to alter the list and for certain things to be considered.

I had hoped that my colleague Dr Duncan Webb’s amendments would have made it through at committee stage, because I do think it would be useful to have the Children’s Commissioner there, the Attorney-General there, as a consultative as well as an explicit reference to the Convention on the Rights of the Child. However, I do see that there are provisions there, and, within the second point, where regard must be had to international agreements that the children’s convention can of course sit within that, it will be a matter of policy and procedure, really, to ensure it does.

My last point, because I think we spent a lot of time on it at committee stage, is on deciding when an exemption would be granted and the broad framing around that. I would just hope—and this possibly isn’t for the Minister but as a general comment—I do think it’s an impossibly hard task to be in the role of making decisions where there is a lot of discretion, and so I just hope that those judges, but particularly the Family Court Associates, will be given some training and support in terms of establishing what the parameters are and also whether it’s a high-bar threshold or whether there is more flexibility than the two examples that are provided. But thank you again, to the Minister, for your hard work on this. I commend the bill to the House.

TOM RUTHERFORD (National—Bay of Plenty): I commend the bill to the House.

Hon JENNY SALESA (Labour—Panmure-Ōtāhuhu): Kia ora e te Pika. Ngā mihi Te Wiki o te Reo Māori.

ASSISTANT SPEAKER (Teanau Tuiono): Tēnā koe.

Hon JENNY SALESA: I’m really honoured to be debating this third reading of the Adoption Amendment Bill—a really important bill—and, as members know, it is not often that we have such agreement in the House, especially under urgency, like this. I think one of the reasons why we are mainly in agreement is because of the issue that is being debated and because at the heart of this bill are some of our most vulnerable in our society: our tamariki—our children.

I’d like to begin, similarly to when I spoke earlier on, by commending and thanking the Associate Minister of Justice the Hon Nicole McKee for her work in ensuring that this bill is actually put before us in the House of Parliament. As you’ve rightly pointed out, Minister, this is an issue that all kinds of Governments of all colours over the past—because the Adoption Act is really old. The Adoption Act is from the 1950s, and so there have been many chances in the past to address this issue.

I’d also like to acknowledge the Minister of Foreign Affairs, the Rt Hon Winston Peters, because I know behind the scenes that he and the Ministry of Foreign Affairs and Trade have actually worked really hard on this issue. I know this because we, as a Pacific caucus, wrote to him that this is an issue that gets covered in the media when adoptions are not quite the ideal that we see. As we know, adoptions are something that are used by many families, and most of the time those adoptions are really good. We adopt our nieces or our nephews, and they come over from overseas and have a better life and better access to education. But, as we know from some of the cases that are covered in the media, this is not always the case, which is why this legislation, the Adoption Amendment Bill, is so important to debate in the House.

As you know, Minister, we do have some reservations, which our justice spokesperson, the Hon Dr Duncan Webb, has already covered. One of those reservations is the fact that it is coming through the House under urgency. One of the things that you said earlier on, Minister, is that a more comprehensive adoption bill is currently being worked on, so we look forward to when that comes through.

The reason why we’re having this debate, and the reason why I believe that we must have this debate, is because behind every clause of this bill lies a child that deserves our protection, a child that deserves our advocacy as members of Parliament, and a child that deserves our unwavering commitment, regardless of whatever political colours we wear, because all of these children need to be safe, and their wellbeing is actually at risk when adoption laws are not as ideal as they should be. We support this bill because, unfortunately, children are being trafficked, children are being exploited, and children are being abused through the loopholes in our current adoption system.

One of the things that I also wanted to cover is the fact that in Labour, one of the things we’ve valued over many decades is the fact that people matter more to us than property, and children matter most. I’m not going to give the examples of how this has been central, but I do want to cover some of the cases that, unfortunately, have come through, and I’m not going to say the names, because there have been many cases in the media.

One of those adoptions that stands out for me is a case where a person with previous convictions for violence was actually able to adopt three boys from overseas and bring them to New Zealand. What followed was a year of horror: a 12-year-old boy was withdrawn from school and held as a domestic servant, children were forced to work in fields without proper medical care, and there were children who were so desperate that they scaled tall fences at night to escape.

The question that we should answer as members of Parliament is: how did our New Zealand adoption system even allow this to happen in the first place? That is why the answer, in its devastating simplicity, is that the current Adoption Act of 1955—which is older than many of us in this House—absolutely has to be amended. So I commend this bill to the House.

NANCY LU (National): Tēnā koe e te Māngai o te Whare. Ka tautoko i te pire ki te Whare—I commend this bill to the House.

GLEN BENNETT (Labour): Kia ora, Mr Speaker. Thank you for allowing me the opportunity to speak and take some time to reflect on what this piece of legislation is about, talk about how we got here, and talk about the implications and the impacts that it will have in terms of our society as we move forward.

Of course, legislation and society are always moving and changing, and when you look at legislation from 1955, obviously, the world was different back then. The way people even got around the Pacific, let alone around the world, was different back then in terms of boats and planes and that type of thing, and the connectivity and the connection that the world has now is very different to what it was back in 1955, when the law that’s being amended tonight was put into place.

I was listening to some of the debate this evening and I participated in some of the committee stage, and so, as has been said, thank you to the Hon Nicole McKee for engaging. In Opposition, it’s one of those spaces where you actually get to eyeball a Minister and really critique and challenge but also help shape and ensure that the legislation is fit for purpose. It was appreciated from our side that you have participated all the way through.

As I was listening and understanding the arguments and looking at what this legislation stands for, it reminded me of the early 1990s, and for those who remember, the Berlin Wall fell and the Iron Curtain was lifted with regard to communism, and a whole lot happened at that time. I remember very, very vividly in the news, every other night it seemed, that there were stories about Romanian babies—stories about people travelling overseas to adopt children. Whether it was to New Zealand or all around the world, people were ending up in these spaces, and with as much love as a whānau and a family have to give—as has been said by many speakers tonight—we’ve always got to centre ourselves on the child. Back in the early 1990s, there were provisions put in place, and there were challenges to make sure that the children back then were protected. Again, tonight, as we move through all stages of this legislation, it becomes very clear that we need to have the child at the centre of the decision making and we need to protect them.

Now, I’m sure most people know that Gandhi spoke very clearly about how a society will be judged on how it treats its most vulnerable, and a small baby or a small child represents that most vulnerable. Yes, there are questions and, yes, there are things that we’ve critiqued and, yes, we’ve pushed back on why we need to go through so quickly, but, if it comes back again to how we treat our most vulnerable—that small child—then we, on this side of the House, have to step up and stand up and say that, yes, we will support this legislation. As the Hon Dr Duncan Webb, our justice spokesperson, has said, there are things we want to continue to discuss and to talk about. On the front page of the amendment bill, it says that these are temporary amendments, and so we look forward to seeing how we move forward with them.

Again, 1955 was a long time ago, and the world was different, as I’ve already said. But also, families and whānau were very different back then, as well, and the make-up of a family today can look quite different to what it was back in the 1950s. Therefore, it is important for us to move and to come to a space where adoption is just part of everyday life. In Aotearoa, often, children are whāngai-ed to whānau and there’s foster care, and there are all types of family make-ups in what they look like. In many ways, this is no different, because it is looking at what it means for someone to adopt a child and bring them into their home but also bring them into New Zealand, and there is how we make sure that they are protected. It’s not just that momentary moment of signing a piece of paper and allowing them access, but it actually is around how, once a child is adopted and is in Aotearoa, we make sure that they are protected and looked after.

Now, I take my hat off to families who put themselves out there to adopt. It’s not easy. Within the New Zealand context, it’s not easy, but then if you bring in different cultures and different parts the Pacific, definitely, it can be a challenge. Therefore, as we support this legislation and as it passes through all stages this afternoon and this evening, we want to make sure that the Minister is focused on making sure that that this isn’t the end; this is just the next step. I guess it’s a stop-gap measure right now to ensure that the legislation can continue to be shaped and moulded so that it has longevity and it keeps everyone safe.

Having a look at the legislation, there are things that happen and things that go on in the everyday world and you don’t realise, and so it’s fascinating to see that there are around a thousand overseas adoptions that are recognised in New Zealand each year under section 17 of the Adoption Act. It’s always fascinating to see what goes on, especially the fact that there are all these people engaged in making sure that they build family and they build connection.

Now, as has been said and as is in the explanatory note at the start of this bill, the aim of this is to prevent the harm to children and young people who are adopted overseas and are brought back to New Zealand to live. Because I’m a visual person, I like to have a look and spend some time going through the flow charts that have been put together around this legislation that go through the New Zealand Family Court. It’s really helpful just to look at the ways and means to make sure, again, that we not only protect the children but we also protect those who are making choices on behalf of them, and we see that there are different ways and different methods that need to be taken and flow charts that need to be followed to make sure that it is done right.

The Adoption Amendment Bill will pass tonight. There are times when politics do need to be put aside, and, as I said at the start, we need to make sure that our children are at the front and centre of that. It is good to listen to the speeches, listen to the intent, and understand why it is we’re doing what we’re doing tonight. For us, we want to make sure that children are front and centre. We want to make sure that the New Zealand law has checks and balances in place that will protect people.

As always with any legislation, we often do things in this place not to celebrate our most able and wonderful people, but often we have to put laws and legislation in place for those who make choices that aren’t right, and so this legislation is to make sure that there are protections. This legislation is put in place to make sure that for those who do often want to rort or play the system, for those who do want to abuse the system or others, there is a stop-gap measure and there is something to protect our young people. We support this bill, and we commend it to the House.

GREG FLEMING (National—Maungakiekie): Tuatahi e mihi ana ki te reo taketake, ki te reo o te Whare, ki te reo o te whenua, ki te reo o te rangi. Ia wā ka rere te reo, ki a au, ka piki te ora, ka ara ake te wairua.

Tuarua, ko au te kaikōrero whakamutunga o tēnei pire e pā ana ki te āwhina mō ngā tamariki whāngai. Nō reira nōku te maringa nui kia tuku i a ia ki te Whare.

[First, I would like to acknowledge the indigenous language, the language of the House, the language of the land, the language of the sky. Every time that the language is used, to me, health is improved and the spirit rises.

Second, I am the final speaker on this bill regarding support for adopted children. And so it is my great fortune to commend it to the House.]

Motion agreed to.

Bill read a third time.

Bills

Defence (Workforce) Amendment Bill

First Reading

Debate resumed from 10 September.

ASSISTANT SPEAKER (Maureen Pugh): Members, we were up to call eight; that is the Labour Party call.

Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Speaker. This is the first time that I’ve spoken on the Defence (Workforce) Amendment Bill. It’s an interesting piece of legislation, and one that cuts across a number of core principles across Parliament, across the Defence Force, and, of course, around the right to strike.

Some may see this as a sensible thing, logical to those who might be involved in the Defence Force, but we’re talking about civilian staff who are critical to the operation of the Defence Force. We talk about this in education and in healthcare. In fact, part of the problem at the moment, through Government and its governance of this country, is that they have dismissed the value and the views of those support staff in both health and education—and, in fact, many of them have been laid off, and we’re starting to see the impacts of that, particularly across health. In this area of defence, there is an acknowledgment that civilian staff are critical—as we would know. In fact, if it wasn’t for them, then the defence of the bases that the military staff are in would be at risk, and many other support systems that, I’m sure, the other side of the House would know better than me.

What this does is, effectively, create a private army, because the Minister of Defence herself—or it might be himself; at the moment, it’s herself—would be able to authorise, in the event of strike action, the military personnel to step in. I think we’ve seen, across the globe, the dangers of the military stepping into what we would consider civilian operations, civilian responsibilities, and in fact the everyday operations of a normal community. When that occurs, it’s often in tumultuous times and times of internal conflict, which is pretty ugly.

What we’re talking about here is that when we have civilian staff—and I would say most of those working in the defence area, in the Defence Force, would be very, very responsible people, but if they get offered a zero percent pay increase and when the military personnel might have had probably a well-deserved increase, then what option do they have? In fact, at the end of 2024, last year, they had to take strike action to get the Government’s attention.

There is a process whereby the military could step in, where there is health and safety involved, to take over those roles and continue them, but the process is vetted by Parliament. I’d put to you, Madam Speaker, that that vetting system is appropriate for a country like ours that enjoys a very healthy democracy. In fact, we should fight very hard to ensure that those protections remain in place. This piece of legislation and the passage of it hands all that power over to the Minister of Defence.

I’ll read from the regulatory impact statement here that the Minister Judith Collins has reluctantly divulged—the Official Information Act, I’m sure, with some of it blacked out here. Can I quote: “The preferred option”—because, in fact, the Ministry of Defence recommended a tighter constraint on the Minister’s powers or the changes that were to be made to the existing legislation that does allow this to happen, but with additional checks; the Ministry of Defence was more cautious, but what we had was the Minister and Cabinet overriding it. “The preferred option”—this is Cabinet’s option—“would reduce the bargaining power of NZDF civilian staff taking industrial action, when compared to the status quo.”

This is just about union bashing. On the West Coast, when we would have people step in over the union, when a strike occurred, they’re called scabs. I would never want to call any of our military personnel scabs. But this is what would occur here at the Minister’s behest. I think if we were to ever create such terrible conflict, Parliament should authorise this; not the power of the Minister herself. This bill goes about two steps too far and, in my view and the view of the Labour Party, it is unnecessary.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Speaker. Look, I’m happy to take a call on this. I just want to pick up on some of the scaremongering we just heard there. This bill doesn’t propose to allow the Minister of Defence to bring in military personnel to cover any striking action. Anyone who was listening to the last speaker, the Hon Damien O’Connor, might think that was what was happening. But I just want to be clear: this is in cases where the New Zealand Defence Force’s civil staff are taking industrial action. Now, there is already power to do this in existing legislation. This is expanding that to allow for situations not just of health and safety, as it is currently, but for national security and to ensure core defence outputs can continue to be maintained through periods of industrial activity by their civil staff. That is what we’re looking to achieve here. It fixes an anomaly, where Parliament may not be sitting, and I think it is a practical change, so we support this bill. Thank you.

CAMILLA BELICH (Labour): Tēnā koe e te Māngai o te Whare i tēnei, te Wiki o te Reo Māori. Ngā mihi hoki ki te Whare e tū nei. Tēnā koutou katoa.

[Thank you, Madam Speaker, during this week, Māori Language Week. Many greetings also to the House that stands here. Greetings to you all.]

It is absolutely shameful that we are wasting our time by debating this totally unnecessary bill that takes rights away from New Zealand workers. Once again, a bill that limits the rights of New Zealand workers has been introduced by this Government to the House, and in very interesting circumstances, I have to say, because we were questioning the Minister of Defence under her other hat, the Minister for the Public Service, and we asked her: is she considering changing the right to strike for New Zealand workers? And she was very circumspect about that. She didn’t confirm or deny the fact that she may be doing that. But then when we come back to Parliament, we see this bill, the Defence (Workforce) Amendment Bill, limiting the effectiveness of New Zealand workers’ right to strike. These are not defence personnel. We are not talking about people in our military or people who have roles in our armed services taking strike action. No, this is when civilians take strike action.

This is what’s happening in the House today. Civilians taking strike action are being limited in the effectiveness of their work by this Government, and for what end? This, as we just heard the previous speaker say, is a law that already exists. In fact, it’s one that we traversed at length in December last year when the Defence Force offered civilian workers a zero percent pay increase. Unsurprisingly, they decided to take industrial action because a zero percent pay increase is not very satisfactory when you’re going through a collective bargaining round.

What happened then? The Minister came to this House, and she put this to the House, and we debated it. Obviously, that was a big imposition on her time, because this Minister has decided that spending that time justifying the use of defence personnel, who could be doing other work that’s important in the Pacific or around the world, into civilian jobs was not a good use of her time. Instead of just allowing that to take place, we had this bill.

What does this bill, essentially, do? It extends the period of time that the Minister doesn’t have to come to this House from 14 days to 30 days. What a petty little bill—a ridiculous thing to be spending time on that takes rights away from people, makes strike action less effective, means that any Minister of any party in the future can essentially send defence personnel into civilian work. My colleague on the other side said, “Oh, it’s not any work, it has to be for these very strict criteria.” Those criteria are so broad it could basically cover anything. If the operations of the Defence Force are under threat, then the Minister can deploy other workers into that position.

It is no surprise that we are seeing this type of action by the Minister. We know the Minister is considering limiting the ability of workers in other areas to take strike action. She will not deny it. Until she denies it, I have zero faith that this is not something that is under consideration. The fact that this bill is in this House tonight actually leads me to believe that this is something that the Government is considering doing in other areas as well.

So it’s no surprise. It’s no surprise when we see a Government that has actually made it harder for people to take partial strikes, meaning it’s more likely for them to take full strikes, meaning it’s more likely for this piece of legislation to actually come into effect. The Government is taking rights away from workers. At every turn, every sitting block, and every time we turn up to this House, another right is being eroded. This time it’s for the good people who work in our civilian defence force.

This is not something we can support, and I want to really want the Government to think about why they’re here when their priorities seem to be bringing tiny pieces of legislation that extend a power for two weeks to the House, wasting our time and taking rights away from the very, very good people who work in our Defence Force who have been acknowledged in this House a number of times.

I want to use my last few seconds to acknowledge the important work of the New Zealand Defence Force. They do a great job. They shouldn’t be sent in to do the work of striking workers by this Government.

DANA KIRKPATRICK (National—East Coast): Oh, well, wasn’t that a good go! Now, this bill gives the Chief of Defence Force the authority to act swiftly while still respecting workers’ rights. It’s about readiness, resilience, and putting people first. I commend the bill to the House.

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

Ayes 68

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

Noes 54

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

Motion agreed to.

Bill read a first time.

ASSISTANT SPEAKER (Maureen Pugh): The question is, That the Defence (Workforce) Amendment Bill be considered by the Foreign Affairs, Defence and Trade Committee.

Motion agreed to.

Bill referred to the Foreign Affairs, Defence and Trade Committee.

Instruction to Foreign Affairs, Defence and Trade Committee

Hon Dr SHANE RETI (Minister of Science, Innovation and Technology) on behalf of the Minister of Defence: I move, That the Defence (Workforce) Amendment Bill be reported to the House by four months and one day after the bill receives its first reading.

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

Ayes 68

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

Noes 54

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

Motion agreed to.

Bills

Local Government (Auckland Council) (Transport Governance) Amendment Bill

First Reading

Hon SIMEON BROWN (Minister for Auckland) on behalf of the Minister of Transport: I present the legislative statement on the Local Government (Auckland Council) (Transport Governance) Amendment Bill.

ASSISTANT SPEAKER (Maureen Pugh): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon SIMEON BROWN: I move, That the Local Government (Auckland Council) (Transport Governance) Amendment Bill be now read a first time. I nominate the Transport and Infrastructure Committee to consider this bill.

This bill is the most significant reform to transport governance in Auckland since Auckland Council was formed back in 2010—

Shanan Halbert: The only decent thing you did in transport.

Hon SIMEON BROWN: Oh, well, we remember “Auckland Light Fail” from the other side, don’t we? How did that go? How did that go? Well, we’re actually getting some stuff done on this side of the House. “Auckland Light Fail”, Mr Shanan Halbert. I know he was also the campaign director for that by-election, remember that? Another fail.

ASSISTANT SPEAKER (Maureen Pugh): Back to the bill.

Hon SIMEON BROWN: Anyway, this bill, of course, signals the Government’s commitment to improving transport in Auckland, working closely with Auckland Council, and ensuring stronger accountability to Aucklanders for decisions made on transport. The transport network in Auckland is struggling to efficiently and effectively move people and goods across the city. This undermines economic performance in our biggest and most important city. Some of my colleagues might disagree with that last line there, but it is the truth.

Many of the transport functions ordinarily performed by local authorities are currently the responsibility of Auckland Transport, a council-controlled organisation, governed by an unelected board. While a board can bring expertise to particular functions, locally elected members in Auckland are removed from transport decision-making. This is despite the fact that rates-funded transport expenditure is the largest component of the council budget.

Public accountability is also a key element in transport decision-making, providing strong incentives to undertake projects in a way that does not waste public funds and responds to public sentiment. Public trust and confidence in transport decision making in Auckland is low, with a survey showing just 32 percent of those surveyed believe Auckland Transport listens and responds to Aucklanders’ needs. So ensuring democratic accountability for decision making for transport in Auckland is a key element of these reforms.

The other key element is to establish a system whereby the Government and Auckland Council can work together in a long-term direction for transport in Auckland and align priorities. A key impediment to progress currently is the fragmentation of Auckland’s transport system. Governance, funding, and delivery are spread across Auckland Council, the Government, Auckland Transport, the New Zealand Transport Agency, and KiwiRail. There are duplicative planning processes without a coherent direction.

Auckland’s importance to our national economic goals in governance, and significant investment in transport, makes it essential to work with the council on a shared, longer-term direction. We need to work together to optimise our joint funding, maximise economic growth opportunities, and develop a shared view on different funding and financing—

Shanan Halbert: You cut their funding, Simeon. You cut their funding, in the millions.

Hon SIMEON BROWN: This is a guy who wants to interject, saying we’ve cut funding in Auckland when we’ve released the biggest national land transport programme in history, and we’re actually delivering things, unlike “Auckland Light Fail”. Of course, we remember, just before the last election, they were scrapping around going, “What do we do in Auckland? Let’s dream up a harbour bridge.” Well, we’ve been talking about and needing to get that done. Actually, they forgot they needed to do the geotech under the harbour, which is what this Government’s actually doing. Anyway, Madam Speaker, back to the bill.

ASSISTANT SPEAKER (Maureen Pugh): Back to the bill is a good idea.

Hon SIMEON BROWN: Back to the bill. I just enjoy the member’s interjections from the other side of the House, possibly a little bit too much.

Shanan Halbert: Tell them about your cuts.

Hon SIMEON BROWN: The whips are telling him to be quiet, and I know, Madam Speaker, you’re telling me to stay focused on the bill.

This bill is about making sure that we do work with the council. That has happened in the past. But, effectively, what this bill does is it formalises what the last National Government did, which was put in place the Auckland Transport Alignment Project, which was to bring the Government and council together for long-term planning, to make sure we have one single plan and a direction moving forward. That’s exactly what this piece of legislation does. It does it through establishing the Auckland Regional Transport Committee (ARTC). The new committee, called the Auckland Regional Transport Committee, will comprise of both ministerial appointments and Auckland Council appointments, will have independent chair, and will be charged with aligning Government and Auckland Council priorities and providing longer-term direction for transport in Auckland.

The committee will develop a 30-year transport plan for Auckland for approval by the Minister of Transport and Auckland Council. The plan will focus on promoting productivity and economic growth, efficient asset management, and maximising the value of public transport. The ARTC will also develop the Auckland Regional Land Transport Plan for approval by Auckland Council.

The bill also transfers most transport functions from Auckland Transport to Auckland Council. This includes shifting policy and planning functions, such as approval of the Regional Land Transport Plan (RLTP) and the Regional Public Transport Plan to Auckland Council. For too long Auckland Council has not been able to have the say it needs, as the one of the major funders, over the policy and planning decisions made by Auckland Transport. Auckland Council will also be responsible for delivering the transport capital programme and for renewals and maintenance of transport infrastructure.

Furthermore, Auckland Council become the road controlling authority for Auckland. Some people say: why are we doing this piece of legislation for Auckland? Well, we’re actually just aligning for Auckland what every other council up and down this country has—every other council up and down the country is the road controlling authority. We are aligning that for Auckland. Furthermore, we are going to be delegating to local boards some specific transport powers by this piece of legislation. Of course, when local boards were set up, under the last National Government, the entire intention was for those decisions to be devolved down to local communities so, again, local people could hold their elected members to account for those decisions.

Local boards will soon be able to make transport decisions on local and collector roads, including setting speed limits, closing roads for events, managing parking, and creating cycleways. And, of course, we’ve seen the infestation of speed bumps across Auckland—hundreds of thousands of dollars being spent on speed bumps. Of course, the only way we’ve been able to stop them is we get people like Sean O’Loughlin, in my electorate, who have to judicially review Auckland Transport to show that, actually, they haven’t been following the law.

Well, actually, we are going to be putting these decisions in the hands of elected members, and if you don’t like the decisions they’re making, you can vote them out. A philosophical approach to democracy, which has been around for hundreds of years, we are now applying back to these types of decisions.

Decision making on arterial roads and all roads in the city centre will be the responsibility of the governing body of Auckland Council. The governing body will also make all remaining decisions not allocated to local boards. A greater role in transport decision-making by local boards will strengthen democratic accountability and ensure that decisions are made closer to the community where local voices and expertise can be heard.

The bill transitions Auckland Transport into a smaller transport council-controlled organisation (CCO) focused on public transport services, which is critically important to moving people efficiently around our city. Streamlining the transport CCO will result in an organisation dedicated to providing high-quality public transport—the novel idea of making sure the buses turn up on time, making sure the train network maximises the investment that this Government and Auckland Council has put into the City Rail Link (CRL), making sure our ferries are operating to schedule. It is critically important that that is a singular focus of this new organisation, to deliver the reduced congestion that is critically important in our biggest city.

The bill contains transitional provisions that will guide the shift to the new arrangements while preserving the day-to-day flow of network operations and delivery of capital investment. The bill sets out that a six-month transitional period will apply, signalling the need for a timely transition while outlining the actions that must be taken for a successful transition. During transition, the transport CCO will continue with the existing operational functions of Auckland Transport until directed to stop by Auckland Council, enabling the current management of Auckland Transport to focus on delivering existing work until new arrangements are in place.

Auckland Council will also appoint a Transition Director, responsible for preparing and executing a transition plan. The transition plan will set out the transition approach and timeline, deal with employment matters, and outline how assets, liabilities, and contracts will be shifted to Auckland Council.

The Local Government (Auckland Council) (Transport Governance) Amendment Bill was the fundamental reset that the transport system in Auckland needs, that the people of Auckland have been asking for for many years, and will lay the foundations for a higher-performing system. Higher-performing transport is critical to our economic growth, critical to Auckland’s economic growth, and to the productivity of our biggest city.

I’m proud to be commending this bill to the House. I look forward to the submission process and the submissions from the public—from Aucklanders—around how it can be improved. But ultimately, this is the reset that this Government has promised. Now, we’re delivering, and I commend the bill to the House.

Hon CARMEL SEPULONI (Deputy Leader—Labour): Such short memories. Some of us were here in 2009, when the super-city legislation went through. Some of us were fighting against the many changes that that Government had put up, including the anti-democratic corporatisation of Auckland Transport that that side of the House had supported at that time. We were here when Rodney Hide brought his Auckland super-city agenda to the House, and that side of the House, at the time, were very supportive and voted us down on every single one of our amendments—I think there may have been a record number of amendments that were put up during the committee stage at that time. We were opposed to the anti-democratic establishment of the Auckland Transport council-controlled organisation that was set up under their watch. It’s only taken them 16 years to come to this House and say that they were wrong.

We do need to give a bouquet to the Mayor of Auckland, Wayne Brown, who has really led the charge on these changes. Fortunately—fortunately—in this particular instance, and there aren’t many of them, the Government has chosen to listen. They have chosen to listen to someone that’s not in their caucus or not making donations to them, perhaps.

We did not support the way that Auckland Transport was set up back in 2009, and now what you’ll find is that we will be supporting this legislation in the House. Every progressive, every Labour councillor in Auckland, is also supportive of this move.

We’ve been watching this closely. It’s good to see that Mayor Wayne Brown has had such an influence on this Government. We give all the accolades to him, not to Minister Simeon Brown. We support it because it reflects a clear request from Auckland Council for greater control over local transport decisions. This is about restoring democratic accountability and ensuring Aucklanders have a stronger say in how the transport system is run. The Minister himself said it in his speech: no other council in the country runs like this; every other council in the country has control over what happens in this regard, but Auckland Council had that taken away from them in 2009, under a National-led Government, when they pushed through the super-city legislation.

There are some concerns that the current model has not delivered the outcomes Aucklanders deserve, and this bill really is a step towards fixing the mistake that was made back in 2009.

Genuinely, on this side of the House, Labour supports localism where councils are empowered to lead, not sidelined by central government. We will engage constructively at select committee to ensure the final legislation is fit for purpose and delivers better transport outcomes for Aucklanders, because that is what this is about. Over the course of the last 16 years, we have not seen that achieved as a result of a decision that was made by a National Government back in 2009.

I find it really interesting that Minister Simeon Brown forgot or chose to omit any of the history on how we got to this point and the fact that he’s having to make changes to National Government legislation. Very convenient.

There’s not much else to say. We look forward to the select committee process. We look forward to being constructive in that process. We give our accolades to Mayor Wayne Brown and all of the progressive and Labour councillors on Auckland City Council.

Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. I have to agree with my colleague the Hon Carmel Sepuloni, who was previously speaking to the history of Auckland Transport and how it was a product of a National-ACT Government with a very ill-advised restructure of Auckland that did reduce democratic accountability. At the time, I would have said that reducing elected representatives is not actually a way to make local government more accountable to the people; it just makes more large bureaucratic structures that are harder to engage with for the average person. When you go overseas to countries that have really great infrastructure that’s working really well, usually there’s more democratic oversight, although often the narrative here in New Zealand is that, somehow, politicians are the problem. Actually, when you have really active engagement with more representatives, the representatives are the ones who are directly accountable to the people and who have the most incentive to go out and directly engage with people.

What was ironic with Auckland Transport is they had this set up to be guided by expert opinion and to move ahead with things, but they almost never did. Even though they didn’t have as much democratic oversight, they seemed less responsive in terms of delivering transport outcomes that might have faced some opposition initially but eventually are actually the things that worked better, like removing car parks on arterial lanes so that you can have a more productive flow of people and goods, as opposed to storing someone’s private vehicles at an underpriced cost, usually.

We will support this bill to at least the select committee. I don’t think it’s perfect by a long shot, but, well, look who is in Government—obviously, we’re not going to agree with a lot of what they’re doing. Ironically, we’d probably agree more with Wayne Brown on transport than with anyone on the Government benches. Wayne Brown was certainly a big supporter of the surface light rail that the Greens have always advocated for and could have seen delivered if it hadn’t been sidetracked into a mega-project. But, of course, this Government isn’t doing any long-term planning for public transport in Auckland, which is our largest city and the one that is probably going to continue to grow quickly.

I was in Sydney not too long ago, and I was really blown away by how much progress they’ve made with their public transport system. They’re probably the only Australasian city that has a higher density of people than Auckland, but they have significantly higher public transport patronage and incredibly frequent, joined-up services going right across the region—I mean, all the way to the Blue Mountains, you can get an electric train. Of course, that is a result of substantial investment in infrastructure that gives people real choices about how to move around. When you do that and you have really, really frequent, affordable public transport, many more people will use it, and then you end up with somewhat less congestion, although they’re still spending a truckload of money on some highways which will inevitably not pay for themselves.

Auckland needs to have that vision. Back when I first moved to Auckland, there was the Auckland Regional Transport Authority, who had shown a lot of leadership and long-term planning. That’s why we got Britomart, we had the renaissance of Auckland rail, and we had the campaign for electrification, which the Greens and local mayors championed—and, of course, Mike Lee at the time, who is the chair of the Auckland Regional Council. Of course, that electrification delivered, despite Steven Joyce and the National Government delaying it by several years. Simeon Brown did something similar with delaying the trains that they’ve just purchased for the lower North Island. We would have had those a couple years earlier if he hadn’t tried to distract and vice signal by forcing people to look for fossil fuel options, even though they’re going to cost more.

Look, one of my biggest concerns about this, actually, is: why are we establishing an Auckland Regional Transport Committee where voting membership comprises ministerial appointees? Where else do we have that in the country? Nowhere. Already, central government has far too much control over local transport decisions.

If we want good transport decision-making and we don’t want flip-flopping between Governments, the solution to that is actually to give more power and more money and more autonomy to the regional level or the local level for communities to make those decisions, and stop having central government reach in and try and dictate what happens, like Simeon Brown did when he was the absolute micromanaging, cars-only transport Minister. Thank God he’s no longer in that role. We have a much, much more sensible transport Minister now, but not as good as when the Greens were in Government.

CAMERON LUXTON (ACT): Thank you, Mr Speaker. This is a bill that’s about reforming governance and planning frameworks for our biggest city. It’s going to be creating long-term plans between central and local government—who are, after all, the funders of our roads.

Democratic oversight is something that has been put forward in speeches and contributions to this House, and that is an important, core part of this bill. It’s a practical step towards a 30-year transition plan jointly agreed to by democratically elected Governments and councils. Auckland Council will become the road controlling authority. It means voters will be able to judge for themselves whether their elected leaders are not just good at speeches and slogans but also delivering roads which are smooth, buses and routes that make new Aucklanders and visitors to that great city get where they need to go on time, and make sure money is spent well.

ACT has been saying for years that councils need to stick to the basics: roads, rubbish, pipes. Ratepayers deserve a voice. Every dollar should count, not be wasted on slow zones, on raised crossings, on cycleway vanity projects. They need to be focused on fixing what matters, and that’s what we’re doing here tonight.

ANDY FOSTER (NZ First): I have been asked by our whip to take a short call so I’m going to do that. That’s been—[Interruption] Ha, ha! It’s by our whip.

Look, there’s been long frustration with Auckland Transport as an organisation, one which I think the residents of Auckland feel does not listen to them and does not respond to their concerns. This is this Government doing exactly that: responding to their concerns. Transport is intensely political, and people want the decision makers to be accountable to them. Auckland Transport certainly did not feel like that.

As a Wellingtonian, I can say that we are certainly looking forward to our council being accountable to us in a few weeks’ time. This is a collaborative model between the Government, its agencies, our biggest council, and also its local board. So it is localism done very intensely. To the Hon Julie Anne Genter talking about no long-term planning, this model which has been proposed specifically sets up the requirement to deliver a 30-year plan for transport. I think that is a very good thing.

This has been a long-held desire, as we’ve heard, of Mayor Wayne Brown, so I’m sure he’s going to be delighted by this. My New Zealand First colleague Jenny Marcroft had a bill in the House to do very similar last August, so we strongly support this as well. We strongly believe in responsible local democracy and the local board empowerment, as I said, shows this localism. I look forward to submissions and to the select committee process. I commend this bill to the House.

DAN BIDOIS (National—Northcote): It’s a great day for restoring local democracy and accountability at Auckland Transport. With that, I look forward to welcoming people in submissions as part of the select committee process. I commend this bill to the House.

SHANAN HALBERT (Labour): Thank you, Mr Speaker. There are benefits to this particular bill. It’s been longstanding—the issues that we have had around Auckland Transport. It is interesting—fascinating, in fact—in the House tonight that Government members do have a short memory. This structure and establishment of council-controlled organisations (CCOs) was introduced by the then National Government and the ACT Party at that time.

What’s important is, if I go back to 14 May, I wrote to Minister Simeon Brown because at that time, the mayor was outraged at some of the issues of changing parking fines, which he wasn’t able to do as our mayor. I put that to the Transport and Infrastructure Committee—Andy Foster was the chair—and all Government members voted down the opportunity to have an inquiry on the future of Auckland Transport and to give Aucklanders their say. So tonight—[Interruption]—and just to acknowledge the shouting from the other side of the House—here we are, 18 months later, introducing a bill.

I want to acknowledge Wayne Brown, because this piece of work wouldn’t be in front of us in the House without him. He’s had to push so hard with this Government to get any action and outcomes from the Minister for Auckland and from this Government. Instead, what this Government has done is cut funding by the millions from public transport in our largest city. So they do need to take some ownership around that as well.

I’m looking forward to the select committee process on this—again, we’ve got more shouting from across the room when they’re held accountable to their failures of the past. What is concerning in this bill, and what I’ll be taking particular interest in, is that the Minister has the power to approve which functions the new CCO gets to delegate. Additionally, why has the Minister been given approval powers for classifications of roads? If the goal of this bill is to return decision-making power to Auckland Council, then it doesn’t make sense for the Minister to be given this level of authority. But it is typical of this Government that they give with one hand and take with the other. I mean, we had another example around fuel excise that the Prime Minister will have to return to the House and explain himself, no doubt, tomorrow on.

But the reality is that this bill is needed. It creates change from a structure that hasn’t achieved everything that it’s needed to and that’s copped a lot of flak. With that, can I acknowledge Dean Kimpton and the team of staff at Auckland Transport that over many years have done incredible work, really—thankless work—across the city of Auckland. But it is realistic to say that there are challenges in front of Auckland Transport that need to be improved.

So this particular bill does achieve some of that. Labour is supporting it to go to select committee. It is important that Aucklanders have their say and, yes, it is important that there is more localism around our future transport network. It also does come with some caution, though, that as politicians we make decisions that get us elected. The caution there is not everything in transport is popular. So I’m really interested in how that will be managed when those decisions about investment, about projects, about infrastructure aren’t naturally popular with the public. Those are going to be difficult decisions for local boards to make and for councillors to make. So there’s some consideration there, and no doubt that will be teased out in the select committee.

So, without further ado, Mr Speaker, we do support this local government bill. It is important. Tēnei te mihi ki a koe, ki a koutou hoki.

[I’d like to acknowledge you, and everyone else as well.]

Dr CARLOS CHEUNG (National—Mt Roskill): Credit to our Minister for Auckland, Simeon Brown, and Minister of Transport, Chris Bishop, for bringing this bill to the House. For people in Mt Roskill, this means having a real voice in shaping a transport system that works for us—one that is reliable, efficient, and future-focused. I commend this bill to the House.

Hon PHIL TWYFORD (Labour—Te Atatū): After a mere 16 years, this bill, thanks to the advocacy of Mayor Wayne Brown, has another go at establishing a workable structure for Auckland Transport. Rodney Hide, back in 2009, backed by the Key Government of the day, insisted on what we characterised at the time as a highly undemocratic and corporatised structure for the new amalgamated Auckland City. We spent days and days, actually, debating the super-city legislation in this Chamber, including the legislation that established Auckland Transport as a stand-alone entity. It wasn’t just Auckland Transport; the great majority of Auckland’s assets and its operations were corporatised in so-called council-controlled organisations—ironically named CCOs, because they were not controlled and, in fact, were barely accountable.

As Julie Anne Genter pointed out in her contribution, there was considerable progress on transport in Auckland before the establishment of the super-city. The electrification of the Western Line, the building of Britomart, and a number of other projects showed that Auckland, when it needed to, was capable of lining up the ducks and making the investments to modernise the city’s transport system.

However, the creation of Auckland Transport in 2009 was a double-edged sword, I think. For the first time, there was a transport entity in Auckland with the scale, the professionalism, and the specialist staff, which meant that it could actually sit around the table with central government as equals. That was really important. I think one of the really great achievements that Auckland Transport made was the modernisation and integration of the public transport network, which was long overdue. It modernised the public transport system, and it reduced a lot of inefficiency and duplication. I don’t think we would have seen that in the old days when you had multiple overlapping local government entities.

The sad thing is that, under the model that Rodney Hide and the National Government set up, Auckland Transport developed a culture of arrogance. It was unaccountable to the people of Auckland as its ratepayers and as citizens of that city, and also completely unaccountable to the elected representatives at Auckland Council, its parent body. It’s fair to say that, for a large section of the population, central government is very unpopular. Well, councils, by and large, are much less popular even than central government, and Auckland Transport, I would say, is even less popular than most councils, including Auckland Council. It’s not an exaggeration to say that a lot of people in the communities that I represent hate Auckland Transport—hate it—because it is so arrogant, so unaccountable, and so high-handed. A huge level of antipathy has built up over the years.

It is a credit to Mayor Wayne Brown, who responded to that as good politicians should, and he’s the person who has championed what this bill does, which is restore some democratic accountability and oversight for Aucklanders through their elected reps at Auckland Council. The key provisions in this will bring the planning, funding, governance, and policy functions of Auckland Transport back into Auckland Council under the purview of the elected councillors, and that’s a good thing.

I will finish with this: Auckland is so important to the economy of this country, and its transport is so critically important to the success of the city and its economy. For it to be a success, it needs a strong transport agency but also a genuine partnership with central government. I’ll leave it there. Thank you.

CAMERON BREWER (National—Upper Harbour): Isn’t it very interesting for the Labour Party to say how much Auckland Transport were hated, how arrogant they became, how heavy-handed they became. They had six years and, I would argue, an absolute majority to work with their best friend Phil Goff, as Mayor of Auckland, and deliver this legislation that the National Party, the ACT Party, and New Zealand First are doing today.

We are reforming Auckland Transport. We are giving power back to the people. Those members had their chance and they squandered it. We’re fixing up the mess. I commend the bill.

Motion agreed to.

Bill read a first time.

ASSISTANT SPEAKER (Greg O’Connor): The question is, That the Local Government (Auckland Council) (Transport Governance) Amendment Bill be considered by the Transport and Infrastructure Committee.

Bill referred to the Transport and Infrastructure Committee.

Bills

Retail Payment System (Ban on Merchant Surcharges) Amendment Bill

First Reading

Hon MATT DOOCEY (Minister for Mental Health) on behalf of the Minister of Commerce and Consumer Affairs: I present a legislative statement on the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill.

ASSISTANT SPEAKER (Greg O’Connor): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon MATT DOOCEY: I move, That the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 17 January 2026.

The Retail Payment System (Ban on Merchant Surcharges) Amendment Bill introduces a prohibition on payment surcharges. In the short term, the focus is on addressing surcharges in retail store settings. Therefore, the bill imposes an initial ban on surcharges for all in-store EFTPOS, Visa, and MasterCard payments. This will mean no surprises at the till for people, who currently feel like they are being charged to use their own hard-earned money. It also means consumers will be able to make a purchase knowing exactly what they’ll pay and how they’ll pay it, regardless of whether they choose to swipe or tap.

Surcharges are used by some retailers to recover the cost of merchant service fees from consumers. However, there can be harm to consumers if surcharges do not reflect the true cost to the retailer, and we know that this is extremely common in New Zealand. In fact, New Zealanders are paying up to $150 million in surcharges annually, including excessive surcharges that are ripping off Kiwi consumers by up to $65 million every single year. That’s nonsense. It demonstrates how confusing the surcharging system is, not just for customers but for businesses too. In some cases, a retailer doesn’t make it clear to consumers what the surcharge percentage is. It may be that they do not even know what they should be charging for different types of payment—it’s just that confusing to work out. And even when the surcharge percentage is made clear, consumers find it frustrating that the price on the shelf is not the price they end up paying. This makes it almost impossible for consumers to accurately compare retail prices and weakens competition between retailers.

What’s been done about this to date, you may ask, Mr Speaker. Back in 2022, the Retail Payment System Act gave the Commerce Commission powers to regulate New Zealand’s retail payment system. The Act empowers the commission to directly regulate surcharges, but its mandate is focused on cost reflectivity and preventing excessive surcharges. The commission is yet to utilise its powers to limit surcharges, and overseas evidence has shown that it would face difficulties if it tried to do so. This is because accurately calculating a cost-reflective surcharge is highly merchant-specific and requires clear, up-to-date information about their acceptance costs.

Setting, monitoring, and enforcing regulated caps have proven to be difficult at scale. Jurisdictions like the United Kingdom and Australia, who initially sought to rein in excessive surcharges through regulated caps, have since shifted gears. Surcharges on debt and credit cards are now banned outright in the United Kingdom, the European Union, and Malaysia, with a few very limited exceptions. The Reserve Bank of Australia (RBA) is also proposing to allow the operators of the EFTPOS, Visa, and MasterCard networks to impose no-surcharge rules from 1 July 2026. The RBA would then monitor the industry response and consider whether legislative intervention is necessary to ensure consumers receive the full benefit of a surcharge-free retail payment system.

It is time New Zealand followed overseas precedent. A ban on payment surcharges will remove hidden fees, improve retail price transparency, and enhance consumer shopping experience. The bill imposes an initial targeted ban on in-store EFTPOS, Visa, and MasterCard debit and credit payments. It applies to all cards equally, be they personal or commercial, domestic or foreign, physical or digital. We have expanded the ban’s coverage because we listened to feedback that businesses and consumers needed certainty. The ban is designed to be easy for retailers and consumers to understand, and it could be extended by regulations in the future to cover online payments and other payment networks if we see that is appropriate. The bill extends the commission’s existing enforcement powers to cover the ban. It also explicitly states that consumers are entitled to a refund from the retailer for any breach of the ban.

The ban will come into force shortly, after the commission’s latest interchange fee reductions, which take effect from 1 December 2025. Businesses are expected to save up to $90 million a year in payment costs as a result of these cuts, and the surcharge ban is the best way to ensure these savings are passed on to Kiwi consumers. The new regime is simple, effective, and flexible. It also supports the Government’s broader payments agenda. Open banking regulations are expected to be in force later this year and will help fintechs enter the payment market to compete with Visa and MasterCard. In particular, open banking is expected to encourage the growth of new payment methods like QR codes—quick response codes. Together, these reforms will revamp New Zealand’s retail payment system for the benefit of Kiwi consumers.

I have also heard clearly that the current system is not working well for retailers, who often receive complex or opaque billing information from their payments provider that does not clearly identify the fees associated with different card types. Retailers should be able to easily understand their payment costs. I expect the commission to work on improving this so that retailers can shop around for better deals and further lower their costs.

In conclusion, retail payments are central to the economy, but, for too long, Kiwi consumers have been subject to non-transparent pricing and retailer over-recovery. We know that up to $65 million of Kiwis’ hard-earned money should have been sitting in their back pockets but instead have been lost to extra fees that do not reflect retailer costs. This bill will make life easier for New Zealand consumers, who have told us clearly that they want the pesky sticker at the till to be gone. It also sets up a flexible, responsive regulatory framework that learns from overseas experience. This bill is a step in the right direction towards a modern, convenient, and internationally comparable retail payment system. Thank you very much, Mr Speaker.

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

ARENA WILLIAMS (Labour—Manurewa): This is a bill that Labour will be supporting to select committee because there are a range of things in here that are really important to New Zealand consumers. The Minister’s right. It is frustrating for New Zealand consumers when they go to the till only to be faced with a sticker that tells them that there will be a surcharge for their preferred method of payment that adds on costs that they weren’t expecting to pay on the sticker price. The principle behind this is that when the price is advertised as something and then you go to pay and it’s something else, it isn’t fair to the ordinary person in a shop, and it certainly doesn’t produce the kind of economy that we want for New Zealanders.

The New Zealand economy is in the grip of an affordability crisis where some industries are dominated by a few firms that are making excessive profits, and the Commerce Commission has been great at pointing out of the last few years just how much this is costing New Zealanders. And here they’ve done it again. They’ve said that consumers pay up to $150 million in payment surcharges each year, of which an estimated $45 million to $65 million is in excess of merchants’ reasonable costs. In other words, we have a problem here going on of rent-seeking by payments merchants—so the credit card companies’ banks that are charging far more than their reasonable costs and far more than the cost that it takes to administer these types of payments, and they are making that in profit at the expense of not only consumers but of small businesses.

This is where the rubber hits the road. This is where we have serious concerns about how this has been done, because the Labour Party did deal with this in 2022 when we reformed the payment systems legislation and gave the Commerce Commission extra powers to be able to set what would be reasonable surcharges. In fact, when the Commerce Commission did come up with its reasonable surcharges, they were lower than what this Government has in fact opted for in the end. In other words, this Government has been approached, it seems, in its consultation in the second round of regulatory impact statements, by Visa and MasterCard. They have, essentially, bought the argument that they need to leave some money in the system so that card merchants and banks can make a share of the profit that they are still making that is excess profit—and I will tell you about how that’s been levied against small business in a second—so that they can continue making that profit at the expense of small businesses and the consumers who buy from them, so that we can continue to have the system. But it won’t be transparent any more.

You and I, when we go to the till, if we’re paying with EFTPOS, we won’t know that some of those charges have been spread around the goods that we are buying. And if we’re paying with cash—perhaps we’re an older person who doesn’t use things like credit cards and EFTPOS but prefers to use cash—we will still be paying for the cost of those merchant fees that those businesses have to soak up. These are still costs on consumers. This is still not an answer to the rising cost of living that National promised at the election to prioritise, and that they keep telling us they are dealing with, whilst making legislative change which in fact makes it worse.

Now why, then, does the Labour Party think that this is something that should go to the committee? Well, as the commerce spokesperson for the Labour Party, I want to hear from small businesses exactly what this will cost them. I was speaking to a small-business owner today and she told me that over the last few months she has really been up against it. She charges a surcharge at the till. She hasn’t actually before; it’s only in the last six months. But it’s important to charge that surcharge because she’s paying up to $500 a month, and that’s taking out of the profit that she makes—about half of that in merchant fees. So she not only discourages people at the till from using that payment method—which is not, I think, something that was a policy intent of this bill but will, in fact, happen as more retailers see just how much this is costing them—but she’s also having to charge that and is now being told by the Government that she’s the problem; not Visa, not MasterCard, not the bank who is charging her for her small business for the privilege of eking out a living that she is trying to do in her community that is making a real difference there. For a pretty minor profit she has to pay $500 a month for the privilege.

We will hear, as a select committee, from a range of small businesses about just how much they are paying and how much it is taking out of their bottom line. I really hope that the Government is open to hearing that feedback, because the Commerce Commission has already suggested better fees and a better regime that can sit behind this, which will make it fairer. It was that Cabinet that rejected a fair regime for small business, and I hope that small businesses turn up and remind the National MPs on the committee that they are their voters, and they can do better.

Dr Lawrence Xu-Nan: Mr Speaker?

ASSISTANT SPEAKER (Greg O’Connor): Dr Lawrence Xu-Nan.

Dr LAWRENCE XU-NAN (Green): Thank you.

ASSISTANT SPEAKER (Greg O’Connor): Now, the reason you need to seek the call is so the people in the gallery, in the booth, can know who is going to get the call.

Dr LAWRENCE XU-NAN: Ah, yeah. Sometimes there’s a little bit of a delay. I apologise, Mr Speaker.

The Greens are opposed to this bill. Now, there’s a reason for that. When this was first announced, part of me was like, “Oh, actually, you know what? That’s not too bad”—you know, people are not going to be paying for surcharges on payWave. And I thought, “Oh, maybe the Minister is doing something right.” And here’s the clincher: then the Minister of Finance came out to say, “You know what? Business should just pass that cost on to consumers.” And then I felt like “You know what? You ruined it.” You could have had something good there, but, instead, you are making the cost of living crisis worse by making businesses pass it on to the customers and the consumers.

Here’s the thing. At this stage, if you are in front of a till, if you are in front of an EFTPOS machine, and there is a surcharge, you have a choice: you can choose not to use contactless payment or you can choose to put your card in there and then do it the old-fashioned way and you don’t get surcharged. But, then, with this new system, we are not going to be seeing any transparency in terms of where some of the surcharges will go. Instead, businesses will be made—and particularly small businesses like your cafes, like your retails, like your dairies—to increase the overall cost on to the customers. We have heard small businesses opposed to this particular move. So it is a shame that we are seeing this bill addressing the issue but in an incorrect way.

So, yeah, the bill amends the Retail Payment System Act 2022 to prohibit payment surcharges on certain in store transactions, and that does include your contactless, it includes your EFTPOS, your MasterCard, your Visa payment network in store. And it allows for the Commerce Commission to enforce the ban. Yes, this does come on the back of the fact the Commerce Commission estimates that consumers pay up to $150 million in payment surcharges each year. But if we do remove that, how then would the Commerce Commission know what additional surcharges businesses are charging as a result of these fees, as a result of the surcharge fees?

One of the things I think that we needed to address—and it’s an unfortunate missed opportunity here that we’re not addressing it—is where these surcharge fees came from originally. What accountability measures do we have for the acquirer when they are negotiating in terms of payment and charges to businesses and, in most cases, to small businesses, around these surcharges that make small businesses have no choice—in order to meet rising costs and the rising cost of living—but to pass it on to consumers?

If the Government was really interested in tackling this issue and addressing this, I guess, nuisance for consumers, addressing this problem that has arisen for small businesses, the better way of doing this is to go after the acquirers and ban merchant service fees. That would have been the reasonable thing to do, and that would have been the more effective way of addressing the cost overall.

What we are seeing here is rather than actually just attacking and addressing the bigger issues, where we are holding large companies and banks accountable for something like this—because, let’s face it, banks are probably not making their money off merchant service fees. So we could have done something in the process of banning merchant services fees from acquirer. But, instead, the Government has decided to use a technical solution that bypasses the core issue altogether and does a patch fix that, essentially, makes it more expensive for consumers.

So the Greens will not support this bill, because we do not believe it addresses the real issue.

Dr PARMJEET PARMAR (ACT): Thank you, Mr Speaker. This bill is about transparency in price, because usually what happens is that customers will see a price on the tag of the item that they are wanting to purchase, and when they go to the counter they realise there is a surcharge if they decide to make that payment using their card or digital wallet. We know that nowadays people are very commonly using these modes of payment. I was talking to a business association in the weekend and I heard that it’s only 10 to 15 percent of people who were using cash, and the rest of the payments are coming from an approved card. So it’s an issue that needs addressing. I’m really looking forward to hearing what submitters have to say in the select committee. Thank you.

JAMIE ARBUCKLE (NZ First): Thank you, Mr Speaker. I rise on behalf of New Zealand First to support the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill. When you go to purchase something—you see something on the shelf, you take that to the checkout—that’s what you should pay, and it’s as simple as that. We’re talking $150 million worth of savings here for consumers. I commend this bill to the House.

CAMERON BREWER (National—Upper Harbour): National is also delighted to be supporting the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill. As the previous speaker said: consumers, at present, pay around $150 million annually in surcharges. Banning merchant surcharges is another great cost of living initiative by this Government.

REUBEN DAVIDSON (Labour—Christchurch East): Thank you, Mr Speaker. The good news is that I won’t be short-changing anybody on the time allotted for my contribution in the debate tonight. [Interruption] I can see that that’s lifted the spirits from the other side of the House immediately, which is great to hear because, right now, New Zealanders are faced with a cost of living crisis and this Government backs big banks, not small businesses that are doing it tough.

What this bill claims to do—and what we’ve heard in some of the very, very short, and very, very truncated, contributions from across the House—is that this bill amends the Retail Payment System Act 2022 to ban payment surcharges on certain in-store transactions, and the Commerce Commission estimates that consumers pay up to $150 million—$150 million—in payment surcharges every year. This bill proposes an initial targeted ban to address the consumer harm that surcharges cause in retail settings.

That’s from the general policy statement, but what does it actually do? What it actually does is it makes sure that everybody pays. It spreads that $150 million across the price of everything for everyone because banks will still charge the small businesses those fees, and those small businesses will need to recoup those costs so they will pass those costs on to consumers.

I’d like to use a term that my friends across the House are very familiar with—it’s the “up to” term. For example, tonight a pound of butter at New World costs $10.99. But if this surcharge is added at the shelf instead of at the till, that pound of butter will cost $11.49, and a kilo of mince will rise from $24 a kilo—

Hon Matt Doocey: Fake news! Straight out of the Duncan Webb school of fake news!

REUBEN DAVIDSON: —to up to $25.20 a kilo for mince. Even Minister Doocey looks unimpressed at that prospect.

Now, I’d like to offer another example, because what we’re talking about here is taking surcharges and tucking them away so that people don’t see them. This Government has very, very good stead in this term, in that space, through the application of administered inflation. We’ve seen car regos rise $25 and a further $25 next year. It now costs $50 more to file an appeal at court. These are the kinds of surcharges that this Government has inflicted on New Zealanders during a cost of living crisis. It does nothing for everyday Kiwis struggling to pay their bills.

Perhaps the most shameful of all, to single out in te Wiki o te Reo Māori—Māori Language Week—is that New Zealanders will now pay $30 more for a passport that this Government have wasted time and money to deprioritise “Aotearoa” and to place “New Zealand” ahead of “Aotearoa” on the front of that passport, and to charge New Zealanders, during a cost of living crisis, a further $30 for the privilege. I find that one fairly hard to explain.

What you will be pleasantly surprised to hear is that I do support this bill proceeding to select committee, but only so that it can get the proper examination that it deserves. Because a select committee will provide that level of scrutiny and the input from the small businesses that have had the buck passed to them. Because on this side of the House, we believe in fair competition, we believe in lower costs, and we believe in stronger small businesses.

Most of all, what we also believe in is that there is a cost of living crisis and that it’s the job of Government to address that for New Zealanders and that this Government is falling short in doing that. All this bill risks doing is removing the sticker off the EFTPOS terminal rather than doing anything meaningful for the cost of living crisis.

RYAN HAMILTON (National—Hamilton East): I’m so pleased that those interchange fees are coming down and we’re going to tidy up PayWave and surcharge bills across the country. It’s a good thing. I commend the bill to the House.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): This could be a good idea but what a dog’s breakfast this Government’s made of it. Let’s have a look at it. We could actually support this bill to the select committee but, by crikey, if this is what you do with a good idea, goodness gracious—it’s how to make a good idea into an absolute mess.

I loved it when the Minister stood up on the other side of the House and said that this is great idea, in question time, to Nancy Lu, and said they’ve had overwhelmingly positive feedback. Did you hear about that? So I said, “Show me the feedback.” He had 33 emails. One was from Suze Redmayne saying, “Good job.”—actually, that was a text message. One was from his chief of staff, talking about social media feedback. One was positive, and 30 were overwhelmingly negative.

This is serious, though, because in fact this is going to be tough on small business. The Minister for Small Business thinks that his job is to make business smaller, and that’s what’s going on here. If you think about it, these small businesses—and I was in a small business on the weekend, it might have been a pub, and he griped no end about this Government and the fact that he has to absorb the cost of this or he has to put his prices up, and, of course, if you put prices up, customers fall off. Walk down Lambton Quay or any main street in any town and see what’s happening with small businesses. They are struggling, and this Government has just said to small business, “We’re stopping you passing on this cost. You should just suck it up.” Look at the number of liquidations that are out there.

This feedback is actually important because the select committee needs to think about things like this. One of 30 overwhelmingly negative pieces of feedback the Minister got said, “What a disgrace. You’re choosing to ban credit card surcharging rather than rein in those excessively abusing surcharges.” It is interesting that this is about retail, not about Ticketek, not about the—I don’t know, how much do they add to a Taylor Swift ticket? I don’t know. Seven or eight bucks? It’s not about Air New Zealand when you pay by credit card on Air New Zealand. Those transactions look like they’re going to go untouched. That’s big business. The other thing to note here is this: who asked for this change to be made? The credit card companies. A little red light should be flashing then. If the credit card companies want this, who’s going to make the money on it? The fact of the matter is that if it costs the same to pay by PayWave or by EFTPOS, you’ll choose the easiest, and let’s face it, PayWave is easier. Contactless is easier. But it’s more costly. What you’re actually doing is driving people to the most costly money handling system.

Matt Doocey talked about open banking and the idea that we might get some innovative payment systems coming through the open banking system. That might be good but we’re not there yet, but we can look at this. Another piece of feedback that went straight to Scott Simpson that he thought was overwhelmingly positive, “Many of us are sick of this rubbish from your Government. Honestly, I doubt we will continue to invest in the economic future of this country for much longer.” My question, further feedback, “How do we recover this amount of money without it coming out of our pockets and not putting prices up to cover this large sum of money?” They are genuine concerns.

Then, some retired people had some comments, and some of those retired people are a little bit parsimonious—those superannuitants. “I’ve never used PayWave.”, said one. “I don’t think I have to pay an extra fee when I can pay using my PIN. This is an option for everyone, but because people choose not to use it, we’re all going to have to pay.” These are the concerns we need to address. The fact of the matter is that the surcharges, the interbank charges, on these PayWave fees are excessive. When we were in Government we worked on this. This Government is continuing in that work, and that’s good. I commend you for cracking down on that and the Commerce Commission is at the forefront of that. But we need to address these concerns, and the Minister was not accurate when he said the feedback was overwhelmingly positive.

NANCY LU (National): E te Māngai o te Whare. I support the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill to select committee.

A party vote was called for on the question, That the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill be now read a first time.

Ayes 107

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11;New Zealand First 8; Te Pāti Māori 5.

Noes 15

Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Bill read a first time.

ASSISTANT SPEAKER (Greg O’Connor): The question is, That the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill be considered by the Finance and Expenditure Committee.

Bill referred to the Finance and Expenditure Committee.

Instruction to Finance and Expenditure Committee

Hon MATT DOOCEY (Minister for Mental Health) on behalf of the Minister of Commerce and Consumer Affairs: I move, That the Retail Payment System (Ban on Merchant Surcharges) Amendment Bill be reported to the House by 17 January 2026.

Motion agreed to.

Bills

Income Tax (FamilyBoost) Amendment Bill

First Reading

Hon NICOLA WILLIS (Minister of Finance): I present a legislative statement on the Income Tax (FamilyBoost) Amendment Bill.

ASSISTANT SPEAKER (Greg O’Connor): That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon NICOLA WILLIS: I move, That the Income Tax (FamilyBoost) Amendment Bill be now read a first time.

The bottom line: those who vote against this bill are voting against up to 92,000 families with young children getting more cash into their bank accounts. I dare members of this House to explain to me why families who have young children in early childhood education (ECE), and who are feeling the pressure of juggling their childcare responsibilities and their work and their cost of living, should be denied the relief that this bill promises.

What this bill does is expand on the existing generosity of the Government’s current FamilyBoost scheme. In short, it means that families with children in early childhood education, on a household income—that is a combined income between two parents—of $230,000 or less will be eligible for up to 40 percent of their childcare costs to be refunded each quarter. What does that add up to? That means families can get up to $120 a week back in cash.

Let me talk you through how this works. This short bill is making amendments to the FamilyBoost provisions which already exist in the Income Tax Act 2007. FamilyBoost, of course, started on 1 July last year and helps parents and caregivers meet the costs of early childhood education. It runs on a quarterly basis; parents and caregivers submit invoices for the previous three months, then these are paid by Inland Revenue (IRD) in a lump sum. The great news is that, across the country, early childhood services have come to the party and are making it as easy as possible for the families that use their centres by printing three-monthly invoices so that this can be done very simply.

Currently, of course, households can get back 25 percent of the ECE fees they pay, but that’s after the 20 hours ECE and the Ministry of Social Development childcare subsidy, which, of course, we have kept in place. Those are taken into account, and then parents get this refund on top of that—up to a maximum of $975 a quarter.

Let me make it clear to members that, to get that maximum payment, a household would have to have had ECE costs of at least $3,900 in the previous quarter. Most eligible households won’t have had costs that high, so they won’t get $975 back a quarter. That’s because, actually, most families don’t spend $300 a week on early childhood education costs for a range of reasons, whether it’s because both parents aren’t working and so they only use childcare a certain number of hours a week, or whether it’s that they attend cheaper early childhood education for parts of the week. For a number of reasons, it is not the case that most families are paying that much in fees.

However, they will get exactly what they are eligible for under FamilyBoost, which is 25 percent of the fees they have paid. In other words, they get their full entitlement. FamilyBoost also, appropriately, has a household income cap—currently it is a maximum of $975 and gradually reduces for households with an annualised income of more than $140,000 and cuts out altogether when a household receives $180,000. That’s how FamilyBoost currently works. It’s been very popular. To date, for this financial year, around 67,000 families have received payments—that is tens of thousands of New Zealand families who have received direct cash into their bank accounts. The idea that there are members in this House who say they should not have received that cash—which is what they would be doing if they voted against this bill.

The feedback that Ministers and MPs have had directly from parents, and through Inland Revenue, is that, actually, FamilyBoost is pretty easy to apply for once you’ve got that clear invoice from your ECE service. It’s all done online, and it has helped families at a time when the cost of living is front of mind. It also, of course, allows and encourages greater participation in the workforce, taking away one of the hurdles that can prevent people returning to work after a period of caregiving. This is good for economic growth.

What is the bill about? This bill adjusts a couple of key FamilyBoost settings, and it will increase the number of households getting payment, and it will increase the payment amounts that households get. When this scheme was being developed, IRD modelled what they thought would be the likely take-up and cost of the original scheme. They have been upfront—they found the modelling challenging. They didn’t have any data—well, not reliable data—about how much parents were paying for ECE. Inland Revenue assumed more families were paying higher childcare costs than turned out to be the case. For those reasons, it turns out that the initial conservative estimate of annual FamilyBoost costs was overstated.

There is room for us to give FamilyBoost a boost, and that is what we are doing. We are increasing—and this bill does it—the 25 percent rebate in FamilyBoost to 40 percent. Good news for families with ECE costs.

Hon Julie Anne Genter: For what? Like, five families? How many families qualify?

Hon NICOLA WILLIS: Households will therefore, Julie Anne Genter, be able to get back 40 percent of their ECE fees up to a maximum of $1,560 a quarter.

Hon Julie Anne Genter: Why not just give free ECE for everyone?

Hon NICOLA WILLIS: That’s up to $1,560 every three months, in the bank account. That is up to $120 a week.

I wish to note for the record, because Hansard might not get it down, that Julie Anne Genter, from the Green Party of New Zealand, appears very, very dynamically opposed to the idea of parents with young children getting this relief. I haven’t seen her this excited all day—not since I talked about the Mt Victoria tunnel a week or so ago.

FamilyBoost payments will increase, and this will be welcomed by working families with very young children, who are a bit more pragmatic than Julie Anne Genter and believe that, actually, that cash is meaningful to them.

Also, what this bill does is that the rate at which the maximum payment reduces after a household reaches $140,000 of income will now be relaxed. FamilyBoost payments will now cut out altogether at an annualised household income of just under $230,000 a year, rather than the $180,000 a year at present.

Hon Julie Anne Genter: It’s still a bunch of paperwork. No one is actually accessing this. The people who need it most can’t get it.

Hon NICOLA WILLIS: I want to emphasise that that’s household income, so it is not just an individual’s income; it’s the income collectively brought into a household by parents and caregivers.

Hon Julie Anne Genter: It’s bad policy.

Hon NICOLA WILLIS: The higher cut-out is partly because of the increase in payments and partly because this bill lowers the rate at which the maximum FamilyBoost payment reduces for higher incomes from 9.75 cents—

Hon Julie Anne Genter: People in Wellington know—that’s why they don’t vote for you.

Hon NICOLA WILLIS: Mr Speaker, honestly. Interjections are meant to be short and witty, and Julie Anne Genter hasn’t been either for some time.

ASSISTANT SPEAKER (Greg O’Connor): We’ll just leave the Speaker to decide that, shall we, Ms Willis—

Hon NICOLA WILLIS: Well, honestly, it’s a constant barrage.

ASSISTANT SPEAKER (Greg O’Connor): —and you just carry on with your legislative statement.

Hon NICOLA WILLIS: Yep. From 9.57c to 7c for each additional dollar of income above the annualised $140k. Those are the technical details, members. What is important is that this scheme will be available to thousands more New Zealand households as a result of this bill, and these changes will apply to eligible early childhood education fees incurred on or after 1 July 2025.

This is the reason why this bill needs to be progressed at pace, because we want to ensure that parents can apply for this extra amount of cash from October. We want to make sure that, for the fees they’ve been paying since July, they can get up to 40 percent of that back, and that’s the reason we are progressing this at pace. Because FamilyBoost is paid out every three months, the first increased payments to more families—and there will be more families who just missed out in the past because they earned just a bit too much as a household; they will look upon this as a great move forward because they will now be eligible for the scheme, and they will find that their claims can be processed and paid by Inland Revenue in October this year.

I have had families say to me, “We just miss out on the scheme, but, let me tell you, we would really like to be eligible for it.” I’ve also had families say to me it was actually really easy: “I applied, and the money went in my bank account, and, man, oh man, did that make a difference when I had to go buy the car seat, when I had to pay the electricity bill, when I had to ensure that my older preschooler had the kit-out to start school.”

Inland Revenue has also updated its modelling to include new insights and data from FamilyBoost, which indicates that the changes will result in FamilyBoost reaching 92,000 households based on an uptake rate of 71 percent. We still don’t confidently say that every family will apply for the money that’s due to them, but I urge them to do so. I want to see this policy working and money going out the door.

The scheme will cost around $170 million a year, which is what we’ve already appropriated—so no new funding is required. These FamilyBoost changes will help many more families deal with the increased costs that come with having young children. I commend this bill to the house.

ASSISTANT SPEAKER (Greg O’Connor): This debate is interrupted and set down for resumption next sitting day. The House is suspended until 9 a.m. tomorrow. Have a good evening.

Debate interrupted.

Sitting suspended from 9.58 p.m. to 9 a.m. (Wednesday)

TUESDAY, 16 SEPTEMBER 2025

(continued on Wednesday, 17 September 2025)

Bills

Income Tax (FamilyBoost) Amendment Bill

First Reading

Debate resumed.

ASSISTANT SPEAKER (Greg O’Connor): Good morning. When we finished last night, we were on the first reading of the Income Tax (FamilyBoost) Amendment Bill.

Hon Dr DEBORAH RUSSELL (Labour): Labour will be supporting this bill. It puts money in the back pockets of New Zealanders at a time when it is desperately needed. We are facing some real difficulties with the cost of living, particularly here in New Zealand. The rest of the world is moving on. The rest of the world seems to be out of a post-COVID low and getting towards a more level state—perhaps even a bit of a growth state—but New Zealand is stuck. The reason we’re stuck is thanks to this Government and its lack of vision, and in particular, its narrow view of what to do to support an economy—nowhere seen any more so than in the 19,000 jobs that have been lost in the construction sector, the 19,000 jobs that put money in people’s pockets that was then circulated through the economy and supported other families. We are in a cost of living crisis precisely because of this Government.

Let’s think about the nature of that cost of living crisis. Food prices in the last year, when that party was in Government, are up 5 percent; fruit and vege are up 8.9 percent; meat is up 9.4 percent; bread is up 9.5 percent; cheese is up 14.3 percent; milk is up 15 percent; electricity—when that party is in Government—is up 11.4 percent. All they do is bleat about the oil and gas changes, changes that wouldn’t have had an effect for 15 years. Yes, there is a cost of living crisis caused by that Government.

Because people need money in their back pockets, we will support this bill, which puts money in people’s pockets, but—and here’s the big “but”—the real story is not the changes that are going to put money in people’s pockets; it’s the absolute great and glorious clustermuck that led to this point, the great and glorious mess that was created by that party, with what they promised and simply could not deliver. That party promised that families in New Zealand would get up to $250 a fortnight in tax relief. That was what they promised. Of that, $150 a fortnight was to come from FamilyBoost. It turns out that that party cannot find a single family that has received the full $250 a fortnight. They promised that 100,000 families would get FamilyBoost. They promised that, and what people heard was that 100,000 families would get $250 a fortnight back—carefully phrased in terms of “up to”. We’ve gone looking for that family that might’ve received $250 a fortnight, and not a single family can be found. In fact, only 244 families have received the full amount of FamilyBoost.

That’s why we are in this House today. It’s not because that party is being generous, it’s not because they have a good policy here; it’s because they mucked it up the first time around and, now, they are coming back to try and fix it. It is a catch-up. Frankly, the fact that it is a catch-up and the fact that families have not been able to get the money from FamilyBoost, and the fact that no one, as far as we know, has received the $250 a fortnight that that party promised and the fact that we are here today speaks to the bureaucracy and the difficulty of this particular payment that is supposed to put money in families’ back pockets. We are here today, fixing up the mistakes that that Government has made.

In terms of the number of families who have received FamilyBoost, what we know is that, so far, only 27,000 families have received money each quarter. Now, there are more families that have received some money, but only 27,000 families have received money each quarter that this policy has been in place. In order to claim the money, those people have to keep their childcare receipts, feed them into Inland Revenue, and claim the money back. The bureaucracy is amazing, and that is partly why only 27,000 families have gotten a bit of money from it.

If that Government had been serious about supporting families, they would have adopted a much simpler policy. The policy that we had on offer, the policy of extending 20 hours’ free early childhood education to more children, and to ensuring that children aged two and up could be in subsidised childcare, would have helped all families without the bureaucracy. We are supporting this bill because it gives money to families, but all it is is a huge mess.

TEANAU TUIONO (Green): Mōrena e te Pika. Kia ora and mōrena e te Whare. I want to start with a whakataukī, because it is Te Wiki o te Reo Māori—a relevant one, I think.

Ko te manu e kai ana i te miro, nōna te ngahere; ko te manu e kai ana i te mātauranga, nōna te ao—the bird that partakes of the berry, their domain is the forest; but the bird that partakes of knowledge, their domain is the world—which I think sits off the foundation of what we actually all should be thinking about when it comes to doing the best that we can for our tamariki and for our mokopuna.

Unfortunately, when I look at this bill—acknowledging it is a bill that has come through here with urgency—we were expecting it to address some of the fundamental flaws that we saw when this scheme was first introduced into the House, but we see that those have not been addressed. For example, we still see that what has been outlined will still be administratively burdensome to claim the tax credit, particularly for busy low-income families. It’s a retrospective refund, so many families will struggle to be able to get that. What that means is you’ve got to be able to have cash on hand, first of all. You’re going to get a refund, but it assumes that parents are actually going to have the money in their hands as well.

We are in the middle of a cost of living crisis. We only have to look around the streets where we see so many different sectors striking. I was watching the news this morning. Teachers are going on strike. They’ve had nurses on strike. There are issues right across as well. All of these people in all of these sectors all have parents in them, and some of them will have young children as well, so folks have to reach into their pockets to be able to pay for their tamariki and their mokopuna to go to early childhood education (ECE).

Also, I am just noting that over the first year—and I’m assuming that’s why this bill came here—only 249 families claimed the full tax credit, despite the Government expecting that thousands of people were. So the idea that this is going to all of a sudden open up the floodgates is also of concern, when actually what we should be doing is making ECE free. We should be making ECE free. We should be addressing the core problem with the ECE sector, which is that it has been gobbled up and controlled by private companies. Just to note that the Government spends around $2.7 billion on early child education each year, so it doesn’t make sense that the cost for whānau is still so incredibly high.

It’s the system that we have as well. We only also have to look at the disproportionate pay that people get. If you’re a kindergarten teacher, you are going to get paid substantially more than if you are in a privately run early childhood centre, despite doing the same job with the same hours. It points to the fact that, actually, this bill doesn’t address all the problems. It is, unfortunately—and I hate to use the analogy—rearranging the deck chairs on the Titanic. The issue is: if you’re rearranging the deck chairs on the Titanic, what’s the point if all you’re going to do is get a better view of the iceberg?

It is important, I think, for the Greens to put on record that what we would do in terms of our reforms would be to put early childhood centres at the centre of it; not tax cuts for landlords, not tax cuts for tobacco companies, not prioritising millions and millions of dollars on defence for what I can only see is pandering to the Trump administration.

Hon Members: Oh!

TEANAU TUIONO: We should actually be putting at the heart early childhood education. I can tell from responses from the other side over there as well, and the fact that this bill has come to the House under urgency—they’ve kind of just tacked it on because the plan as designed isn’t working. It isn’t addressing the fundamental flaws within the system itself. That is why it’s so incredibly important that we bring more equity into that system, that we actually move the system to be more run by community-led early childhood centres and we make it easier for families to be able to take their kids. The Greens had been advocating for free ECE.

As I started, I will end as well with another whakataukī—I’ll end with the same whakataukī, because maybe there’s some understanding there for all of us: ko te manu e kai ana i te miro, nōna te ngahere; ko te manu e kai ana i te mātauranga, nōna te ao. Let’s do better, whānau, kia ora.

LAURA McCLURE (ACT): Thank you, Mr Speaker. Well, I am proud to be part of a Government where ACT is actually fixing what matters. You know what? This bill—and I’m pretty astonished, actually, that the Opposition is actually supporting it, given all the hype that they’ve been rousing around this isn’t enough, there’s not enough families getting enough money out there. But what I am proud of is for the first time in a long time, we have a Government that has recognised that the middle is getting completely squeezed.

Maybe I should give a little bit of a history lesson to the Opposition around what has been happening in New Zealand. We have seen lower incomes rising time after time, we’ve had really big increases in the minimum wage—and, yes, we’ve seen some upper wages increasing too—but the bulk of New Zealanders, the middle class, the mums and dads haven’t seen wage increases in 10 or so years. This is where it’s really hurting everybody. We’ve seen high inflation, we’ve seen the cost of living going through the roof, and this bill aims to put some measures back to those that are getting up every day, getting out there, earning money. They’ve got their kids, they need to put them in some childcare because in today’s day and age, both mum and dad do need to work to get ahead.

This is a step in the right direction. By lifting the threshold and lowering the abatement, the Government is finally recognising that middle-income families are actually feeling the squeeze too. I’m really proud of that because this Government is focused on fixing what matters to New Zealanders. I commend this bill to the House.

Dr DAVID WILSON (NZ First): New Zealand First supports this bill as it delivers the relief that households deserve and helps parents stay in the workforce and invest in the early education of our youngest New Zealanders. It’s a shame that the member did a little hit and run from across the aisle with the attack on the economy, but I would just like to show that, sometimes, good ideas can come from wherever you think they least come from.

When I was running the Institute of Public Policy, I had Dr Ian Hassall, an ex - Children’s Commissioner; and Dr Emma Davies, who was specialising in research around children, and we had a debate about productivity. So I asked, “Where is the best place to invest if you want to increase productivity in the long run?” It is in children and early childhood education. That is where you’ll get the greatest benefit because that’s where they’re learning the most. We commend this bill to the House for many reasons, this being one of the primary ones. Thank you.

CAMERON BREWER (National—Upper Harbour): The National Party’s very, very happy with this bill. It increases the percentage of early childhood education expenses claimable from 25 percent to 40 percent, raising the maximum quarterly tax credit from $975 to $1,560. That means up to $6,240 per year for families—a great cost of living initiative.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Mr Speaker. It’s a pleasure to be able to speak on the Income Tax (FamilyBoost) Amendment Bill. Just to pick up a point that Dr David Wilson raised in his speech, it is true that the first five years of a child’s life is incredibly important, particularly the first two years. In the first two years, a child is more likely to be able to learn languages, to be able to retain information, and the brain synapses and the connections that they have in those first two years is incredibly important. So I want to acknowledge the points raised by Dr David Wilson.

As many people in this House know, I am a mother of a lot of children. We have been very fortunate—for a number of our children, we didn’t have to send them to early childhood education (ECE). We didn’t have to send them to an early childhood education centre because we had to; we could send them to an ECE because we wanted to. We also had the privilege of being able to have one parent stay home, and that’s because we made the choice that it was going to cost more in ECE—it was going to cost more than our mortgage payments to be able to send our children there. We made a conscious decision as a family, and a financial decision, that one of our parents would stay home because those connections in those first five years are so important for the growth and development of children going forward.

This particular bill, as much as the Government members will be very happy to bring this bill to the House, is actually an admission of the failure of this Government’s policy. This policy has been a failure. There have been a number of statistics, which Dr Deborah Russell referred to, that have shown this policy to be a failure. Initially, the Government, when they were campaigning, said 130,000 families would be applicable for FamilyBoost. When they got into Government, those numbers were revised down to 100,000. What we have actually seen, as Dr Deborah Russell has talked about, is that only 27,000 families have consistently received FamilyBoost since its inception last year on 1 July 2024. That’s only 27,000 families who have actually received it consistently.

Why I wanted to point out that particular statistic is because—going back to my earlier point—some families have no choice but to send their children to an early childhood education centre because they need to work. But yet the Government promised 100,000 families would be able to get FamilyBoost, but, to me, it is a failure if only 27,000 families have been able to actually consistently get this for the last four quarters.

The other element and the other statistic which Dr Deborah Russell spoke about was the fact that there were meant to be 21,000 families who were able to receive the full amount of the FamilyBoost. For members of the House, just to remind them, that was around up to $975—that was the maximum amount, but, actually, the statistics have shown over the last four quarters only 244 families have actually received the full amount.

The reason why I want to lay out these statistics is for the reason why this side of the House, why the Labour Party, is supporting this bill. It’s because we acknowledge this is a Government failure—of their policy. We acknowledge that times are really tough for families right now in Aotearoa. We know that food prices, energy prices, insurance premiums, rates, those administered costs have gone up, so we support this bill because we want families to get the little that they can in order to support them. That does not mean that we accept that this policy is a success, because, quite clearly, the statistics show it has not been a success.

What it also shows is that that Government has broken a number of promises to Kiwi families. Again, the other statistic that Dr Deborah Russell talked about was the zero. That side of the House, the Government, cannot find one family—one family—that has received the full $250 that was promised during the election campaign. That is a travesty because, ultimately, there would have been families across the country who would have depended on that, who would have depended on the $250 to help plan for the year. Instead, we only have $975 going to 27,000 households. That is a really poor policy, a super poor policy, which is why Labour will support this bill, because it’s fixing up the mess—fixing up the mess that Nicola Willis—

Hon Nicola Willis: Ha, ha!

Hon BARBARA EDMONDS: —because of her failure to be able to put in a policy that actually worked—and she may laugh about flip-flop, but that’s the problem: she’s not taking it seriously.

RYAN HAMILTON (National—Hamilton East): It’s funny when they talk about poor policy but then say, “Oh, but we’ll support it.” Sixteen-thousand families will be better off with up to $1,560 a quarter. I commend the bill to the House.

Hon Willow-Jean Prime: Mr Chair—oh, Mr Speaker.

ASSISTANT SPEAKER (Greg O’Connor): The Hon Willow-Jean Prime.

Hon WILLOW-JEAN PRIME (Labour): Sorry, Mr Speaker. I’m still collecting my thoughts after listening to the Minister of Finance laughing over there at the contribution of my colleague the Hon Barbara Edmonds; the Minister gleefully laughing and welcoming Labour’s support for this legislation this morning, not listening to the reason why Labour is supporting this. Labour are supporting this to fix up your mistake—sorry, Mr Speaker; not you, sorry, Mr Speaker—the Minister of Finance’s, the Government’s mistake.

This Government promised—promised—New Zealanders at the election that this policy would bring much-needed relief in a cost of living crisis, and here we are—

Hon Nicola Willis: 60,000 families, Willow-Jean.

Hon WILLOW-JEAN PRIME: Oh, now? Now, because you didn’t do it at the beginning? What about the ones you promised at the election? Then, almost two years later, here is the Minister fixing up her mistake. This is an admission that they had not done the work on their policy to be able to deliver it. I do wonder if this was because they never wanted to spend the money in the first place.

Mr Speaker, you have heard the House ask time and time again: where is a single family who has received what this Government promised? They have not been able to show this House one single family who has received what they were promised prior to the election.

This legislation that we are discussing this morning is an admission by the Minister of Finance that her original policy got it wrong. To fix up that mistake, here is a piece of legislation that is now promising that it will reach further numbers of people. We will hold this Government to that. We will hold this Government to showing us the full 60,000 people who are going to benefit from this policy.

One of the things that parents have raised with me is the poor thought that was put into this policy development—the hurdles that they have to jump through, as busy parents, to access much-needed support in a cost of living crisis. This Minister is putting more life admin on busy parents. There are much simpler ways that this Government could get some money to our busy families who require it, but, no, this Government and this Minister want to make that as difficult as possible.

This policy is coming so late in the piece. Why did it take the Minister of Finance so long to admit the errors that were made, the broken promises to the voters, to finally come into the House now and fix this mistake? Yes, Labour are supporting this because we recognise that families are doing it really tough, that they need real action on the cost of living, that this Government should not have taken almost two years to admit its errors and to fix up its mistake and finally make this available to those families. We are supporting this legislation this morning because they should have been getting this all along, instead of being given promises from this Government which were then broken.

In the final 40 seconds, what I want to point out is that the policy from the Child Poverty Action Group—it says: “The failures in the policy design are ones [that they were] warned about … the high administration costs, the retrospective nature of it, and not knowing if you will receive it from one quarter to the next. These failures are reflected in the poor [uptake].” I implore the Minister to look at how she can make this more administratively straightforward for our families who are struggling. What is she going to do about that?

DAN BIDOIS (National—Northcote): In summary, I commend this bill to the House.

A party vote was called for on the question, That the Income Tax (Family Boost) Amendment Bill be now read a first time.

Ayes 107

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8; Te Pāti Māori 5.

Noes 15

Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Bill read a first time.

Second Reading

Hon NICOLA WILLIS (Minister of Finance): I move, That the Income Tax (FamilyBoost) Amendment Bill be now read a second time.

As I set out in my first reading speech, this bill expands the successful FamilyBoost scheme to help more families pay for their early childhood education costs, and it means that households will get larger rebates on the early childhood fees they pay.

This bill has become quite symbolic of the journey that the Labour Party in particular has been on in which the arc of sensible policy has bent towards pragmatism because, of course, the Labour Party’s position, to date, has been to oppose this form of cost of living relief for families with young children and early childhood education. They voted against the FamilyBoost scheme, but, of course, that scheme has gone on to ensure that more than 60,000 families—colleagues, more than 60,000 families—have benefited from cold hard cash going into their family bank account that they would not have otherwise received, as a result of this scheme because it has successfully provided rebates to families who face high fees and have children in early childhood education.

Now, Labour opposed that, and that was curious to me because it did seem somewhat contradictory to be calling for cost of living relief but voting against one of the more concrete things that our Government has done to deliver it. But today, we have had a moment of sense in this Parliament, and I want to commend colleagues opposite for supporting the FamilyBoost scheme. It’s OK to have a flip-flop when you end up on the right side of the flop, and so good on you. You’ve come around, you’ve seen wisdom. FamilyBoost is an excellent scheme delivering real income relief and it’s great that the Parliament as a whole can get behind it, and I look forward to colleagues across the House promoting this scheme to the constituents in their electorates, encouraging families to apply for this rebate and get the relief that they deserve.

I note we do still have a hold-out and that’s the Greens, and I look forward to some gymnastics to explain why it is that families with young children should not get this income relief. I’m sure the Greens will somehow link it to climate change and, possibly, Palestine.

Now, what does this scheme mean? It means that the abatement rate for families earning more than $140,000 per year will reduce and the changes will put more money in the bank accounts of those households currently receiving FamilyBoost. So, in effect, where they once got 25 percent rebates on their fees, they’ll now get 40 percent. So for those 60,000 families that have already made claims and said, “Actually, this is pretty easy. All I did was I went to my very cooperative early childhood education centre who put together a three-month invoice for me.”—as many of them have—“I uploaded it on to the IRD website and, a couple of days later, the cash went into my account. Now, next time the cash goes into my account, instead of it being 25 percent of the fees, it’ll be 40 percent of the fees. I’ll be getting more money in the future.” Great news for those households.

But here’s the next thing: because we are changing the abatement rate, we are extending the group of households who are now eligible for this scheme. Where once there was a cap on the family income, we’re now expanding that out so that families with incomes of up to $229,000 will now be eligible. What that means is that thousands more families can now apply for rebates on their early childhood education fees.

I know this is really meaningful, and I suspect that’s what’s happened with the Labour Party’s voting decision today, because I have met with families who have said to me, “Look, we really like this scheme, but we’re just on the outside of it because between my income and my husband’s income, we’re just over the limit. Would you look at expanding the limit so that families like ours can be eligible for it?” That is what we have done. We have responded to that, we have listened to that, and we have expanded the scheme so that more families can be eligible.

I just want to point out something that has always been the case, which is that the amount that households receive through FamilyBoost depends on one thing in particular, which is how much they actually pay in fees for early childhood education. I want to acknowledge that not all families face high early childhood education fees, and that’s for a range of reasons. Sometimes, it’s because they don’t have their children enrolled for many hours because of their care and work arrangements. Often, it’s because their early childhood education service doesn’t charge very high fees and by the time they get their 20 hours subsidy, their Ministry of Social Development subsidy, there’s not much fees left to pay. However, regardless, families who are within the income threshold, no matter what fees they pay, once those things are accounted for, are eligible for rebates.

The maximum rebate is only available to those paying $300 a week in fees. However, if you’re paying less in fees than that, you’re still eligible for a rebate. Let me step you through this, colleagues. Let’s say your household pays $100 a week in early childhood education fees—not an uncommon amount for a family to spend—well, under this FamilyBoost scheme at the moment, you’d be eligible for $25 a week in rebates. Well, today, what we are voting for is to make it so that you are eligible for $40 a week in rebates, which, over the course of a quarter, really adds up into the bank account.

Let me extend that because it’s been very clear to me that members opposite don’t understand the scheme—so I think they should listen—which is that if a household is paying $200 per week for early childhood education, then currently they’re eligible for $50 a week in rebates. But under this bill that Labour are graciously voting for today, that expands to $80 per week. The point that I am making is, quite simply, that the amount of your rebate depends on how much you pay in fees. Now, it seems to be the position of the Labour Party that everyone should get the same rebate, but, obviously, by voting for this today, they’ve seen that this is the better way to do things.

Inland Revenue estimates that around 16,000 additional families, perhaps more, will access the FamilyBoost scheme because of the changes we are legislating today, and so that is meaningful. It means more families getting assistance with the cost of living at a time in family life when households face so many additional expenses. Many members in the House today will have experienced this period of life and some are still experiencing it when you have children, your costs go up suddenly. Often you need to move into a bigger rental or get a bigger house because there’s a baby and there’s a toddler and they can’t all fit into the two-beddie that you once had, so your housing costs go up. You’re paying for nappies, you’re paying for formula, you’re paying for car seats, you’re paying for prams. It’s right at the time when, actually, your working hours are reduced because of your caregiving responsibilities, so your income is under strain. Then you make that decision that both of you are going to return to work, that you’re going to take on those extra hours of work, and by the time you take on those extra hours and you pay your early childhood education fee, you pay for the car parking to go to work, you start to ask yourself, “How do I make this all add up?”

What FamilyBoost says is that we recognise your effort. We recognise your aspiration that you are working, that you’re paying those early childhood fees in order to support that aspiration, and, we, as the Government, are on your side. We recognise those costs. We’re not going to judge you for which early childhood service you choose, how many hours you send your children for, how old your kids are; we’re going to have a simple scheme that says if you’re in that stage of life, we will refund up to 40 percent of your early childhood education fees in recognition of your effort and family circumstances. So this is a very positive way of standing alongside families at what can be a financially difficult and stressful time in life.

It is the case, that in order to benefit from this scheme, families do need to register and they do need to make claims. Now, 67,000 families have already done so, and I commend the Labour Party for hearing those families and moving from their position, which was previously to deny them the support, because those 60,000 families have voted by applying for the scheme and made it clear that the scheme matters to them. As a result of the changes we’re making today, more families should apply because more families will be eligible.

If anyone in this House wants to know what they can do to support families, then they should make sure they talk to them about this scheme, encourage them to apply, and make clear that more families are now eligible than was previously the case. I strongly recommend that households do that.

Families have been telling Inland Revenue that it actually took them around five minutes to make a claim. I once again want to commend those early childhood education services who have made that process simple by, in many cases, changing their invoicing approach to have collective three-monthly invoices so that the family get the print-out, they upload it to IRD, and they’re right as rain. In fact, more than half of the families who have submitted written feedback on the scheme indicated that they found the process top-notch and easy.

Families who have not already registered and claimed for last year’s rebates can still do so. This is important: families have said, “Oh, well, actually, I never got around to it so I missed out.” Actually, you haven’t. You can still make a claim for fees from last year, so take the time and do it.

Look, to recap, this is about making more families eligible for cost of living support. The changes can be met within existing funding. I want to once again thank Labour for their huge turn-around and their support for the FamilyBoost scheme, and I urge the Green Party to stand on the right side of history and follow Labour’s lead. A divided left is an ugly thing to look at.

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

Hon Dr DEBORAH RUSSELL (Labour): What an ugly speech—what an ugly speech. Here’s why it’s ugly: it is ugly because it is a cover-up. It is a cover-up for the non-delivery of their flagship policies at the election. That’s the only reason we are back in this House today. It was because they proposed an unrealistic policy, they couldn’t deliver on it, and we are back in the House today fixing it up to cover face for Nicola Willis.

We are, of course, supporting a policy that does put more money in people’s back pockets in a cost of living crisis—a cost of living crisis caused by their failure to support the economy. Now, caused by their failure to support the economy, we are back in here covering up Nicola Willis’ failure—a complete failure.

It’s a failure in terms of non-delivery. They promised that 100,000 families would receive up to $250 a fortnight—said it was a fortnight rather than a week. That’s what they promised, but they simply did not deliver it. That was not possible for them. So that’s one of the things that they simply could not deliver. People voted for them on the grounds of getting $250 a fortnight. They did not deliver.

Let’s talk about some of the particularly worrying concerns about non-delivery. Unfortunately for the Minister of Finance, her own officials have pointed to a particular area of non-delivery, and it’s one that we ought to be deeply, deeply concerned about. Sitting in the regulatory impact statement—I’m going to direct people to look at paragraphs 27 and 28—it talks about the population impacts of the Minister’s policy. Generally, it says early childhood education (ECE) participation rates for Māori and Pacific children remain lower than those of other groups. Since FamilyBoost operates as a rebate model, requiring fees to be paid upfront, it is uncertain whether changes to the policy settings—that is the changes that the Minister has proposed—will increase ECE participation among those communities.

This is a policy that puts money in families’ back pockets, but not Māori and Pasifika families. We want to have a long, hard think about the actual delivery of this policy if it is not getting to some of our families who are most in need. Then it says the specific impacts of lower-than-expected reach and average payment amounts suggest that lower-income households, including those overrepresented in this group such as Māori, Pacific, and some disabled people, may benefit less from FamilyBoost. Check the regulatory impact statement. This is because they often use low-cost, donation-based, or poorly subsidised ECE services. As a result, these households are not the ones who are getting some extra money in their back pocket. In a cost of living crisis, those families are not going to get extra money. This policy is there to provide extra money; it is not going to happen for these families who are most in need.

Let’s carry on. It’s reflected in the scheme’s notably low uptake among families using kindergartens, playcentres, and kōhanga reo. In contrast, higher-income families have greater unsubsidised fees, so they are more likely to apply for and get FamilyBoost. This is a non-progressive policy. It’s a policy that benefits the well off more than it does the less well off. Again, that means median families: we know median families are struggling. We know that people need some extra money in their back pockets—of course we will support that, but behind this policy is a record of failure; it is not a progressive policy.

In terms of actually claiming it, we had the Minister saying that—sorry, I want to go to the bureaucracy that surrounds this policy. Now, the way that FamilyBoost works is families pay their fees upfront, they get receipts from their childcare provider, then they go to Inland Revenue’s website and claim the rebate. It’s an extraordinarily labour-intensive policy, and we can tell this. It takes 95 full-time employees at Inland Revenue to administer this policy—95 fulltime-equivalent employees at Inland Revenue to make sure that this policy succeeds. That’s because it’s an incredibly manual policy. Instead of having an automatic policy, such as the one proposed by the Labour Party at the previous election, we have this incredibly labour-intensive policy, which requires 95 fulltime-equivalent employees to deliver it at Inland Revenue.

That’s an extraordinary amount of people who are working on this scheme. In fact, the administrative cost of that in the 2024-25 year was $13 million. That’s how much it’s costing to deliver this policy; a huge administrative cost.

Normally, that side of the House worries about the quality of spending in Government departments. Well, here’s a whole lot of time and effort and money being spent to deliver a policy, because it was a policy which would not work right from the start, and the Minister was told that.

Hon Dr Ayesha Verrall: Face saving for Nicola Willis.

Hon Dr DEBORAH RUSSELL: Yeah, face saving for Nicola Willis. There’s that kind of failure sitting in there.

Then the Minister had the temerity to say that families who have claimed the rebate have found it easy. Well, yes, the families who have been able to claim it would find it easy, but where is the research for the families who have not been able to claim it? How do we know what barriers are sitting there, which means that people are not accessing the payment? It’s all very well to say that people who’ve managed to do it found it easy. What about the people who have not managed to do it? So that is a failure as well.

Then there’s the ad hoc nature of this change; a whole bill going through under urgency in order to change the primary legislation in order to fix up the Minister’s mistake. I see members over there have their faces in their hands worrying about it.

There’s a link to the current tax bill that is going through the House that has just been introduced to this House this week. I want to direct members’ attention to a clause in the current tax bill, because it’s an important one. I take it that members won’t have the current tax bill right in front of them, but clause 80 in that bill inserts a new section, “MH 6 Orders in Council for FamilyBoost”. What it does is it enables the Minister, by Order in Council, to change the settings for FamilyBoost—to change them on a dime, to change them pretty much at will, to change them because perhaps the policy isn’t delivering.

I mean, what that clause in the new tax bill suggests to me is that the Minister anticipates that, even with her changes, there still will not be sufficient families taking up this policy—people still won’t be claiming it, and so she’s given herself a fail-safe. She’s not going to need to come back to the House to tweak the settings yet again; she can just do it from the comfort of her office and hide her policy failures by sneaking it through quietly with an Order in Council.

This bill is, I think, a testament to the failure of vision on that side of the House. It’s a testament to the failure of Nicola Willis’ policy around FamilyBoost. Despite all she was told about how it would not deliver, despite all she was told about how the data was unsure, despite a clear policy alternative about an absolutely sure way to ensure that families got support for their early childhood costs, she decided to go down this path—a path which simply could not be achieved.

I think it’s time for the Minister, instead of just touting the numbers, instead of saying it’s an increase to FamilyBoost—of course it’s an increase to FamilyBoost. But the reason for it is because the Minister’s policy, right from the start, did not deliver. It’s a bit like those wretched boats: simply not delivered. This is Nicola Willis’ record of failure, and it is beyond amazing that she would turn up to the House and say that this is a success.

Hon JULIE ANNE GENTER (Green—Rongotai): Early childhood education (ECE) is crucial support for tamariki. It’s one of the best investments we can make as a society in reducing inequality and improving productivity and ensuring that all tamariki are able to live up to their potential. The future flourishing of Aotearoa, and if you want to think of that in economic terms, is very much about the investment in our people. The research shows that the first few years of a child’s life is the most important for their ongoing long-term outcomes.

There’s no question that the Green Party wants to support early childhood education. When I was Minister for Women, I had the privilege and opportunity to speak to officials and Ministers from other countries and those from the Scandinavian countries like Iceland, Sweden, Denmark. What I found in Norway was that there was a clear agreement that if you want to get better outcomes for women, the policies you have to invest in are paid parental leave and quality early childhood education. The benefits are much greater than just for the children; it’s the ongoing productivity because it means parents can go out and work or volunteer or go to education, whatever it is they’re going to do, and not be under that financial pressure.

Now, currently in Aotearoa New Zealand, we had a policy of 20 hours free early childhood education. I personally have benefited from that. I have one child in early childhood education now and one who’s in primary school who did go to early childhood education. I’m so grateful for the support that they had from the kaiako, the teachers—the loving, supportive, nurturing environment, which meant that I could still be a representative in Parliament and have young children and my partner can continue with his paid work because he’s very passionate about that as well.

However, despite the 20 hours free ECE for three-year-olds and four-year-olds, we still have some of the highest early childhood education costs in the entire world. For families with children in early childhood education, it’s the biggest cost after housing. The Government’s spending a lot of money on ECE, but a lot of it isn’t getting to the families because we have a number of for-profit centres that are returning a healthy return. Now, we have a Government that’s looking to lower the standards, make it possible to have more non-qualified teachers so that it’s easier for owners of those centres to reduce their costs, cut their costs at the expense of the care of the child.

It is such short-sighted policy and today we have the Minister of Finance, Nicola Willis, come in here and proudly claim that this FamilyBoost policy and the legislation going through the House right now is somehow a big win for families and that those who are not supporting the bill, like the Greens, are somehow opposed to investment in early childhood education. What a joke. It’s ridiculous. The Green Party showed in our Green Budget in May that we could provide free universal early childhood education to all New Zealanders, and that would make sense, it would be with qualified teachers, and that would be a genuine investment in the long-term future and productivity of our country.

Why would we support this failed policy of FamilyBoost, which, over the first year, only 249 families claimed the full tax credit when the Government was expecting thousands. Well, I could have told Nicola Willis—I’m pretty sure I did tell Nicola Willis in 2023 on the campaign trail—that this policy was not going to be accessible; it was not going to reach the families that needed it most. It shows how out of touch she and the Government of the day are that they think low-income, working parents have the ability to easily pay upfront early childhood fees and then claim them back four times a year. It’s actually ridiculous.

It’s not easy for the centres. I’ve been out there talking to kindergartens, for example, and they’re very worried about the moves that the Government is making, mainly under the direction of David Seymour, to deregulate the sector, to undermine the quality and training of kindergarten teachers and early childhood educators—just to make it like kiddie farms, basically. I mean, that’s really one of their main donors—the kiddie corp legacy. The people who make their money out of early childhood centres, not because they care—I mean, maybe some of them care about the care of their children, but it’s pretty clear that they’re less interested in healthy, safe, quality teaching and more interested in cutting costs and being able to make lots of money.

That’s just not what early childhood education should be about. It’s a public good. It benefits all of us. The last Labour Government did have a policy that would have been really administratively simple, that would have benefited a lot of families, that would have reduced the cost of living a heck of a lot more than FamilyBoost, and that was extending the free 20 hours to two-year-olds—two-, three-, and four-year-olds. That was about to come in in March 2024. Did it come in? That would have saved families thousands and thousands of dollars if they had two-year-olds in early childhood education. It would have been administratively simple. It would have reached far more families. Let’s not pretend that FamilyBoost is some great policy that is going to benefit lots of families struggling with the cost of living, when they could have had 20 hours free at early childhood education centres for two-year-olds in 2024.

The FamilyBoost scheme entirely fails to address the fundamental issue of the profit-driven ECE sector passing on huge cost to parents and the Government with little transparency about how the funding is used. It’s complex for families, administratively expensive; it doesn’t address gouging by private ECE owners. It doesn’t address the fact that early childhood educators are often not earning enough money to live where we need the centres. So there’s a massive shortage of early childhood education places in Te Whanga-nui-a-Tara—in Wellington. That’s because early childhood teachers, if they didn’t buy a house in Wellington 20 years ago, were really struggling to be able to do their job and live near their work.

So there are issues around housing and transport affordability, which of course the Green Party is aware of as well, but there’s a simple, positive alternative: free early childhood education provided by community organisations rather than for-profit businesses with quality kaiako—quality teachers. The Government could afford to do this—absolutely—if the coalition Government genuinely believed in economic development and things that would boost productivity and address inequality and provide equality of opportunity to every tamariki in this country, they would be looking at a policy like what the Greens have proposed, which is free, universal, quality early childhood education.

I hear that the members opposite are sceptical. They just think we can’t afford it. Well, Iceland can. Iceland’s a country with—what? —350,000 people. They’re not making money out of minerals or oil; they actually have renewable electricity. They have demonstrated that when you invest in people, it is sustainable, and you get a thriving society. So there’s no reason why New Zealand could not have a more visionary policy and something that’s actually going to be effective.

I mean, one thing I can definitely tell you is that investing in early childhood education would get a better return to the economy than spending $2 billion to $3 billion on 1 kilometre of one lane of motorway in Wellington—the centre of Wellington. Like, that’s how outrageous and how utterly backwards this Government is that they think that throwing some money at tarmac is somehow going to benefit the economy. It shows the poverty of thought—absolute poverty of thought—that they don’t understand.

Cameron Brewer: You’re pro-tunnel in Seatoun—you’re pro-tunnel.

Hon JULIE ANNE GENTER: As—Mr Brewer—I failed to mention the other day, I don’t think the National Party actually has the support of the people of Rongotai, because the Green Party got 50 percent more party votes than the National Party did. The Green Party alone got more party votes than every Government party combined in Rongotai, so they absolutely have—oh, and then the Labour Party was very close. OK, the Labour Party was a very close second. The Green Party and the Labour Party together got 66 percent of the vote in Rongotai.

So the Government doesn’t have a mandate. They’re out of touch. They don’t understand what’s genuinely going to benefit the economy or the long-term health of our society. That’s why they plug away with these failed policies that are administratively burdensome, and that don’t reach the families that need it most. It’s all about branding. They think if they go out there and brand themselves as good managers of the economy, “Oh and we care about early childhood”, but only for certain families, not for all families. They don’t recognise it’s not just the families with children in early childhood that benefit from policies like investment in early childhood; it’s the entire country—it’s the entire country, and New Zealanders deserve better.

CAMERON LUXTON (ACT): We’ve just had two contributions this morning in the first and second reading for this bill—one from the member Tuiono and one from Julie Anne Genter—from the Green Party. They have both been a mishmash of confusing anecdotes and getting off track, it has to be said. I heard a couple of quotes in there that might be considered relevant. We heard “not accessible to families” and “certainly not all families will benefit”. Well, I can only assume, based on that, that the Green Party is not supporting because, to surmise, that’s because their average voter base earn above the cap, but, other than that, I couldn’t see why the House wouldn’t support this unanimously. The ACT Party does. Thank you.

Dr DAVID WILSON (NZ First): I find, with some irony, that members across the aisle are casting aspersions on the management of the economy when one particular party was fully in charge of the economy and it was like looking at a train wreck in slow motion. The Marxist manifesto that’s come from the Green members about how we run our economy says that we’ll all be equal and, I suspect, we’ll all be equally poor. This is not just an investment in our kids. It’s an investment in our human capital, our productivity, and our prosperity into the future, which I think all members across the aisle can agree with, and we look forward to their support of the passing of this bill.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Mr Speaker. I’m just going to take a call on the second reading of the Income Tax (FamilyBoost) Amendment Bill. I actually quite like following Dr David Wilson’s contribution. Again, congratulations to the new member who’s joined us in the House. I do find some of his contributions actually very considerate and measured. I didn’t agree with some of his comments around the economy, but, actually, what I did agree with is the acknowledgment of having to come together to help families with the cost of living. That’s exactly why Labour is supporting this bill. We know, and we have affirmed through the first reading, that this bill is actually fixing a failure of a Government policy.

What I found quite disappointing in the first reading of the bill was an interjection that came from the Minister of Finance where she laughed. She laughed about the Labour Party supporting them to fix their bill to support families with the cost of living. I found it quite revealing of the Minister of Finance’s view. This is a bill that’s had to be introduced to fix a problem in her own policy because of the failure for families to actually take up this policy. She’s had to increase and change thresholds and rates so that, hopefully, more families can actually access the FamilyBoost payment. I found it quite revealing that she wanted to laugh about that, given that this is a bill to fix her failure. Perhaps she was actually laughing at herself and not at the Opposition, who was trying to support this bill.

One of the reasons why I believe that this policy has been a failure—and it’s been traversed by members in the House previously—is that, when this Government came in and they decided to repeal the ECE, or the early childhood education, 20 hours free policy that was extended to two-year-olds, that was actually one of the very first policies that this Government decided to repeal. That was a terrible, terrible move because, actually, that ECE 20 hours free meant that families didn’t actually have to do anything. They could just take their two-year-old to their early childhood provider and get, basically, the 20 hours free. There was no paperwork that they had to do other than the normal enrolment of their child into an ECE.

This Government decided to add a bureaucracy and add more red tape, which I thought was quite ironic given their war against red tape. They decided to make it harder for parents to access entitlements for them to be able to subsidise their early childhood education for their children. As Dr Deborah Russell has set out earlier today, what that bureaucracy has practically meant is that there are 95 more full-time employees at the Inland Revenue Department administering this policy at a cost of $13.9 million. Just to help the House understand that, that’s 20 percent of the money that the Government has set aside for this policy spent on administering this policy. I know the Inland Revenue Department; they are very good people who work very hard and would try and make it as efficient as possible—95 fulltime-equivalents (FTEs) needed just to administer this new policy.

It is ironic that, for a Government that wants to make it easier for people to send their children to early childhood education, one of their first acts was to repeal a policy that actually did make it easy, that was hands off and no work, and then they put in a policy where now parents have to make sure they’ve got their invoices and receipts and file a return. That’s come at a cost of $13.9 million for a new bureaucracy that’s had to be set up to actually administer this.

Another interesting statistic for the other side of the House is that IRD have had to field over 28,000 phone calls for this policy. They’ve also had to deal with over 20,000 web messages. This is the red tape and bureaucracy that has been set up by a Government who ironically wants to fight red tape and bureaucracy. Instead of a very simple policy that was in place and that was hands off for parents, they put in a new policy that required parents to do more compliance and also built a new bureaucracy surrounding it.

The other interesting element that has come out through written parliamentary questions around the failure of this policy is that over 41,000 families have actually been declined FamilyBoost. The main reason why they’ve been declined is because their quarterly income is over the income threshold. It’d be interesting to see how those numbers change with the changes of the threshold within this particular bill. The element for me that is most surprising about that is that there’s still only 244 people who’ve actually got the full entitlement. Again, the Government promised it was going to be 21,000 families who would receive the full entitlement, but, actually, only 244 people received the full entitlement. That is an absolute failure. I go back to that initial remark I made around the Minister laughing about it. She should be laughing at herself. This is a failure of a policy, which is, again, why Labour is supporting this. At the moment, families need money to be able to support them.

The other interesting element that has come out through the regulatory impact statement, in relation to administration costs and the ability to make this policy as easy as possible, is that rather than the Government actually putting through urgency some more measures to make the administration easier for families; they actually went and consulted—and I give credit to the Inland Revenue officials who did this—with kindergartens, ECEs, and some experts around what sort of changes they could make to make FamilyBoost easier. The interesting point, which is at paragraph 33 of the regulatory impact statement, is—and I quote—“Most suggestions had a focus on encouraging uptake through making the process easier or more accommodating for families, however, these suggestions could not be achieved within the short-term.” There, in the regulatory impact statement, you’ve got very good officials who are consulting with the sector and saying, “We want to make FamilyBoost easier for families.”, and then you’ve people that they’ve consulted with coming to say, “Well, actually, here’s our suggestions to make it easier.” Unfortunately, because of this rushed process of urgency and the inability for officials to be able to provide a proposed bill for the Minister, they’re not actually able to make the policy easier for families. Yet there’s some very good consultation that was done with some suggestions to make it easier for families.

We support this bill because we know families need every dollar at the moment. What we don’t support is a Minister of Finance laughing at the efforts of the Opposition members in trying to support families to get that money. Again, this bill is an admission of the failure of the Government policy and the Minister of Finance. Her policy has been a flop. That is the flop that’s happened here. It has been a flop from the beginning. As much as people in the sector and as much as people in the Opposition have been saying “Just keep the ECE extent for two-year-olds and up”, because that’s the policy that’s actually in for three-year-olds and four-year-olds. No, for one year, families have additional administration costs. We have a new bureaucracy, which has 95 FTEs. We have 20 percent of the cost of this policy being spent on administration by the Inland Revenue Department. Again, it doesn’t matter what’s in this bill to try and lift rates and thresholds to try and get more families into it; there is still the major issue that this should have been easier for families.

I look forward to seeing whether the Government actually improves the administration of this policy. Hopefully they bring it in a bill next year so that more families can actually access this. At the moment, this is just a band-aid trying to fix a failure for a failed uptake of a policy that’s meant to help families in a time of need. When the Government promised 130,000 families that they were going to get $250, there are still zeros. There’s still crickets from the other side of the House because they can’t find one family at all.

CELIA WADE-BROWN (Green): The Greens will not be supporting what I would call a fig leaf on this coalition’s regressive tax policy and it’s continuing to put taxpayers’ money into the profiteering from the most vulnerable youngest members of our society.

We continue to hear a bit of a myth that this country is the best country in the world to bring up children. But if you look at early childhood provision, if you look at family violence management, if you look at a whole lot of health statistics, this is not what it should be—the best country to bring up our tamariki. You cannot say that other parties care more about our tamariki than the Green Party. We would in this House—and I acknowledge the words from Dr Wilson—probably all agree unanimously that early childhood is the most important investment that we could make. But it’s not babysitting. It’s not an investment just so that workers can go to work and make tax for the Government to spend. It’s an investment in human capital, it’s an investment in the public good.

I was very disappointed when I visited Ko Te Aroha community childcare centre in Masterton earlier this month. They’d actually sought the presence of the National Party MP there, who, for one reason or another, had not yet been able to visit. But what they told me is that this coalition Government does not really care about early childhood care for the following reasons.

First of all, there is no Ministry of Education funding for the buildings. But if it’s a school—so when the children get to five—they get a bit of funding for the buildings. If they’re under five, there is no funding for the buildings. Secondly, they are only funded for when children turn up. So if they have 30 allowable placements but only 27 children come because three are sick—or the parents are sick or there is some other difficulty—then they are only funded for 27. Thirdly, if one of those qualified teachers is sick—and my goodness, the bugs that go around in early childhood; we can all understand how that might happen—it is very, very difficult to get relief teachers, and I don’t see any help from this Government in solving that.

Also, it was a pretty good education going to Ko Te Aroha. They do have some children with high needs. There’s an extraordinarily high number of children who have experienced trauma and maybe those are ones that the private early childhood centres choose not to take on their books, but you get 1½ hours of special-needs support for a child at that childcare centre. It’s low pay already, and if you’re going to try and add up 1½ hours at this centre and 1½ hours at that centre and 1½ hours at another centre, it’s very, very difficult to make a career choice to be a teacher-aide for early childhood education.

So the Green Party’s clear Green Budget supports a much simpler, much more effective way of working with the tax system. This bill is fiddling with the fig leaf on the tax system, not taking a simple approach: first $10,000 tax-free. I would like to see the money that this Government spends on public good not going to fund oil exploration subsidies, not funding tax on tobacco, and if you want to ask me about other issues in the tax system, I would need a lot longer than 35 seconds.

Labour’s spokespeople who talked earlier on pointed out that 20 percent of the fees will go to admin. What percentage will go to corporate profit from centres that are soon going to have far more unqualified teachers looking after our most precious tamariki?

DEPUTY SPEAKER: Before I call Cameron Brewer, I just to clarify that the House has got itself a little bit out of order in terms of speaking. So we’re going to have Cameron Brewer, and then we’re going to come back into order and have Ryan Hamilton straight after Cameron Brewer.

CAMERON BREWER (National—Upper Harbour): Thank you, Madam Speaker. Just looking at the regulatory impact statement as to how successful this policy already has been: $50 million has been paid out to 60,000 families. This is about improving FamilyBoost, making it more rewarding and more accessible to more Kiwi families. I commend it.

RYAN HAMILTON (National—Hamilton East): Oh, $6,240 a year eligible refund—so good. I commend this bill to the House.

DEPUTY SPEAKER: This is a split call.

VANUSHI WALTERS (Labour): Thank you, Madam Speaker. How embarrassing—how embarrassing—for the Government to get their policy settings so wrong and to get their systems so wrong that they have to return to the House. They have to return the House to reset the policy. Now, they are embarrassed, but this is also a Government who is not backing itself. We can see how they’re not backing themselves in something that my colleague Dr Deborah Russell pointed out before, which is that the Government has also introduced an amendment in the annual taxation bill that will allow future changes to FamilyBoost to be made by Order in Council. If you’re very embarrassed now, the last thing this Government will want to do is to have to return back to Parliament to change the settings again if they’re wrong. But they are not backing themselves; they are using an Order in Council to go around the side door if, yet again, they find that their policy settings are simply wrong.

While we do support the changes that are being made in this bill, in truth, we don’t know whether they will be successful because there are unanswered questions about whether parents, for example, have been consulted on what the easiest way to access these supports is. There are issues, also, about the Government failing to see this sector as a whole. My colleague Teanau Tuiono spoke earlier about moving the deckchairs. Having a policy that families can use to support them to make it easier, in terms of the cost of living, to access these services and not looking at the pay of early childhood education (ECE) teachers and not looking at the mechanisms through which they would access those supports is an absolute failure. This Government really needs to think about what those access mechanisms, are as well as supporting our ECE teachers.

The NZEI put out a press statement that talked about the massive impact that Labour Budgets have had in the past, including our policy—our simple policy—of introducing 20 hours of ECE for two-year-olds, the simple policy that would have worked. They talked about the investment into the ECE sector, and they queried whether the FamilyBoost changes would, in fact, help people because of the placement of those administrative burdens on some of the families who least have the time available to navigate the process.

Interestingly, the Government’s own document, the departmental disclosure statement, also echoes this issue. It says that this policy won’t be effective if the uptake is low. The uptake is really the cornerstone in terms of understanding whether these supports will be taken up at all. Now, what we’ve seen in the past is that a number of families simply haven’t been able to access the support. The big questions is: what consultation and what work has the Government done identifying what system improvements can be made? Again, the departmental disclosure statement gives us some insight into this, but there is an important point. It says that there was consultation, however—and I quote—“there was a constrained consultation period with a limited group of public government and private sector stakeholders when developing the proposal to be given effect by this Bill.” There is no mention of parents, the people who will need to use the system. My question would be: what consultation was done with the users of this system? It appears that there has been none. It’s OK, because, again, the Government have put in place a back door where, if and when they get this wrong again, rather than coming back to the House and being up front and open with the people of New Zealand, they can—through the back door—through Order in Council make a significant change to Government policy. I’d put it to the Government that that is not the purpose of an Order in Council. You must not avoid being embarrassed. You must face up to your mistakes.

DAN BIDOIS (National—Northcote): This is a great policy, I commend it to the House.

Hon WILLOW-JEAN PRIME (Labour): Thank you, Madam Speaker. Oh, I haven’t got my sparring buddy here for this contribution.

I’ll start from the beginning—from the very beginning. When this Government came into Government, there was a policy in place—and that was the Labour Party’s policy—to provide funding to extend the 20 hours early childhood education (ECE) subsidy to two-year-olds, because it was currently only available to three-year-olds. What this Government did was they cancelled that policy because they believed they had a better one—they had a better idea and a better plan.

But what we know is that they have not been able to deliver on what it is that they promised to families, and that’s why we are here today, debating this bill, which Labour is supporting because we can see that the Government is admitting their failure, coming here to fix up their mistakes, and to finally get the support that was promised to families.

There has been a bit of discussion in the last few contributions—one of the members on the other side of the House was boasting about the almost $70 million that has been paid out so far, but what that member failed to acknowledge is that, actually, they were expecting to pay out up to $174 million. The difference between $69 million and $174 million is quite a big number. It points to the fact that they have failed to deliver on their promise and to deliver this policy.

I did mention in my previous contribution that I have heard from parents—and I do note that the Government has not consulted parents on this proposed change, but I was talking to parents yesterday who were saying that this Government’s scheme is difficult for parents. It gives them more life admin on top of their busy lives and looking after young children. This Government says, “We have some relief for you, but you have to do all of these things to be able to access that relief.”

Now, compare that to what Labour had in place, which was to extend 20 hours free ECE that was automatic based on your enrolment. This Government says, “We have some relief for you, but you have to collect the receipts, you have to get the invoices, you then have to submit it, you have to do it every so often”—and that is causing a lot of people not to access the support that they have.

In the regulatory impact statement, at paragraph 33, the IRD did do some consultation on this proposed change, and one of the things they got from that feedback was suggestions about how to make it more accessible—how they could encourage the uptake by making the process easier and more accommodating for families.

We were just having this debate across the House in the earlier speeches—the Minister of Finance absolutely ignoring or refusing to listen to the points that I was trying to make on behalf of parents. Her own regulatory impact statement points out that this is feedback that the IRD have been receiving. One of the things that needs to be noted is that, in a rush to address their failed policy, it says here that “however, … [the] suggestions could not be achieved within the [short time frame]”. Once again, this Government refuses to listen to feedback on their policies and make the changes accordingly.

We have some figures that we have been talking about in the House this morning about FamilyBoost and about what was promised but what has actually resulted. We know that only 244 families have received the full amount, and we don’t know—nobody has been able to provide us with one single family who has received the $250 that was promised. Nicola Willis promised 100,000 families would get FamilyBoost, but only 27,000 have consistently received it. Only 27,000 households have consistently received a payment for the year—a payment every quarter—and 67,590 unique households have received at least one payment. We support this bill because we want all of those families who are entitled to receive this support in a cost of living crisis. This bill fixes up the policy’s abject failure.

The other thing I think is really important to note for this House is that this is administratively expensive: $13.9 million has been spent on the administration of this policy. That is an additional 95 fulltime-equivalents. The scheme is complicated, and IRD has answered over 28,000 phone calls about FamilyBoost and also responded to over 20,000 web messages relating to FamilyBoost. It also concerns me, when we look at the data that we have, that, up until 3 September, 41,482 claims have actually been declined. What we know is that around 69 percent of those were declined due to their income being over the quarterly threshold, but the remainder were declined for a range of reasons, including relating to the invoice or due to a return not being filed.

This information that we have received, through written questions and other sources, shows the Government that there is a whole lot more that they could be doing if they genuinely wanted people to be able to receive the support that this policy is promising them. But they don’t want to do that, and I just can’t understand why they don’t want to make this a simpler process for families to receive much-needed financial relief in a cost of living crisis. Why do they continue to ignore that information?

The final thing that I want to talk about in my contribution is the lack of time that has been taken to engage directly with parents. This Minister seems to assume that she has all the answers for that without taking any time to engage with them. At paragraph 34 in the regulatory impact statement, it says: “The short consultation time frame means officials were unable to engage directly with families.”

I know, because I met yesterday with those advocating and supporting families in this early childhood education space, who said they desperately want to be working with the Government and be heard by the Government in terms of the concerns that they have. But because of rushed time frames, because of a dismissal of those concerns that they’re raising, the Government is not prioritising ensuring that they are consulting with that parent voice—and I would suggest that this Minister and this Government do more of that.

Labour is supporting this bill because we recognise that these families who have been promised this support from the Government—who have not been able to deliver on their promise—deserve to receive this. We are supporting it because it is an acknowledgment that this Government’s policy has failed, that it needs to be corrected.

We see—sorry, one other point that I’ll make—that they actually are anticipating that they’ll need to come back again, so they’ve changed the law—they’re making a change in there—so that they can just do this through orders and won’t have to come back and be embarrassed once again. We commend this bill to the House.

NANCY LU (National): I support more tax credits for the 22,000 additional families who can be supported by the FamilyBoost. Therefore, I support the bill to the House.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Speaker. Here we are, cleaning up Nicola Willis’ mess because she couldn’t get it right: she couldn’t design an effective, simple, and straightforward system. She went out on the hoardings and she said there’s going to be thousands of families that are going to get $250 a week—

Hon Barbara Edmonds: 130,000 families.

Hon Dr DUNCAN WEBB: —130,000 families—thank you, Barbara Edmonds—and how many are there? Nada, zilch, none, zero—zero.

The spiteful speech of the Minister of Finance—we’re coming here saying, “If you want to fix it up, we’ll give you a hand.”, and here she comes and attacks the Labour Party because she’s got nothing good to say about the National Party.

But we’re here—and you know what? This is a flawed policy, but it’s not as bad as giving nothing. I honestly don’t understand why you didn’t just give free early childhood education (ECE) to two-year-olds. Look, there are people out there, there are families out there putting baby formula on Afterpay, and you’re asking them to pay for their childcare first, then go and get the invoices, then go online, fill out the form, upload the invoices. We know it’s well-documented that the reason there’s been such poor uptake is if you put enough administrative hurdles in front of people, you will get attrition. Where will that attrition be? It’ll be amongst those people who are less literate or less able or more busy, more distracted, not amongst your wealthy, leafy, middle-class families who’ve got a bit of time for admin for an evening; no, it’ll be those people who’ve got three kids and three different jobs and who are struggling to make ends meet.

So this doesn’t help those that need it most—the most. It actually provides a very generous subsidy right up into quite high income brackets. It abates, I think, at a family household income of over $200,000. Whereas, we think the help should be going to those that need it most. This will help some truly needy families, and that’s why we’re supporting it.

But let us be clear: this is a patch on a policy that failed. We need to address the real issues in our country, and whilst this will give some relief against the horrific cost of living crisis that that Government is overseeing, it doesn’t go far enough. We need genuine measures to address things like the cost of food. If people are putting baby formula on Afterpay, going to the gas station and having to borrow money to put petrol in their car to go to work—these are the problems that families are facing, and that Government is not interested in addressing them. They’re fiddling at the edges. There are no measures. In fact, it’s the opposite. They are putting costs up; things like the Natural Hazards Commission, car registration, the soon to be petrol tax. They are actually creating inflation in Government charges. Here we have a derisory patch on a policy that, in fact, favours the well-off, rather than those that really need it the most.

We are supporting the bill. In the tone of the speech, you might wonder why we are supporting it—because one of the things it does is help families who are really struggling with their childcare and ECE costs, and that is a good thing. It’s the least bad piece of legislation that the Government has presented so far, so we will support it, but for Nicola Willis to come in here and pretend that in some way this isn’t just a fix of an absolute policy flop is ridiculous. She should come in here humiliated and be humble, to apologise for the mess she made and that she’s having to ask us to help her out. Here we are, happy to help out—

Carl Bates: Humble like Duncan Webb!

Hon Dr DUNCAN WEBB: There’s Carl Bates—keep up the good work!

Look, this is a policy which hasn’t worked. It’s a bit of a fix; it doesn’t go far enough. The sooner that Government is removed and we can make some real change that helps those that need it the most, the better.

Motion agreed to.

Bill read a second time.

ASSISTANT SPEAKER (Teanau Tuiono): This bill is set down for committee stage immediately.

In Committee

Clause 1 Title

CHAIRPERSON (Barbara Kuriger): Members, the House is in committee on the Income Tax (FamilyBoost) Amendment Bill. We now come to clause 1, and this is the debate on the title. The question is that clause 1 stand part, and I just wanted to make a point before we start this. We have received a number of amendments around the title and I’ve had a good look through them, and it’s likely that I will rule some of them as an attempt to criticise the bill. I just wanted to make members aware, before we started clause 1, to just be very logical with the title clause amendments, because some of them are quite a stretch. Having said that, the question is that clause 1 stand part.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Point of order, Madam Chairperson. Just to clarify: we’re going through this clause by clause, are we?

CHAIRPERSON (Barbara Kuriger): I have not been told any different.

Hon Dr DUNCAN WEBB: OK. That’s good. Yes, well, I’m very happy to talk about the title, because I do think that the title doesn’t really capture what this bill does. Madam Speaker, I may take a call.

Really, this is a bill which addresses the problem that there are no people, and it’s unlikely there ever will be any people, getting $250 a week, which is the maximum that people are entitled to. Presumably, I think the Minister said in her speech—well, she alluded to the fact that, in fact, to get that amount of money, you’d have to be paying an enormous amount of childcare because of the fact it’s a subsidy and it doesn’t pay for all the childcare, and childcare doesn’t usually consume that amount of household income.

Really, we should be calling this bill something along the lines of the “Income Tax (Imaginary $250 Per Week Subsidy) Bill”, because that’s what it is: it’s imaginary. In fact, it was misleading to go to the electorate and say that there were going to be those subsidies to a large number of people. The Government hasn’t fronted up and said, “Look, here are the actual figures.”, because they will now know. They will actually now know, with a pretty high degree of accuracy, what the curve of the subsidy will be, who will be getting the most and how much that will be and where it will tail off, and what the entire curve and distribution of those will be. The Government should be upfront about that.

Look, in fact, if we’re going to change the title of the bill, and, in fact, we should—and, in fact, there may be some tabled amendments, either here or arriving shortly, that do that. The “Income Tax (Imaginary $250 Per Week Subsidy) Bill” is a good start, but if you don’t like that one, I’ll address some more in due course.

Hon Dr DEBORAH RUSSELL (Labour): I, too, want to speak to the appropriateness of this name. In particular, I want to talk about it because, although on the face of it what this bill does is just increase the amount of FamilyBoost available to families—and this is a good thing which we’ve said we support because of the cost of living—in actual fact, it disguises what really has gone on with this bill. That is that right from the start, this policy was flawed; was flawed not because it was attempting to give money to families, but it was flawed because the money could not be delivered. The delivery mechanisms weren’t there. The data wasn’t there to support the Government’s analysis that it would go to 100,000 families. The data certainly wasn’t there to show that people would get $250 a fortnight, as the Prime Minister promised during the election campaign.

We pointed this out as the initial FamilyBoost legislation went through the House, I think, back in Budget legislation. We said there would be problems with delivery. We pointed out that there were issues with the policy. We said a simpler way to do this would just be to give a straightforward subsidy via the early childhood education 20 hours free that already exists. We warned the Minister that her policy would not work. Well, you know, it hasn’t worked.

So we’re coming back now to this House in order to save Nicola Willis’ face. She promised money; she couldn’t deliver it. That’s the real reason we are in this House today. So disguise it, as one might, by claiming it’s all about just putting more money in families’ pockets; good thing to do in a cost of living crisis. What it’s really about is fixing up the giant stuff-up that was made.

I think that this bill should be called the “Income Tax (FamilyBoost) (Saving Face) Amendment Bill”. I think that ought to be the way that this is referred to because all it does is try to save Nicola Willis’ face.

Hon SIMON WATTS (Minister of Revenue): Thank you very much, Madam Chair. For those watching this debate at home, you can tell by the quality of the contributions from members of the party on my left that they are not taking what is a significant benefit for New Zealand families seriously at all. The fact that we are increasing the income threshold for people to be eligible for FamilyBoost from $180,000 to $230,000 is a significant increase in scope, and the fact that we’re increasing the credit from 25c to 40c is significant. I think, in all fairness, let’s take this issue seriously. This is a significant win for New Zealand families, and we should treat it as such.

CHAIRPERSON (Barbara Kuriger): Can I just make it clear that I will judge the quality of the contributions, thank you.

Hon Dr AYESHA VERRALL (Labour): Thank you very much, Madam Chair. It is with the utmost seriousness that I begin my contribution, because, of course, Labour is supporting this bill. We recognise the Government has owned up to its mistake, today, and has finally—after months of pressure in this House from my colleague Barbara Edmonds and from my colleague Dr Deborah Russell—seen the light.

We want to be recognising the fact that they have changed their policy, their unworkable policy that they took to the election, and—to just make sure that this is appropriately recorded in legislation—to give the bill a title that reflects what it actually does. Because we’ve been so vigorous in the House in our prosecuting of the fact that this policy has been unworkable, we would just like the gratification of having that reflected in the title. So we would like this to be the “Nicola Willis Caves to Labour’s Pressure Bill”, because that is a description of what’s actually happened. The Government has defended this policy in this House for months. We have made the case that no one received the $250 that they were promised at the election and, therefore, we now want to have this turn-around appropriately noted.

The other potential name for this bill—because we know, as the Minister reflected in her contributions, that people are finding it tough out there. There is a cost of living crisis, and the Government has spent an awful long time supporting an Act that wasn’t delivering to expectations for New Zealanders. I would humbly like to suggest this is called the “Out of Touch with Working Parents Bill”, because working parents face everyday realities of making their budget add up. Childcare is a significant cost, and yet, for two years, the Government has been arguing that this unworkable policy that they are now having to correct was all right. Yet today, under urgency, we’re passing a change to all of that. So it would just be appropriate to note that the Government has recognised that it hadn’t met the needs of working parents because it was out of touch.

Then, finally, I think working parents would, quite rightly, ask the Government whether this could be called the “Show Me the Money Bill”, because they haven’t been getting the money. There are multiple instances of Christopher Luxon saying at the last election that working families will get $250, and yet the Government can’t find a single family that has received the $250—yet the Government can’t find a single family that has received the $250. We saw a valiant attempt at defending that from the Minister of Finance in the earlier stages of this debate, when she said—I think she was, essentially, saying that, theoretically, if someone did have high costs, they could get a $250 rebate from this policy, but the fact that no one exists who’s got that rebate shouldn’t be held against that Act. That is absolutely ridiculous, and Kiwis could, quite rightly, ask the Government to show them the money.

Then, when I reflect on this—that this was a policy the National Party designed in Opposition and that has proved to be utterly unworkable in Government—I’m also reminded of their cancer medicines promise, which they had to defer because they couldn’t get that. So we could also call this bill the “Problems in the National Party Policy Shop Bill”, because they’re unable to really seriously put forward proposals that would help working people.

Finally—because I do find Mr Campbell’s contributions give me many reasons to continue to speak—we could also think about the fact that this is, as my colleague has said, face saving and yet has been an overly bureaucratised bill with 25 percent of the costs going on to administration of the bill rather than giving relief to working families. So we could call it the “Making Red Tape Bill”, because I know that is a particular preoccupation on the part of Government members.

So there we go: five excellent contributions to renaming this bill!

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Chair. I want to support a number of those amendments to the bill title that the Hon Ayesha Verrall has just run through, because it is quite farcical that this particular bill is here fixing the mistakes of a policy that was bound to fail because of the administration costs—the compliance costs. Then, when I look at, actually, the regulatory impact statement about what’s the policy problem: “The policy problem is that FamilyBoost is reaching fewer families and providing less financial assistance than originally intended.” So it’s quite clear that this is an admission of a failure of a bill.

Hence why my suggestion to the Minister, in relation to this bill, is maybe calling it the “Income Tax (Save FamilyBoost from Further Failure) Amendment Bill”. It’s quite clear that, through the contributions in the House this morning, which clearly set out all the different failures—from when the admin cost is around 20 percent of the spend; when it was promised that 21,000 families would get the two full $250 that was promised at the election actually being less than 300 families; or the 130,000 families that were entitled to FamilyBoost that was then revised down to 100,000, which is now less than 70,000, or actually 58 percent, as set out on the regulatory impact statement—I think the “Income Tax (Save FamilyBoost from Further Failure) Amendment Bill” is actually a perfect title for this particular bill.

Then, also, to Dr Verrall’s other contribution around the “Income Tax (Out of Touch for Working Parents) Amendment Bill”, I think that is a fitting title for this particular bill, because as we set out earlier in this debate, the number of steps that parents have to go through to actually get their entitlements for this bill—her suggestion as to rewording this as “Out of Touch for Working Parents” is actually a very fitting name for this bill, because, again, as I questioned in my second reading speech, my question or my thing to the Minister really was: “Is there going to be more bills to fix this policy?”, given that this bill does not even touch on improving administration; it just increases the families who are entitled to it. Again, as I’ve prefaced before in the House, the question that I had around the administration is that it needs 95 fulltime-equivalents. We can probably go through those questions as we work through the rest of the clauses.

I do believe that this should be called the “Income Tax (Save FamilyBoost from Further Failure) Bill”, because it has been a failure of a policy. We’ve had an admission from the Government that they’ve had to bring this bill to the House, rush it under urgency to try and get more families entitled to it, which is why Labour is supporting the bill. But it is a failure from this Government, full stop. When both the Green Party and the Labour Party, in earlier speeches, said, “You should have just extended early childhood education to two-year-olds”—a policy that was minimal administration for families; it was already a policy that they have to undertake when their child turns three and four years old—instead, the Government decided to repeal it and bring in the FamilyBoost policy, which is clearly not boosting anybody sufficiently, which is why they’ve had to come back, fix the legislation, and, also, why they’ve actually got another bill—another tax bill, actually, another tax bill—that has some changes through Orders in Council, which Dr Deborah Russell had talked about. My suggestion to the House is that we should call this the “Income Tax (Save FamilyBoost from Failing Even Further) Bill”.

Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Madam Chair. We’re here in urgency and, obviously, we’re not going through a whole process, and I believe that when this bill was originally brought in, it was also—the primary legislation this is amending was brought in under urgency, during Budget urgency, and so we’ve never had a select committee on this policy or this legislation. Reading from the regulatory impact statement the summary of the options to expand FamilyBoost, this is from the officials at Inland Revenue: “What is the policy problem? The policy problem is that FamilyBoost is reaching fewer families and providing less financial assistance than originally intended.” Well, intentions are all good, but here we are: we have the evidence that FamilyBoost has not been working.

During a cost of living crisis, it has not been providing the financial support to families who need it and that it was intended to, and so what would have been much better was if the coalition Government and Nicola Willis hadn’t cancelled the planned extension to free 20 hours’ early childhood education (ECE) to two-year-olds. That would have easily reached a whole lot of families in the past year and a half. It would have meant thousands of dollars more in the pockets of families of two-year-olds. It would have made a substantial difference, and here we are, rearranging deckchairs on the Titanic of this policy, which is—

CHAIRPERSON (Barbara Kuriger): Can I just remind the member that we’re on the title.

Hon JULIE ANNE GENTER: Yes, we’re on the title, and—

CHAIRPERSON (Barbara Kuriger): Thank you.

Hon JULIE ANNE GENTER: —that’s why—I mean, but the title says it all, right? “(FamilyBoost)”—it’s all just a marketing exercise to make it look like the coalition Government actually wants to help families when they chose to give billions of dollars to landlords and tobacco companies, and for that reason, they didn’t have enough money to do the planned extension of 20 hours’ free ECE, which would have actually helped families who had two-year-olds.

Instead, families with two-year-olds in early childhood education pay thousands and thousands of dollars more, and a very small number—250—and what is that as a percentage of the population? There were 250—no, 249 families—who went through the process to get some sort of rebate. That’s just a pathetically small number, and it doesn’t begin to touch the number of people with two-year-olds. They were saying with their policy, “Oh, well, we thought there’d be a 100 percent uptake.”, but now, even with these changes, they’re saying that a more realistic uptake is 71 percent of eligible families. That means that 29 percent of eligible families—which is nearly a third—are not estimated to take up the benefit of this policy.

So there are many alternative titles, but it’s like “Income Tax (FamilyBoost) Amendment Bill” is not a title that actually captures the impact of the policy. I very much agree with the Hon Barbara Edmonds, the previous speaker, who has said that this should be called the “Income Tax (Trying to Save FamilyBoost from Failing) Amendment Bill”.

Look, a better solution would be not to do this legislation at all, but to go back to what the Green Party have supported, or at least the halfway house of what Labour has suggested, of extending 20 hours’ free early childhood education to two-year-olds. What if we just said that all tamariki are eligible for free, universal public and community early childhood education—why not? What is the reason to not do that? Wouldn’t that be a better policy to achieve the intended outcomes of this bill?

We haven’t been to a select committee, but it’s pretty clear that the policy objective is to improve the uptake of FamilyBoost by increasing the number of eligible recipients and the payment amounts to better align with the Government’s intended level of support. It’s clear that this policy has not worked, and while this legislation—this tweak—is going to try and make sure that more families get the benefit, it’s not as good as what we could have, or anywhere near as good as what we could have.

When we talk to people in the early childhood education sector, they’re very, very clear that this Government doesn’t support quality teachers and it doesn’t support quality early childhood education. It is taking steps through the review to try and water down early childhood education so that it’s easier for the owners of for-profit centres to cut costs, rather than looking at the outcomes we want. The outcomes we want are children who receive the care and who receive the early childhood education that they need to thrive, and we want families that aren’t out of pockets by tens of thousands of dollars every year in order to ensure that they can access that. It’s not a hard ask.

The title of this bill is wholly inadequate. It’s a joke. It should be called the “Income Tax (FamilyBoost is a Joke) Amendment Bill”.

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

CHAIRPERSON (Barbara Kuriger): Dr Lawrence Xu-Nan has been really keen to give a very quick title speech, so I’m going to give him that opportunity.

Hon Dr Duncan Webb: So has the Hon Dr Duncan Webb.

CHAIRPERSON (Barbara Kuriger): Yeah. I just said I’m going to give Dr Lawrence Xu-Nan the chance to talk on the title. I note that the Hon Dr Duncan Webb has had one chance. I do want to remind the team that we are on the title, and we are getting to the point where we’re straying off the title and into other things which are more important to talk about.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair, I really appreciate it. I do want to address the title because I think, overall, what we’re finding here is an incredibly laughable and out-of-touch bill, mainly because it is providing a technical solution without addressing the core issues that we’re currently seeing with FamilyBoost.

So my recommendation is that this title should be “Income Tax (FamilyBoost, but With a Massive Caveat That We’re Still Going to See Limited Numbers of Households Being Eligible to Get FamilyBoost) Amendment Bill”. I mean, I do acknowledge that it’s a very wordy title.

But, I think, if we’re boiling it down, the title should be more appropriately called “FamilyBoost, yet another blue and yellow and black tape we’re seeing by this Government”. So “(FamilyBoost and Blue Tape) Amendment Bill”, because that’s what we are seeing here.

Although we are wanting to address the fact that this is a genuine concern—there are going to be, supposedly, more allocations of budget for something like this—the core crux of the issue, as we’ll discuss further along, is that not enough families have the time or the energy to claim the reimbursement in the first place, which is something we said when this Act was introduced under urgency in last year’s Budget.

So an alternative title should be “Income tax (the Government is Out of Touch With Young Families) Amendment Bill”, or “Income tax (This Government Think That Parents of Young Children Don’t Already Have Enough to Do) Amendment Bill”. Because, frankly, the Government members are completely out of touch with what young parents. Not everyone has the fancy resources that the Government members on that side of the House have; some of them have to work multiple jobs; there isn’t sufficient time to do the compensation and to look at the commencement, to look at—the ability for families to apply for that retrospective amount. That’s my final one. I think that’s the one to land on: “Income Tax (The Government is Out of Touch With the Parents of Young Children)”.

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

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

Ayes 68

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

Noes 54

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

Motion agreed to.

CHAIRPERSON (Barbara Kuriger): Now we come to a number of questions and the first one around the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Zero Families Fully Boosted” is ruled out of order as being merely an attempt to criticise the bill.

There are a number of tabled amendments which are also deemed by myself as merely an attempt to criticise the bill so I don’t think we need to go through those one by one, is my judgment.

Hon Dr Duncan Webb: Yes, we do. Point of order.

CHAIRPERSON (Barbara Kuriger): My advice says no, I don’t, Dr Duncan, but I will hear your point of order.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Well, the Standing Orders and Speakers’ rulings in dealing with amendments allow amendments to be dealt with together where they are all, essentially, achieving the same thing. Each one of those amendments that you are addressing is quite unique, has a quite different title, and makes a quite different point, eo each of them should be dealt with on each of their merits—whatever the decision of the Chair is or this committee, should be dealt with individually.

CHAIRPERSON (Barbara Kuriger): OK. Yes, I could group them but I’m going to actually read them as the member’s suggested. It won’t change the result but, as the member’s requested, I will read them.

The next one is that the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Broken Promises” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Wealthfare” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Show Me The Money” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Imaginary $250 Per Week” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Desperate Vote-Grabbing Measure” is ruled out of order as being merely an attempt to criticise the bill.

The question that the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “FamilyBoost, But Not Really for Māori or Pasifika” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Bigger Subsidies for Richer People” is ruled out of order as being merely an attempt to criticise the bill.

That the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Cleaning up after Nicola” is ruled out of order as being merely an attempt to criticise the bill.

The question that the Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Leadership Chances Boost” is ruled out of order as being merely an attempt to criticise the bill.

And that Hon Dr Duncan Webb’s tabled amendment to clause 1 replacing “FamilyBoost” with “Pay First, Subsidise Later” is ruled out of order as being merely an attempt to criticise the bill.

Hon Dr Duncan Webb: Point of order. That last one, though, that really is quite an accurate description because—

CHAIRPERSON (Barbara Kuriger): I think—I’d ask the member to be careful about trifling with the committee. I ruled these out of order—

Hon Dr Duncan Webb: But it’s only the one that I’m asking about. Just reflecting that “pay now, subsidise later” is actually an accurate description of what this bill does.

CHAIRPERSON (Barbara Kuriger): My judgment has been made, the Hon Dr Duncan Webb. I’d like to ask you to resume your seat and then—

Rima Nakhle: When’s your 13th birthday? So we can get a cake.

CHAIRPERSON (Barbara Kuriger): Quiet please, we’re voting.

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

Ayes 68

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

Noes 54

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

Clause 1 agreed to.

Clause 2 Commencement

CHAIRPERSON (Barbara Kuriger): Members, we now come to clause 2, which is the debate on commencement. The question is that clause 2 stand part.

Hon Dr DEBORAH RUSSELL (Labour): This bill comes into force on 1 July 2025—so that’s backwards-looking from today’s date, which is 17 September. Now, in a sense, that makes a certain kind of sense because this childcare rebate is claimed in arrears. People have to pay the childcare fees up front and collect the receipts from their early childhood education provider and submit those to Inland Revenue, who will pay out the rebate. Even though people are eligible for it from 1 July 2025, they won’t actually have the receipts or make the claim until the end of this quarter. In a sense, going retrospective there is not such an issue.

However, the more interesting thing to consider is: why not make the commencement date for this bill 1 July 2024? Now, there is a tabled amendment putting this in place, in my colleague the Hon Barbara Edmonds’ name, and it’s a very simple one: just replace “2025” with “2024”. It means that the changes in the bill would take effect from 1 July 2024.

The Minister of Finance, when she has been asked questions about this in the committee—I’m referring there to the pressure that my colleague the Hon Dr Verrall has referenced in her speech—has made much of the point that families don’t lose the capacity to claim for their childcare just because the quarter has passed. They can save up their receipts and claim them all in one lump, if they like, at the end of the year or at any time that actually suits them. The point of filing them every quarter is just that that’s how often a family may do it—they are not required to do it every quarter. In fact, I think the Minister of Finance has, at times, said that, in fact, families could claim in three or four years’ time if they wanted to, as long as they had saved the receipts. It was not necessary to claim on any particularly time-bound basis, except for that up to four years.

She has also said that, really, one of the reasons—well, she hasn’t really said it this way—that we are here debating this is that, quite simply, FamilyBoost wasn’t paying out enough. There weren’t enough people claiming it. The settings were wrong. It seems that not everyone who could claim it was claiming it; that not enough people were aware of it; that the only reason that FamilyBoost hasn’t paid out as much as the Minister had hoped was because of some of those issues around not understanding it and so on.

It really does beg the question: if we want to subsidise families more—if we want to cover more of the cost of childcare—why not go back to 1 July 2024? Those receipts are already in. It would be quite straightforward for Inland Revenue to go back and pay out the additional subsidy to those families who had already been there. Why not go back? The idea was to get the settings of FamilyBoost right to ensure that the amount of money that the Government had budgeted for it was actually getting paid out, but, in order to do that, I think it behoves this Government to go back to 1 July 2024.

There will be families who have got receipts sitting there who would probably like to claim them now. Perhaps they might be able to do that if this went back to 1 July 2024. I’d ask the Minister to consider whether or not it would be reasonable to go back to that date on the grounds that that would then get more of the payout that that Government promised to families actually into families’ hands on a reasonably timely basis. So some explanation around that commencement date, please, Minister.

Dr LAWRENCE XU-NAN (Green): I do want to speak to my amendment which addresses a similar query, and I guess we’re looking to the Minister in the chair for some response on that. My amendment also states the commencement date should go back to 1 July 2024 when FamilyBoost was first introduced, because noting that the date 1 July 2025 is already retrospective, there’s no reason for us to go back even further. Based on what we’re seeing in terms of regulatory impact statement, it also doesn’t specifically highlight, at least from a cursory reading, the reason for that particular retrospective date—I understand it is the beginning of a quarter; that does make sense.

The commencement date also introduces, I guess, a recommendation but also a question for the Minister. I guess the recommendation is: noting that the commencement date is retrospective to 1 July 2025, would the Minister, then, consider streamlining the process of rather than having people reapply for that period if they have already made application, just simply letting IRD, who already have that data on file, proactively give the money to the families and with a difference based on the commencement date. That might be something—just checking. Yeah, that is something I’m not seeing in the bill as providing any clarification. Would the Minister be able to clarify?

My other question to the Minister is: what does the date 1 July 2025 imply? Does it imply the date of service, as in that a family is able to apply for the reimbursement and get the higher rate from 1 July 2025, or is this the date of the application to IRD for reimbursement?

Let’s say certain families who are have applied, maybe proactively before that day, let’s say for the first quarter or for the second quarter—probably in this case more for the first quarter—would not be eligible for the new threshold, whereas families who are applying for the first quarter potentially after the 1 July date then would be eligible for the higher threshold.

So I’d like a clarification from the Minister as to whether 1 July implies the date of service, as seen when a child is at early childhood education and therefore they are eligible for it, or the date of application for reimbursement. Thank you.

Hon SIMON WATTS (Minister of Revenue): Thanks, members, for those questions. In regard to the question on the ability for people to reapply, people will not need to reapply for claims open on 1 October 2025 for early childhood education fees from the 1 July 2025 to 30 September 2025.

In regard to the question around retrospectivity in the amendments, we will not be accepting those amendments. We’ve had 240,000 applications. To have to go back and reopen every one of those 240,000 applications, re-evaluate, and make that is simply not a practical reality—hence the practical pathway that’s been outlined.

Hon BARBARA EDMONDS (Labour—Mana): This really is the “show me the money” moment for the Government. The Opposition is trying to support the Government to ensure that it meets the purposes of the bill, which is to increase the number of recipients eligible for this payment, to increase the payment amounts, and to maintain the fiscal envelope, but what we’ve just heard from the Minister in the chair is that he does not believe that this should be retrospective back to 1 July 2024, which is covered within the amendment by Dr Lawrence Xu-Nan and also my tabled amendment.

My question to the Minister is: if the Minister of Finance has continually said that families have up to four years to be able to be entitled to this and to lodge their claims for FamilyBoost, why can’t this go back, then, the full four years in which the FamilyBoost payment came into force, which is 1 July 2024? It meets all the purposes of this bill, which the Government has brought to the House because of its failure of this policy. Why, therefore, can they not show families the money that they’re entitled to and take it back from when it first began? The Minister, in his response to an earlier question, just said that October of 2025 is when they’ll be able to apply, but it goes back to payments from 1 July 2025. That makes total sense. Because this is backward-looking, take it all the way back from when FamilyBoost started.

Is the real reason why the Government won’t support those amendments by both Dr Lawrence Xu-Nan and myself because they don’t want to pay out that money to families? They’ve had to come to the House today to change their policy, to fix their policy failure. They’re getting good-faith support from the Labour Party to be able to do so. Why, therefore, can’t they take it all the way back to when FamilyBoost started, which is only an additional year?

To the Minister’s point that they’ll have to go and reopen 240,000 claims, that is still fewer than actually what was first proposed. If the committee can remember, this Government promised that 130,000 families would be eligible for FamilyBoost when they campaigned on it. Instead, we have less than 70,000 families who’ve got FamilyBoost. I think it’s worth the effort, given you’ve got 95 fulltime-equivalents at IRD having to process this. You’re spending 20 percent of this particular policy on the administration. I think you have the resources available to be able to support those 240,000 claims to be able to take them back. If you can do it for the full four-year period, why can’t you do it for a one-year period?

I think this is really the “show me the money” moment for the Government. They’ve come here, they’re fixing their policy failure. They’re saying, “Well, we want more people to be entitled to FamilyBoost.”, but they don’t want to take it back to the very first day that FamilyBoost was in. I don’t think I’ve heard a clear reason other than reopening 240,000 claims. You’ve got the resources, you’re spending 20 percent of the money on the administration, you want people to be entitled to their entitlements—definitely the Prime Minister wants the people to be entitled to their entitlements—so do the right thing by Kiwi families and take this back one year to when you first introduced this policy. We will ensure, as we’ve said, we’ll support you with your policy-failure fix.

Take it back to 1 July 2024. Otherwise, I don’t understand why the Minister is concerned about the 240,000 when the Minister of Finance has said that it can look back past the four years. I’d like a response from the Minister on those particular comments. You’ve got the money because it’s been underspent, you’ve got the bureaucracy set up, and you’ve got the actual information. I don’t understand why you can’t just go back to 2024 other than because it doesn’t meet the fiscals. If it doesn’t meet the fiscals, then it just shows how much more of a failure this policy is in the first place.

RICARDO MENÉNDEZ MARCH (Green): Thank you, Mr Chair. This is my first opportunity to speak on this bill, and I wanted to follow up on questions in relationship to the commencement date. I notice that the clock is not moving on me—we can start at five minutes. Thank you very much.

In relationship to the questions that have already been asked, this is something we could have unpacked at the select committee stage. I want it to be noted that we are debating this in urgency. Some of the questions that I think could have arisen at the select committee stage—and, certainly, some of us would have lodged parliamentary written questions to try and ascertain this—is whether, at all, at any point during the development of this bill, the Minister of Finance sought advice on the costings that would have been involved should this have been made retrospective to 1 July 2024.

Did the Minister, at any given time, seek advice in relationship to making it retrospective to the 1 July 2024 date which, as others have canvassed, has an amendment on the Table in relationship to it? If the Minister did indeed seek advice in relationship to exploring options to that date, did officials provide any potential costings that would have involved having this bill with a commencement date of 1 July 2024; if that was the case, what were those costings?

I think the questions that my colleagues have raised are incredibly valid because I think the current commencement date does not seem to meet the intent of the bill as publicly stated by the Government, which is to have more families access this payment. So I’m curious to know as to whether the Minister even bothered exploring this option.

In the regulatory impact statement (RIS) that we’ve been provided, there were four options that were given to the Minister, but we don’t have much detail in terms of whether, at all, the option of having the commencement date on the 2024 date was explored, whatsoever. Following from that, if the Minister did explore having the commencement date in the development of this bill being the 1 July 2024 date, I wonder whether he also asked for a distributional impact analysis, particularly because of the changes in incomes and job losses that we’ve experienced over the past 12 months. I can see that the profiles of people who may have been eligible between the 1 July 2024 date, as proposed by my colleagues, and 1 July 2025 would have changed. Did the Minister seek any advice around the sort of profile of people who could have been eligible for what it is in this bill and 1 July 2024, compared to now?

This is quite important, I think, because the Government talks a lot about the state of the books and I think it would have been quite negligent to not have sought advice of what moving this to 1 July 2024 would have looked like. I think, because we did not have a select committee process, it’s really critical that the Government is upfront with exactly what the initial scoping was that would have been done to develop this bill. The RIS does note that there’s four options, but I’m sure that in the earlier discussions that he would have been having with officials—we could have found out through parliamentary written questions or a select committee process, should this bill have not been brought under urgency, as to whether this date of 1 July 2024 was explored all together.

Just to recap—the questions are: whether, if at all, the Minister of Finance sought advice on an earlier commencement date; if not, why not? If she did ask for the advice, did she get given any costings as to the implications of moving this to 1 July 2024, and whether a distributional impact assessment would have been done if the Minister had explored, at all—in discussions with officials or colleagues—moving this date or exploring having the date beginning 1 July 2024 as opposed to 1 July 2025?

Once again, this is all stuff we could have explored in the select committee stage, which the Government chose not to have, despite knowing for quite a few months that not many families were accessing the full amounts that this policy was intended to provide.

Hon SIMON WATTS (Minister of Revenue): Thank you for the contribution. As part of the policy development process, the Government received a wide range of advice. The four specific options that were considered in the context of this bill are, as the member noted, outlined in the regulatory impact statement, and I refer the member to look at those bullet points which outline the key considerations that were given to this policy.

I appreciate that some members in the Chamber might find it ironic that sometimes you need to stay within appropriations that you set in a Budget—OK? On the opposite side of the Chamber, that doesn’t really mean anything, where it’s just spend money like there’s no tomorrow, fire-hosing the money around, hoping it hits a target, and it never does. I’m glad those days are over, OK? We’ve got sensible, balanced people who actually understand the economy in charge of this place.

We’ve got an appropriation, and the changes in the context of this bill ensure that we meet those requirements.

Hon Dr DEBORAH RUSSELL (Labour): Thank you, Mr Chair. I would like to point out to the Minister in the chair that he makes a good point about staying within appropriations, but, of course, there has been an underspend in this appropriation—

Hon Barbara Edmonds: A massive underspend.

Hon Dr DEBORAH RUSSELL: In fact, a massive underspend, and that’s why we’re here, so I’m not sure that that quite answers the point that was being made.

I do want to raise a particular issue—it’s an administrative issue—and I hope that the Minister has talked this over with his officials and that he can provide some reassurance on this because the Minister is not going to backdate this policy to 1 July 2024, but he is going to backdate it to 1 July 2025, and because, as we’ve been told frequently by the Minister of Finance, it’s perfectly possible for people to save up their receipts from their early childhood education provider and submit them in lumps.

I’m thinking of a scenario, Minister, where perhaps a family that hasn’t claimed previously—but, thanks to this bill, is now aware of it because we’ve had to come into the House and fix up these mistakes—would have a whole swag of early childhood education receipts, say, from March this year, or whatever, from April, May, June, July, August this year. Actually, August wouldn’t matter, but last year as well.

Of course, those are receipts that would be eligible for the rebate up to 1 July 2025. I’m thinking of the receipts from 1 July 2024 through till 30 June 2025, for childcare in those periods. Those receipts are eligible for the original rebate—the failed rebate, the one that was simply not paying out enough—and, of course, the receipts from 1 July 2025 onwards are going to get the new refreshed and revised rebate, which will get paid at a higher amount.

That is going to mean a bit of work, and I want to know where this work is going to fall, because there will be families who submit receipts that go over that 1 July 2025 threshold—some from the lower rebate, some from the higher rebate. I want to know if Inland Revenue is adjusting the way it is going to set up the rebate claims process.

Now, my children are in their twenties, so I have not had to do this for myself—I haven’t been able to go in and go through the rebate process myself. I don’t know exactly how it works, but is it going to be the case that people are going to have to put in the date for each set of receipts and that then triggers the amount of rebate that is available to them? That’s an extra compliance cost for the person claiming the receipt. Or is it going to be the case that Inland Revenue officials are going to have to, for the next however many years—and it could be up to four years—go through each set of receipts that is uploaded, and work out whether they are eligible for the earlier, lower rebate or the later, higher rebate? Of course, that’s a processing cost for Inland Revenue.

We know that there are 95 fulltime-equivalent employees engaged in administering this rebate, It’s a lot of people engaged when, typically, we manage our tax system so that things flow pretty seamlessly. I want to know if Inland Revenue is anticipating having to hire any more people because of this change in the rebate. In fact, the Minister has talked about the work involved in going—if we shifted the application date back to 1 July 2024—back and reprocessing receipts and claims for people who have claimed up until now. I want to know if there is any work being done on how much work is going to need to be done, wherever it’s done, to work out how many of the receipts get the lower rebate and how many of them get the higher rebate, and what checking is going on.

It just seems to me there’s two sets of work involved here, and I’d like to know what analysis was carried out on it and whether this influenced the particular start date that has been chosen for this policy, given the fact that the appropriation has been underspent. The actual appropriation is not an issue, but what might be an issue is the work involved.

Hon SIMON WATTS (Minister of Revenue): As the member the Hon Dr Deborah Russell will recall from her time as the Associate Minister of Revenue, the aspect or the point that’s being noted is from 1 July 2025 onwards, families who are claiming the rebate will be eligible for the new rate which we are putting through today. In the circumstance where a family has not made any claims to date in regards to any periods, they will still be able to make a claim; however, their claim, again, will be relative to the period from the start on 1 July 2024 through to 30 June 2025 at 25 percent, and then beyond that at the new rate. That is the way in which it will be calculated. It is a clear-cut point in time of which the rate has changed. From a practical implementation point of view, that allows the department to do what it will do. There is no intent for the department to increase resourcing as a result of these changes. They will be able to deliver that through baseline, because they are a very effective department.

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

RICARDO MENÉNDEZ MARCH (Green): Thank you, Mr Chair. One of the questions that I’m still seeking adequate engagement on, because the answer that I got is “I sought a range of advice”—but I specifically asked the Minister of Revenue as to whether he sought advice on the commencement date being made on 1 July 2024, and, if so, whether he sought any costings? Because we didn’t have a select committee process, I don’t think it’s good enough to just say “I sought a range of advice.” I think the Minister should honour the fact that this is a process that has been led by urgency.

I have a couple of other questions. Again, these are issues that we would have canvassed at the select committee stage. I think this is quite related to the commencement date anyway, so I may as well use the time right now that I have—it seems amazing that I’ve still got five minutes left—so I appreciate the additional time.

Going on to the issue of how this impacts children, and specifically on the current commencement date we’ve got in front of us, I wanted to ask as to—and I think it’s important for the Minister to put it on the record and in the Hansard—whether a child impact assessment has been done in relation to the bill in front of us. We know that this affects families with children. In a select committee process, ordinarily, members are able to ask for a child impact assessment to be produced by officials. In my view, this is one of those bills where, because it so explicitly affects children, I would like to know as to whether the Minister sought for that to be produced; if that is the case, would he mind tabling the child impact assessment or maybe talk about the findings if one was made? If not, I would like to know as to why that didn’t happen.

If there wasn’t a child impact assessment being done on this bill, I think that’s deeply problematic. Particularly, as other colleagues have noted specifically on the commencement date, we know that additional families could have benefited should the commencement date be brought forward to 2024. Therefore, in terms of the child impact assessment, it would have been useful for the Government to front up and actually give us some more detailed analysis as to what that would have looked like in more detail. That’s one of the things that could have been useful as well.

It would also be useful for the Minister, in relation to the commencement date, to say as to whether he had a discussion with the Children’s Commissioner at all on this issue. I think that’s a really important entity that should be consulted as part of this, particularly, as others have noted—in terms of showing the money to the families that could benefit from this—whether there was any feedback from the Children’s Commissioner in relation to making sure that families could have been captured if the commencement date was brought earlier.

I think this is important because the Minister may have talked about sticking to the appropriations, but the bill in front of us is due to bad policy design by this Government. It’s been brought forward to us because the Government did not design this policy the right way—we’re seeing it in the number of families that are receiving it. Therefore, I think it’s important to get more robust answers in relation to the full scope of advice that the Minister would have commissioned, particularly in the earlier stages of this bill. I think the Minister should talk in more detail about this rather than say “I sought a range of advice.”

The other thing I wanted to ask—and, again, I don’t know if there’s a specific part of the bill in which this would have better fitted, but I think, because this is brought under urgency, this would have come up in the select committee stage as well—is as to whether the Minister sought any advice in relation to whether this bill contributed in any way to the Government’s child poverty reduction targets. I think, probably, the impact would be minimal if there was to be any. I think this is quite important to note because the current projections—the Minister talked about appropriations—that we have in front of us when it comes to child poverty is that material hardship is projected to continue to rise as a result of Government decisions. I think it would be curious if no advice was sought in relation to meeting child poverty reduction targets.

Again, this would have been such a simple question that we could have asked of officials should there had been a select committee stage, or the Minister himself once he stood in front of us. Even though the scope of the bill will likely benefit families that are doing better off, it is important that we get the Minister’s comments on this issue because of the concerning statistics in relation to material hardship.

Additionally, there would have been families that would have lost their jobs between 1 July 2024 and now, who now may be in poverty and may not have benefited with this bill, and would have actually, maybe, received more support if we moved to 2024 while they may still have a higher income due to them still having a job.

To recap, I’m curious to know as to whether a child impact assessment was produced, whether the Minister has got comments on this issue as to whether there was any analysis being done on meeting child poverty reduction targets, and, if not, why not? I’d like to ask as to whether any advice was sought as to changes in potential incomes, and therefore eligibility for families that, for example, would have lost their jobs between the 2024 date and now. As much as I note that backbenchers on the other side are complaining, they brought this under urgency; I think adequate scrutiny is well overdue.

Hon SIMON WATTS (Minister of Revenue): In regards to the questions on a child impact assessment, all the analysis that the member is referring to is in the regulatory impact statement, and while no specific child impact assessment was undertaken, the reason, the rationale, why this is is because this is dealing with tax legislation around impacted family—family—income, and in that context it is not deemed appropriate. However, the broader considerations are outlined in the regulatory impact statement. If the member had read that, he would know.

Hon BARBARA EDMONDS (Labour—Mana): I just want to speak to the tabled amendment by Camilla Belich that has actually just been tabled. It’s in relation to, or perhaps in response to, the Minister’s concerns about the backdating and reopening of 240,000 claims. I can see where Camilla Belich has been very clever to help the Minister. She’s actually thought to amend it—rather than 1 July 2025, she’s proposing that you move the date to 1 October 2024—so not 1 July 2024 but 1 October. Therefore, the 240,000 claims that have been reopened would be a bit less than that. If the Minister’s got any figures or can break down the 240,000 claims that would have to be reopened, we would really appreciate that. As the member from the Greens Ricardo Menéndez March has raised, we haven’t had an opportunity to take this through the select committee, and we haven’t had an opportunity to be able to actually analyse the bill and get some advice from officials to the additional questions, so I support the comments that he made.

Also, if you go to the 1 October 2024 date, perhaps that will fit the fiscal envelope or the appropriation that the Minister in the chair talked about, because, to Dr Deborah Russell’s point—and, again, I acknowledge her comment in relation to that—there is an underspend in this policy. The regulatory impact statement itself says the uptake is only 52 percent for this policy, so there’s clearly an underspend in the first year of this policy being enforced. I didn’t hear a response from the Minister to the Green Party member’s question—did the Minister seek any advice on a different commencement date, and, if he did, can he step through that advice, because, again, we haven’t had a select committee and we haven’t had the chance to ask that of officials ourselves—and if he did, what was that advice?

Therefore, we can be just as helpful and can keep recommending amendments to ensure that the maximum amount of families may have a chance—and I say only a chance, because it’s quite clear the uptake is so low at 52 percent, and we want to be able to make this as easy as possible for them, and the Government doesn’t want to put in any proposals to actually make the administration easier. Again, they’ve got the money, they’ve got the bureaucracy there, they’ve got the 20 percent that they spend on this, which is on administration costs for the department—I just want to understand from the Minister if he would consider a 1 October 2024 date, because I think that could help him in relation to the fiscal envelope, and, again, I’d really like a response, given this is going through under urgency, to the Green Party member’s questions around whether he actually sought an earlier date—and if he did seek the earlier date, what advice was he given?

DANA KIRKPATRICK (National—East Coast): I move, That debate on this question now close.

Hon Dr DEBORAH RUSSELL (Labour): Mr Chair, thank you. I will keep this short, but I didn’t actually get an answer from the Minister in the chair in terms of the administrative load around this changed commencement date.

Now, the Minister made the very correct point that when you look at the receipt date, it’s quite straightforward in terms of how much people get in terms of a rebate. That’s really clearly defined by when the person received the childcare services and the receipts along it. Those dated for childcare before 1 July 2025 get the old rebate; those from 1 July 2025 onwards get the new rebate. That’s a really straightforward point—no worries there—and that was the Minister’s reply.

What I’m concerned about, though, is, actually, the administration of that. Are families going to have to upload extra information to Inland Revenue? Are they going to have to navigate their way through a website which makes them classify receipts into pre 1 July 2025 and post 1 July 2025? Or is Inland Revenue going to have to go through each set of receipts that is uploaded and have people actually checking the date on them and classifying them to ensure that the rebate that is applied to each receipt is the correct rebate? So it’s an actual workload processing issue there.

What I want to know is what analysis was done around that. The Minister has already said that they’re not intending to hire any more than the current 95 fulltime-equivalent employees that are engaged on processing FamilyBoost. But there is some extra workload somewhere in this, now that we’ve got a date that separates how much rebates are worth on one side of that date or the other. So if the Minister could speak to the actual workload, not the calculation.

Hon SIMON WATTS (Minister of Revenue): There isn’t a significant increase in workload on the IRD team as a result of this policy change; it is simply a process change. For the individuals that work in IRD, they will apply that new process to the application. They already undertake quite a significant degree of integrity checking of the information received from parents to ensure that it complies with this law. That will not change in terms of their process, but in the context of the amounts being payable and based on the duration and the dates of the periods being applied for, that will change, but that is not going to have a material impact on staffing.

RICARDO MENÉNDEZ MARCH (Green): I’m just picking up on a comment the Minister in the chair made, and I appreciate he delivered it with quite a bit of sass, but, actually, he noted in his earlier comments in relation to my answer that a child impact assessment has been done and it was in the regulatory impact statement (RIS). Can the Minister point out exactly where in the regulatory impact statement there are comments relating to a child impact assessment? There doesn’t seem to be any. If he’s so confident that a child impact assessment was done as part of this bill, why isn’t it in front of us so we can evaluate its findings? This is important because the regulatory impact statement, for example, talks about quite limited consultation, mostly with the early childhood sector. The Children’s Commissioner doesn’t seem to have been consulted at all as part of this bill, and I’m curious as to why that was the case.

I’m also giving the Minister an opportunity to potentially correct himself, because he talked about the child impact assessment being mentioned in the RIS, but that doesn’t seem to be the case, although I’m happy to be proven wrong. Again, if he’s so confident that there was a child impact assessment produced, normally at the select committee stage, we would be given access to it. So why isn’t he presenting to us the robust analysis on the impact on children this bill would have?

This is about demanding that the Minister actually holds himself accountable for the advice that he has sought both in terms of the commencement date but also around the child impact assessment that he claims was done and was mentioned in the RIS.

Dana Kirkpatrick: Where’s the commencement?

RICARDO MENÉNDEZ MARCH: I appreciate that Dana Kirkpatrick may be new to this place, and maybe she doesn’t know what a child impact assessment is, but it would be quite useful.

Hon Member: Write her a letter.

RICARDO MENÉNDEZ MARCH: If we had had a select committee process we would not be needing to ask questions. That would have been made clear at the select committee stage. I appreciate that these legislators are very new to this place, but I would appreciate that they understand why we’re asking these sorts of questions at this point in time—because they’re related to a select committee process that we have not had.

Anyway, other than the innocuous and useless barracking from the other side, I’ll recap my questions. Is the Minister confident that a child impact assessment was done—[Interruption]

CHAIRPERSON (Teanau Tuiono): Members, I need to hear him. Could you quieten down a little bit.

RICARDO MENÉNDEZ MARCH: It’s fine; I’ll just recap my questions.

CHAIRPERSON (Teanau Tuiono): But just to note for members, if we can relate this to the commencement clause, I would appreciate that.

RICARDO MENÉNDEZ MARCH: I appreciate that but I would like to seek some guidance from the Chair. Where would you like us to ask questions that we could have been able to ask in the select committee stage, including things like a child impact assessment, which is a completely fair thing to be asking at the select committee stage? If it is not now, where would you like us to ask it?

CHAIRPERSON (Teanau Tuiono): You can do it right now. If you relate it to the commencement date, it’s fine—and I do need to hear.

RICARDO MENÉNDEZ MARCH: Going back to my questions, because I do think these deserve answers: is the Minister confident that a child impact assessment was done; if so, where in the RIS is this mentioned? Why wouldn’t he put forward the findings of the child impact assessment that was supposedly done, as he claimed, for the sake of transparency? Why was the Children’s Commissioner apparently not engaged with at all in the creation of this bill, and only the sector?

I would like, once again, answers to questions that have been asked multiple times—beyond just sort of general answers like, “Oh, I sought a range of advice.”—as to whether he actually sought any form of advice on an earlier commencement date. This is about robust lawmaking This is about genuinely presenting to members of the public—and members of the Opposition have a duty to scrutinise this bill—that enough analysis was done on this bill and adequate agencies and reports were commissioned in relationship to this bill.

I do think it’s quite fair for us to challenge the Minister when he makes claims that the child impact assessment is the regulatory impact statement, and for him to tell us where it is. So far, I’ve sought to find it with my colleagues, and we can’t see there at all. So if he’s so confident, tell us where, and if he’s so confident that a child impact assessment was done, table it so that we can look at what the findings were. I don’t think that’s a hard ask. Maybe the child impact assessment didn’t find anything controversial—and that’s fine—but, actually, we do deserve a level of transparency in relationship to the advice that was sought and the reports that were produced. The Minister seems to potentially be incorrect in the previous assertion he made where he said that the child impact assessment could be found in the regulatory impact statement.

Hon SIMON WATTS (Minister of Revenue): I’d encourage the member to look at the Hansard of my response to his question, and if he had listened to my response, the answer would be within that.

CHAIRPERSON (Teanau Tuiono): Just to give more guidance to the committee, clauses 4 and 5 implement the substantive policy, so that could be a good place to probe more deeply on things like child assessment policies and other issues as well—

Ricardo Menéndez March: Child impact assessments.

CHAIRPERSON (Teanau Tuiono): Child impact assessments as well. So there is an opportunity in clauses 4 and 5. But if we could keep stuff to the commencement date, the committee would appreciate that.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Mr Chair. I find it really interesting how much the Government members are interjecting and trying to take calls to close down this debate given, again, we’re in urgency. We’ve spent less than three hours on this bill—less than three hours on this bill. Look at the date of the regulatory impact statement: it’s 25 June 2025. The question is: why did the Minister not attach this to his August taxation bill, which also has a FamilyBoost amendment in it, so that it could have gone through a select committee process? I find the interjections and the calling for the closure of this debate quite interesting, particularly because what they’re trying to close down are amendments from the Opposition that actually increase the number of people that can actually get the greater entitlements in this bill.

“OK, yes, we need more people to get FamilyBoost because it failed. OK, let’s change the bill. Let’s put in new rates, and let’s increase the abatement threshold.” But, then, when we actually say, “Take it back to when it first started.”, the Government members just want to shut down the debate. I think the real reason is, as the Minister said, the fiscal appropriation, but, as the regulatory impact statement, which is dated June 2025, showed, there’s only been a 52 percent uptake of this.

On the commencement date, there is another tabled amendment, in the name of Camilla Belich, to help the Minister, again, try and get more families into the greater entitlements that this bill introduces with a higher rate, a higher threshold. Camilla Belich has recommended that the committee agree to a proposed amendment for clause 2, the commencement date, to change it from 1 July 2025 to 1 January 2025. Again, it might deal with the processing issue that the Minister spoke about, which is why we haven’t gone all the way back to 1 July 2024. It might actually deal with the fiscal underspend or the fiscal issue because it’s actually 1 January 2025. You might have less people applying for it and less pressure on the appropriation. Or, again, are we just going to hear a response from the Government members to shut down any helpful amendments that would mean that more families can actually be entitled to FamilyBoost in the new changes that come in?

I don’t understand why the Government members would not support any of the numerous commencement date amendments. If you don’t like 1 July 2024, how about 1 October 2024? If you don’t like 1 October, why not 1 January? We’re just trying to help the Government out to improve it even more. The Government members laugh. I know you’re laughing at your own policy failures. It’s quite clear that this policy has been a failure, which is why the committee’s time has been taken up with trying to fix this bill. It doesn’t matter how much the Government members interject. Again, we’re trying to help you out by increasing the number of people that are entitled to it.

This is the Government’s “show me the money” moment because we’ve given them different options for a commencement date. We’ve given them different options for a commencement date, and if they’re going to vote down those commencement date amendments, it quite clearly shows that the Government doesn’t want more families entitled to this; if they did, they would have taken it all the way back to when FamilyBoost started.

Dr Hamish Campbell: Ha, ha!

Hon BARBARA EDMONDS: You can laugh, you can heckle—even the chairperson who I’ve got a lot of time for now, even though I still believe that Nancy Lu should have been the chairperson of that select committee. We still have a lot of support for you, Nancy Lu, the only female Government member on the Finance and Expenditure Committee. This is seriously awkward. However, we are trying to help the Government increase this to more families.

We understand that the Government is embarrassed to have to bring this bill to the House to try and increase the entitlement for families. We’re supporting it because we know families are doing it tough right now. Actually, go a little bit further because you’ve got the money and you’ve got the process set up. Go all the way back—if not to 1 July 2024, then at least, maybe, to 1 January 2025.

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

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

Ayes 68

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

Noes 54

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

Motion agreed to.

CHAIRPERSON (Teanau Tuiono): The question is that the Hon Barbara Edmonds’ tabled amendment to clause 2 replacing “2025” with “2024” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Teanau Tuiono): Dr Lawrence Xu-Nan’s tabled amendment to clause 2 replacing “2025” with “2024” is ruled out of order as being the same in substance as a previous amendment.

The question is that Camilla Belich’s tabled amendment to clause 2 replacing “1 July 2025” with “1 October 2024” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Teanau Tuiono): The question is that Camilla Belich’s tabled amendment to clause 2 replacing “1 July 2025” with “1 January 2025” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

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

Ayes 73

New Zealand National 49; ACT New Zealand 11; New Zealand First 8; Te Pāti Māori 5.

Noes 49

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

Clause 2 agreed to.

Clause 3 Principal Act

CHAIRPERSON (Teanau Tuiono): We now come to clause 3. This is the debate on the principal Act. The question is that clause 3 stand part.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Mr Chair. To your earlier guidance that you provided, this is the part where we can speak about the substantive policy, isn’t it?

CHAIRPERSON (Teanau Tuiono): This is the principal Act bit. So I was talking about clauses 4 and 5; this is clause 3.

Hon BARBARA EDMONDS: My apologies. Then, therefore, to the principal Act. My question is to the Minister in the chair, the Hon Simon Watts, because throughout the regulatory impact statements, there are some elements that have been withheld due to—I understand that it’s section 9(2)(f)(iv) of the Official Information Act. So my question to the Minister is those particular elements. Again, this is a regulatory impact statement that was done in June. We haven’t been able to scrutinise this in the select committee process. What exactly—or why have they been withheld, and given the date of this particular regulatory impact statement, can they actually be released? My question really is: should some of those changes be done now through this particular bill, or the next bill as part of the taxation bill, or, actually, should this be done as a separate bill itself, or there’s upcoming changes coming?

Dr LAWRENCE XU-NAN (Green): Thank you, Mr Chair. In terms of the principal Act, I actually want to talk about the overall amendment we’re looking at in terms of the Income Tax Act, because one of the things we’re looking at in terms of FamilyBoost is subpart MH. When we’re looking at MH 1—the majority of the amendment that we’re looking at in this bill is around MH 3 and MH 5, but MH 1 actually sets out the whole purpose of family credit in the first place. I quote from MH 1: “The purpose of the FamilyBoost tax credit is to provide financial assistance to caregivers with early childhood education costs.” Now, with that part of the principal Act, it makes sense, but without any specificity that all caregivers should have some form of financial assistance for the early childhood education cost; however, I’m noting, on page 8, table 2 of the regulatory impact statement, that overall we have seen total year to date 28,540 families or applicants have been denied their claim to FamilyBoost.

I wondered if—seeking clarity from the Minister in chair on whether the fact that there is such a huge number of declined claims actually serves the purpose of the principal Act, particularly section MH 1, at all. So it’s a short question, just asking the Minister for clarity on whether he thinks that the providing financial assistance to caregivers gives the implication that it’s supposed to be for all caregivers, yet we are seeing a lot of claims denied.

While the Minister seeks guidance, I’ll just take another quick, short call on the principal Act which is: other than these two, is there any other part of subpart MH or broader aspects of the Income Tax Act that would be affected by the changes we’re seeing right now?

Hon SIMON WATTS (Minister of Revenue): In response to the question in regards to the elements that have been withheld, those elements are being withheld because they remain under active consideration.

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

Ayes 73

New Zealand National 49; ACT New Zealand 11; New Zealand First 8; Te Pāti Māori 5.

Noes 49

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

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

Ayes 68

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

Noes 54

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

Motion agreed to.

Clause 3 agreed to.

Clause 4 Section MH 3 amended (FamilyBoost tax credit)

CHAIRPERSON (Maureen Pugh): We now come to clause 4. This is the debate on “Section MH 3 amended (FamilyBoost tax credit)”. The question is that clause 4 stand part.

Hon Dr DEBORAH RUSSELL (Labour): Clause 4 and the debate to come on clause 5: these are where the major work of this bill is done, and I think where some of the policy issues are best discussed. I think it’s been reasonably well established that we have this bill in the House because the policy design was flawed from the start, and now we’re coming back to correct that policy design.

A particular way that the policy design was deeply flawed was that the rebate simply wasn’t going to enough families, and the amount that families could claim simply wasn’t enough. In looking at the regulatory impact statement, we do have some analysis on the rate of uptake and what it’s predicted to be in the new setting. Part of the problem—and I’m quoting from the regulatory impact statement here—is that the current FamilyBoost uptake rate to date is 52.8 percent. Now, it does say this reflects three or four quarterly payments and assumes gradual uptake growth over time.

One point there; just a slight point of clarification which we could have gotten from officials during a select committee process but not today: the way I’m reading that is that officials have collected that information over three quarters, and, over that time, 52 percent of the people who would have been expected to have taken up FamilyBoost have taken it up, rather than that somehow that 52 percent is spread over four quarters, even though there’s only three quarters available. I just wanted a slight clarification there to make sure that we’re talking about the same sorts of numbers. Of course, that 52.8 percent is very low for a policy which aims to put money in people’s pockets, and it’s a real shame that it’s worked out that way.

I guess, when doing social policy like this, there are two possible mistakes that a Government can make, and a Government has to decide which side of that mistake it’s going to err on. Either the Government is going to pay too little, so some people miss out who should have gotten it and needed it—and that’s in fact the mistake that has happened here—or a Government is going to pay too much and some people who don’t need the payment do get it in the first place. That’s just one of those things; it just goes that way. It’s very hard to get a policy that’s exactly perfect. Nevertheless, this one did fail quite substantially. Here’s the thing: by a lot, and perhaps that mistake is too big. It’s why we’re here back in it.

But the new costing and the new model—and this is sitting in the regulatory impact statement—assumes a 71 percent uptake rate over time. That’s still much, much lower than 100 percent and it is still erring on the side of reaching too few people rather than reaching too many people. I want to understand whether that was a deliberate decision made by Government, that they’d rather go under than over? It is a choice and it’s still under. The other thing, though, that I’m concerned about here is that Inland Revenue—and the officials are very open saying that, actually, they just don’t really have good data on this. So they’ve done the best they can with their forecasting, and having worked there, I know how good that forecasting unit is. Those people do a great job with the data that they have available to them, but they are nevertheless saying, “Actually, we can’t be sure about this information.” So we are operating with a fair amount of uncertainty here.

Again, I just want to understand from the Minister in the chair, given that degree of uncertainty that surrounds this policy, to what extent the Minister can be sure that this new set of changes will actually reach people—that people will actually get the benefit of the FamilyBoost policy. Or does the Minister anticipate that he’s going to have to use the new power that’s contained in the current tax bill, the current annual rates bill, of putting through an Order in Council? In fact, there’s that uncertainty that we’re seeing in this regulatory impact statement. Exactly why that new power for the Minister to adjust the settings for FamilyBoost by Order in Council—is that why that’s been included in this other bill? I appreciate we’re discussing this bill right at the moment, but, obviously, there’s an implication through that bill and it does sort of answer a few questions there, as well. I guess I’m looking for a little bit of discussion about the nature of the uncertainty and how it’s affected decision making here with respect to the FamilyBoost bill.

Hon SIMON WATTS (Minister of Revenue): Thanks, Madam Chair; thanks to the member for the question. The inherent nature of any forecast is that it will change. The latest estimated uptake rate is at 64 percent based on 10 September. That is an increase, obviously, from the numbers that are included—that the member has been quoting—and that is because a new quarter’s worth of data is now included within that.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Chair. Yes, forecasts are forecasts, but I actually want to ask some questions in relation to the actual data set that his officials used, on page 8 of the regulatory impact statement (RIS). Table 2 talks about the claims that have been denied. The total year to date, as of 11 June, was around 28,540. Does the Minister have any updated numbers on this? Again, we’re under urgency, and we don’t have a chance to ask officials for this information so we can analyse it a bit more. Of those claims denied, how many of them would now be applicable or entitled to the FamilyBoost changes due to the change in the income threshold? If the Minister or his officials have any advice on how many more people would now be covered, who were declined before, that would be quite an interesting statistic for us to understand so that we can ask some further questions on it.

Also, in relation to some of the data that’s provided in the RIS, we note some of the income distribution in figure 3, “Income distribution of families receiving FamilyBoost payment between $950 and $975”. I think it goes to an earlier comment from Dr Duncan Webb, in relation to high-income earners, that they are the ones who are actually accessing this much easier than lower-income earners. One of the comments in the regulatory impact statement from officials is their assessment about how the status quo is intended to develop over time—particular to the claim: “A late surge in claims may occur following 1 July 2025, when the final FamilyBoost payment for the 2024/25 fiscal year becomes available.”

My question to the Minister is: now that we are past that 1 July 2025 date—I accept this RIS was written back in June—do we have any updates to figure 3, which is the “Income distribution of families receiving a FamilyBoost payment between $950 in $975”? Once again, we haven’t had a select committee. It would be really good to understand that income distribution. Following our earlier points on other clauses, we believe that this bill could actually be made better, even though it was a bill trying to fix a failure, but it could be made better. We think that that income distribution for families is actually quite an important question that, hopefully, the Minister is able to seek some advice on from officials.

While he’s seeking that advice, one interesting aspect of this particular figure, figure 3, is the number of families with household incomes that are receiving the minimum $25 payment—sorry, that’s on figure 2, the “Number of claims by amount paid”. Officials in the regulatory impact statement talk about, at the lower-income levels, there being a high peak. Basically, at the low end, a number of families receive FamilyBoost—I think just under 6,000. That drops right back down until you get to the $925, and then it spikes back up to just under 5,000 families, or “Distribution of claims by amount paid”.

One of the interesting discussions I’ve had with a kindergarten out in Porirua, in Cannons Creek, when I visited was about how they’re going with their families who are eligible for FamilyBoost. They said in their first quarter that they got about 15 percent uptake—because they are a low-fee early childhood education centre, they had 15 percent uptake. They had to help their families through the first quarter. In the second quarter, that had reduced to 7 percent. The reason why it had reduced to 7 percent was that the families had to spend time to do the administration of this and were actually only getting between $7 and $15 back. I think that’s the reason why, as the regulatory impact statement sets out, a number of kindergartens and kōhanga reo families won’t be applying for the FamilyBoost. Now that officials have provided the Minister with advice, I just wanted to see if he’s had any response to my questions. Thank you.

Hon SIMON WATTS (Minister of Revenue): Thank you to the member for the question. Based on the latest data that we have available, as of 10 September, there will be 15,636 unique households with declined claims due to their income being over the threshold, but below the new threshold that we are currently considering under this bill. As a result of this bill passing speedily through the House today—with the support of that party—then those individuals, those 15,636 unique households will be contacted by IRD to advise of that fact and have the opportunity to reapply.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair, I have a number of questions for the Minister in that purview—clause 4—but as well as to the regulatory impact statement. I want to start with asking in terms of the “Problem definition and options” on page 1 of the regulatory impact statement. The particular figure I want to draw attention to is the 71 percent. So on page 1, it says: “A more realistic uptake rate is 71% of eligible families, which is an estimated uptake of about 80,000 families”, and throughout this document, what we’re seeing is the new, assumed 71 percent annual uptake—for example, on page 5—and there was I think another one that I was looking at where they also make the assumption of 71 percent.

I guess the first question, of paragraph 50 on page 17, is: if a 71 percent uptake rate is assumed, I want to check with the Minister on where did the 71 percent come from? It seems, based on the regulatory impact statement, like a number that’s been plucked out of thin air. If the 71 percent is something that it is aiming at, I also want to check—the second question I have is whether the Minister is familiar with Goodhart’s law; whether the 71 percent is going to be a target or a measure, because those two things are also fundamentally different. So where does 71 percent come from, and is that a target or is that a measure? That’s my first series of questions.

My second question is around consultation. My colleague Ricardo Menéndez March has asked previously why, if we’re going to be brought under urgency—this is something the Government is aware of—Mana Mokopuna was not consulted, as a part of that.

But I want to draw attention to paragraph 32 on page 14, about who have been consulted with. I’m surprised that in that list, the Early Childhood Advisory Committee, which isn’t much of a committee—the Office of Early Childhood Education, which, you know, has a particular, very important individual; but this Early Childhood Council, which is the organisation of owners of privatised and commercialised early childhood services. But what I’m not seeing being consulted is public- and community-based early childhood education (ECE) services for their feedback. I would like to ask the Minister: why has there been a cherry-picking of ECE service providers who have been consulted?

The example that I want to give, and this is just one example of many, is Kindergartens Aotearoa. They represent thousands of teachers and they also cater to 12,000 tamariki every single day. That is a substantial stakeholder that could have been consulted as a part of this, if there are already people who have been consulted with from the ECE sector. I do want to check with the Minister my second question, which is around consultation.

My third question is something that we consistently come up with, and I know that others will have more questions around: the availability of resources and reports when we are in urgency for a bill like this, for the House to have as much information, be fully aware of the context that we’re dealing with. The Minister has responded to a child impact statement, but I do find the Minister’s response of “Well, that’s not relevant because it’s an income tax bill.” does not address the bigger picture of the impact that this does have for children.

The one thing I want to address is the New Zealand Bill of Rights Act (BORA) report that has been submitted as a part of this. I understand that it is under urgency; I’m just currently looking at the BORA report now. There’s nothing in the BORA report that has been addressed. I want to check with the Minister if the Minister has actually engaged with the Attorney-General, or anyone else, to even consider the fact of whether there is an implication for section 19 of the BORA report, particularly in association with the Human Rights Act, section 21(1)(b) and (l).

That is my third question, which is: I do find the BORA report lacking for this bill, to be perfectly honest, and I would like to ask the Minister if the Minister had any engagement with either the Minister of Justice or the Attorney-General on the broader implications of section 19 of BORA, in conjunction with the Human Rights Act, section 21(1)(b) and (l).

CHAIRPERSON (Maureen Pugh): The member’s time has expired.

Hon SIMON WATTS (Minister of Revenue): Just a quick response to those questions. With regards to the 71 percent rate, that’s based on the FamilyBoost uptake rates to date, as well as observed uptake for other Government assistance programmes. In regards to the consultation, the member asked around public kindergartens and other aspects: they are part of the Early Childhood Advisory Committee, which was consulted with.

Hon Dr DEBORAH RUSSELL (Labour): Thank you, Madam Chair. I do have some questions that I want to get to when we discuss clause 5. I just want to foreshadow them here, because of course there’s two parts to the change to FamilyBoost: one is increasing the amount that a family can receive; one is increasing the number of families who are eligible, by shifting income thresholds. That’s in clause 5, and I do want to discuss some of the issues that are sitting around clause 5 there.

However, clause 4 is the one that does the work of increasing the amount that’s available. I guess I was wondering to what extent—it’s interesting, here, because the Minister had choices, which we’ll discuss under clause 5, around whether to try to get more families into the scheme in the first place or give those that are in the scheme more money. He’s chosen both of those, but in this bit, in clause 4, it’s giving them more money. I guess this relates to the comment that my colleague Dr Ayesha Verrall made earlier in terms of the pressure that, in particular, my colleague Barbara Edmonds has put on the Minister around whether or not anyone was going to get the full $250 a month that was promised by the Government, in the combination of childcare rebates and tax cuts.

We know that 244 families received the full amount of FamilyBoost, but we couldn’t find a single family who had received both FamilyBoost and sufficient tax cuts to get to $250 a fortnight. Now, by increasing the amount of FamilyBoost that’s available per clause 4, that increases the amount of FamilyBoost, so you need less tax cuts to get to that $250 per fortnight. I guess I’m worried that by making the choice to increase the amount of the rebate that’s available rather than trying to get to some of the families who aren’t receiving FamilyBoost and should be getting it—here, I’m particularly thinking of some of our low-income families, our Māori and Pasifika families, who are not claiming it—was that a really deliberate choice to go after that $250 a fortnight, rather than thinking about where the need is? It really worries me that this is a policy that actually makes those who are well off better off. Those who are not necessarily well off, but in the middle, they’ll get the extra money—that’s a good thing—but what about the people at the bottom end? It feels to me as though they’re missing out.

So a slightly meta-question—I probably won’t have to another question on the detail of clause 4—but just around the extent to which the thinking was around being driven by that $250-a-week tax cut and FamilyBoost target promised in the last election campaign, and the way to achieve it has been done through increasing FamilyBoost.

Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Madam Chair. This is my first call on clause 4, and I wanted to start by speaking to a tabled amendment by my colleague Dr Lawrence Xu-Nan, which, basically, would amend clause 4 to change the expenses claimable from 40 percent to 50 percent.

The Government has stated that the intention of this amendment bill is to provide more support to families who are struggling with the cost of living. As I pointed out in earlier speeches, obviously the Green Party believes that the best way to do that would be to have kept the extension of 20 hours’ free early childhood education to two-year-olds. In the absence of that—which, obviously, this Government has not done and will not do—we think that at least we should be making it possible for those families who are eligible to claim back more funding to support the very high cost of childcare.

What that would do is shift the maximum claimable amount from $1,560 to $1,950. It would make a difference. As the previous speaker, the Hon Dr Deborah Russell alluded to, as far as we know, there is no family out there that has received the amount per week that the National Party had campaigned on and claimed that they were going to deliver in the election campaign. I assume that the mandate they got at the election campaign is the reason for having FamilyBoost rather than a more effective policy that would make it easier for more families to access early childhood education and not have such high costs.

I have a question, but I want to speak to that tabled amendment, and there’s a further amendment paper that I will speak to in clause 5. This tabled amendment also amends clause 5, but it predominantly amends clause 4. I’m hoping that the Minister of Revenue can consider it. The question would be: was increasing the amount that was available to a higher amount—was that considered? I don’t believe we’ve had an answer from the Minister in this committee of the whole House debate to the question of whether there was a distributional impact analysis of the policy—both the policy when it was originally—

Suze Redmayne: More money to more people.

Hon JULIE ANNE GENTER: —brought through—yeah, but that’s not what a distributional analysis is, so maybe I can explain for the members opposite what a distributional analysis is. It’s related to other things that have been raised in this debate, which is: who is this going to get to, which people, and what income levels? Is this predominantly supporting people on low incomes, on middle incomes, on higher incomes? Is it reaching the families that are the most in need? That’s what a distributional analysis does.

I’m asking the Minister: has a distributional analysis been done, and would they or did they consider this sort of change of potentially enabling the expenses claimable to be 50 percent rather than 40 percent—which would provide more support with the cost of living and make it easier for families to access early childhood education, which we know is something that is good for everyone in Aotearoa.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Chair. I have just a really brief question actually, and it’s around clause 4(3); it says, “Subsections (1) and (2) apply to tax credit quarters commencing on or after 1 July 2025.” I just want to ask the Minister why he needed that specific subclause (3) to that clause when we already know that the Act comes into force from 1 July 2025. It would be great if he could just explain why it needed its own specific enforcement date. Maybe it’s a drafting decision, but it just looks unusual, given the shortness of this bill. I note that it’s also covered under clause 5 as well. Why is there a separate need to set out a commencement date for the subclauses, given that the commencement date of the bill is already covered under clause 2?

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

CHAIRPERSON (Maureen Pugh): The question is that Dr Lawrence Xu-Nan’s tabled amendments to clause 4(1) and (2) replacing “40%” with “50%” and replacing “$1,560” with “$1,950” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendments not agreed to.

A party vote was called for on the question, That clause 4 be agreed to.

Ayes 68

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

Noes 54

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

Clause 4 agreed to.

Clause 5 Section MH 5 amended (FamilyBoost tax credit abatement)

CHAIRPERSON (Maureen Pugh): Members, we now come to clause 5. This is the debate on “Section MH 5 amended (FamilyBoost tax credit abatement)”. The question is that clause 5 stand part.

Hon SIMON WATTS (Minister of Revenue): Thank you very much, Madam Chair. For members, clause 5 of the bill proposes reducing the abatement rate from 9.75 percent to 7 percent, applying to households earning over $35,000 per quarter or $140,000 annually. This increase of the maximum qualifying household income per quarter increases from $45,000 to $57,286, or equivalent to $180,000 increasing to $229,144 per year. Accordingly, households with a quarterly income exceeding $57,286 would become ineligible for FamilyBoost.

In regard to a question on distributional analysis and income distribution, I must refer members to the fact that in the regulatory impact statement (RIS) under Figure 1, which relates to clause 5, this analysis is actually included in there. So if the members review the RIS, they will find the response in regard to that point, which is relevant.

Dr LAWRENCE XU-NAN (Green): Thank you, Madam Chair. I want to just first pick up on two questions that I asked previously to the Minister that I think are still worthwhile. Thank you to the Minister for addressing my consultation question, but I also wanted to check with the Minister in terms of my question around the 71 percent assumption that was made, as well as the question on the New Zealand Bill of Rights Act.

In terms of clause 5, I think clause 5 is where we are able to look at some of the additional options that have been presented here. I guess the predominant question I have is: why 9.75 percent to 7 percent, in terms of lowering the abatement rate? With that, I would like to speak to my tabled amendment, which is lowering the 7 percent to 5 percent, in terms of abatement. I think it just allows more families to have the ability to access FamilyBoost, as well. But I guess the question around that, which I guess I’m a little bit concerned by—and this comes back to the 71 percent, when it comes to the eligibility criteria, which the abatement rate of this section of this clause is a large part of. I’m drawn to paragraph 54 of the regulatory impact statement under option 3, where on the first page they talk about we’re never going to achieve 100 percent. We’re making an assumption that 71 percent is realistic, but in option 3, under paragraph 54, it says that the risk is that there is an uptake higher than 71 percent.

Is it true, then, that the Minister is making an abatement rate from 9.75 percent down to 7 percent on the premise of the 71 percent assumption in order to lock in the 71 percent accessibility as a target and it shall not go more than that? I guess that is a concern for me, because if that is not the case, I would ask the Minister to seriously consider my amendment to lower the abandonment abatement even further to 5 percent so that, in that way, there are more families who are eligible and we could potentially reach that 100 percent uptake rate, which then would be more in line with my original question on the purpose of section MH of the Income Tax Act. Thank you.

Hon Dr DEBORAH RUSSELL (Labour): I want to explore some issues around the interaction of the abatement rate and the previous clause; they do sort of do fit together. I don’t want to go too far. We’ve done the previous clause, so it’s reference only.

Very roughly, if we think about it, clause 4 covers the amount of the rebate that’s available to people. Clause 5 covers the families who can claim it—all right? That’s quite an important distinction. In terms of clause 5, there are a couple of questions that I think we do very much need to understand; actually, three I want to understand. The first is just a point of clarification. I’m not quite sure, because we’ve only had this bill for less than 24 hours—and good, but not that good. I just want to understand where the abatement starts kicking in from. I think from the way I’m reading it that it still kicks in from $140,000. It’s just that the abatement is now slower, so it goes further. But it’s neither here nor there; it’s just a point of clarification.

The real question I want to ask, though, is around just how far out the abatement rate goes, because what it means is that now that families who are earning up to $229,000 max—but, actually, a family who’s earning $220,000 a year can still get an abatement, can still get some money back under FamilyBoost. It’s only $160 a year, but that’s still a nice little chunk of money. A family that’s earning $200,000 a year can still get $510 a year back. Those are pretty high household incomes. I appreciate that families are under strain, that we have people who’ve perhaps—particularly in that particular age group where you have young children who are in childcare—there’s a whole lot of pressures on household budgets. There’s likely to be mortgage pressures, certainly food pressures, ordinary cost of living pressures. There are childcare pressures. I remember it well. I think a lot of us have gone through that experience. Nevertheless, a household income of $200,000 is a high income.

Now, the Minister has said that the idea here is really wanting to extend the reach of FamilyBoost to ensure it got to more families, but there was a choice to be made here, because another way to ensure it got to more families would have been to work with families to make sure they’re claiming the rebate in the first place. The first set of changes in clause 4 makes the rebate more worthwhile. People get more money back for each dollar of childcare spent—all right? The second change in clause 5 extends the number of families, but it does that by increasing the income thresholds or decreasing the abatement rate.

The alternative was to spend more on outreach, to spend more time seeking out the Pasifika and Māori families who we know are missing out on FamilyBoost. The alternative was to spend a bit more time and effort in making it easier for people to claim the rebate and making sure that people actually got it. We know that people are missing out on it. We know that the take-up rate was around 51 percent, up to 64 percent now. We know that the modelled uptake is going to be around 71 percent. But the alternative strategy for ensuring that more families got the rebate was to reach harder into the communities that aren’t claiming it and to work harder on getting it to those families who aren’t getting it in the first place.

I said in a previous contribution that there are two mistakes that a Government can make in terms of trying to pay out benefits or welfare or rebates or whatever. One is the mistake of being too generous, so it goes to people who don’t need it. Are we making that mistake here by having it go to families who are earning more than $200,000? The other mistake is where families who need the rebate aren’t getting it in the first place. It does seem to me that more work needs to be done to ensure that families who weren’t otherwise claiming the rebate are getting it now. Why that choice, Minister, to simply extend the abatement range rather than making a greater effort to get into our most socio-economic deprived communities?

Hon SIMON WATTS (Minister of Revenue): Thank you very much, Madam Chair, for the opportunity to—

CHAIRPERSON (Maureen Pugh): At your leisure, Mr Watts.

Hon SIMON WATTS: Very good, appreciate that. To the questions noted by the member in regards to why “9.75” to “7” percent, the abatement rate decreased to 7 percent and the relevant changes that we had made in regards to, or are proposing to make in regards to the rebate rate increase to 40 percent are both within the original Budget 2024 funding allocation for FamilyBoost, so that is the rationale of why 7 percent.

In the context of what seemed to be a little bit of confusion around the 71 percent: to clarify, the 71 percent refers to the number of families likely to take up the payment out of the total eligible families for FamilyBoost. That clarifies those two.

Hon BARBARA EDMONDS (Labour—Mana): Thank you, Madam Chair. Thank you for the opportunity to take my first call on clause 5. Again, the bill is under urgency. We haven’t had a chance to be able to actually analyse it at length and with the officials, as well. I appreciate, again, that Government members are trying to shut down the debate, but at least allow us to actually analyse the bill if you’re not going to add anything yourselves.

To clause 5: it’s a similar question to that which I asked at clause 4, which the Minister was not able to respond to. In subsection (3), it provides a different commencement date, which is the same commencement date that is in clause 2. My question to the Minister, at the time, for clause 4 and now for clause 5, is: why do you need subsection (3)? Why do you need a commencement date in subsection (3) for subsections (1) and (2) and clauses 4 and 5? I’m hoping he’s able to provide an answer—whether that’s just part of a drafting issue or whether that is just a style issue; it would be good to know—because those are the types of questions one would ask if we were given a proper select committee process. We would have asked it, probably, as part of the revision-tracked version of the bill.

The second part of my contribution on clause 5 is actually to speak in support of Dr Lawrence Xu-Nan’s tabled amendment to clause 5, which is to replace the “7” with a “5”, which goes down to the tax credit abatement rate. The reason why I stand in support of it is because, similar to other tabled amendments today that have been put forward by Opposition members, these amendments actually fit within the purpose of why we are here for this bill. It’s set out very plainly in the regulatory impact statement (RIS): it’s to increase the number of recipients eligible for FamilyBoost. It’s to increase the payment amounts for FamilyBoost. Again, to the third point, which is where my question to the Minister is: could this fit within the fiscal envelope or the appropriations that he referred to before, given the significant underspend on this policy, to date?

Why I support Dr Lawrence Xu-Nan’s tabled amendment is because, again, it gives families more money. If the Government decides to vote down, yet again, another tabled amendment that is helping to increase eligibility, increase money that doesn’t get cut back for families because of an abatement threshold—I don’t quite understand why Government members would vote down such tabled amendments which actually help their bill. We already know this bill is here because it was a policy failure. We already know that this bill is here because the Government has to try and increase the eligibility—

Ryan Hamilton: That’s your opinion.

Hon BARBARA EDMONDS: —increase the eligibility. No, it’s actually here, on page 1 of the RIS: “increase the eligibility”. That is why we’re here—

Ryan Hamilton: That’s the reason?

Hon BARBARA EDMONDS: —and if the member Ryan Hamilton is saying that it’s not the reason why we’re here, you can actually read right through the RIS the policy problem that you’re trying to fix with this bill. Since the member has clearly not read the regulatory impact statement, I can take him through the policy problem—the policy failure—that this bill is intending to address. In response to his interjection, it’s around the following factors that may be influencing the uptake in the level of financial assistance. The policy design: the regulatory impact statement says, “a feature of FamilyBoost is that it covers unsubsidised fees.”

I’m just responding to the interjections from the Government side of the House, which I think is fair. “As such, the original estimate of eligible families may have been too high as the model included all families who appeared eligible based on their income … Additionally, the design of the policy as a rebate model requires families to pay for ECE fees before receiving a FamilyBoost payment.” This is a policy failure. To the second point—to the interjection by Ryan Hamilton: compliance costs; “the current model requires families to upload their ECE invoices”—

CHAIRPERSON (Maureen Pugh): Can I just ask the member to address her comments to the Minister, not to have a debate across the Chamber?

Hon BARBARA EDMONDS: Fair enough, Madam Chair, and particularly because the Government members don’t want to add any contribution themselves. So to the Minister: again, the policy problem, which a member from the Government side of the House was questioning, which is this is not a policy failure. The compliance costs, the perceived benefit of the policy, the transient population—that’s why this bill is here; to fix a policy mistake and a failure by that side of the House.

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

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

Ayes 68

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

Noes 54

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

Motion agreed to.

CHAIRPERSON (Maureen Pugh): The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 5(1) replacing “7” with “5” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): Dr Lawrence Xu-Nan’s tabled amendment to clause 5(2) replacing “$1,560” with “$1,950” is ruled out of order as being inconsistent with a previous decision of the committee.

A party vote was called for on the question, That clause 5 be agreed to.

Ayes 68

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

Noes 54

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

Clause 5 agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Maureen Pugh): Madam Speaker, the committee has considered the Income Tax (FamilyBoost) Amendment Bill and reports it without amendment. I move, That the report be adopted.

A party vote was called for on the question, That the report be adopted.

Ayes 107

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8; Te Pāti Māori 5.

Noes 15

Green Party of Aotearoa New Zealand 15.

Motion agreed to.

Report adopted.

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

Third Reading

Hon SIMON WATTS (Minister of Revenue) on behalf of the Minister of Finance: I move, That the Income Tax (FamilyBoost) Amendment Bill be now read a third time.

I would like to thank the members of the House for engaging with the content of this bill during the committee stage. It is good to see such thought going into the objectives of this bill.

I would like to emphasise one point about FamilyBoost: this scheme is targeted at low to middle income New Zealand families. While some higher-income families will receive some FamilyBoost, the fact remains that FamilyBoost is targeted at low to middle income families. That means that the benefits of FamilyBoost are concentrated on low to middle income families. They receive the tax credit with no abatement. The fact that some higher-income families will also receive some of the benefit of FamilyBoost simply shows the effect of abatement in action.

Just as with Working for Families, we cannot simply abruptly terminate entitlement. It must be abated to ensure and allow for different family circumstances and incomes. That naturally means that although the focus is on low to middle income earners, there is some peripheral benefit to higher-income earners.

To remind you, this bill proposes that FamilyBoost credits increase from 25 percent to 40 percent of weekly early childhood education fees, meaning much larger FamilyBoost credits for eligible families on the fees that they pay. We are also making the scheme available to more families by reducing the abatement rate. This will increase the upper limit for households that receive a portion of FamilyBoost from $180,000 per year of income to just under $230,000.

These are good measures which will bring relief to the targeted income earners, and therefore I commend this bill to the House.

ASSISTANT SPEAKER (Maureen Pugh): Members, the time has come for the lunch break. The House will resume at 2 p.m.

Sitting suspended from 12.55 p.m. to 2 p.m.

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

SPEAKER: The House is resumed. I present the report of the Controller and Auditor-General entitled Insights into local government: 2024.

Oral Questions

Questions to Ministers

Question No. 1—Finance

1. Dr HAMISH CAMPBELL (National—Ilam) to the Minister of Finance: What recent reports has she seen on the economy?

Hon NICOLA WILLIS (Minister of Finance): I have seen several recent reports about the New Zealand economy. Some are forecasts, peering into the future; some are data releases about the here and now; and some are backward-looking, given the long lag that can occur between events happening and their being reported. Each of these types of reports add to our understanding of how the economy has been performing and is expected to perform in the future.

Dr Hamish Campbell: When will the next GDP figures be released?

Hon NICOLA WILLIS: GDP results for the second quarter of this year come out tomorrow. This is a good example of backward-looking data. The second quarter started on 1 April, before the “Liberation Day” tariff announcement, and we are now only a couple of weeks away from the fourth quarter. Peering in the rear-view mirror, forecasters are picking a negative number for growth in Q2—somewhere between negative 0.3 percent to negative 0.5 percent, with activity in the manufacturing and construction industries likely to have fallen. As I said, the second quarter—which we will have an announcement about today—was when substantial tariffs were announced, representing the biggest hit to trade openness since the 1930s. That clearly affected the confidence of firms to invest and employ staff, and the willingness of households to spend.

Dr Hamish Campbell: How is the economy performing in the current quarter?

Hon NICOLA WILLIS: We are currently getting towards the end of the third quarter. Recent monthly data points to growth returning in this quarter, indicating that the worst is behind us—for example, the performance of manufacturing and services indices are a bit better than they were in the second quarter. The ANZ’s Truckometer also points to an improvement. Electronic card transaction values show a rise in July and August, and lower interest rates are having more of an impact on households as mortgage holders move to fixed, on lower and longer-term rates. Despite a stutter in the second quarter, the economy looks likely to have picked up again.

Dr Hamish Campbell: Supplementary. [Interruption]

SPEAKER: Just wait for a moment.

Dr Hamish Campbell: What are the forecasters saying about growth in future quarters?

Hon NICOLA WILLIS: Forecasters are expecting economic growth to strengthen as lower interest rates are felt more widely across the economy and uncertainty around tariffs passes. For example, the Reserve Bank’s Monetary Policy Statement last month forecasts modest growth of 0.3 percent in the third quarter, but accelerating to 0.8 percent in the fourth quarter—which is, as I said, only a fortnight away—and remaining at around that level for the next couple of years. More broadly, the New Zealand Institute of Economic Research does a regular exercise to average the individual forecasts of banks and other forecasters. The latest one was released on Monday; it shows the average GDP forecast of 0.5 percent for the current quarter—that is the third quarter—and 0.9 percent for the next quarter.

Question No. 2—Minister for Children

2. Dr PARMJEET PARMAR (ACT) to the Minister for Children: What recent reports has she seen regarding the progress of the Government’s target to reduce child and youth offending?

Hon KAREN CHHOUR (Minister for Children): I’ve seen a recent report which shows that in June 2025 the number of children and young people with serious and persistent offending behaviour is 14.6 percent lower than the June 2023 baseline figure, and is nearly at the target of the 15 percent decrease we initially hoped to achieve by 2030. The number of serious and persistent youth offenders peaked in November 2023 at 1,126. It has fallen consistently since then, including a massive 40 percent decrease in Northland.

Dr Parmjeet Parmar: What specific reasons does she believe have contributed to this decrease in serious and persistent youth offending?

Hon KAREN CHHOUR: Oranga Tamariki have been working to better understand the factors that have contributed to the faster-than-expected decline in offending since November 2023. This analysis concluded that fast track, which has been expanded and strengthened by this Government so that it includes 14- to 17-year-olds at six sites across the country, continues to show promise in preventing children and young people from entering the youth justice system and from escalating to more persistent offending. Other initiatives introduced by Oranga Tamariki, such as intensive case management teams, also seem to be having a positive effect.

Dr Parmjeet Parmar: What other reasons does she believe have contributed to the reduction in youth crime?

Hon KAREN CHHOUR: It is likely that the wider Government work has contributed to this reduction. We know that offending is often linked to underlying factors, such as non-engagement in education. The work that Associate Minister of Education David Seymour has done on school attendance has likely contributed to this reduction. This success also highlights the strong focus that Oranga Tamariki and the Police have put on working more closely together.

Cameron Luxton: What recent data has she seen on the reduction of youth crime in the Bay of Plenty?

Hon KAREN CHHOUR: More good news. I can confirm that, since the Government target was set, nine of the 12 police districts have seen a reduction in serious and persistent youth offender numbers. One of the largest reductions is in the Bay of Plenty, which has seen a 33 percent decrease since June 2023. This means fewer serious offences, fewer victims, safer communities, and more young people who have taken the opportunity to turn their lives around.

Dr Parmjeet Parmar: What feedback has she received—[Interruption]

SPEAKER: Hang on—wait. No discussion while the question is being asked.

Dr PARMJEET PARMAR: What feedback has she received about the impact of the Government’s efforts to reduce serious and persistent youth offending?

Hon KAREN CHHOUR: I’ve had an overwhelming, positive response from members of the public that I talk to. I think of the shopkeepers who tell me they no longer stay up worried that they’re going to turn up in the morning and find that their store has been ram-raided. Oranga Tamariki youth justice staff that I meet with talk about police and judiciary taking a harder line on youth offenders, alongside stronger multi-agency responses, and seeing a positive difference in young people’s lives. The public told us that this is an issue that matters to them, and we’re getting on and fixing it.

Question No. 3—Prime Minister

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

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes.

Rt Hon Chris Hipkins: Will Winston Peters announce New Zealand’s position on the official recognition of the State of Palestine at the United Nations next week; if so, why won’t he tell New Zealanders what that position is?

Rt Hon CHRISTOPHER LUXON: Because, very simply, we have had our preliminary discussions and we want to be able to keep an open mind, given the dynamic nature of events in the Middle East. We will make our final Cabinet decision as close as possible to when the Minister of Foreign Affairs gives his address at the UN Leaders’ Week.

Rt Hon Chris Hipkins: When will the New Zealand Government recognise the unfolding genocide taking place in Gaza, particularly following yesterday’s UN-commissioned report that concluded that “statements made by Israeli authorities [about Gaza] are direct evidence of genocidal intent.” and that Israeli authorities and security forces have committed four of the five genocidal acts defined by the 1948 Convention on the Prevention and Punishment of the Crime of Genocide?

Rt Hon CHRISTOPHER LUXON: Well, New Zealand’s position is that we respect the decisions of the International Criminal Court and the International Court of Justice. They are the appropriate bodies to make those determinations, and we’ll let them comment.

Rt Hon Chris Hipkins: If his Government’s infrastructure announcements are great news for the construction sector, why are there now 19,000 fewer people working in construction than there were at the election?

Rt Hon CHRISTOPHER LUXON: Because he ran up inflation, and interest rates put the economy into a recession, and he crashed the joint and drove up unemployment.

Rt Hon Chris Hipkins: So, when his Government boasts of a $17.5 billion projected infrastructure spend this year, is he aware that this represents only 4.1 percent of GDP, which is a drop from the 20-year average in New Zealand of 5.8 percent of GDP being spent each year on infrastructure?

Rt Hon CHRISTOPHER LUXON: In answer to the first part of the question, yes. This is an infrastructure pipeline now that has grown another $30 billion to $237 billion. Most importantly, about $125 billion of it is actually funded, and we have $17.5 billion in projected spend across 2025. Most importantly, we have about $7 billion worth of infrastructure with shovels in the ground—properly—before Christmas, which is great news for the construction sector.

Rt Hon Chris Hipkins: So, if it’s great news for the construction sector, why is the Infrastructure Commission forecasting that spending on infrastructure next year will actually drop even further than this year, to $16.6 billion, making it well below the average that we have been spending every year for the last 20 years?

Rt Hon CHRISTOPHER LUXON: Well, what I can say is I’m not responsible for the Infrastructure Commission, but what I am responsible for is making sure that there is a pipeline of activity so that the construction industry has clarity to be able to plan ahead. It’s $237 billion, and is up another $30 billion in the quarter. I’d just say to the member that if he really cares about construction workers, he would actually support things like oil and gas and mining so that construction workers don’t leave the sector and go to those sectors somewhere else, he’d actually support fast track, and he’d actually support public-private partnerships. But we just don’t know what the position is.

Rt Hon Chris Hipkins: If the pipeline on infrastructure projects is such exciting news for New Zealand, why is the Infrastructure Commission forecasting that the workforce required to deliver the pipeline projects will more than halve in the next 10 years?

Rt Hon CHRISTOPHER LUXON: The pipeline is sitting at $237 billion. The total activity—public and private activity—is another $30 billion worth of projects being added in the last quarter. That should be seen as good news for the construction sector. The reality is that interest rates are coming down. That’s what put the industry into so much difficulty, and that member needs to take 100 percent responsibility for that.

Rt Hon Chris Hipkins: So, when investment is down and falling further, jobs are down and falling further, and project delivery of the projects in the infrastructure pipeline is so uncertain, isn’t it just the case that he’s more interested in announcements than in actually funding and delivering the infrastructure that New Zealand needs?

Rt Hon CHRISTOPHER LUXON: Oh, crocodile tears—crocodile tears. Are you trying to gaslight the nation here? Let’s just be clear: you crashed the joint and you didn’t deliver anything. It’s incredibly disappointing that after six years, including three years with an absolute majority, you did so very, very little.

Hon David Seymour: Is the Government committed to construction projects that are actually constructed, or is there any circumstance where it would ever content itself with announcing bike bridges and light rail that doesn’t get built for years and years and years?

Rt Hon CHRISTOPHER LUXON: We have real projects, not phantom projects.

Rt Hon Winston Peters: Can I ask the Prime Minister: does he think that the future of the Palestinian State is worth only two superficial supplementary questions?

SPEAKER: Well, hang on—

Rt Hon CHRISTOPHER LUXON: Well, I’m not responsible for the questions, but I would just commend the Minister of Foreign Affairs, who I think is leading our Government through very, very well.

Rt Hon Chris Hipkins: Point of order, Mr Speaker. I seek leave—given the Minister’s intervention—to put those questions to the Minister of Foreign Affairs, seeing as the Prime Minister wasn’t willing to answer them.

SPEAKER: Well, I will put the leave, but just bear in mind that it’s the Government’s choice as to who answers questions on any particular day, and when a question is asked as a primary about standing by all his Government’s statements, it, appropriately, goes to the Prime Minister. Leave is sought. Is there any objection to that course of action? There is.Question No. 4, Debbie Ngarewa-Packer—when the House settles itself.

Question No. 4—Prime Minister

4. DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori) to the Prime Minister: E tautoko ana ia i ngā kōrero me ngā mahi katoa a tōna Kāwanatanga?

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

[Interruption]

SPEAKER: Hang on, hang on a minute. Just calm it down. It is appropriate that the Prime Minister waits to make sure that the translation is—

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes.

SPEAKER: —hang on, don’t give an answer while I’m speaking.

Rt Hon CHRISTOPHER LUXON: Oh, sorry. It’s a bit confusing with all the—

SPEAKER: The earpieces are not 100 percent in the House, and we know that.

Debbie Ngarewa-Packer: Does he accept, since his Government made Māori ward references mandatory, it is ultimately his responsibility when councils fail to include profiles for Māori ward candidates in election documents?

Rt Hon CHRISTOPHER LUXON: I thank the member for their question. I agree, I think it’s a very concerning development that those profiles were missed, and that is a council responsibility for running those local government elections and they should be held to account for that.

Debbie Ngarewa-Packer: Would it be acceptable if candidates were excluded from official documents during a general election, or is it only considered acceptable when Māori are excluded?

Rt Hon CHRISTOPHER LUXON: No, and no.

Debbie Ngarewa-Packer: If Māori can’t trust the system to even print our candidates in the booklet, how can Māori trust it to run a fair referendum on Māori wards, which are determined by the Government?

Rt Hon CHRISTOPHER LUXON: Well, again, these are issues for individual councils who are responsible for local government elections, and I would ask the member to direct those questions to those district councils.

Debbie Ngarewa-Packer: Did the Government determine to proceed with Māori referendums in the Māori wards?

Rt Hon CHRISTOPHER LUXON: Well, our position on Māori wards has been very clear. We’re not dictating it from Wellington; we’re sending it back to local communities to make that decision. If they choose to have Māori wards, that’s fantastic. If they don’t, that’s the decision of the local community.

Debbie Ngarewa-Packer: Point of order, please. My question was: did the Government determine to proceed with referendum for Māori wards?

SPEAKER: Well, I think the answer was given to that: the Government determined that it would be the local councils that made that decision.

Debbie Ngarewa-Packer: Will the Prime Minister commit right now to an independent investigation into the mishandling of Māori ward candidates from official election documents?

Rt Hon CHRISTOPHER LUXON: As I said in answer to the first question, I think it is a concerning issue, and I think the Minister will be looking into it.

Debbie Ngarewa-Packer: If the Government can’t guarantee security for Māori during referendums, will it guarantee that there will be no more progressing with the referendum until a review is enacted?

Rt Hon Christopher Luxon: Sorry, I don’t know what you mean by security.

Debbie Ngarewa-Packer: A supplementary?

SPEAKER: Well, look, you can elucidate on the same question to make things flow a bit.

Debbie Ngarewa-Packer: Thank you. If the Prime Minister can see that the referendum process has not worked, can he guarantee that they will stop the referendum process until a review has happened?

Rt Hon CHRISTOPHER LUXON: Again, those will be considerations for the local district councils who are responsible for running local elections in their district.

Question No. 5—Prime Minister

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

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

Rt Hon CHRISTOPHER LUXON (Prime Minister): Yes.

Hon Marama Davidson: E tautoko ana ia i ngā kōrero a te United Nations Independent Commission of Inquiry, “Israel has committed genocide and has genocidal intent against Palestinians in Gaza.”?

[Does he support the statements of the United Nations Independent Commission of Inquiry, “Israel has committed genocide and has genocidal intent against Palestinians in Gaza.”?]

Rt Hon CHRISTOPHER LUXON: As I’ve answered before, these are determinations for the International Criminal Court and the International Court of Justice, not the UN.

Hon Marama Davidson: He mea nui rānei ki tōna Kāwanatanga ko te whakaū ka pūāwai tō tātou reo me ā tātou tātai kōrero ki te ngākau me te hinengaro o te hunga rangatahi, ā, me he āe, he aha ia i poro ai i te pūtea a Whakaata Māori?

[Is ensuring that our language and stories of our ancestors thrive in the hearts and minds of rangatahi important to his Government, and, if so, why did he cut funding to Whakaata Māori?]

Rt Hon CHRISTOPHER LUXON: I missed the first part of the question, sorry, in the translation.

SPEAKER: Can we—

Hon Marama Davidson: Anō?

SPEAKER: No, can I just ask the translator to repeat the translation?

Rt Hon CHRISTOPHER LUXON: In answer to the first part of the question, yes.

Hon Marama Davidson: E whakaaro ana ia ka pāngia kinotia tētahi tūāpapa whakahirahira e hāpai ana i te reo me te mātauranga Māori e te poronga pūtea mō ngā kaupapa Matariki mā te 45 ōrau?

[Does he think slashing funding for Matariki events by 45 percent affects a critical platform that promotes te reo and mātauranga Māori?]

Rt Hon CHRISTOPHER LUXON: No, I’m very proud of the funding that we’ve put aside for te Matatini but also of the fact that we have created teaching resources in both te reo and English.

Hon Marama Davidson: Ko te unuhanga o te $30 miriona i te kaupapa nei, arā i Te Ahu o te Reo Māori, mā ngā kaiako he whakaiwikore i ngā mahi whakatupu i te hunga kaimahi reo Māori, e pāngia kinotia ai ngā ākonga o roto i ngā whakatupuranga?

[Does shifting $30 million in funding away from Te Ahu o te Reo Māori programme for teachers weaken efforts to grow the reo Māori workforce, affecting generations of learners?]

Rt Hon CHRISTOPHER LUXON: Look, I’m very proud of the efforts that this Government is doing to promote te reo. We’ve spent $142 million on four Māori language entities. We’ve spent over $100 million in education, including $60 million of ring-fenced funding for Māori-medium and Kaupapa Māori education, plus we’ve provided resources in both te reo and English for structured literacy and structured numeracy. That’s a first by any Government.

Hon Marama Davidson: Ka kī taurangi rānei ia ka oti i a ia ētahi panonitanga o te Pire Paerewa Waeture hei whakaū ka kore e whakamahia hei turaki i ngā herenga Tiriti o Waitangi, hei pā kino rānei ki ngā kaupapahere e tautoko ana i te whakarauoratanga o te reo Māori?

[Will he commit to making any changes to the Regulatory Standards Bill to ensure it is not used to override Te Tiriti o Waitangi obligations and adversely affect polices that support te reo Māori revitalisation?]

SPEAKER: Well, I can’t hear anything. What’s going on? Can someone explain? There was no translation available on that question. Can someone please find out what’s going on. [Translation resumes]

Rt Hon CHRISTOPHER LUXON: The primary purpose of the Regulatory Standards Bill is to make sure we get better-quality regulation. That should be beneficial to both Māori and non-Māori.

Question No. 6—Finance

6. Hon BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: Does she agree with the Acting Reserve Bank Governor that “it’s been a challenging period for the Reserve Bank of New Zealand, as we face a test of trust and confidence in us as an organisation”; if so, what role has she played in that?

Hon NICOLA WILLIS (Minister of Finance): Yes. I think that statement from the acting Governor shows a healthy degree of self-reflection that hasn’t always been a feature of the Reserve Bank. To the second part of the question: as Minister, I have made clear to the Reserve Bank my expectation that it meets higher standards, public accountability, and transparency.

Hon Barbara Edmonds: What self-reflection has she undertaken, given she did not make any inquiries into the resignation of one of her most senior officials?

Hon NICOLA WILLIS: I reject the characterisations in that question.

Hon Barbara Edmonds: Why has she not corrected the record when she said in the House on 9 September that the first time she was aware of the reasons Adrian Orr resigned was on 27 August, but, on 18 June, she told the Finance and Expenditure Committee that “disagreements between the board and the Reserve Bank Governor and the Government over the level of that funding that the Reserve Bank required had contributed to those employment discussions”?

Hon NICOLA WILLIS: Those statements are consistent with each other.

Hon Barbara Edmonds: Is she confident that she or her office have been fully transparent in relation to her or her office’s dealings between herself and either the former Reserve Bank chair, staff members of the Reserve Bank, or information communicated to her by the Secretary to the Treasury?

Hon NICOLA WILLIS: Yes.

Hon Barbara Edmonds: How can she be trusted when throughout this process she has withheld information, only releasing it after the Ombudsman got involved?

Hon NICOLA WILLIS: Because at every opportunity where I have had the ability to push for more transparency and openness, I have, as the public record shows—as I have communicated privately and publicly. I would note that the member is fully aware that I both supported and prompted the release of additional information.

Hon Barbara Edmonds: So do the prompting and the supporting of additional information therefore provide her reasoning as to why she did not think to ask the former Reserve Bank chair to resign until after the Official Information Act was released?

Hon NICOLA WILLIS: As has been traversed in this House, I relied on the judgment of the former chair of the Reserve Bank that the statements he had made were as far as he could go, given the legal obligations he had under exit agreements. As the case proved later, that judgment was wrong and he is no longer the chairman of the Reserve Bank.

Hon Barbara Edmonds: How can the country trust her statements when it is clear she has not been as transparent as she could have been, she has withheld information, has not asked for advice on correcting the chair’s misleading statements on 5 March, but instead waited almost six months to say she would have asked the chair to resign if he didn’t?

Hon NICOLA WILLIS: That was a collection of assertions, many of which I reject. I want to, once again, state that the member is the one who is politicising this issue. It would have been inappropriate for me to be involved in the process initiated with respect to Mr Orr. I have been very careful in commenting, and I stand by those judgments.

Rt Hon Winston Peters: Can I ask the Minister as to whether she’s reminded of those famous poetic lines, “I shot an arrow into the air, [whether it landed] I knew not where”?

SPEAKER: Well, that is—

Hon NICOLA WILLIS: As is often the case in discussion with the Deputy Prime Minister, I find his reflection useful and in line with many of my thoughts.

Question No. 7—Justice

7. DAVID MacLEOD (National—New Plymouth) to the Minister of Justice: What recent reports has he seen on crime in New Zealand?

Hon PAUL GOLDSMITH (Minister of Justice): Yesterday, the Ministry of Justice published new statistics on criminal convictions and sentencing for the year ended 30 June 2025. The statistics show a 14 percent increase in the number of prison sentences compared to the previous year. This suggests the rebalancing of the justice system is under way, from a focus on reducing the prison population under the previous Government regardless of what was happening in the community, to reducing the number of victims of crime under this Government.

Rt Hon Chris Hipkins: That’s a big, fat lie.

Hon PAUL GOLDSMITH: Restoring tougher consequences for crime has been an important part of that rebalancing. I presume, Mr Speaker, you’re going to do something about that interjection.

SPEAKER: No.

Hon Nicola Willis: Point of order, Mr Speaker. As I heard it, the Leader of the Opposition said, “That is a big, fat lie.” I believe that that statement—if it is the statement that the Leader of the Opposition made—is a clear breach of the Standing Orders.

SPEAKER: Well, there’s a course of action if you want to take it. What I would say is that accusing someone of being a liar is a different matter to saying that something is a lie. We can dance around the pedantics of it. I think it reflects poorly on the person making the comment, and that is where the public will make their own judgment. The Hon David Seymour, about to say something?

Hon David Seymour: How did you know?

SPEAKER: Well, I’ll tell you what, it was the way in which you were jumping up sort of halfway and not quite getting there or waiting for me to finish speaking.

Hon David Seymour: Well, a jump must be a smaller thing for you than for me, Mr Speaker.

SPEAKER: I didn’t hear that because of the noise that’s coming from my left.

Hon David Seymour: Mr Speaker, it’s the convention that all members are honourable and should be taken at their word. If one member makes a statement to try and perform their duty of informing the House and is told that what they’ve just said is a big, fat lie, the House can’t function. I don’t know why you wouldn’t ask the member to withdraw the statement. It’s actually quite a big problem.

SPEAKER: Yes, it is, and I’m sure that your attendance at the Standing Orders Committee to make those representations will be very valuable.

David MacLeod: What insights do the latest statistics reveal on the implementation of the Gangs Act 2024?

Hon PAUL GOLDSMITH: Well, 225 individuals were charged under the Gangs Act in the previous year, 252 of which were for displaying insignia in public places; 230 of those gang members were convicted; 33 percent had their gang insignia destroyed; and 22 people were sent to prison. I notice that the Opposition spokesperson on justice, Ginny Andersen, said that the gang patch ban hadn’t turned out too badly as she feared, and we certainly agree with that. It is part of our successful plan to restore law and order in this country.

David MacLeod: What other insights can he provide on crime in New Zealand?

Hon PAUL GOLDSMITH: Well, the latest data shows that the number of ram raids dropped from 308 in 2023 to 55 this year—a drop of 82 percent. The Government is making real progress on reducing retail crime, and, thanks to the work of the ministerial advisory group, we’ve got much more to do.

David MacLeod: What recent updates can he provide on the Government’s target to have 20,000 fewer victims of serious violent crime?

Hon PAUL GOLDSMITH: The latest New Zealand Crime and Victims Survey data, released last month, shows that, in the 12 months to May, there were 156,000 victims of serious violent crime—that’s 29,000 fewer than when we came into Government; 9,000 ahead of our target; and four years ahead of schedule. But that is still 156,000 too many victims, and that is why this Government has reformed sentencing laws, brought back three strikes, passed tougher gang legislation, and is focused every day on restoring law and order in this country.

Question No. 8—Economic Growth

8. Hon DAMIEN O’CONNOR (Labour) to the Minister for Economic Growth: Kia ora, Mr Speaker. Do recent industry closures and job losses contribute to economic growth?

Hon NICOLA WILLIS (Minister for Economic Growth): Well, first and foremost, I feel for anybody who has lost their job, and any community that is affected by plant closures. In fact, the very reason why our Government is focused on economic growth is because it is the best way to create jobs and income growth in all of our communities. As the member knows, no Government can control all of the commercial factors that influence the decisions of individual firms. What we can do—and are doing—is deliver policies that support economic growth, including sound management of the Government’s books; low inflation; and investment in things that lift productivity, like education; high-quality infrastructure; and research, science, and technology. These are all things the Government is progressing at pace as part of its Going for Growth agenda.

Hon Damien O’Connor: Can the Minister explain why the Government called back $10 million from the Wood Processing Growth Fund in Budget 2024, given the closures of the Kinleith paper mill, Penrose mill, two Winstone Pulp mills, and the Eves Valley Sawmill?

Hon NICOLA WILLIS: I want to note that the closure of the plants in question has, of course, had significant impact on many New Zealanders, and that is always of concern to the Government. As the member knows, there are a number of factors that have influenced each of those commercial decisions, with firms citing a range of factors including international prices for their products; including their own consolidation efforts; and, quite specifically, the price of energy, which has been very directly affected by declining volumes of gas supply in New Zealand, which is very directly connected to the decision by the previous Government—doubled down on by the current Labour administration—to ban the exploration of gas in New Zealand. Now, that is a bad decision; it is one that our Government has reversed.

Hon Damien O’Connor: Does the growth in unemployment figures, the growth in manufacturing closures, the growth in people leaving for Australia, the growth in electricity prices, and the growth in the cost of food represent the “growth, growth, growth” Government agenda?

Hon NICOLA WILLIS: Well, let me take each of those factors and present some facts. When it comes to food price inflation, under our Government, that is significantly lower than it was under the last Government, where it reached double figures. Under our Government, the rate of inflation—[Interruption]

SPEAKER: Just a moment. There’s a huge amount of interjection and commentary from both sides of the House—rare and reasonable is the call.

Hon NICOLA WILLIS: Under our Government, inflation has stabilised, having peaked at 7.3 percent under the last administration and having a far higher average than was even allowed within the target band. Under our Government, we’ve seen interest rates reduce significantly, which is a major factor for any business wishing to consider expansion or new hiring plans. Under our Government, we have seen that policies are in place to ensure that, going forward, the economy grows faster, creates more jobs, and lifts incomes.

Hon Damien O’Connor: Does she agree with the Mayor of South Waikato, Gary Petley, that the proposed closure of the Tokoroa plywood plant shows that this Government “doesn’t give a toss”?

Hon NICOLA WILLIS: Look, I can completely understand why the mayor is feeling aggrieved for his community, because communities that experience job losses through plant closures like this are deeply, deeply affected. I would simply say to the mayor that we do care. I would note, in particular, comments by Louise Upston, who has noted that the Ministry of Social Development is offering significant support to those who’ve required it and who has noted that we are working very hard as a Government to create the conditions for future job and business creation.

Hon Damien O’Connor: Does she see the closure of Smithfield meatworks in Timaru, Columbine Industries Clothing Ltd, and the likely closure of the Sealord factory in Nelson as examples of successful economic growth for New Zealand regions?

Hon NICOLA WILLIS: Once again, I acknowledge that each of those closures will have had a deep impact on the employees affected and on their surrounding communities, but I reiterate the message I gave in answer to my primary question, which is no Government—including the Government that that member was part of—can control all of the commercial factors that influence the independent decisions of individual firms around their business operations. What we can do, and are doing, are delivering conditions which better support firms to succeed. The examples of that are many, and the examples of the steps his Government took to make it hard for business are manifold.

Hon Damien O’Connor: What, in light of these closures, on a scale of one to 10 for regional economic growth, does she think she would score?

Hon NICOLA WILLIS: What I have made very clear is that we are working hard as a Government to create conditions that support growth. If you were to talk to any business around the country right now about whether they would prefer the inflation rates delivered under the last three years of the Labour Government or the inflation rates under this Government, they’d pick us. You would ask any business around the country, would you prefer the interest rate levels that exist right now or the interest rates left to them by the last Government, they’d pick us. You would ask any business around the country, would you prefer the employment law provisions under this Government or the last Government, they’d pick us. I stand by our record.

Hon Damien O’Connor: Point of order, Mr Speaker. The question is a really simple one: one to 10?

SPEAKER: Yeah, that implies a yes or no answer, which the member knows can’t be asked. We move now to question No. 10.

Hon Kieran McAnulty: Zero should have been an option.

SPEAKER: Zero will be an option for the rest of the person on my left’s day if you keep going on like that.

Question No. 9—Mental Health

9. DANA KIRKPATRICK (National—East Coast) to the Minister for Mental Health: What recent announcements has he made about new investment for eating disorder services?

Hon MATT DOOCEY (Minister for Mental Health): One of my top priorities as Minister for Mental Health is to improve access to mental health support so we can ensure New Zealanders have the help they need when and where it’s needed. As part of New Zealand’s first Body Image and Eating Disorder Awareness Week, I announced the first refresh in 16 years of our eating disorder services. This included a 20 percent funding boost of over $4 million annually, bringing total annual investment to over $23 million. This will bring meaningful changes to ensure our eating disorder services remain fit for purpose and meet the needs of our communities.

Dana Kirkpatrick: How will this increased investment support new eating disorder services?

Hon MATT DOOCEY: This Government is delivering faster access to support and more mental health front-line workers. This increased investment for eating disorders will result in the roll-out of peer support workers across all our regional eating disorder services, new community-based support for families and carers, an increase in the capacity of our specialist services, and the expansion of prevention and early intervention programmes. When someone is making the brave step of reaching out to get support, workforce should never be a barrier.

Dana Kirkpatrick: How will the new funding improve access to early intervention and community-based care for those experiencing eating disorders?

Hon MATT DOOCEY: This Government is committed to strengthening prevention and early intervention. Through funding peer-led and family based support, we are making it easier for individuals to access help earlier, reduce the need for acute in-patient care, and improve long-term recovery outcomes. When people, their loved ones, friends, or family make the brave step of reaching out for help, this Government is committed to ensuring we have the right support in place.

Dana Kirkpatrick: What support has the Minister seen for this announcement?

Hon MATT DOOCEY: Eating disorders worker Victoria Schonwald said, “By strengthening community-based supports for families, this investment recognises that recovery doesn’t just happen in clinics or hospitals, but also around kitchen tables and within households.” The Eating Disorders Association said they were “encouraged to see an additional $4 million committed to the sector—a welcome boost for those impacted by eating disorders and their [family].” While Eating Disorders Carer Support said the announcement is “bringing a significant funding boost and valuable updates for Kiwis for the first time in over 16 years.”

Question No. 10—Local Government

10. CELIA WADE-BROWN (Green) to the Minister of Local Government: E tautoko ana ia i ngā kōrero me ngā mahi katoa a tōna Kāwanatanga e pā ana ki ngā wāri Māori?

[Does he support all the Government’s statements and actions in relation to Māori wards?]

Hon SIMON WATTS (Minister of Local Government): Yes.

Celia Wade-Brown: Does he support the statement of the previous local government Minister that “We want Māori voices to be heard and represented.”; if so, does he think Māori wards provide a valuable opportunity of representation for Māori?

Hon SIMON WATTS: To the first part of the question, yes.

Celia Wade-Brown: Does he think his Government’s decision to reinstate referenda on Māori wards poses a risk to Māori political representation at the local government level?

Hon SIMON WATTS: No.

Celia Wade-Brown: Will he consider amendments to the Local Electoral Act in light of issues with Māori ward candidate profile information being left out of voting packs, to bring the administration of local body elections away from private companies and under the Electoral Commission, as recommended by the Local Government New Zealand electoral reform working group?

Hon SIMON WATTS: No.

Celia Wade-Brown: Does he acknowledge that Māori wards support continued representation for tangata whenua at the decision-making table, and will he be showing his support by encouraging voters to retain Māori wards?

Hon SIMON WATTS: The most important thing that community members can do in the context of supporting local democracy is to get out and vote in local body elections, and I would encourage all people and all voters to do that.

Question No. 11—Commerce and Consumer Affairs

11. ARENA WILLIAMS (Labour—Manurewa) to the Minister of Commerce and Consumer Affairs: Tēnā koe e te Māngai o te Whare. Does he agree with Christopher Luxon, who said, “National will curb the rising cost of living”; if so, what recent actions has he taken to curb food costs?

Hon NICOLA WILLIS (Acting Minister of Commerce and Consumer Affairs (Grocery Sector)) on behalf of the Minister of Commerce and Consumer Affairs: Christopher Luxon made that statement in March 2023, when there was a Labour Government. At the time, the latest inflation figures showed consumer prices across the board had risen 7.2 percent over the previous year—almost the highest in 35 years. Food prices, in particular, had risen a whopping 10.7 percent. So, yes, I do agree with him. To the second part of the question, as I told the member yesterday, the Government doesn’t set food prices—communism tried that approach and failed. In terms of the cost of living, I want to acknowledge the Labour Party who, have today, finally done a road to Damascus experience and voted to support our FamilyBoost relief for families.

Arena Williams: Is the Minister blaming others, when, after two years of this Government, mince now costs more than $22 a kilo, up $3.40 in the past year of her governance, a loaf of white bread is up 42 percent and broccoli is up 75 percent?

Hon NICOLA WILLIS: I am very interested in this member’s questioning because I wish to share some figures with the House. They relate to food price inflation. In the period ending December 2022, food price inflation was 10.7 percent. In March 2023, 11.3 percent. In June 2023, 12.3 percent. [Interruption]

SPEAKER: Sorry. Hang on—sorry. Just a minute. Yelling across the House like that doesn’t help order at all. Rare and reasonable interjections are, of course, accepted, but not that sort of barrage.

Hon NICOLA WILLIS: My simple point is that I acknowledge that food prices affect every family and we always wish to see lower rates of food price inflation. It is also the case that in recent history food price inflation, particularly under the last Government, was completely out of control. We are now experiencing much lower rates of food price inflation, but I recognise that for any family at the supermarket checkout aisle—dealing with the cost of mince rising—it is difficult. I know that families understand that the Government doesn’t set that price but that it’s important we do what we can to set the foundations for an economy that allows for a more affordable cost of living.

Arena Williams: Does the Minister think that when Kiwis complain under her Government about the cost of mince, bread, and broccoli, they are just being a part of—to quote Christopher Luxon—a “very negative, wet, whiny, inward-looking country”?

Hon NICOLA WILLIS: Well, no. I think that when families acknowledge that the cost of broccoli is high or the cost of bread is high, they are reflecting reality and they are welcome to their view of reality, and I sympathise with it. For the member to use the Prime Minister’s statements from Opposition, out of context, is beneath her.

Rt Hon Winston Peters: Referencing the first supplementary question, is numeric literacy important in the cost of living analysis and has this Government been in power for two years?

Hon NICOLA WILLIS: The Minister makes a very good point. On behalf of the Minister of Commerce and Consumer Affairs, it would be quite a miraculous thing indeed if, as Minister of Commerce and Consumer Affairs, I had changed competition law in such a way that I had set the price for broccoli, white bread, and the other products that the member has listed. If that is the approach that she is suggesting the Minister of Commerce and Consumer Affairs should take, I’d suggest to her that that would come with an awful lot of problems.

Arena Williams: How can the Government claim to be curbing—[Interruption]

SPEAKER: Just hang on—wait. Now you go.

Arena Williams: How can the Government claim to be curbing the cost of living when food prices are up 5 percent, administered inflation is up 10.8 percent, and they only increased the minimum wage by 1.5 percent?

Hon NICOLA WILLIS: Because, quite simply, on our watch, inflation is significantly lower than it was under the last Government, as is food price inflation. Specifically, fresh from the road to Damascus, they’re now on the road to serfdom.

Rt Hon Winston Peters: Has, as Arena Williams said, this Government been in power for two years?

Hon NICOLA WILLIS: The Minister is correct.

Arena Williams: Mr Speaker.

SPEAKER: Arena Williams—[Interruption] Just wait for the calm among your colleagues.

Hon NICOLA WILLIS: Point of order, Mr Speaker. I seek leave to correct my statement.

SPEAKER: Leave is sought. Is there any objection to that course of action?

Hon NICOLA WILLIS: I’m advised by the Minister for Justice that in fact it’s 22 months rather than 24, Minister.

Arena Williams: Is the Minister overseeing—

SPEAKER: Just hang on—we will calm down. OK.

Arena Williams: Is the Minister overseeing a worsening affordability crisis while tinkering around the edges, where less competition, higher prices, and stagnant wages are all moving in the wrong direction?

Hon NICOLA WILLIS: Well, no. But what I would note is that when it comes to substantive reforms that will increase competition in the economy and deliver a better deal for consumers going forward, yesterday the Government announced the most substantive reforms to the Commerce Act in 20 years. The member was provided a briefing on those. I hope that she will engage with their substance and be more constructive going forward.

Question No. 12—Transport

STUART SMITH (National—Kaikōura): Thank you, Mr Speaker. My question is to the Associate Minister of Transport and reads: what recent—

SPEAKER: Hang on, hang on. No, stop—Mr Smith! Just wait until—as the questioner asks the question, there’s a bit of respect shown by the rest of the House. Questions are asked in silence.

Stuart Smith: I haven’t had a question in a long time, Mr Speaker.

SPEAKER: Well, I’ll tell you what, you’re in danger of losing it completely.

Stuart Smith: That’d be criminal.

SPEAKER: We’ll just have a quiet House, because obviously this is a very important question.

12. STUART SMITH (National—Kaikōura) to the Associate Minister of Transport: What recent announcements has he made about aviation?

Hon JAMES MEAGER (Associate Minister of Transport): Yesterday, at the Aviation Industry Association conference, I was very pleased to announce the Aviation Action Plan. This plan has been developed by the Interim Aviation Council, which is a collaboration between industry and Government, and I want to acknowledge the work of the previous Government in recommending the council’s establishment. The plan contains 25 actions to grow and futureproof the aviation sector, ensuring it continues to deliver for all New Zealanders. It is a first for New Zealand and represents a major sector milestone. I’ll be using these actions to bolster our aviation work programme, to encourage innovation, and to grow the economy.

Stuart Smith: What are the key actions from the plan?

Hon JAMES MEAGER: Key actions from the plan include reworking specific civil aviation rules, including those in emerging technologies, like drones and uncrewed aircraft. We will tackle workforce issues, including by updating the pilot and engineering training pipelines, promoting aviation careers, and progressing international mutual recognition of pilots’ licences and associated aviation qualifications. We will also look at making our Royal New Zealand Air Force Base Ōhakea available as a permanent alternative runway for wide-body aircraft. The aviation sector is an important contributor to economic growth, so we need to have modern rules, a well-trained workforce, and the right settings to encourage that growth.

Stuart Smith: What role does regional connectivity have in the plan?

Hon JAMES MEAGER: Regional connectivity is a key action from the plan and is critical to supporting our regional communities. Our small regional carriers have been under pressure from rising costs, limited access to capital, and ongoing post-COVID disruptions. The $30 million in loans from the Regional Infrastructure Fund and support for interline agreements are going to be vital in ensuring the long-term viability of our regional airlines. I’d like to thank the Hon Shane Jones for his support and his pūtea, as well as the member Stuart Smith’s advocacy for his community, including reinstatement of the Blenheim to Christchurch route through Originair.

Stuart Smith: What are the next steps for the Aviation Action Plan?

Hon JAMES MEAGER: The interim council will now become permanent, giving the sector and Government the leadership we need to deliver on the actions in the plan. I’d like to thank the council for their work and look forward to continuing to work alongside them. This is not a document that will sit on the shelf gathering dust. Several actions are due to be completed by the end of the year, and I look forward to updating the House in due course.

Hon Louise Upston: Point of order.

SPEAKER: Supplementary?

Hon Louise Upston: No, point of order.

SPEAKER: Sorry, point of order, the Hon Louise Upston.

Hon Louise Upston: Oh, I’m happy to wait until this question’s finished, sir.

Hon Shane Jones: To the Minister: can he assure the House that he has communicated clearly to the new CEO and the board that we have no tolerance for any more of the historic dysfunctionalism within the Civil Aviation Authority?

Hon JAMES MEAGER: I can assure the member that both the board and the CEO have received that message loud and clear, and I’m pleased to report that the board of Civil Aviation Authority and the authority are making great progress in updating their culture, improving certification timelines, and modernising the aviation industry.

Question No. 7 to Minister

SPEAKER: A point of order to the Hon Louise Upston.

Hon LOUISE UPSTON (Deputy Leader of the House): Thank you, Mr Speaker. I want to refer back to a matter that came up in Question No. 7 and just considering Speaker’s Ruling 48/2, and would ask, sir, that you consider whether or not you are making a new ruling about the use of the word “lie” in this House, and if you could come back to us. Thank you.

SPEAKER: Thank you. I’ll take that under advisement. That concludes oral questions.

Bills

Income Tax (FamilyBoost) Amendment Bill

Third Reading

Debate resumed.

Hon Dr DEBORAH RUSSELL (Labour): Labour supports this bill, and we support the bill because it puts a bit of extra money into families’ back pockets. We are in the midst of a cost of living crisis. We know families are doing it tough. In the last year—a year under that Government—food prices have gone up 5 percent; fruit and vegetables have gone up 8.9 percent; meat has gone up 9.4 percent; bread has gone up 9.5 percent; cheese has gone up 14.3 percent; milk has gone up 15 percent; all on that Government’s watch.

Families are doing it tough, and right through winter, things have been even worse. In the last year, electricity prices have gone up 11.4 percent, and they’ve gone up because that Government will not invest in renewables. That is why we are struggling and why families are paying higher prices. On top of that, it seems—as admitted by the Minister of Finance today—within the last quarter, when the numbers come out tomorrow, it might show that we’ve been in recession.

The green shoots that they keep on talking about seem to be withering away, and it’s because that Government has failed to support the economy. Families are doing it tough because money is not circulating. Jobs are disappearing; 19,000 jobs in the construction sector. Here’s the thing: propping up the construction sector would have propped up jobs, would have propped up money circulating in the economy, would have propped up small businesses. Instead, we have low wages, an economy that’s stagnating, high prices, and a cost of living crisis.

That is why Labour is supporting this bill: because families are doing it tough. But lest the Minister of Finance say that this is a road to Damascus moment or anything like that, let us be clear that if she says it’s a road to Damascus moment, it’s only because she wants to shine a bright light in one direction and hide the complete failure of her policy in the other direction. The only reason we have been putting this bill through the House in urgency is because the Minister’s policy was a glorious mess—an absolute mess.

That Government came into office saying that they were going to deliver $250 a fortnight to families. Every now and again, they manage to remember the words “up to”. But the headline promise was $250 a fortnight to families, and that money was going to be delivered through tax cuts and through this policy, FamilyBoost. Up to $250 a fortnight, they said—but, when we asked, again and again and again, they could not find a single family that had gotten up to $250. Their headline promise, and they have not delivered it.

In fact, when we pushed and pushed and pushed, what we found was that, in terms of the families who got it, only 244 families had actually gotten the full amount of FamilyBoost. We’ve had a very recent update to that data in the regulatory impact statement for this bill; it’s now up to 385 families who have received the full amount of FamilyBoost, and, of those families, the Government couldn’t identify one that had had the tax cuts as well to get up to $250 a fortnight.

That Government promised that 100,000 families would get FamilyBoost. So far, only 27,000 families have gotten it in every quarter that it has been on offer. That is a failure of a policy, and that is why we’ve been back in the House, putting the Minister of Finance’s tweaks through—to live up to the promises that they made and did not deliver on.

It is really interesting. It was very hard to forecast this policy, as shown in the regulatory impact statement. It turns out, once we got that data, that, of the families who are predicted to take it up, only 51 percent of families had taken it up. Even in the new model—even with the tweaks that are being put through in this bill—even then, only 71 percent of families are projected to be able to take up FamilyBoost.

This policy is still not working properly. Families are missing out, and, if we look at who’s missing out, there’s some really telling data on that—some really telling information. From the Minister’s own officials, and from the regulatory impact statement, it is Māori and Pacific families who are missing out on getting FamilyBoost—who are missing out on that extra money that they so desperately need when we’re dealing with the cost of living crisis being manufactured by this Government.

I can understand why they’re missing out: one of the things that’s going on is that it’s actually hard to claim FamilyBoost. The families who have claimed it say that it’s an easy process—but what about the families who haven’t been able to claim it? We haven’t heard from them, and I know why the barriers might be there. In order to claim FamilyBoost, a family must get receipts from their childcare provider; they must upload them to Inland Revenue, and then they must claim the money back that way. What about the families who don’t have the capacity to copy documents at home? What about the families who can’t get those documents in the first place? What about the families who don’t even have computing at home? What about the families who don’t have easy access to the internet? There are a whole set of barriers there for families in terms of claiming FamilyBoost. I think that bureaucratic process is part of the problem, and we told the Minister that the process would be too bureaucratic.

On the other side of the equation—on the other side of the screen—Inland Revenue has had to employ 95 extra fulltime-equivalent staff members to deliver this policy at a cost of $13 million; 95 people processing receipts and putting the claims through. It’s great that people are employed, but this is a highly manual process, and, again, we told the Minister that the manual nature of this process would create barriers.

“Why?”, we said. “Why on earth?” If we wanted to have this kind of policy of supporting families—of ensuring that we reduced the costs of childcare, of ensuring that children get good early childhood education—there was a perfectly good policy on offer on this side of the House, of taking the existing model, which was working, of 20 hours free early childhood education for three- to five-year-olds and expanding it to two-year-olds. That would have helped families out; that would have made a difference to them, but the Government on that side decided to reject it.

Here’s another one of the stinkers that comes through from the regulatory impact statement and from the information we got with this bill. Sitting in the officials’ commentary on the bill, we have the data and the calculations that show us the income levels that families can earn and still get this rebate. This rebate—only a small amount of money, but money none the less—is available to families earning $220,000 a year. That’s a large income. I don’t begrudge those families getting that rebate—I think we should be helping families out—but $220,000 a year? That’s a very large income for a family. That puts those families well, well into the top 10 percent of families.

Families earning $200,000 get some of this money—that’s still a large income. These are large family incomes, and yet they are getting assistance with childcare. In some ways, I don’t begrudge it, but, in other ways, for goodness’ sake! What we have here is families at the upper end of the income scale getting this assistance, and Māori and Pasifika families not getting it. There is something wrong with this policy; something wrong with the way it’s being set up and the way it’s delivered. Even then, we do not have any guarantees from the Minister that it will work.

The Minister, in the latest tax bill, is putting in a clause to give herself, or himself, the right to make further tweaks to FamilyBoost by using an Order in Council. That, to me, says that they are worried that what they are doing in this bill will not be enough; that they know that they are going to have to otherwise come back to this House again and again and again to tweak their policy because they have not got it right.

Yes, Labour supports this bill—we want families to have more money. But let’s be quite clear: what this bill represents is a giant mess made by that Government, and a big cover-up for Nicola Willis.

Hon JULIE ANNE GENTER (Green—Rongotai): Tēnā koe, Mr Speaker. Thank you very much for letting me take the call. The Green Party absolutely supports early childhood education, and, in our view, it is a public good. It should be free, it should be universally available, it should be for public good—not for private profit—it should be the community sector that supports it, we should have qualified teachers. All of this is entirely possible and within reach, as the Green Party demonstrated in our Green Budget in May. It is a completely different approach to the one from this Government. We want to wind down subsidies for commercial centres who are making profits, and we want to ensure that we have a child-centred, fully public system—and why not? What else could be more important than our tamariki?

Early childhood education is an investment in our country. It’s an investment in our future. But, you know, it’s the last thing that this lot want because they’re quite happy with the inequality in this country, as we can see from their actions, which have all gone towards exacerbating and increasing it. The reason is because the people who they represent benefit when there are people living in poverty. It means there’s cheaper labour. It means that they can benefit from tax-free capital gains. That’s why they made the terrible, terrible decision to give billions of dollars to landlords, quite a lot of money to tobacco companies, a couple a hundred million to fossil fuel exploration—all things that don’t genuinely benefit our country in any way whatsoever, but do benefit vested interest.

All of the information about the failure of Nicola Willis’ early childhood education support policy is right here in the regulatory impact statement (RIS), which says, very clearly, “What is the policy problem?” The policy problem is that FamilyBoost is reaching far fewer families and providing less financial assistance than originally intended. A change is required. FamilyBoost was dreamt up on the campaign trail to try and pretend that you can have it both ways: that you can have a National-led Government that is clearly going to prioritise the interests of landlords, private property owners, large corporates, and polluters over the common public good of the country, but they know that that’s not actually popular, so they try to dress it up and pretend they’ll have policies that will take action on the things that New Zealanders actually care about. Families do want more support for quality early childhood education, so the Government dreamt up this policy, FamilyBoost, and cancelled and repealed the extension of the free 20 hours of early childhood education that was set to come in for two-year-olds. Something that would have been delivering real benefit to a much larger number of families over the last year and a bit, year and a half.

Instead, they brought in FamilyBoost. After the time at which the free early childhood 20 hours for two-year-olds would have come in, they brought in FamilyBoost. Now, in 2025, we can see it’s barely getting out there. Only a very small number, 249 families, actually benefited from the full subsidy, so that is obviously a tiny percentage of the families that have young children. It’s not addressing the issues with unaffordability of early childhood education.

Nicola Willis and the Government have come to the House—again—under urgency. By the way—oh, this is here on the RIS, this is good—“Given the lack of available data when the scheme was being designed in late 2023, the eligible population … for the current settings was modelled assuming 100% uptake in order to set the fiscal cost”. They came in with their harebrained policy because we don’t have an independent fiscal institution. In Opposition, it’s all about what’s going to sound good in headlines—“Let’s try to make it look like we’re doing something”—and come up with this crap policy. They come in, the officials, to have limited data, they’re trying to design this programme with no information, and they estimated that there would be much higher uptake. In fact, I think it was only about 50,000 families received any sort of benefit from this, when they originally thought it would be many times more than that.

So, yeah, it was about 59,000 across all of the categories—only $50 million paid out, when they’d budgeted $174 million. What is that? That’s more than two-thirds of the money set aside has not gotten to the families who need it, who are struggling with the cost of living crisis. They come—again—under urgency and try to claim that the Green Party doesn’t support early childhood education or families with young children because we won’t vote for their crap policy brought to us under urgency—again. I mean, it’s just pathetic. Like, it’s just really hard—look, I try to use more erudite language to describe what the Government’s bringing, but I try to be straightforward and to the point and the reality is it’s shallow, it’s irresponsible, it is not good policymaking. It’s disappointing.

I’m sure all the voters who voted for the Government policies, many of them are absolutely regretting their decision because they can see that the economy has crashed, people are struggling, record numbers of people are leaving for other countries like Australia. By the way, they’re going to countries that have a capital gains tax, that have a higher, more progressive tax, that have more public services, because that’s how we as a country deliver quality public services, is having a fair tax system instead of having these complicated, ridiculous policies that say, “Oh, we’re going to try and make low-income, working parents keep their—firstly, they have to pay upfront for the early childhood.” They have to pay up front for it with FamilyBoost and then claim it back with invoices.

Why is this Government creating extra bureaucracy and extra administrative burden on families in order to access some measly support that doesn’t even address the fact that all this money we’re putting into early childhood centres, a lot of it isn’t getting to the kaiako, it isn’t getting to the children; it is getting to the owners in the way of profit. The decisions that the Government’s about to make—because the Minister David Seymour is quite committed to making our early childhood centres less safe, lower cost, with less qualified teachers in order that the owners of those private centres can rake in more profit. As if that is going to help our country. Well, we all know that it’s not. People out there in Aotearoa should know they have a real alternative. We don’t have to vote for your sad, pathetic attempts to address real issues when they don’t address the issue, and we will not—we will not.

I want to read more from this regulatory impact statement because I thought it was quite fascinating and quite telling. So we’ve got the distribution of payments by income and payment amount. I asked the Minister during the committee stages if there had been a distributional analysis of the impacts of the policy, and he claimed that Figure 1 showed that. Well, it really doesn’t, because it only includes the people who have actually accessed the money. It doesn’t include the many people who have not accessed this who are eligible. It doesn’t look at the overall impact. But what it does say is that of the people, the families who are accessing this, the data shows that claims and payments are concentrated among families at the higher end of FamilyBoost income eligibility, particularly those, you know, they’re still not high income, but overall the policy is still not addressing childcare costs for the people who need it most. That’s the problem with the overall design of it.

If you want people who are under stress, who are low income, who are dealing with kids, who are maybe working multiple, insecure jobs, who maybe have insecure housing because the Government has made it easier for landlords to kick out tenants for no reason, who are maybe dealing with insecure work because the Government has made it easier for employers to exploit workers, that they have to somehow figure out how to navigate myIR and figure it out. Also, it may not even be worth it to them to do that, because they’re simply likely to receive smaller payments and see less value in claiming FamilyBoost.

All of this just to say that it is terribly disappointing, I think, for New Zealanders to have this Government who is so short-sighted, who is so much in the pocket of vested interests, of big business, of fossil fuel interests, of private, corporate, of owners of early childhood centres who cannot understand the value of investing in our people; who do not care about reducing inequality and looking after tamariki and ensuring that they have quality education; who do not understand the value of women providing basic, core, essential services to our economy and who rip money away from them. It is a disgrace.

SIMON COURT (ACT): I want to acknowledge that when this Government recognises a problem with laws that have been made, we act very quickly to fix them. We don’t stand here in the House and pretend we don’t know what the problem is. We are here to fix things that matter.

That is why the Income Tax (FamilyBoost) Amendment Bill is so important. It aims to reduce the cost burden of early childhood care on families. The goal is to make childcare more affordable, particularly for lower and middle income families. That is why ACT is here in Parliament: to fix things that matter. We support this bill.

Dr DAVID WILSON (NZ First): We have established across the House today that early childhood education is not just an investment in our kids; it’s an investment in our long-term human capital, productivity, and prosperity. We congratulate the Minister for her work on this bill. It’s the right policy in the right place at the right time. We commend this bill to the House.

Ricardo Menéndez March: Tell us why.

Dr DAVID WILSON: I just did.

ASSISTANT SPEAKER (Greg O’Connor): A five-minute call—Ricardo Menéndez March

RICARDO MENÉNDEZ MARCH (Green): Thank you, Mr Speaker. I think it’s really telling that so many members of the Government are unable to acknowledge the policy design failures and to adequately own up to them. Kudos, at least, to one of them—Simon Court—for acknowledging that in the previous contribution that he made.

Let’s begin by acknowledging the fact that we’re debating this bill under urgency due to a complete botch-up by the Government, who, I would say, has gone as far as mischaracterising the policy during the election season, promising that this would provide genuine and meaningful cost of living relief for families with young children. As the months have rolled on, what we have found is that most families have not been able access this support at all, let alone receive the maximum support available. At a time of growing inequality and of growing material hardship for children living in poverty and for the families who are currently being locked out of accessing emergency housing and are living on the streets, the Government’s flagship policy seems to be, right now, under urgency, simply expanding the income brackets so that higher-income New Zealanders can access this FamilyBoost payment.

It’s not a meaningful intervention in a cost of living crisis that has been, literally, worsened by decisions that this Government has taken to cut thousands of jobs and to deprive people living in poverty of essential assistance from Work and Income. It simply aims to pander to the early childhood education (ECE) companies that are running our early childhood education centres as a for-profit business, as opposed to a public good. Early childhood education should be a core public good that is adequately supported, where the workers are well looked after and there are enough workers so that they can look after the children that they care so much about. Right now, what we have is a Government that is simply subsidising corporations at the expense of the future of our children. This policy, unfortunately, does not go any way to addressing the core underlying issues that are preventing so many families from accessing early childhood education.

My colleague Julie Anne Genter talked about some of the design issues that this policy has—particularly, the barriers it creates for low-income families who desperately need support. The fact that the policy has been designed in a way that means that you have to pay first before you can access the rebate, means that, for lower-income families, it still remains a barrier. This is why the Greens, rather than pushing through the technocratic and poorly designed policy, would instead champion ECE as a public good, adequately support the workers, and make it free so that no family in Aotearoa—no matter their income bracket—has to make decisions about whether they can afford early childhood education or their bills.

What is also really clear as well, looking at the regulatory impact statement on this bill, is that this Government chose to not engage with the agencies who have public good ahead of profit when it comes to their interests. Looking at the regulatory impact statement, it is incredibly clear that they chose to simply consult with people in the early childhood education sector as opposed to, for example, the families who have not been able to access this very same policy, or, for example, consulting with the Children’s Commissioner who would’ve, in my view, been a critical agency that this Government should’ve consulted with to get really important feedback on the impact that this policy is having on families.

This policy is a joke if this is the Government’s flagship cost of living relief on top of the tax cuts that will disproportionately benefit high-income earners. They need to turn their faces away from the halls of Parliament and on to the streets to realise that inequality is growing in this country, that more people are living in the streets, and that this FamilyBoost bill will do nothing to alleviate the hardships—many of them caused directly by Government decisions—that they have inflicted upon our communities. The Greens are fighting to not just get rid of this Government but to have a Government that treats early childhood education and things like dental care and things like our GP services as core public goods. Yes, we will make the wealthy few pay for it, as much as it scares the members on the other side.

The Green Party won’t be supporting this bill, because it’s a terribly designed policy. It does not meaningfully deliver cost of living relief and does not address, in any way, the fundamental issues within our early childhood education sector. We look forward to working with families affected by the cost of living crisis to put forward alternatives that meaningfully allow families to have what they need to live a thriving life. Kia ora.

Debate interrupted.

Amended Answers to Oral Questions

Question No. 7 to Minister

Hon PAUL GOLDSMITH (Minister of Justice): Point of order, Mr Speaker. I seek leave to make a personal statement to correct an answer to an oral question.

ASSISTANT SPEAKER (Greg O’Connor): Leave is sought. Is there any objection? There appears to be none.

Hon PAUL GOLDSMITH: In response to question No. 7 today, when asked on the latest stats around the Gangs Act, I said that 225 individuals were charged under the Gangs Act in the previous year. I should have said that it was 255.

Bills

Income Tax (FamilyBoost) Amendment Bill

Third Reading

Debate resumed.

CAMERON BREWER (National—Upper Harbour): The National Party is delighted to support the third reading of the Income Tax (FamilyBoost) Amendment Bill. Of course, it’ll ensure that more families are eligible, it will lift the amounts that are available. I commend the bill.

Hon BARBARA EDMONDS (Labour—Mana): I rise to again provide Labour’s support for this bill, not because we support the policy itself when it repealed what was an excellent policy of early childhood education free for two-year-olds but because Kiwis right now are doing it really tough. My electorate of Mana is an area that is one of the highest deprivation areas in the country. It’s an area that I drive past as I go home every day. Every day in my constituency of Mana, I see the impact that the high cost of living is having on our families. I see it when Pātaka Kai, which is the first time we’ve had a soup kitchen in Porirua, has had to be open this year to feed the homeless people who are now increasing in our community.

I was able to go and help out one particular Monday at Pātaka Kai, which is led by Ngāti Toa, our local iwi, to talk to homeless people about the struggles that they’re facing, to be able to have a conversation with them because a lot of people ignore them, and just to be able to play a simple game of Last Card. What really saddened me at that time was I recognised a person and I said to this young person, “What’s your name? How old are you?” That young person was 23 years old and I said, “What school did you go to?” She told me her school. I recognised then and there that in many of my children’s school pictures in my home, there was that young person in the same classroom as my daughter. This is the impact that the cost of living is having on our families every day—that a 23-year-old is homeless; a 23-year-old that was in the same class as my daughter. These are the struggles that everyday Kiwis are facing.

So that’s why Labour is supporting this bill. We know that, right now, Kiwi families need every single dollar that they can get. We’ve had a lot of political debate today over this particular bill because, yes, it has come in under urgency; yes, we haven’t been able to, as a Parliament, scrutinise it and ask officials the detail of this bill; but what we did on this side of the House was try to be constructive. We tried to offer the Government members ways to actually increase the eligibility, to increase those payments. We said, “Change the commencement date of this bill.” FamilyBoost started on 1 July 2024, but this bill only comes in from 1 July 2025. Why can’t you go back to the very side of your failed policy—but none the less a policy—and make that the commencement date so that families that missed out then can actually get some now? Why can’t we go back there so that some families can get a little bit more? That was voted down by the Government.

We also, constructively, had tabled amendments that increased the abatement threshold just a little bit more from 7 percent, down to 5 percent. For those members who don’t know, when that abatement threshold cuts in, that’s at the level at which every dollar after that threshold gets cut back. Dr Lawrence Xu-Nan offered 5 percent, but the Government voted it down.

Let me take you back to why we are here for this bill. This bill was meant to help families with the cost of living, with the childcare costs. Yes, we disagree—we believe that extending early childhood education to two-year-olds was the better policy but we came to the House today to be constructive, to try and help the Government fix their failure of a policy, to try and make it better, because right now it is absolutely appalling that I, as the MP for Mana, have to go to a soup kitchen and recognise a homeless person who’s only a year older than my daughter and happened to be in her class. That is an indication that something is wrong with our society. Something is wrong with our economy when you have a 23-year-old who is homeless.

We came to this House today to be constructive, to offer constructive tabled amendments, to help the Government—and it sits within the scope and purpose of this bill. It was to increase the number of recipients eligible for the payment. Those tabled amendments were to increase the payment amounts. Those tabled amendments were also to help maintain the fiscal envelope for the scheme because the regulatory impact statement, in the absence of a select committee, was actually a very good statement because it set out that only 52 percent have actually taken up this policy. There was fiscal headroom for this—because there’s clearly an underspend.

We implored the Government members, with tabled amendments, to try and get Kiwi families that extra dollar more. Instead, they were rejected. They were laughed at by the Minister of Finance, and they were totally voted down, which to me points to “Where is your connection with your communities?” Where is the Government members’ connection with their communities? Do you not see the increased homelessness? Do you not see the increase in unemployment? Do you not see the increase in pain on our families today? If you did, you would have had your road to Damascus moment and approved those tabled amendments. Instead, it was shameful that Government members turned down those tabled amendments during the committee of the whole House.

One particular biblical story that I think might help the Minister—and I went to an all-girls Catholic school, and I was very, very good at religious studies.

Shanan Halbert: Good school.

Hon BARBARA EDMONDS: Very good school, yes, on the North Shore of Auckland. One of the things that I learnt at that Catholic school was around social justice, the importance of social justice and making wrongs right. One of the stories, which I think members on the other side of the House might not necessarily remember if they went to a Christian school, is the story of King Nebuchadnezzar. That particular story is about unrepentant pride, and, unfortunately, what we’ve seen through this House is a party who is incredibly proud about this bill, about bringing this bill to the House. Yet when time and time again the Opposition tried to be constructive, to help extend that bill so it actually helped more families, all we saw was rejection, laughing, and the voting down.

I do stand here proudly as a Labour Party member, being able to support this bill. I don’t support FamilyBoost as a policy because I believe that early childhood education extension to two-year-olds was actually better. It was better for a number of reasons. Firstly, the family didn’t have to apply for it; secondly, they didn’t have to try and gather their invoices and receipts every quarter; thirdly, they didn’t have to go on to myIR and input their information; and, fourthly, they didn’t have to wait for their reimbursement.

Hon Kieran McAnulty: Who has time for that?

Hon BARBARA EDMONDS: The Hon Kieran McAnulty asks “Who has time for that?”

Hon Kieran McAnulty: Not working people.

Hon BARBARA EDMONDS: Not working people, which is why the uptake of this particular policy has been so bad. If the members on the Government benches don’t believe me, then they need to read their own regulatory impact statement, which actually sets out the problems with this policy.

Working parents are time-poor, and what you see in the distribution of income within that regulatory impact statement is that those at the highest income are the ones that are actually accessing this policy. Why are people on higher incomes able to access the policy more easily? For the same reasons that Dr Deborah Russell set out. It’s access to digital. It’s access to computers. It’s access to printers. It’s access to all the things that many of the members in this House take for granted.

I implore members on the Government benches, go and talk to your communities. If you’re a list MP and you don’t necessarily want to talk right up and down the country, go to Wellington. Go to Wellington City. Go to the city mission there and talk to the City Missioner Murray Edridge. Go and talk to him about the impact he’s seeing on Wellington City with the rise in unemployment, the rise in homelessness, and maybe get some perception and some humility, and be connected to your communities. Again, I think it is a travesty of our society when I go to a homeless kitchen and I see a 23-year-old girl, who was in the same class as my daughter, be homeless.

Hon Judith Collins: Where were her parents?

Hon BARBARA EDMONDS: I hear the Minister say, “Where were her parents?” but this is the thing—life is complicated. If you stay connected with your community, you’ll be able to understand the complications of being a human being. I’m not going to pass judgment on that 23-year-old. Instead, my job is to be able to help her, to be her voice, and to support a bill that will, hopefully, bring a dollar extra for our families.

RYAN HAMILTON (National—Hamilton East): Mr Speaker, thank you. This bill will help provide people $6,240 more a year. We’ve increased both the eligibility and the amount of money that people will receive. We’ve just heard from the Opposition that some of their amendments have said, basically, “Let’s do more and more—even than what we’re doing now.” Yet they voted the first one down. They say, “Shame”, but they’re going to support today’s amendment. They’re trying to have their cake and eat it too. I commend this bill to the House.

ASSISTANT SPEAKER (Greg O’Connor): This is a five-minute call—the Hon Willow-Jean Prime.

Hon WILLOW-JEAN PRIME (Labour): What a speech to follow. I have spoken on the earlier readings of this bill in the House, and I have outlined what my concerns are in terms of a missed opportunity that we have here today to make this scheme more accessible to more families. This Government has completely ignored that, and they haven’t taken the time, and they haven’t acknowledged that this is one of the key issues that New Zealanders have—that working parents have—with accessing their scheme.

We know that this bill is an admission that their original policy has been an absolute failure. It’s taken almost two years for this Government to acknowledge that it has been a failure and to come here and fix up their mistakes. The Minister—the Hon Nicola Willis—could have been a little bit more humble in her contribution earlier today, but instead we heard her laughing and dismissing and attacking the other side of the House. This Minister should have been a bit more humble in coming here, accepting that a mistake has been made and that they are doing something to fix it, and open to the further suggestions that this side of the House had suggested that could improve this, but that didn’t happen. Instead, she chose to focus on us and our change in position of now supporting this policy.

Let’s be very clear: Labour is supporting this because these families were promised this money, and they have not received it because the Government overpromised and under-delivered. Let’s look at the statistics. Up to 130,000 people were supposed to benefit from this policy. It’s been a complete failure because only 244 families have received the full amount, and we don’t even know one single family who has received the $250 that they promised. Nicola Willis promised 100,000 families would get FamilyBoost, but only 27,000 families have consistently received it.

We heard in a contribution in the second reading how wonderful it is that $69 million had been paid out, but what that member on the other side of the House failed to mention is that it was expected that $174 million would be paid out—over $100 million short on what New Zealanders were promised. Labour supports this bill because it will result in more families actually receiving cost of living support despite this policy’s abject failure.

When I started, I talked about my concerns that the Government has rushed this through without giving consideration to how they might make this scheme more accessible to busy, working parents, instead giving them even more life admin on top of looking after young people. I spoke to the ECE Parents’ Council Aotearoa yesterday and they talked about this additional life admin that many stressed, working parents are having to do in order to access this. Why could it have not been made simpler? We know that this has been an issue because we see that the IRD are fielding a huge number of phone calls, something like 28,000 phone calls about FamilyBoost, over 20,000 web messages relating to FamilyBoost, and that they’ve spent $13.9 million on administering this with 95 fulltime-equivalents working on it. That is money that could be going directly to families, but instead they’ve made it such a cumbersome process and ignored the request from parents to make this a more simplified process. Why can’t the Minister of Finance do that? Why is she making it harder for families to access something that she promised?

Hon Nicola Willis: But you voted for it.

Hon WILLOW-JEAN PRIME: Oh, look at her! Where is that humility? That’s what I was talking about earlier—absolutely none, absolutely defiant in coming to this House. Kia ora, Mr Speaker.

Hon JAMES MEAGER (Minister for Hunting and Fishing): New Zealand, don’t believe them, don’t believe anything they say. They don’t support this. They don’t support more money for working New Zealanders. Check the Hansard: they voted against it in committee stage every single clause; they don’t support it. If you can take one proof point, look at what Deborah Russell said, look at what Barbara Edmonds said. They said, “We don’t want to extend this. We don’t want to give this to more high-income families.” Well, guess what! Those families: one police officer, one nurse—go and sit on the street and go and talk to them, go call them high-income families and say, “We’re going to take money out of your pocket.” I look forward to seeing a single policy proposal from the Labour Party at some point, but we see nothing.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Mr Speaker. I look forward to a 10-minute contribution on this bill, which will be somewhat more fulsome than the Minister’s earlier contribution. Labour supports this bill, the Income Tax (FamilyBoost) Amendment Bill, because it puts money where it’s desperately needed, and families under immense pressure need that support, as the Hon Willow-Jean Prime has said. Even though it is difficult and even though it is administratively burdensome for these families to claim this difficult rebate scheme, there are still families who really need this support. Even though this is not what we would have done—these are interventions which would have been better dealt with through Labour’s policy to extend early childhood education more fulsomely and more universally—this is something that we can get behind, because in the current situation where families are dealing with an affordability crisis that the Government is overseeing, they need some sort of relief, and this is something positive that the Government can do.

It’s biting harder here for most families than other parts of the world because of this Government’s hands-off approach to economic management for them. These are policies that many institutions around the world have urged Governments to take on, particularly targeted relief for families that are struggling with rising costs that they cannot get out of: rising food costs, rising power costs. Having some sort of subsidy designed to put the relief where it is needed most, particularly for families with young children, is sensible economic policy.

To design that policy in a way where it is hard to claim, where it is difficult for people to understand, and where it is not universal is not the advice. This is a policy which has been designed in a way which is harder and more unreasonable for people to claim for. It creates more indignities in an economy which is already in the grips of monopolies, who are quite happy to trick people—to trick people with unfair pricing and to trick people with prices that are not well displayed in stores and so they end up paying more. Online in ticketing it is common for New Zealanders to be paying extra fees on top of what they thought they were paying.

The Government is using that tactic here to introduce more and more barriers for people who need persistence and perseverance to get a fair deal. Why are we happy for New Zealand consumers and these families to need to jump through more and more hoops to get what they deserve from a Government who says that they are helping families and helping with a cost of living crisis when, in fact, the only people getting that are those who are most persistent, who are keeping their receipts, who are keeping their records, and who are the best placed to actually get any of that support. There’s not one family that the Government can point to who are getting the full amount. There are some families out there who are owed that, but they are not claiming it. There are these families who are going by the wayside, and I’ll talk about that a little bit more.

When you look at this kind of policy and you look around the world and you compare it to other jurisdictions, one thing that you would notice is that the rest of the world is picking up, that global inflation has peaked, and yet New Zealand is stuck because the Government’s responses are things like this that don’t get to the people who need it—that don’t address where the pain is being felt most. That’s because the plan doesn’t match up with the promises that were made in the election campaign. Their vision for economic growth is growth for a few at the top. They’re talking tough with people like supermarkets, with people like banks, but they roll over when they are asked for concessions.

The results are clear to the families we are talking about today—the families who are not getting the $250 that they were promised, the families who are walking down the supermarket aisle when they were told at the election that this was a Government that was focused on rising food costs and noticing that things are continuing to go up, those families who are paying more in every power bill. Those families know that they are living through an affordability crisis, which is getting worse and worse under this Government.

The results are also clear for those 19,000 New Zealanders who have lost their job in the building and construction sector. That’s only since this Government took office that there has been this massive downturn in that particular sector. Those are 19,000 people who could have been supporting their families and supporting their children through early childcare and through early education. Those are 19,000 people who were buying a pie and a Coke at their local bakery and putting money into small businesses and into their local economy. None of that is happening and that’s why these families, even if they’re not directly impacted by those job losses, are feeling that this economy is getting worse and worse and it’s getting worse for them.

The Government also chose to only put the minimum wage up by 1.5 percent. A huge number of these families have seen their wages going backwards in real terms this year. As prices rise around them and the cost of butter goes up 40 percent, those families who are minimum wage earners are seeing their real income drop and drop. The affordability of simple things like a dinner of mince on toast is now out of those families’ reach. That has a big impact on children. What the Government should have been doing is focusing on the impact on those kids. This policy is not designed to help those kids because it doesn’t get to all of the kids. As my colleague the Hon Deborah Russell said, a more universal policy—

Hon Nicola Willis: What, so you want the really, really rich people’s kids to get it? Where’s your socialism now?

ARENA WILLIAMS: —would have dealt with the Māori and Pacific members who that member’s—who is heckling me—own policy documents show are missing out on being able to claim this policy. It should have been in their hands and it should have been a better-designed policy that really got to them and gave them some sense of relief in this affordability crisis.

Nothing in FamilyBoost helps those families who know that this is a problem and that also they are living through an economy where larger and larger corporate entities own more and more things, and therefore they are paying more and they are also dealing with the indignities of being tricked into paying higher prices that they didn’t even expect. There’s nothing in this to actually address the problem of continuing affordability problems for those families.

It’s also getting sucked up. I mean, this is a good policy that we need to offer these families some relief for, but it’s getting sucked up into their rising costs. When you have food prices that are up 5 percent, fruit and vegetables that are up 9 percent, meat up 9.1 percent, cheese up 14 percent, and power bills up 11 percent, the Government might like to laugh it off, but that is having exactly the kind of impact on these families that sees them working harder to stay in the same place. This is a policy that will still see those families working harder but feeling as if they are living a life which is worse than it was two years ago or, as the Minister would like to say, 22 months ago. The difference isn’t relative for these families; the difference is that they are working harder and they’re not earning as much. This Government has made choices which mean that they have lost their jobs and they have lost their salary increases that they otherwise could have expected.

This bill is meant to be the answer to that. They told New Zealanders that they would get up to $250 a fortnight in relief, and $150 of it would come from this policy, but they cannot show us one family who are receiving that. That is not relief; that is the same logic of those companies that are charging New Zealanders more than they expect to pay and those companies who are operating in monopolistic markets where they are making excessive profits from what their reasonable costs are. That is the same logic where you make it harder and harder for people to get a fair go, and easier and easier for those people who are restricting their quality of life to get away with it. It’s not logic which lets anyone live a dignified life and it’s not the way you would design an economy where people feel like and are really getting ahead.

What’s worse—we’ve talked about this—the design of this policy is cumbersome and, frankly, ridiculous. Families keeping every childcare receipt, feeding them through the Inland Revenue Department, and then waiting, when the alternative was Labour’s policy, which made this available to them without doing that. Well, there’s no wonder that only 27,000 families have managed to get any payments. Families being busy with kids is something that we all know is true, and it shouldn’t be the case that exactly those people who are the time-poorest of any generation in New Zealand are the people who should be encumbered with this sort of administration. It’s not fair on those families and they know it too. This is the way to design a policy if you were setting out to make it something that didn’t pay out to these families—that is the way you would do it.

This sense of indignity that people feel, the sense of being tricked, is not something that this Government will get away with for long. When people feel like they are being laughed at because of rising prices and their wages are not keeping up, they know that there is a problem. No matter how much the Government tries to brush it off, no matter how much the Government tries to blame other people, tries to blame those families, tries to blame the Labour Party, tries to blame the small businesses who are on-charging for surcharges, no matter how tough the Government talks, those families who are finding it harder and harder know that things are getting worse and they have got worse since the election. This Government is making the cost of living crisis worse for families with their decisions.

Hon James Meager: Big fat lie!

ARENA WILLIAMS: They are tinkering around the edges with competition policy without really addressing the true cause of the issues that families are facing, and they are making things worse.

ASSISTANT SPEAKER (Greg O’Connor): Before I call the next member, Mr Meager, you heard the Speaker before. There will be a ruling on the use of that word. Refrain in the meantime.

Hon NICOLA WILLIS (Minister of Finance): It gives me pleasure to rise to give this, the final speech, as we mark the passage into law of the Income Tax (FamilyBoost) Amendment Bill. The changes we are voting for as a Parliament today mean that tens of thousands of families with very young children will be financially, materially, better off.

I do want to acknowledge the important change that has happened with this bill, which is that the Labour Party, who previously opposed the significant FamilyBoost scheme to support tens of thousands of Kiwi families, have reversed that position and are now going to support this important policy from the coalition Government. Now, it may be the case that their speeches on the matter have been more focused on critique than support, but what we know counts is their votes, and they are voting for it, therefore endorsing this policy.

There is no wonder why, because households will get much larger FamilyBoost rebates on the early childhood education (ECE) fees they pay, as a result of the passage of this legislation. While it is just a short bill, it will have a big impact for many people because rebates are being increased from 25 percent to 40 percent of fees for eligible families. That means, for example—and a very practical and relevant example—that a family with early childhood fees of $200 a week could now have their weekly FamilyBoost payment go from $50 a week to $80 a week. That is meaningful. That is a meaningful amount of money, which will certainly make a difference to the household budgets of many parents with young kids. In that example, that family would receive a quarterly payment after three months of attending early childhood education each quarter, and then, over the course of the year, those payments would have added up to $4,000—$4,000, which previously, if we were not amending the legislation as we are today, would have been $2,500. That is a significant difference to families with children, being delivered by this Government. We know, very much, that a lot of families are still doing it tough, and so we are pleased that these changes will help many households deal with the increased costs that come with having young children.

In addition, it is relevant that those with household incomes of up to $229,000 will now be eligible for the FamilyBoost scheme. This broadens the net of families who will benefit from this policy. It doesn’t change the fact however, that FamilyBoost remains focused on low to middle income households—unashamedly so.

I was surprised by Arena Williams’ remarks that there were some children who would not be eligible for the policy. That is the case. Children in very high-income households who already receive subsidies through the early childhood education system, through the education system, will not qualify for this rebate. That is a surprising position from the Labour Party that they would wish to see those children in very high-income families getting more support.

But what this scheme is is targeted, so those families with slightly higher incomes will receive, at least, partial FamilyBoost payments as a result of this legislation. As with Working for Families, we have introduced an abatement rate, with the idea that we shouldn’t abruptly terminate entitlement when a household gets to a certain income; we should gradually reduce payments as incomes rise. Yes, there’s benefit for some households further up the income curve, but the focus of the scheme remains on those with lower incomes.

As has been discussed throughout this debate, FamilyBoost is a quarterly scheme. This reflects the limitations that IRD face in terms of their ability to make payments more regularly and assess payments more regularly. The changes will apply for fees paid from 1 July this year. Good news is, if there’s anyone listening to this debate today with children in early childhood education, ask your ECE service for an invoice for the last three months and you can apply for this rebate on 1 October. That should be the case. If you previously qualified for the scheme, you’ll probably get more out of it now, but even if you haven’t previously qualified, apply now because many thousands more families are now eligible for the scheme.

If there’s one thing that members in this House can do to make their votes real—and I urge Labour Party members opposite to take this course—it is to go out and remind all of the families in your constituencies and the communities that you care about to make sure they get the money that is owed to them by applying for their FamilyBoost rebate. I encourage households who think they may be eligible to register for FamilyBoost on the Inland Revenue website, and I can assure them that families who have done so tell us that once they have their simple invoice from their early childhood service, it is simple to upload it and apply. In fact, it only takes a few minutes.

I thank members for their contribution to these debates, and I thank the policy officials and drafters for their work on this bill. They have been responsive in ensuring that the Government’s intention to ensure that the funding that we have appropriated for the purpose of supporting families with young children goes to families with young children. With these tweaks we are making today, the funds that we budgeted for in 2024 will reach the people they are intended for. They will get into the bank accounts, back pockets, and household budgets of families with young kids: a time in life that I certainly recall and that many in this House are still experiencing, that is beset by pressures from all sides, not the least of which are financial.

Those people are very much in the minds of this Government because one of the things I want us to reflect on is that parents with young kids are doing two jobs. One job they’re often doing is going out and earning an income for their household to pay for the nappies, to pay for the food, to pay for the house, to pay for the activities; but the other work they are doing, which is so very important to our society, to our economy, to the New Zealand that we want, is they are parenting their children—and parenting their children well is something that we want to acknowledge. With these FamilyBoost payments, we are ensuring that they get just a little more support.

This is a day of rare and—I have to say, Mr Speaker—unexpected bipartisanship. I did not expect, following the ongoing quibbling we’ve heard from the Labour Party about whether or not these tens of thousands of families deserved this income, that Labour would come down to the House today and support the FamilyBoost scheme and vote for it. But they have, and that is the right course of action and I look forward to them continuing to support it into the future, doing their utmost to promote it and reversing their previous course, which was to deny the support for families with young kids.

It’s a great policy. It gets cash to people who need it. It gets it to them directly. This one is for the kids. I commend it to the House.

A party vote was called for on the question, That the Income Tax (FamilyBoost) Amendment Bill be now read a third time.

Ayes 107

New Zealand National 49; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8; Te Pāti Māori 5.

Noes 15

Green Party of Aotearoa New Zealand 15.

The result corrected after originally being announced as Ayes 102, Noes 15.

Motion agreed to.

Bill read a third time.

Bills

Customs (Levies and Other Matters) Amendment Bill

Second Reading

Debate resumed from 21 August.

Hon NICOLE McKEE (ACT): Thank you, Mr Speaker. I rise on behalf of the ACT Party in support of the Customs (Levies and Other Matters) Amendment Bill. I think that this is a fantastic bill that looks to support a lot of our businesses while also making sure that we have the ability to be able to pay for that support. I particularly like what is in Part 3 of this bill, which is ensuring that we can get GST refunds available to all importers who return goods valued at over $1,000, including looking at work around those who are not GST-registered also being able to extend how long it is before they can return goods and apply for GST refunds, if needed.

There is one aspect of the bill that I ask the Minister to be fulsome on and to work with her officials on, and that is in regard to the levies for recovering costs relating to goods management. I’m thinking, as the Minister in charge of firearms reform and having come from a wholesale industry where a lot of prohibited goods are imported by one person or one company but also have to go through a process of approval with different agencies, as well, that we need to ensure that when the levies are set for businesses who may end up having two sets of fees to pay, that is considered at the time that the levies are set.

All in all, it is a great bill that is going to get things moving, support businesses, support the Customs Service, and get this country rolling. Let’s fix this. We commend this bill to the House.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Speaker. Look, I’m happy to take a call here on the second reading of the Customs (Levies and Other Matters) Amendment Bill. We considered this in the Foreign Affairs, Defence and Trade Committee, and I’d like to thank committee members from across the House for their time and work on this, and for advisers’ contributions as well.

Ultimately, this is about efficiency—making the system better—and that is one of the core aspects of this Government: improving efficiency. That, ultimately drives productivity gains, and that drives economic activity. That’s what we want to see on this side of the House, so I commend this bill.

KAHURANGI CARTER (Green): As has been noted in the first reading of this bill, it is largely technical in nature. It seeks to improve the way Government agencies, particularly Customs, recover costs and manage imported goods, while also progressing product stewardship schemes and providing greater clarity for consumers on GST refunds. There are incremental but important changes and, on balance, the Green Party continues to support this bill.

The bill amends three existing pieces of legislation—the Customs and Excise Act 2018 and the Goods and Services Tax Act 1985 and the Waste Minimisation Act 2008—to support the implementation of product stewardship by clarifying the role of Customs in collecting stewardship fees.

Product stewardship, simply put, is: if you made it, you’re responsible for it at the end of its life. We all know it’s easier and cheaper to buy a new kettle than get one repaired. It wasn’t that long ago that a kettle bought as a wedding gift would last a couple’s lifetime. Let’s get back to that and have less in landfill.

As my colleague Francisco Hernandez noted at the first reading, the Green Party has a commitment to product stewardship and the zero-waste kaupapa. The Waste Minimisation Act started as a member’s bill and was championed by former Green MP Nandor Tanczos—who is running for the Mayor of Whakatāne—and passed with cross-party support.

The Hon Eugenie Sage did amazing things with product stewardship in her time as the Associate Minister for the Environment. We are happy to see the Government is continuing to progress on product stewardship through the changes proposed in this bill, particularly through enabling Customs to collect fees tied to product life-cycles. This is a sensible and efficient step, especially when dealing with imported goods. It gives appropriate powers to allow Customs to support product stewardship without requiring new stand-alone systems.

We need to move towards a system that reduces waste. Waste minimisation is about moving to the top of the waste hierarchy. Reduce and repair are right at the top; recycling is right at the bottom.

Ryan Hamilton: Point of order. Sorry, Mr Speaker, to interrupt the speaker but I believe she’s on the wrong bill.

ASSISTANT SPEAKER (Teanau Tuiono): The member can continue.

KAHURANGI CARTER: Thank you. Waste minimisation and a circular economy that futureproofs our next generation is best summed up by the words “waste not, want not”. Consumers want to have eco-choices. We see it with choosing the bus, worm farms, growing kai, buying local, and researching eco-solutions. The Waste Minimisation Act is about shifting responsibility upstream on to producers, importers, and distributors, to replace the burden of waste on whānau, councils, and Papatūānuku, and ultimately allow us to move towards a circular economy. These amendments help support that transition.

This is not just a practical and sensible change but it also helps promote a culture of repair over replacement. Consumers want to choose eco, but the system encourages fast consumption and throwaway culture. Extraction, production, consumption—throwaway; a straight line all the way to the dump. We must make it easier and cheaper to repair goods, and this is a practical step and contribution towards waste minimisation and a circular economy.

It also ties in with the Greens’ broader advocacy on the right to repair bill, championed by the Hon Marama Davidson and Ricardo Menéndez March. Supporting repair practices means supporting consumers, small business, and the environment.

I want to shout out to Repair Revolution Christchurch, Repair Cafe New Zealand, Para Kore, WasteMINZ, and the Zero Waste Network for your contributions to product stewardship. You will be celebrating this small but important step in moving towards product stewardship and a circular economy.

While this bill is technical, it supports important progress and, most importantly, allows for stronger foundations for product stewardship. The Green Party supports these practical steps towards a circular economy and a waste-free Aotearoa, and we commend the work behind the bill. We will be voting in support.

ASSISTANT SPEAKER (Teanau Tuiono): Thank you. Before I take the next call, just to clarify for the House: it’s the Customs (Levies and Other Matters) Amendment Bill, but Part 2 is the amendments to the Waste Minimisation Act 2008, and Part 3 is amendments to the Goods and Services Tax Act 1985—so those are the “Other Matters”.

Debate interrupted.

Voting

Correction—Income Tax (FamilyBoost) Amendment Bill

ASSISTANT SPEAKER (Teanau Tuiono): Before we move on, I need to correct a vote—tēnā koe, tēnā koutou—on the last bill, the Income Tax (FamilyBoost) Amendment Bill. The Ayes were 107 and the Noes were 15.

Bills

Customs (Levies and Other Matters) Amendment Bill

Second Reading

Debate resumed.

TIM COSTLEY (National—Ōtaki): Thank you, sir. Look, waste minimisation was one area discussed in select committee; another big one was around GST refunds and whether this was opening a loophole for those that might claim it back on damaged goods but also might import more goods duty-free. I’m satisfied that, from the work in the House, that doesn’t apply, so this bill becomes one more part of our plan for economic growth to deliver better quality of life and more affordable living for every Kiwi. I commend it to the House.

Hon PEENI HENARE (Labour): Tēnā koe, Mr Speaker. Thank you for the opportunity to stand and speak on the Customs (Levies and Other Matters) Amendment Bill in its second reading.

I want to be very clear with Labour’s position on this particular matter during the second reading, and it is that we will be supporting the bill through this particular stage but will be interrogating parts of it, in particular, through the committee of the whole House. We want to signal to the Minister and to the Government that we believe, as was prefaced by our colleague on the other side of the House—the Hon Nicole McKee—around the matters pertaining to new section 414A, “Levies for recovering costs relating to goods management”. I thought the honourable member made a very good point that, I think, requires a little bit of interrogation and perhaps some consideration by the Minister, with respect to where it says, in subsection (2), that “Every specified person is liable, while there is a levy order in force under subsection (3), to pay a levy to the chief executive”—it goes on, anyway, to speak about certain matters that relate to that particular part of the bill. It says, in subsection (2)(a), “any of the following activities: (i) the importation or exportation of goods: (ii) the shipment, transhipment, or transport of goods”, and it says, in subsection (2)(b), “any of the following goods: (i) prohibited goods” —which I believe Minister McKee was talking about—and then it says there, “craft” and “other prescribed goods”.

I think that deserves a little bit more interrogation where we can ask ourselves, whenever we look towards making an impost on the public in this sense—it’s either a levy or a tax or a fee—we’ve got to ask some very key questions, and they must be answered in order for the House to make sure that what they’re doing is the right thing for the public. One of those questions that we have to ask ourselves is: what is the level of the charge? What is it, exactly, that we’re charging here? We’ve got to be very clear with the public about what does this mean—what does it mean for those that do import and export goods? What does it mean for the matters that Minister McKee raised about some of the prohibited goods that look to be imported into the country?

The other question that we must always ask ourselves is: is the cost of providing the service relative to the income that comes from the impost of the cost? That’s an important one, because otherwise, we’ve got to ask ourselves, “Well, is this efficient? Are we making it harder for people out there? Are we making it even harder upon those agencies that we asked to recover these fees and costs, when, actually, what they are recovering doesn’t cover that?” That’s, I think, another question that must be asked in this process.

Of course, one of the primary ones is: what is the purpose of the charge? We’ve heard some good examples across the House during this debate about why we think there are good reasons. I thought Kahurangi Carter explained some good ones with respect to the matters that she raised, which I understand were in Part 2, which you elucidated in your kōrero from the Chair, Mr Speaker. But we must always ask ourselves those questions on: what is the purpose of the charge? The next one is: who does it apply to? I thought that was the point that Minister McKee referenced in her contribution—she spoke to a very specific part of the community with respect to the importing of prohibited goods. So we’ve got to be very clear on what we’re asking ourselves there.

The next one is we must ask ourselves: in that process, are we eroding the democratic power of this House? That’s an important question, because I know that there are ways that we can have efficiencies, we can look for expediency in certain matters, but to do things by Order in Council, I think, deserves proper interrogation. To just simply say, “We’ll do it by Order in Council”—having been a Minister for six years, we’ve got to make sure that the House, right across the House and all members and all parties of the House, get an opportunity to interrogate these matters to make sure that it truly does represent the people, so that it answers those questions that I asked of the House a little bit earlier about “What is the purpose of the charge? Is the level set at the right rate?”

All those kinds of questions that, I think, need to be interrogated by the House, and in order for those changes to happen, must continue to be brought back to the House and not simply changed through Order in Council. As I said, I understand why we might do Order in Council; it does provide for an efficient way for the Minister and the Government, the executive, to make some changes there, but for something that’s so important—and we’ve all spoken across the House about the need for economic development and economic growth and making less red tape, and cutting through matters so that they can be far more efficient—we still can’t erode the powers of this House. That’s why we want to interrogate that particular matter and we want to offer to this Government and to the Minister through the committee of the whole House on whether or not we can continue to grow the support, certainly from the Labour Party on this bill, by tightening up or at least interrogating and asking for the Minister to clearly answer and consider the questions that I’ve just raised in our Part 2 speech in the second reading of this bill.

I think those are all really fair questions that need to be answered by the House. In the previous bill, I heard the Minister of Finance talk about what it is that we must take back to our constituents and the communities that we represent here in this House. I think once we’ve answered those questions, that’s when we’re able to say to those communities, “This is the reason why this is happening. This is why the level of the cost is set at this much, and this is why this is good for either our community or our economy.” I’m sure, for the most part, they’ll agree with those things, but they will have questions—questions like, “OK, is that a set rate? Will that rate change in the future? Does it mean that we’re going to be back here in a month’s time, in a year’s time or some time in the future, or whether or not that change will impact on me and my services or my goods, or me and my community?”

I think those are fundamental questions, and if there’s one thing that I can say and continue to remind the House of, it’s the erosion of those democratic powers. I’ve been here, certainly not as long as other members that are sitting in the House here this evening, but long enough to know that once that starts, it turns into an open gate whereby, as any farmer will tell you, trying to stop a sheep running through a gate—especially one that’s open—is very difficult. The point there is that we must make sure that there is a hand on that gate, so that people understand that when we do these things, those democratic powers and expectations that our people have of this House aren’t eroded. Like I said, we support this particular bill, but we want to make sure that, in the next stage of this bill, we’ll continue to interrogate that matter.

When we speak of taxes and levies and other matters, we also want to make sure that it is fair and that it’s not charged twice on returned or replaced goods. A fair system, as Kahurangi Carter mentioned in her contribution here, is going to be something that will need to be looked at and interrogated properly, and must answer that question that I asked earlier about, is the administration of this particular levy—or GST, in this particular matter—far outweighing the income that is derived from it, or is it simply more bloating of a bureaucracy that means that, while well intended, it actually doesn’t hit the mark?

Those matters being said, we look forward to the next part of this bill, where we will be looking to propose a number of Amendment Papers for the Minister’s consideration in the hope that we can strengthen this bill. If there’s one thing we know about when levies or taxes are imposed by this House, it’s that it’s best that actual support is broad right across the House and that consensus of this House is something that represents the people; if it isn’t, well, then we’ve got some challenges, and I suspect that those challenges fall directly on the shoulders of the Minister and the Government. We’ll be looking towards making some very—what I think are—fair and reasonable recommendations to this bill to make sure that it does continue to strengthen the democratic processes of this House while also being very clear about what it is doing, what it intends to do, and answers those questions that I’ve asked of the House a little bit earlier. We look forward to that part of the House.

I want to support the words of the chair of the Economic Development, Science and Innovation (EDSI) Committee and say, too, that in the short time that I was off that committee—found myself off the committee of EDSI—we did cover the bill of the Hon Marama Davidson around second-hand goods and the longevity of goods, which I think is a good part that’s covered here in this bill that Kahurangi Carter spoke to.

All in all, once again, to spell out our position, we are continuing to support this bill, but I look forward to the committee of the whole House, where we can interrogate it just a little bit further and offer, if I can, an olive branch to the Minister to seek broad consensus across the House, so that the House can speak with one voice. Mr Speaker, thank you.

DANA KIRKPATRICK (National—East Coast): Thank you, Mr Speaker. I rise in support of the Customs (Levies and Other Matters) Amendment Bill. This legislation modernises our border cost recovery by introducing targeted levies that reflect the actual services provided by the Customs Service. It ensures fairness, and that those who benefit or create risk at the border will contribute appropriately. The bill amends three Acts, introduces safeguards, and prevents double-charging. In our view, it’s a practical, future-focused reform that strengthens our border systems while supporting trade and economic resilience. We commend the bill to the House.

ASSISTANT SPEAKER (Teanau Tuiono): The next call is a split call.

CAMILLA BELICH (Labour): Thank you, Mr Speaker. It’s a pleasure to take a call on the Customs (Levies and Other Matters) Amendment Bill.

This bill—as my colleague Peeni Henare has outlined today, and previously my colleague Jenny Salesa discussed when this bill was first brought to the House—has a number of elements to it. The second two parts of the bill—Part 2, which looks at waste minimisation, which I think is something that is a very good step and builds on a lot of work done over many years, and, I think, is probably an area that we need to do more on. I’m aware of the work that the Green Party has done in relation to a member’s bill on this, as well, so I’m definitely supportive of further efforts in that regard.

The third part, which is around the recovery of GST, seems to be quite sensible; you don’t want GST charged twice on returned or replaced goods. There is, as many enthusiastic online shoppers will know, a $1,000 limit before you are charged GST on your overseas goods, and when people return those goods, obviously that GST shouldn’t be charged, because they no longer have those goods. I think that sounds like a sensible change that aligns with common sense.

The main part of this bill that I think is of interest to the Labour Party in terms of improving the bill is really through the quite strong and wide powers that are given to the Minister of Customs in terms of levy-setting powers over quite a wide range of goods. That is really, I think—I’m looking forward to the committee stage where we will be looking to see if the Minister is minded to make some improvements.

I have had a look at the tabled amendments moved in the name of my colleague the Hon Jenny Salesa, and, I think, on our side of the House, we would be very keen for the Minister to have a look at those amendments to see if she is willing to engage with those, because I do think, if she was minded to engage with and accept some of these particular amendments, that would lead to a better piece of legislation. They’re mainly in the areas around—for example, in clause 6, there’s a long list of different areas that the Minister can charge a levy, and the last one is prohibited goods. That is quite a wide area that a Minister could choose to utilise their levy-setting power in, and there’s a proposal from my colleague to look at deleting that particular provision.

There’s also democratic powers, which I think are important. My colleague has suggested, I think wisely, that when we are setting these fees and levies—which do come out of people’s incomes—there is oversight of that, and so wanting those to come back to the House. We have actually discussed a bill under the Defence Act which was looking to take powers away from the House in terms of confirming the actions of the Minister and, while these are not linked—they’re two different matters—there is a pattern here that I don’t agree with, which is taking away the powers of the House and giving more powers to Ministers, which erodes, slowly, the democratic nature of this House.

We do have to be mindful of that. As colleagues have said, we are supportive, generally, of the bill and of the modernisation aspects of the bill, and also in relation to the second two parts of the bill, but I do think scrutinising the first part is particularly sensible. I would draw the House’s attention to the part that discusses “without limitations” in clause 6. This is a very, very wide power, and, obviously, Ministers in the New Zealand legal system have a large degree of power due to the way the executive works. However, when we are putting in place legislation, it is unusual to give such discretion to a Minister without having recourse back to the House.

So we’re really, I think, clearly signalling general support for what is the stated intention, but we have clear concerns around Part 1. We do have a strategy for addressing that, which is that we have, in good faith—and my colleague Jenny Salesa, I’m sure, will speak to this—tabled amendments in relation to the bill. We encourage the Minister to accept those amendments, and, obviously, we will see where the discussion goes in terms of the final bill that is put forward, but, at this stage, I commend this bill.

DAVID MacLEOD (National—New Plymouth): Thank you, Mr Speaker. It sounds like all the parties are all for this moving to the next stage. This Customs (Levies and Other Matters) Amendment Bill obviously has powers that the Opposition has identified. I look forward to the committee of the whole House questioning, and answers from the Minister passing judgment on why it’s been drafted the way it has. With that, I commend this bill to the House.

Hon DAMIEN O’CONNOR (Labour): Mr Speaker, thank you very much. This bill might seem like an innocuous one that is just a bit of a tidy-up and the Government’s just moving ahead with making things “more efficient across the economy”, they say; this is always their mantra. So the Customs (Levies and Other Matters) Amendment Bill: it actually goes to the heart of who we are as a nation—a trading nation. The Government makes a lot of noise about keeping costs low, but what this bill does is it actually opens the door to any charges for anything in relation to customs, import or export of goods, at the Minister’s behest. That is a dangerous situation for any democratic system.

I think we have, in this House, a great history across Parliament of appropriate oversight of such levy-making processes. We have funds that are set up whereby, you know, there’s an agreement between industry people and Government that says that, “Well, if we’re not quite sure what a charge will be or how much income will be generated, what the cost of that will be, then we’ll set up a fund, we’ll assess the fund, and then we’ll change the levies accordingly at the end of a one- or two-year period.” It’s not in this piece of legislation. One of the things that I would ask is that how can we trust—and then indeed, the Minister of the day might be fine and is trying to make things efficient and transparent, but we don’t know who will be the Minister in the future. With a number of pieces of legislation that we see this Government bringing to this House, “Oh, it’s all very tough and fine, and we’ll manage this and ensure we get the right outcome because we’ll hand it over to the Minister to make the final decisions. We’ll shortcut the process that might require a parliamentary oversight because it’s more efficient.”

When you hand those powers into the hands of a Minister—and you might think, “Oh, Cabinet has oversight”; ultimately, the legislation says “the Minister”. With the wrong advisers or the wrong advice—and those who have been in Cabinet, there are always hierarchies within Cabinet, and systems that are not always perfect. So, in fact, the broader oversight of the levy-making processes and secondary legislation in this House should be protected and insured.

While we kind of thought it’s good to modernise the system of levies, there are a couple of things in the legislation, as my colleagues have pointed to, that raised some flags with us, and a reminder to the Government that what goes around comes around. While being assertive and confident and, I guess, dominant in the Parliament of the day and getting what you want—which is, I guess, the right of democracy—and handing things over to a Minister, that situation will change, I can promise you.

We will be—that is, the parties in the Opposition—in Government at the end of next year, and I have confidence that our Ministers will address this in an ethical and appropriate way. I, too, even when we’re in Government, want to have some checks and balances on the independence of Ministers, particularly here, when, as I say, it goes to the heart of imports and exports—the way this country operates. Let’s not dismiss this as some small, little insignificant piece of legislation. I mean, we talk about the Waste Minimisation Act and there are some sensible changes there, but, again, looking at the significance of this, it is important that we have proper scrutiny.

Perhaps the Government members can get up and explain exactly what they’re doing and why they’re doing that. I think that would offer the wider public some confidence that, indeed, in urgency, that the Parliament is scrutinising legislation appropriately. If we are looking at costs—and let’s not pretend that this Government has come in and cut costs for business. They say that, but, actually, you can look at many, many levies—because if you go back 18 months or you go back to the first Budget, of course, the Government gave tax cuts to a whole lot of people, most of whom didn’t need it. Those who did need it didn’t get much. So how would you pay for that? They have looked at every part of Government operation and squeezed fees and levies wherever they can: civil aviation, registration of a car—all of those things that affect people; people who have no ability to offset or remove themselves from that charge. So the Big Brother, “Big Government” operation has been brought to play and is extracting every single thing it can from people through levies, including customs. We say that we need to look at this more carefully.

I think that my colleagues will go through and, as I say, probably table some amendments, I understand, but there are areas of particular concern that I should go to here. We have under clause 6, levy orders, of course—and people should read this, because they might think this is just some kind of political speech to oppose legislation for the sake of it. Clause 6: I’ll read through it here. I won’t read the whole lot; I’m trying to shorten it up so that Ministers, and also members over there can—“performing a function under this Act, or any other legislation, relating to goods management, including (without limitation)”. Two words there: “without limitation”; normally we would have in a piece of legislation some principles of what costs should be set and why, and how they’re processed. This says, “(without limitation) costs incurred relating to—(a) any of the following activities: (i) the importation or exportation of goods”—pretty much anything that we rely on—“the shipment, transhipment, or transport of goods”.

Those levies and fees can be imposed upon the transportation and movement of those goods—not just the goods themselves, “any of the following” goods. And I can’t quite understand this one: prohibited goods. So how would we levy prohibited goods when they shouldn’t be here in the first place? What’s the kind of logic of that? Maybe the members on the other side there, part of Government, can get up and explain how you would levy prohibited goods. Craft; other prescribed goods—I can understand that. These are all things that are of genuine concern to the Opposition who wants to move ahead, grow this country in a sustainable way, not just make a lot of noise about growth and then squeeze the people who have driven that growth and invested in that through backdoor levies and charges.

I’ll just go on, and I’m very aware we’re kind of running out of time here, but “The Governor-General may, by Order in Council, made on the recommendation of the Minister”—so the Minister will come up with a bright idea, talk to a few people in his or her office, and then go along to the Governor-General, and, you know, there’s a few processes there, this is not just “Wander up and knock on the Governor-General’s door.” but it is on the basis of the Minister, not a process of consulting with stakeholders, consulting with affected parties and ensuring that the bright idea doesn’t—which is what the regulatory impact statement says here—“impact adversely, unfairly on small business”.

I’ll finish off saying that, when we look through here, we are not opposed to change and modernisation of regulations and charges where needed, but we do need to have some limitations. We do need to have some rationale for the change in those charges, and this piece of legislation says, “without limitation”. It is really important that the Government explains how they’re going to do this into the future, and, in particular, the many, many thousands of small-medium enterprises that make up our economy. The companies like Fonterra and the meat companies, they’ll get through this, they’ll shift that, either give less to the farmers or more to the customers, but the small-medium enterprises across New Zealand are going to be hit by this piece of legislation. They need to know how much it will be, they need to know why, and whether they’ll be able to trade through this.

Dr HAMISH CAMPBELL (National—Ilam): It’s a pleasure to rise in the second reading of the Customs (Levies and Other Matters) Amendment Bill. This is quite clear: it introduces new rules to help Customs recover costs and improve certain fees and levies and how they’re managed. I haven’t heard any dissent across the House during this reading. Therefore, I commend this bill to the House.

Motion agreed to.

Bill read a second time.

ASSISTANT SPEAKER (Maureen Pugh): This bill is set down for committee stage immediately.

In Committee

Part 1 Amendments to Customs and Excise Act 2018

CHAIRPERSON (Teanau Tuiono): Members, the House is in committee on the Customs (Levies and Other Matters) Amendment Bill. We now come to Part 1. Part 1 is the debate on clauses 3 to 11—“Customs and Excise Act 2018”. The question is that Part 1 stand part.

Hon CASEY COSTELLO (Minister of Customs): I just would like to take the opportunity to open the initial discussions and thank the members for their contributions in the second reading. It has been helpful to structure this discussion.

This bill is about making revenue collection on imported and exported goods fairer and more effective. It is creating a levy regime in place for recovering costs related to travellers—the border-processing levy is an example. This works well and we think we should do more.

We want a similar system for cost recovery around goods. A levy means that similar types of people, a category of payers, can pay the costs related to that service. It makes sense that, for example, those people shopping overseas, online, importing products should be paying for the costs associated with that, rather than that cost falling on all taxpayers.

The bill makes three key changes, which have been outlined: introducing a levy regime into customs legislation and providing an assurance that it is a levy regime and that the establishment of any levies would work through a process, which would require Cabinet approval and would definitely require consultation, so that it isn’t at the discretion of a Minister individually.

It clarifies that Customs or other agencies can collect, as has been outlined, the stewardship fees. This, again, is about creating some efficiencies to support their process, and, finally, as has been raised, the ability to recover GST on returned goods. At this stage, there has been no mechanism under which we can do that.

In summary, the bill is really about improving systems. I recognise the contributions that have been made in the second reading. I look forward to answering your questions on this bill.

Hon JENNY SALESA (Labour—Panmure-Ōtāhuhu): Thank you for the opportunity—kia ora, Mr Chair—to, as the spokesperson for customs for the Labour Party, make a contribution in the committee of the whole House stage. The Customs (Levies and Other Matters) Amendment Bill is an omnibus bill that proposes to amend three different pieces of legislation: first, the Customs and Excise Act 2018; second, the Waste Minimisation Act of 2008; and, third, the Goods and Services Tax Act of 1985. The goal, as the Minister of Customs has set out, is for revenue collection at the border to become fairer and more effective.

Now, Labour has supported this bill at first reading as well as at second reading, and one of the reasons is that we are in support of the broader aim that the bill proposes, which is to modernise cost recovery and to enhance efficiency, including the measures to fund environmental programmes and to make GST rules fairer for our consumers. However, Minister, we have serious reservations about the sweeping new levy-making power, particularly in Part 1 of this bill, and the potential impact that that would have on—and our former Minister of Trade spoke about it earlier in his second reading speech—especially, our small and medium sized enterprises (SMEs) and our small businesses.

If we are to refer to new section 414A(2) in clause 6, which actually states that this bill will be able to relate to “goods management”, it actually includes these words. It says that in collecting the new levies, it will have—and it’s got it in brackets—“(without limitation) costs incurred”, and then it goes through and lists various other activities that it could actually levy in order to collect from small and medium sized enterprises. This is what we have major reservations about. One of the reasons why we have major reservations about this part of the bill is that the two words “(without limitation)” may sound like it’s kind of innocuous and it’s only two words, but it’s actually huge because it does not give any minimum or maximum limitations on the costs to our small businesses. At a time when Aotearoa New Zealand is going through and experiencing cost of living issues, we hear on the ground from many of our small businesses that they too are experiencing smaller margins and slimmer margins, and when they are feeling the effects of the cost of living as well, it is of concern.

The other concern that we have with this term of it being “(without limitation)” in terms of costs that could be incurred by a levy made by Order in Council is that you have the environment of a country like the United States charging tariffs which, in the past, were going to be at 10 percent but are now actually going to be at 15 percent, and, at that same time, our export and import businesses are going to be hit with yet another tax. It’s called a levy, but it is actually a tax, and—worse than that—as businesses, they won’t be able to actually forecast into the future what those costs are likely to be.

When you’re running a business and you have to actually look at your bottom line and you have very slim margins, and you get a possible levy where, in the legislation itself, there is no limit, it is actually a cost that says that it is without limitations. It will be charged on the importation and exportation of goods. It will be charged on shipments, on transshipments, and on the transportation of goods, and so this could even be the transportation of goods, because it doesn’t say that it’s only the domestic transportation of goods. It could be charged on the transportation of goods here, after they actually arrive in the country.

I have introduced an amendment that says that, in new section 414A(2) in clause 6, we should delete those two words “(without limitation)”. We should delete it. Why do we even have such expansive powers, and it’s actually given to the executive. The Minister of Customs, via Order in Council through Cabinet, can decide what this levy charge could be. It is, effectively, a broad taxation power delegated to the executive, via the Minister of Customs, that is creating a new charge with no specific dollar cap, and it is narrow in terms of its scope in the primary law.

The other concern that we have is the fact that this is actually not a confirmable instrument, and so the Minister can, by Order in Council, come up with a levy charge, and who knows how big this levy charge is going to be? But it’s actually not going to even come back to the House for us, as members of Parliament, to have a say on as to whether or not this levy is reasonable.

In fact, in one of the clauses here, it says this. The only safeguard that I can see—and the Minister can correct me if I’m wrong—in this bill is that the Minister can go and consult, but there is no definition about who the Minister should go and consult with and what is reasonable, and also it is up to the Minister, after she consults, as to whether or not the levy that she proposes is reasonable. It is really all up to her, and all of this is because it is going to be done by executive Order in Council and, as I say, it doesn’t even come back to the House of Parliament to confirm whether or not it is a reasonable levy. This is something that we should definitely interrogate further because this levy could apply to virtually any category of goods and it could apply to any transaction whatsoever, and there is no limitation on how much the cost is going to be.

My question to the Minister: why are such broad powers needed? Clause 6 hands the executive the sweeping ability to impose these levies without limitation. Would the Minister consider, for example, limiting the scope of the levy in law so that parliamentarians can set the outer boundaries on these charges?

Another question: how will the Minister ensure that Parliament retains oversight of this new taxation power, and, specifically, why are the levy orders not made confirmable instruments, requiring a House vote? Does the Minister agree that delegating taxation to regulations is a significant step that should involve greater democratic control?

Another question: who will be consulted before a levy is imposed? The bill requires no consultation, but there should be a commitment specifically to include SME representatives. The Minister should consult Māori and should consult with ethnic businesses, Pacific business networks, consumer advocates, and unions, particularly where it impacts on workers. How will the Minister determine what constitutes reasonable consultation, and will the consultation feedback be made public?

Cost recovery is something that when we are in Government, we do. However, cost recovery should be reasonable. Our industries and our small businesses should have a say about what is a reasonable levy. Having a levy-making power like this, which has no limits whatsoever, is outrageous. It is unreasonable and, can I say, it is not very democratic, either, to have an instrument that doesn’t come back to the House to be confirmed by members of Parliament.

Hon CASEY COSTELLO (Minister of Customs): I think it’s probably relevant at this point—sorry, I’ve got a cough, so I’ve got a cough drop in my mouth. As the Hon Jenny Salesa is a former Minister of Customs, I had assumed there was some sort of level of understanding, but if you read the legislation as it’s written, the “without limitation” is referring to the list of functions, not to the levy itself.

If we record what is said in the position, it’s new section 414A, “under subsection (3), to pay a levy to the chief executive in relation to the costs incurred by Customs in, or for the purpose of, performing a function under this Act, or any other legislation, relating to goods management, including (without limitation) costs incurred relating to”. The “without limitation” relates to the list of activities, and so it is talking about not limiting the activities listed. it’s not about the levy fee, it’s not about the levy; it’s about the list of activities—so it is not about that function.

I think it’s important to differentiate that a levy is not a tax, as you’ll be aware from the border-processing levy. It is a levy that is established on a cost recovery basis. As you know, Customs is operated on an activity-based costing model. Under the Estimates process, it is very clear that Customs cannot gain revenue from something. This is about recovering the cost from where the cost is incurred, and this is what we’re talking about here. A levy recovers the cost from payers who are provided a service or who create the risk of the need or activity. When we talk about fairness, a tax is applied to everybody; a levy is applied to someone who is creating that activity requirement. That is what we’re talking about.

This legislation is creating the mechanism under which we can establish levies. As you will have been through the process yourself around the border-processing levy, it is a negotiated, consulted process that goes through to ensure that those that are generating that cost are consulted in this process. There is a lot of transparency, a lot of engagement with those sectors. As you’ll be fully aware, Customs rely on this building a relationship with—we want to encourage trade, we want to encourage travel. Customs is very focused on ensuring that we optimise the opportunities, too.

I think that’s the key point here: we are creating a mechanism under which levies can be established. Levies are a much more relevant process, a much fairer process, because it is not applying a cost to everybody; it is applying a cost to those that generate that cost. I hope that answers the question.

FRANCISCO HERNANDEZ (Green): Thank you, Mr Chair. I just want to make a quick contribution to ask a question around a point that the Hon Damien O’Connor raised in a speech in a previous section of the debate. It was the question around how a levy order would be applied to prohibited or prescribed goods. Is there precedent for that in legislation? Definitionally, if something is illegal, how could that be taxed? I’m curious to see what the nexus is between taxing something that’s not technically legal.

Hon CASEY COSTELLO (Minister of Customs): Yes, I thank the member for the question. I think I can clarify. Again, this is not about a tax; it’s about a levy. If we’re talking about prohibited goods and if there’s a cost incurred to respond to those prohibited goods, to deal with those prohibited goods, those that have generated the risk should be paying the levy or the cost for dealing with that prohibited good. It’s not taxing something; it is about the process under which levies can be applied. At this point, what we’ve been using as the example is the small goods, the packages, the Temu-type products that come through. We have a huge amount of packages that come through. That has increased significantly. The cost incurred for processing that has grown significantly. The Crown ends up paying to monitor and control and deal with those packages, because we don’t have a mechanism to apply levies to that process, and rather than taxing everyone, what we’re talking about is a process whereby, where those costs are being incurred, levies are applied to those who are generating that cost.

All of those areas are talking about applying a levy to where that activity is causing a cost. Nothing, again, in this legislation is actually establishing the levy. The levy will go through a secondary process, as has been mentioned, through an Order in Council, but that would go through a process of Cabinet approval, then it’s scrutinised through the Estimates process and the Budget, and there is a consultation process in order to achieve it. I think it’s really important to reference the fact that it’s important for Customs to build trade and maintain those positive relationships, so that’s what we’re trying to do.

Hon JENNY SALESA (Labour—Panmure-Ōtāhuhu): Thank you, Mr Chair. Let me just follow up on my previous contribution. The Minister of Customs somehow denies what is written in the bill in black and white, so can I just read the clause out?

Clause 6, new section 414A, the subheading is: “Levies for recovering costs relating to goods management”. Subsection (1) states, “In this section, specified person means any person or class of person specified in a levy order made under subsection (3) as primarily responsible for paying a levy.”

Subsection (2): “Every specified person is liable, while there is a levy order in force under subsection (3), to pay a levy to the chief executive in relation to the costs incurred by Customs in, or for the purpose of, performing a function under this Act, or any other legislation, relating to goods management, including (without limitation) costs incurred relating to—(a) any of the following activities: (i) the importation or exportation of goods: (ii) the shipment, transhipment, or transport of goods: (b) any of the following goods: (i) prohibited goods: (ii) craft: (iii) other prescribed goods.”

The reason why I read that out is just so we’re clear what is actually in black and white, stated in this Customs (Levies and Other Matters) Amendment Bill. This cost recovery matter—as I said earlier on, we do agree with cost recovery in general, because there are cases where it is the right thing to do, but this delegation in this bill, Minister, is very open-ended, and the use of “without limitation” to define the scope of the costs recoverable means that the executive and the Minister gains wide discretion to decide what Customs costs to recover from small businesses. This could extend to border protection activities, and the reason why I say that is because, in new section 414A (2)(b), the very first bullet point of “any of the following goods:” to be covered is “prohibited goods:”.

Now, one of the main responsibilities of the Minister of Customs is to ensure that our borders are safe and secure. It is a public good for all of Aotearoa New Zealand that our borders are safe and secure and that we do not allow prohibited goods to come through the borders—that includes illicit drugs, it includes illegal guns, and includes many other prohibited goods.

My worry about the possible direction that is being taken with this bill is the possibility that private companies, small businesses, our traders, our exporters, our importers are, in the future—that this is the first step to, possibly, privatising Customs, because this Minister will, by Order in Council, be able to, without any limitations in terms of costs, charge any of these folks—and I don’t want to read out the list again. People can actually get the bill, it’s up online on the Parliament website, and they can read, in black and white, what the legislation says.

It is like Parliament being asked to approve a blank-cheque authority for future levies—the details of who pays, how much, and for what services will be set later by regulation. We are being asked to trust the Minister in respect of the regulations by Order in Council that she will regulate later. She will set them later in regulation—just trust her. Small businesses—no worries, trust the Minister. Whatever the levy charges will be, they will be reasonable somehow. Just trust this Minister. Who pays how much for what services she will charge? Just trust this Minister. That is, essentially, what MPs and parliamentarians are being asked, because it is not a confirmable instrument; it does not come back to the House for confirmation.

Hon CASEY COSTELLO (Minister of Customs): Yes, I’m sorry, I probably didn’t explain it particularly well. To reassure you, the “without limitation” refers to the functions—“performing a function under this Act, or any other legislation, relating to goods management, including, (without limitation)” the list below. What we’re saying is the “without limitation” relates to the functions. I’m not sure if I’ve got that clear still. As the member will be aware, I do not have the authority to create anything. This is a Cabinet process that requires Cabinet approval. I do not have the authority, and no Customs Minister would have the authority, to set a levy. The secondary regulation is a process that would be developed in consultation to develop. Therefore, we go through a Cabinet approval process before the levy is set, and that is a process that’s in existence now. All we’re doing is looking at a levy structure that allows levies to be applied for all of the activities that Customs do. I hope that answers the question.

VANUSHI WALTERS (Labour): Thank you, Mr Chair, and thank you in advance to the Minister of Customs for responses to my upcoming questions. I actually will just start with the first question around why the use of urgency for this particular bill. While I understand that the bill did proceed to select committee, having a truncated second-half process in my view doesn’t aid good lawmaking, doesn’t facilitate a true dialogue over the committee of the whole House or allow the Minister to truly consider amendments. I think that there are several that my colleague the Hon Jenny Salesa has proposed that deserve consideration.

I wanted to first make some comment on what we’re seeing happen with secondary legislation generally because it will be clear by now that this is the real issue that we have. Having sat as a member of the Regulations Review Committee in the past, it is becoming clear that we’re seeing a trend towards the creation of framework legislation where there is much more autonomy given to sole Ministers to make significant policy decisions. We’re seeing delegation through Order in Council for very significant, substantive policy decisions to be made, and that’s not just the case in this legislation. We also saw it in regards to FamilyBoost, which has recently come through the House under urgency, and the Rates Rebate Amendment Bill, which the Government also put through under urgency where they created what’s called the “Henry VIII” power that allows a Minister to alter legislation. We saw it also through adoption reform which allowed, through Order in Council, the list of countries to be adapted solely through a Minister’s recommendation.

Now, the Minister made a comment on this in terms of there being a process in place; the process is that the Minister recommends. There is a lot of power in that recommendation. As the Minister will know, the Governor-General doesn’t often not grant—or I struggle to recall a time when the Governor-General has not granted—that Order in Council on the basis of a ministerial discretion.

The point of my colleague in this case is that the Minister has selected the option that gives the Minister the most scope and the least oversight of this House in relation to this bill. Now, for any ordinary power that covered Justice or Foreign Affairs, that would be an issue. However, historically around the world, the concept not just of taxes but of levies as well has always been seen to be a power that sits most closely with Parliament. It sits most closely with Parliament and even in this House, there have historically been times when these sorts of powers are made, not by bringing new legislation to the House, but through resolution of the House, and then, that shifted into Orders in Council provisions. It got more loose, if you like, from those resolutions of the House into Orders in Council.

What we’re seeing here is a dramatic shift and a purposeful decision to pass this law, to make Orders in Council not subject to confirmation, the agreement of the House. That is the next step down because you can then have secondary legislation that operates, but the House still needs to consider it, and the Minister has purposefully decided not to do that. My colleague Jenny Salesa has raised that issue, but I just have noted that the Minister hasn’t yet responded to the intent behind why that option was taken, as opposed to going for, in my view, the more accountable option of having an Order in Council. We don’t object to Orders in Council, but I’m talking about ensuring that as much accountability can be given to the order, given the subject matter of this bill, which is a levy power. It is a very broad levy power and, hopefully, I can speak more to that in upcoming calls. But if the Minister could speak to that particular decision, that would be appreciated. Thank you.

Hon CASEY COSTELLO (Minister of Customs): I just think it’s worth clarifying, firstly, there is this existing system where we have fees applied and levies recovered. This is already a system in place; this is just about how we apply this. The scope of the costs that are recoverable are limited to those that are incurred by Customs in performing a legislative function relating to goods management. This is a limit that is built into the levy-making power. This isn’t just “We can apply a cost to anything.”; this is about costs that are generated by Customs and are performing a legislative function.

The other part that is worth highlighting is that Customs costs in relation to goods are already recovered by the fees set by secondary legislation. That secondary legislation system already exists. Levies just provide more flexibility and fairness than fees and having them set by secondary legislation is not an extraordinary function; it is not without precedent. I think it is, again, ignoring in this process that this isn’t a power bestowed on the Minister; it is a power bestowed on the Minister to take something to Cabinet, and for Cabinet to approve it before it goes to the Executive Council for sign-off.

Hon DAMIEN O’CONNOR (Labour): Thank you very much, Madam Chair. I appreciate that the Minister of Customs has brought this legislation back to the House having had it scrutinised by the Foreign Affairs, Defence and Trade Committee. I guess there is an opportunity now to sit down once again, because we’re under urgency, to actually just check that what we’re doing here is appropriate.

I know my colleagues have asked a question around the words “(without limitation)”, in new section 414A, in clause 6. It wasn’t a big part of consideration at the select committee. On reflecting—and I appreciate the Minister’s response. But the wording of new section 414A(2), if you go through, is “or any other legislation, relating to goods management,”—right, so that’s what the levies are being set for—“including … costs incurred relating to”. That’s what it says, and then in brackets we’ve got “(without limitation)”. I’m no lawyer. We’ve got plenty of lawyers here—probably too many, but anyway—and so there might be some who can clarify that.

My reading of this is that—I’ll go back again, because these are genuine questions. “(2) Every specified person is liable, while there is a levy order enforced under subsection (3), to pay a levy to the chief executive in relation to the costs incurred by Customs in, or for the purpose of, performing a function under this Act,”—all right, so that’s the function—“or any other legislation, relating to goods management, including … costs incurred relating to”. Including costs. Then there’s a brackets in there, “(without limitation)”.

I guess the Minister’s explanation, I think, was that it didn’t restrict the kinds of costs that it would relate to, rather than the cost itself. I know, further down in here, and setting through the Order in Council, the Minister can recommend a rate of a levy and not specify it, of course, in the legislation, because there needs to be some flexibility, but I do need to check with the Minister about that “(without limitation)”. She said that relates to which particular activity, not to the cost of it. I’m sorry to ask the Minister to repeat. If she could clarify that, that would be really good, because I think anyone coming in like myself, who’s not a lawyer, would look through this and say, “Oh, hold on, there’s a bit of a danger here.”

The next area that I ask a question of the Minister is around a memorandum account, which is a standard part of—and I referred to it briefly in my other speech—a system of setting up an account where we’re not quite sure of the income from a charge or a levy, but there’s an agreement with industry that the Government’s not going to rort it for the consolidated account that actually will take the fee and the levy for the purposes for which it is legislated for.

I guess the question is—and, again, it’s not something that came up in the select committee. In clause 7, which is part of Part 1, “Section 415 amended (Trust accounts for levy money payable to chief executive)”—now, that may be referring to what is a memorandum account, but it’s not clear here. The question is: if it is there, that’s great, because that’s standard practice; if not, how do we know this is not just going to go back into the consolidated account? Actually, if you look at the standard practice of this incoming coalition Government, it does go to the consolidated account. The international visitor levy is taken off visitors coming into this country—$100 a person—and it goes straight into the Minister of Finance’s slush fund. It does not go back to—[Interruption] With very little, in fact. The money that the Minister for Tourism and Hospitality has given out has come from our international visitor levy fund—I don’t think it’s all been spent—and the $100 charge, as I understand, is just going straight into the—

Hon Louise Upston: No, you’re not right. Go check your facts.

Hon DAMIEN O’CONNOR: The Minister can take a call and explain that. I suspect—and I know the early payments from that fund, where the conditions were that it go back into tourism, have still been allocated out. In fact, the Minister of Finance now is the beneficiary of the $100 per visitor levy.

Can I come back to the point? I don’t want to get off track, Madam Chair, of course. But the questions around that—

CHAIRPERSON (Barbara Kuriger): I wasn’t taking it as being off track; actually, I was taking it as using another example to try and explain the example that you were talking about.

Hon DAMIEN O’CONNOR: Thank you very much. That is it, indeed. I come back to clause 7 to say: does that relate to a memorandum account or an equivalent? Does that have the normal safeguards that industry normally seeks from Government to ensure that this is not just a tax; that, in fact, it’s a fee or a levy for the genuine purposes of cost recovery? We support cost recovery, but we are not going to, in Government, at the end of next year, impose unnecessary costs, but as we have worked through, we have sought cost recovery. So the question to the Minister is: can she give us an absolute assurance that it’s only cost recovery, and will that memorandum account process be the one that is used? Thank you.

Hon CASEY COSTELLO (Minister of Customs): I thank the member. Yes, it is a memorandum accounting model. Again, this is the mechanism stuff. We’re talking about the mechanism to create the levy. If you apply it to the border-processing levy, for example—because we have an activity-based costing model—it’s very clear that we cannot use the recovery of processing passengers through the airport to offset package processing and that sort of thing. It is rationalised over a three-year period, so the levies are set in a three-year advance model, which is what we’ve just gone through recently to reset those levies. If we have overestimated, then there’s a reduction in the levy moving forward because we’ve recovered too much, and if we’ve underestimated, there’ll be an increase in the levies. That’s the same. That is that memorandum account model, to assure you.

Just going back to the—I think it’s about where we put the brackets of the “(without limitation)”. It’s saying “including (without limitation) costs incurred”; it’s not saying, “costs without limitation”. It’s including the functions. It’s trying not to limit the functions. It’s trying to say that these are the functions to which we may incur costs, but “without limitation” means there may be other things for which there’s a legislative requirement for us to recover costs. That’s what the earlier part of it says—it’s for “performing a function under this Act, or any other legislation,” in which goods management incurs a cost. That’s that cost recovery discussion you have. The “without limitation” isn’t referring to the cost without limitation; it’s referring to the list of functions below. We’re not limiting the list of those functions as there may be other ones for which there may be a cost, for good management, that could come under this.

Hon PEENI HENARE (Labour): Thank you, Madam Chair. To the Minister of Custom’s point, might the Minister be clear to the Chamber, then, about what some of those other ones might be, to help us understand where she’s going with this? I appreciate that in respect of “(without limitation)”, she talks to it, saying, “any of the following activities”. Might she help us by providing what some of those instances might be that fall under the scope of “(without limitation)”‘? As I take the point made by my colleague the Hon Damien O’Connor, it was a piece of work called the Legislation Design and Advisory Committee—I think it was in 2021—that actually covers off these matters around tax, levy, and fee.

We’ve got to get this language really crystal clear for us here, because if we look towards what the Minister’s saying, which is a levy, it’s got to—at least from my reading of that particular recommendation and in order to make sure that what we’re doing here is sound and makes reasonable sense, but also is passed democratically—answer two questions. The first one is the terms of empowering provisions. That’s the first question that has to be answered—the terms of empowering provisions—and I accept that in this particular bill, in this particular clause, it sets out to do that, but for the purposes of this debate around “(without limitation)”, there is clearly still some confusion here. Whether it’s been lost in translation or whether or not we haven’t quite got it right and we’re not connecting here, I think it’s still important that we get that particular question answered.

The other part, which is in respect to what the Hon Damien O’Connor was saying, is that in secondary legislation, we’ve got to make sure that the appropriate circumstances for secondary legislation are used—the appropriate circumstances. I’m afraid that with language like “(without limitation)” and some of the other matters that we see here, as raised by my colleagues in respect to new section 414A(4), inserted by clause 6, “The Minister must, before recommending that a levy order be made under this section”—it goes on and the Minister knows what those words are. Are we satisfied, then, that the appropriate circumstances for secondary legislation are being met here? While I accept that in some instances it might be, but we’re talking about something quite considerable here, something that will impact large groups of society in our communities. We’re talking about small to medium enterprises, as highlighted by my colleague the Hon Jenny Salesa.

In order for those to be answered, perhaps, then, coming back to the Supplementary Order Papers by my—are they still called SOPs?

CHAIRPERSON (Barbara Kuriger): Amendment Papers. Some of us have been around for a while. We still call them SOPs from time to time.

Hon PEENI HENARE: Amendment Papers. Sorry, yeah, showing our age. Sorry, Madam Chair. Perhaps it might be advisable to the Minister, then, that because of this confusion, we just simply take out that “(without limitation)” as proposed by the amendment tabled by my colleague the Hon Jenny Salesa.

Those are the questions that I do have for the Minister. Are the terms of empowering provisions—is the Minister satisfied, then, that it’s covered off within this particular bill? The second part is the appropriate circumstances for the use of secondary legislation. We’re talking about the Order in Council matter here. The questions have already been asked by my colleague the Hon Jenny Salesa, and we want to be very clear about who they must consult with and whether or not there’s enough transparency there to give us any form of comfort, to make sure that this is going in the right direction.

Then, just finally, coming back to my first question: can the Minister give us any examples—any examples—that would fall under the remit of “(without limitation)”?

Hon CASEY COSTELLO (Minister of Customs): I’ll try to work through these. I suppose, when you talk about if you take out “(without limitation)” from this piece, we end up with having to ensure that this list is fully exhaustive. Therefore, because we’ve talked about other legislation, because Customs is in the position—there may be levies that Customs would be asked to collect on behalf of other agencies and this is the part where we’re trying to ensure that we have the ability to collect levies as they arrive from other legislation.

Some of those activities that may relate to the process of goods management, which is what we’re talking about here—so some of the examples that have been put forward is a risk assessment process, and we are really reliant on understanding risk on products before they arrive to us. That is one of the components. Ship rummaging, offshore intelligence gathering—those sorts of functions that are functions that occur because of the goods management process. Again, it’s about this idea that the person generating the cost, or the entity generating that cost or that liability to New Zealanders should be responsible for that fee. So this is about alternatives to taxing to cover everything—those that generate the cost—and I think it’s that fairness process that we’re talking about. If you are generating the risk to New Zealand or you’re generating the cost, then you should be incurring the levy around that.

The other part I’d like to talk about is the levy-setting process and the consultation process. If we look at where we had gone through some processes with levy setting—we’ve done it recently around order processing—we need from a “New Zealand Inc.” point of view and from Customs’ point of view, we need those that are generating the cost to want to work with us. Customs, as you know, we collect revenue. We contribute to the economy. Customs is a function that we want activity, we want trade, and we want people travelling here. So that’s why the consultation process is really important to ensure that we are not turning trade away. If you go back to the customs and excise legislation, the reason that this exists, the purpose of Customs is trade, border security, and travel. We want to make sure that all of those functions are—we’re motivated to generate it so it’s not about incurring liability. That consultation process is very engaged through that process.

Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Chair. I want to thank the Minister of Customs for that, but she raises an interesting point—and, as I say, we are supportive of the cost recovery, as well—but the Minister has left the door open for other agencies that might go out and say, “Look, we’ve got a cost that we’ve incurred.” It might be the Ministry for Primary Industries, it might be somewhere else, biosecurity, or it might be relating to the Police, and they’re checking on these things. We don’t want to leave an open cheque-book here. The Minister of Customs is in a really difficult situation; she has to front the charges or the costs, but if, as she suggested, this allows the flexibility for other costs incurred through other agencies to then come through customs and be imposed on someone who’s importing or exporting, then that’s quite a huge impost.

I need to know—or the Minister, actually, needs to know, too—that other agencies can’t front up and just say, “Look, we’ve got this cost. It cost us a couple of million dollars for these people who are importing this product, and you’ve got the ability now, Minister, to charge for that—so, please, can you do that?” Then you come under pressure at Cabinet, where some more senior Minister who’s got an agency that has gone out and necessarily, perhaps, or not necessarily; who knows.

So it’s the checks and balances. But what she’s explaining, I think, is that any kind of cost recovery levy or management practice can be, in fact, funnelled through this levy-making process. Now, that itself is—as I say—a bit of a risk, it’s a bit of pressure on the Minister, and maybe she can explain how the checks and balances before those other agencies go out and do that work need to be in place, as well. Otherwise, they say, “A $2 million cost—it’s been incurred, we can show you invoices. We want you to go and recover that from those importers.”—and that could be quite unfair. The Minister needs to have appropriate safeguards.

The second thing I’ll just ask—and, again, it comes back to when the Minister explained that it’s a “model” of the memorandum account, but she didn’t say it’s a memorandum account. Now, I can’t recall the specific safeguards around the memorandum account. My recollection is that with those go some requirements for review and some requirements for no additional or overcharging. Does the model include the safeguards—and, in fact, they may be the sections referred to in clause 7, and maybe the Minister can answer that and say “Yes, there are the same safeguards as we get in any other memorandum account, be it biosecurity or some other one, and, in fact, the references through clause 7 and the subsections in there are, indeed, the ones referring to the safeguards.” Two questions for the Minister, really.

Hon CASEY COSTELLO (Minister of Customs): Yeah, so the memorandum accounts are audited. They are audited by the New Zealand auditors, so they are audited. We have the performance bands and also, we report on it through the performance band process.

The other component you’ve talked about around the—this legislation only enables Customs to incur costs that they incur. We haven’t touched on it yet but the product stewardship thing—if there is a system by which Customs is going to be collecting a levy, or collecting a fee, this is about the costs that Customs incurs. The only thing this applies to is the costs that Customs incurs. All we are collecting is the levy as it applies to what costs that Customs incurs.

If we are acting on another agent, all we are talking about is the costs that Customs incur; the levy is about Customs recovering its costs. Again, it’s about that logical discussion around we don’t have an agency that is doing a whole lot of work for a whole lot of people, and we’re just going to charge everybody; this is about specifically the things that Customs is required—and again going back, this is about goods management.

Hon DAMIEN O’CONNOR (Labour): Thank you, Madam Chair, and I appreciate the Minister of Customs. I read through this again. Again, I’m not a lawyer, but new section 414A(2), in clause 6, does say, as she quite rightfully points to, “to pay a levy to the chief executive in relation to the costs incurred by Customs”—so it’s by the agency—“in, or for the purpose of, performing a function under this Act,”—so it’s under this Act, the Customs and Excise Act—“or any other legislation”.

The question is: does the other legislation refer to other parts of the importation process or does it just come back to Customs? The wording—and I’ll read it carefully, because that might be just my misunderstanding—is “(2) Every specified person is liable, while there is a levy order in force under subsection (3), to pay a levy to the chief executive in relation to the costs incurred by Customs in, or for the purpose of, performing a function under this Act,”—which would relate to Customs or this one—“or any other legislation, relating to goods management”. I accept the Minister’s explanation on the “(without limitation)”.

Maybe, just a clarification on what may be my misunderstanding that, actually, another piece of legislation imposing a cost could then be channelled through Customs in the repayment system.

Hon CASEY COSTELLO (Minister of Customs): I suppose the logical one is the Misuse of Drugs Act. We stop drugs on behalf of the misuse-of-drugs legislation, which incurs a cost to Customs because we do that on behalf of another agency. It’s another piece of legislation that Customs incurs a cost to do, so that’s that function that you’re talking about.

CHAIRPERSON (Barbara Kuriger): I’m going to take a call from the Hon Jenny Salesa. I think we’ve pretty much exhausted that particular topic, and so if there’s any other related questions—the Hon Jenny Salesa.

Hon JENNY SALESA (Labour—Panmure-Ōtāhuhu): Thank you, Madam Chair. Thank you for giving me this opportunity to ask a question, and I will go to a different clause.

My questions are about clause 4, which amends section 5 of the Customs and Excise Act 2018 by adding references to new section 414A and new section 414B in the definition of “prescribed”. Now, technically, this ensures that any regulations or Orders in Council made under the new levy section is recognised as prescribed matters under the Act. In practice, this is consequential to integrating the new levy regime into the Act’s new terminology. Our concern is actually not with the drafting per se, which is standard, but rather what this section facilitates because it gives the legal effect to the levy order that can be imposed, potentially, including significant costs on stakeholders and small-business owners without returning to the House of Parliament, because, as we discussed earlier on, this is not a confirmable instrument. Once this bill is passed into law, it doesn’t actually come back to the House for us to have any say about any of the costs, the levies, whether or not it is fair or reasonable for our small businesses.

Clause 4, by plugging the new sections into the Act’s definition of “prescribed”, makes it so that the levy powers that follow are something that are able to be implemented. As we see from—and I go back now to section 414A, in clause 6, and to subsection (3)—the Governor-General is the person who actually gives the levy power. That is true. However, any Orders in Council cannot actually be implemented until the Minister—and, in this case, it is the Minister of Customs and her department—actually drafts up the Order in Council. Then the levy is prescribed and according to the legislation, to the bill we have in front of us, it includes the rate of the levy, the basis on which that rate is to be calculated and ascertained.

Even though the Minister, in one of her answers much earlier on, said that she doesn’t actually have the power to make a levy, I suppose that is possibly technically true. However, this Order in Council, which will have the levy, none of that could happen until the Minister takes an Order in Council paper to Cabinet for Cabinet to approve. She actually does have that power, and this bill, in doing this, delegates that lawmaking power to set levy details over to the executive when the Minister takes that Order in Council to Cabinet. This is actually one of the reasons why we have major reservations about Part 1.

My questions to the Minister are: can the Minister confirm that clause 4 expands the definition of “craft” or relevant terms so that any levy can cover aircraft as well as ships, thereby ending the current cross-subsidy where goods fees have been partly funding ship-related costs? How will the Minister ensure that a fairer distribution of border costs between aviation and maritime sectors occur in the future as a result of this new bill?

Another question: does clause 4 or any part of this whole bill explicitly classify the new levies as duty under the Customs Act; if so, how will this assist, if at all, in enforcement and collection; if not, what legal mechanism ensures that unpaid levies can be collected or that goods can be held until levy obligations are satisfied?

A further question about the levy, to the Minister: is she going to consider ring-fencing this levy so that, following up on a question that the Hon Damien O’Connor had before, it actually just stays within Customs because this levy is being collected for Customs?

Hon CASEY COSTELLO (Minister of Customs): Yeah, there’s a few there. First of all, the cost recovery processes: we’ve talked about memorandum accounts—and the member the Hon Jenny Salesa was a former Minister and should understand the process around memorandum accounts. There’s a guidance around best - practice cost recovery from the Auditor-General. Levy funding goes into a memorandum account that shouldn’t be in deficit or surplus. A strong activity-based costing model at Customs is recognised. It’s reviewed regularly and reported in the annual reports that are delivered to the House, so there is an assurance that there is no way it is being used—and the member will know full well about how that process works.

I think the other component that we’ve talked a bit about—I think that answers the ring-fencing component. We’ve got to be very careful here that we’re not conflating—the member talked a lot about ships and aeroplanes and the costs. That is the border-processing levy, that system exists, it’s been fully traversed. This bill relates to goods management, not border processing, so we’re talking about the cost incurred with border processing. In relation to the Minister’s power to do these things—again, as the member knows, the Parliamentary Counsel Office drafts the levy orders, they follow through policy work that is carried out by Customs, which is then taken to Cabinet for approval. There is, again, a robust process that is in place around how those levies are established. The bill doesn’t amend the definition of “craft”.

Going back to the first point, the member talked about prescribed, and prescribed by regulations. This amendment, which was referred to in clause 4, is a technical amendment to support consistent definitions across the Customs and Excise Act. The definitions section in the Customs and Excise Act, section 5, defines “prescribed” throughout the Act as meaning “prescribed by regulations”. The two new sections inserted by the bill, sections 414A and 414B, relate to levy orders, not regulations. Therefore, “prescribed” should not mean “prescribed by regulations” in relation to those sections. That is why that clarification is there. Thank you.

CHAIRPERSON (Barbara Kuriger): I feel like I’ve got a burning question from Vanushi Walters.

VANUSHI WALTERS (Labour): Thank you, Madam Chair, and thank you to the Minister of Customs for answering some of the questions thus far. My first question is in relation to whether the Minister received advice in terms of how this would impact complaints on the scope of levies made. At present, if there is a sense that a levy has been made outside the scope of primary legislation, an individual could potentially argue that it’s ultra vires; they could make a complaint to the Regulations Review Committee. This is really why the advice from many quarters, including the Office of the Auditor-General (OAG), is to have those powers quite specific in terms of what you’re intending to cover. Would there be any unintended consequences in terms of excluding a complaint because it was deemed to be within the scope of very broadly drafted discretionary powers, when the Minister’s intent is for it to be drawn down more closely?

The Minister just then referred to border processing, and so I wonder whether there are examples of language that the Minister has contemplated which could draw down those powers in the way in which the Minister does intend, but also not without that unintended effect of limiting the ability of those complaints to be very validly brought to fora such as the Regulations Review Committee, and then instruments to be disallowed should they be outside the scope of the Minister’s and the Government’s intent.

My other question was in relation to new section 414B, “Contents of good management levy order”, and this in clause 6 of the bill, where there are powers of exemption, so powers to exempt certain persons or classes of persons from the requirement to pay the levy and, also, provide the circumstances in which the levy paid may be refunded. The first half of my question is whether the Minister considered putting some caveats around when that can occur—and I’m pleased the Minister referred to the OAG’s advice, which I also have here. The Regulations Review Committee has also commented on the drafting of secondary legislation, and often, across both sets, there are comments about the value of being specific when powers are created, but also when exemption powers are created—was that considered?

Part B of that question would cross-reference to new section 414A(1), which talks about the person primarily responsible for paying a levy as the person who’s liable. That is a determination, of course, on fact, and my question is whether the Minister and officials have thought through risks in terms of conflicts of interest and how they would be managed, and decision making in terms of exemptions or payback of levies, and identifying precisely who the primary person responsible for paying a levy is versus a person who may benefit from an exemption or a payback. For example, if a company exists or if entities are held within trust, there could be multiple individuals who may have an existing conflict who would benefit from an exemption who wouldn’t be identified as the person primarily responsible. Yes, those are my three questions for now.

RIMA NAKHLE (National—Takanini): I move, That debate on this question now close.

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

Ayes 68

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

Noes 54

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

Motion agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Hon Jenny Salesa’s tabled amendment to clause 6 new section 414A(2) deleting “(without limitation)” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Hon Jenny Salesa’s tabled amendment to clause 6 new section 414A(2)(b) deleting subparagraph (i) “prohibited goods” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Barbara Kuriger): The question is that the Hon Jenny Salesa’s tabled amendment to clause 6 new section 414A inserting new subsection (7) be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

Part 1 agreed to.

Part 2 Amendments to Waste Minimisation Act 2008

CHAIRPERSON (Barbara Kuriger): Members, we come now to Part 2. Part 2 is the debate on clauses 12 to 15, “Amendments to the Waste Minimisation Act 2008”. The question is that Part 2 stand part.

FRANCISCO HERNANDEZ (Green): Thank you, Madam Chair. I just want to take a quick call on this topic. This is something that the Greens are quite passionate about around the Waste Minimisation Act. My question is around whether there are any safeguards that would prevent the fees that are enabled to be collected by this legislation from being spent outside of product stewardship? We do know that there have already been changes to the Waste Minimisation Act that have dehypothecated it. So, earlier last year, the Government changed it so that the levies collected under the Waste Minimisation Act could be spent on not just waste minimisation things but on remediating landfills, for example. Is there anything in this legislation which could potentially stop or prevent that? That would be obviously quite concerning to us.

Hon JENNY SALESA (Labour—Panmure-Ōtāhuhu): Thank you, Madam Chair. Part 2 amends the Waste Minimisation Act 2008 to improve how the product stewardship fees are collected for certain goods. I have a few questions for the Minister. Which product stewardship schemes does she anticipate that the Customs Service’s fee for collection will do once this bill is passed—for example, is she considering, say, having the tyre-recycling fee under the Tyrewise ready to be collected at the border by Customs, and, if she is, does she have a timeline for that?

The second question: how will she ensure that Customs, in collecting these fees, improves the compliance rates and reduces the administrative costs, and does the Minister have estimates of increased collection, in dollars or percentages, due to the change that this bill has?

My last question is: will all the fees collected by Customs under this part of the bill be transferred to the appropriate environmental fund in full—in other words, can the public be assured that the levies she is collecting are ring-fenced for environmental purposes, and not mingled with other general revenue?

Hon DAMIEN O’CONNOR (Labour): Thank you very much, Madam Chair. I’m actually quite surprised that this is in any piece of legislation from this Government, because I thought they’d just about get rid of every stewardship fee. But anyway, it’s nice to see it here—nice to see it here. The one issue raised by my colleague Hon Jenny Salesa is the one around tyres, of course. We know that is a nightmare, and there has been a fee put on. The proposal, of course, is to make it more efficient and bring it under Customs. I have to say, I acknowledge Customs staff are passionate people who do an incredible job to protect our country from illicit drugs and things that are unwanted, and now they’ll have to be responsible for tyres that we do want—well, but we want to deal with them properly. This does bring into question the enthusiasm from Customs for this.

There may be other stewardship fees on things like unwanted plastic containers, where there is a real cost of recycling. There should be a fee on it, to ensure that anyone who produces it is then responsible for recycling. The next one would be lithium batteries, I’d suggest. This is a new and emerging area.

I guess the question to the Minister of Customs is: can she give us an assurance that, actually, the Government is committed to product stewardship fees? We assume that she is, but it’d be nice to hear that. What new stewardship fees are being proposed? Indeed, as I say, the evolution of our economy and technology means that there will be, if the principles of product stewardship fees are continued. Maybe the Minister can clarify that: the principles of user-pays around recycling or dealing with some products. We still have a lot of chemicals coming into our system that, if not dealt with properly, can become quite a cost, often to councils. This is proposing that for efficiency, Customs will collect that.

Indeed, the challenge and the responsibility will only get larger, I’d suggest—well, it probably will under responsible Government; if the coalition is to be responsible in this area, then that will increase. The Minister should, then, ensure that the cost of this within the Customs system will be covered, not just the issue of dealing with the product itself or the waste minimisation—which I think is an objective of each and every one of us. A couple of questions there for the Minister that I’d appreciate a comment on. Thank you.

Hon CASEY COSTELLO (Minister of Customs): Just first, the assurance that the fees collected have to be used for the purpose that was collected—so this is a product stewardship fee; it has to be used for that function.

In terms of the amounts, there is commercial sensitivity in the dollar amounts and it would vary on a case by case basis. Again, just to clarify: this is just setting up a mechanism under which Customs could collect the fees. It’s not an action driven by Customs around waste management or waste product stewardship. It’s just a mechanism under which Customs could now—there was a temporary arrangement set up in about March last year to allow Customs to assist with the collection of levies as part of the border processing of these goods. This is about tidying this up.

Yes: absolutely committed to future product stewardship. That’s why we think it should be in this legislation without defining—it’s just about setting up the mechanism, because, logically, it is an opportunity for Customs because we see the goods coming in and out. It would logically be an easier process. Customs does collect fees on behalf of other agencies.

Hon DAMIEN O’CONNOR (Labour): Thank you, very much, Madam Chair. I understand that in 2020 when we were—of course we were in Government then, there were six priority products—

Tim van de Molen: Dark days.

Hon DAMIEN O’CONNOR: The good old days, yeah. There were six—

Andy Foster: You even caused the pandemic.

Hon DAMIEN O’CONNOR: Thank God we were in charge. There are tens of thousands of New Zealanders who are alive now because we were in charge.

Can I come back, Madam Chair—I never deviate.

CHAIRPERSON (Barbara Kuriger): You certainly can. You certainly can—it’s clear the debate’s not over.

Hon DAMIEN O’CONNOR: “Please, keep it tight.”—yes, keep it tight. There were six priority products to be subject to product stewardship schemes, and I acknowledge the Government brought one in for tyres. Maybe, the Minister could give us an indication of whether the other five products are still in the process and whether, because of the new, efficient system that will be now put in place under Customs, whether that will be fast tracked into this new scheme, so there’d be five other products. Maybe, the Minister can give us an indication on that.

Hon CASEY COSTELLO (Minister of Customs): The information I’ve received in terms of schemes that are in the pipeline includes tyres, electronics, and farm plastics. Those are some of the indications of the things in the pipeline. Just in terms of that cost, at the moment, if Customs was chosen to collect a product stewardship fee, it would be regulatorily efficient to use an existing revenue-collection system. That would reduce the cost, if it was using an existing collection system. The Government has decided that that would reduce compliance costs, if we were using an existing framework of collection fees, so that’s part of it in terms of what’s in the pipeline. Again, this isn’t Customs work; it’s just that we’re just setting it up, but what I’m informed of is that farm plastics, electronics, and tyres are in the pipeline.

CHAIRPERSON (Barbara Kuriger): The question is—

Hon Member: Madam Chair?

CHAIRPERSON (Barbara Kuriger): Does the member want to take a call? I was beginning a vote.

Hon Member: That’s all right, sorry.

Part 2 agreed to.

CHAIRPERSON (Barbara Kuriger): Members, the time has come to suspend the House for the dinner break. Just remember that we are on a shortened dinner break tonight due to urgency. When we come back, we will be on to Part 3 of this bill.

Sitting suspended from 5.56 p.m. to 7 p.m.

Part 3 Amendments to the Goods and Services Tax Act 1985

CHAIRPERSON (Maureen Pugh): Good evening, members. When we suspended for the dinner break, we were just about to start Part 3. Part 3 is the debate on clauses 16 and 17, Goods and Services Tax Act 1985. The question is that Part 3 stand part.

Hon JENNY SALESA (Labour—Panmure-Ōtāhuhu): Madam Chair, thank you for the call. I would like to ask the Minister of Customs questions in terms of Part 3, which amends the Goods and Services Tax Act of 1985 and it is supposed to have refunds that are fairer for people who return imported goods.

There are two main changes that I can see that Part 3 does. It extends the time frame for GST refund claims so that importers, including those who are individuals consumers who import goods, will now have up to 12 months to re-export those goods and claim a GST refund, instead of the current very short window of two months. My question for the Minister is: why was the original GST refund window only two months, and does she or her Customs Service officials have evidence that drove the decision to extend it to 12 months?

I have a few more questions. How will consumers and businesses learn about this new term of entitlement under which they can return their goods? What will Customs do to ensure that consumers know that this is what they have an entitlement to do now under this new bill? Next question: will Customs or Inland Revenue be doing an information campaign so that people actually know that they can claim back the GST on returned imports—because there’s not much point in making the rule fairer if those who are supposed to be benefiting from it are unaware that the rules have changed.

I wanted just to let the Minister know that we are in support of this part, just as we were in support of Part 2 of this bill. The final question for this part is: what is the process for claiming the GST refund under the new rules? Will it be automatic, or will people still need to fill out a form?

Hon DAMIEN O’CONNOR (Labour): I’d just like to take a call because I think it’s one of these emerging challenges across regulation and governance that we kind of have to keep up with. The idea of kind of importing something and then sending it back overseas and then getting something replaced just kind of was beyond comprehension probably even 10 years ago, five years ago, but such is the commercial world now that people are buying a lot more online.

The Foreign Affairs, Defence and Trade Committee looked at this and basically saw it as a logical step forward, but I think the questions that the Hon Jenny Salesa asked are ones that the Minister of Customs, hopefully, will answer. It was seen by most people on the select committee as a logical step for a technical glitch to make sure that people don’t—and it might only be $50, it might be a relatively low-value item, but none the less, if they end up paying twice in GST, then it’s not very smart. We just request of the Minister some answers to the questions that the Hon Jenny Salesa put up. Thank you.

CHAIRPERSON (Maureen Pugh): You’re asking a question of the Minister to answer the question of the former—

Hon DAMIEN O’CONNOR: Madam Chair, that’s an excellent, excellent summary. Just in case the Minister didn’t hear the first time.

CHAIRPERSON (Maureen Pugh): Just for my notes. I’d just like to get it correct.

Hon DAMIEN O’CONNOR: Actually, Ministers don’t always answer the question in this House, I’ve noticed.

Hon CASEY COSTELLO (Minister of Customs): Yeah, so, firstly, just to pride and assurance, the process of reviewing and granting refunds will be robust. It normally requires submission of supporting information such as showing a record of the export to ensure that the refund is appropriate. From a communications standpoint, Customs or Inland Revenue will inform using the normal release processes which goes out to all the trades—the communication process—as well as updating websites to inform trades, etc. There’s the process when you’re exporting the goods, there’s an information connection through Customs as well, so I’m confident that there is.

Just in answer to the two months only previously, so as most trade was within New Zealand, this was not a bigger issue previously. Now, there is a lot more purchasing from overseas directly by individuals as well as that process. I think the 12 months is more aligning to that warranty period, so that equates to that.

Hon JENNY SALESA (Labour—Panmure-Ōtāhuhu): I just have a few more questions of the Minister. For items that are under $1,000 that overseas sellers charge the New Zealand GST when the item is put up on sale, if such an item is returned, does the customer get the GST back from the seller or would they now get it from Customs, because of this new bill?

Second question: we would like clarity on ensuring that no one pays GST twice or pays GST unnecessarily under the various import scenarios. Would it be Customs that would deal with this issue, or would the customers go to IRD?

Lastly, are there any protections against—

Tim Costley: These are frivolous questions—frivolous!

Hon JENNY SALESA: The member on the other side of the House is most welcome to get up and contribute and ask his questions in the normal way, because this is why we are having this committee stage. It is open to every single member of Parliament to take five minutes, take a call, ask as many questions as you like instead of just making a lot of noise from the other side and actually making it harder for us to ask our questions.

Lastly, Minister, are there any protections against abuse of this refund system—for instance, what is to stop someone from importing and then exporting to claim GST back in a fraudulent way?

Hon CASEY COSTELLO (Minister of Customs): Just in answer to the last part, which is what I alluded to, this was discussed in the Foreign Affairs, Defence and Trade Committee. It was addressed in my answer previously about Customs providing assurance around the process, the review, and the provision of documentation at the export stage. If a person is purchasing something from a shop and returning it to a shop, the transaction is between the seller and the purchaser within New Zealand, so this GST component isn’t required. You’re returning a good to the shop and the shop is refunding you or giving you a store credit or whatever they do. That’s out of the scope of this discussion. The other part that’s out of scope is anything under $1,000. This doesn’t apply to that.

VANUSHI WALTERS (Labour): Thank you, Madam Chair. Thank you to the Minister of Customs for answering these extremely important questions that we have, especially given we’re here under urgency.

My question is in relation to clause 17 (1AB). I’ll just read part of that out so we know where we are. It says, “Goods and services tax is not payable under subsection (1) for any goods if the chief executive of the New Zealand Customs Service is satisfied that, at the time of importation or entry for home consumption under the Customs and Excise Act 2018 (the current importation),” which is the totality of the clause, “(a) goods and services tax has been paid on the importation or entry for home consumption of the goods or substantially the same goods on another occasion (the original importation) before the current importation;”

My question on that part is whether there was a consideration of applying any timing restrictions in terms of the original importation and the time between the original importation and the current importation. My interest in this is also because of paragraph (c), where it says, “the goods of the current importation are goods that are the replacement, repair, or refurbishment of the original importation goods under a written warranty or a written returns policy.” You might consider a circumstance where you had an original importation of goods and then several months later, perhaps more than a year after the fact, you would have a refurbishment of goods, to a different standard perhaps, of adding potentially a significant amount of value to the goods in question.

The question is in two parts. One was the consideration of limiting the period between the two for that section. The second is in terms of looking at refurbishment in particular, or even replacement, if you consider. Was there thought given to replacement or refurbishment where the value of the item might increase, or decrease, for that matter, in a substantial way, and, if so, how the treatment of GST ought to apply in those circumstances? Thank you.

Hon CASEY COSTELLO (Minister of Customs): That time frame relates to where there’s a written guarantee, so it’s the period of the written guarantee.

Hon DAMIEN O’CONNOR (Labour): I have just a couple of questions here, and I think there was a question about people perhaps fraudulently using this provision and saying that goods are faulty and then getting a replacement, and then, in fact, some importer is getting two for the price of one and getting an exemption on GST. But there is a legitimate issue here for some people who are sending it over from, say, the US or elsewhere in the world, which is that when they send it over, the cost of sending it back may be such that they’re just prepared to send on another replacement. Now, I don’t know whether that happens very often, but I know that depending on the value of the goods, that might be the best option. There could be a loophole here.

The question for the Minister is: have they checked that the export of those goods, which is required to get the GST refund, or to have an exemption on the second one—I think it’s a perfectly reasonable proposition and requirement, but is there an ability for someone to front and say, “Look, the person I bought it off says, ‘Just dump it, and I’ll send you another one.’, because that may be the cheapest option for them.”? I ask whether there is provision for that in there, and the Minister might be able to clarify.

The second one is the emerging situation of tariffs, of course, and we’ve had New Zealand Post not export items such as this into the US, because there were clear, I guess, calculations of whether they would be subject to the tariff, who should pay the tariff, etc., and whether the GST is then calculated on it, and it won’t be a tariff from there. But if there is a good going back into the US that has come out of the US, will it be tariff-free if it goes back in?

These are, I’d say, technical questions. They might seem like crazy situations, but, actually, with the world that we’re in at the moment, if we’re tidying this up—I know that the Foreign Affairs, Defence and Trade Committee didn’t have the opportunity to have a look at this. Tariffs weren’t on the table, necessarily, but it could be one of the complications, and maybe the Minister has an idea of whether the officials have looked at this in recent days or weeks to see whether this might change the provisions needed in this piece of legislation.

Hon CASEY COSTELLO (Minister of Customs): I think the key point here is that we’re talking about goods over $1,000. The issues that we’ve had about those packages being stopped in the States is relating to the small goods stuff, which is the challenge we’re working through at the moment. So this is all relating to over $1,000.

Just to one of the earlier questions about if it was modified and it was more value than it was, then it’s not deemed to be a replacement. I think it’s important to note that when the process under which we’re dealing, if it was going to be disposed of, the process of verifying this and providing the information—and this is what Customs talked about: the robust processes to ensure there’s evidence of destruction or evidence of disposal; those sort of components. It’s not a huge issue, but it is generally of significant items that we’re talking about when we’re talking, and you all know it’s that machinery-type components, which is expensive pieces of equipment. This is what we’re trying to deal with in this space.

Part 3 agreed to.

Clauses 1 and 2

CHAIRPERSON (Maureen Pugh): Members, we come now to the final debate, which is clauses 1 and 2—“Title” and “Commencement”.

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported without amendment.

House resumed.

CHAIRPERSON (Maureen Pugh): Mr Speaker, the committee has considered the Customs (Levies and Other Matters) Amendment Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

ASSISTANT SPEAKER (Greg O’Connor): The Customs (Levies and Other Matters) Amendment Bill is set down for third reading immediately.

Third Reading

Hon CASEY COSTELLO (Minister of Customs): I move, That the Customs (Levies and Other Matters) Amendment Bill be now read a third time.

This bill aims to improve revenue collection on goods by making collection fairer and more effective and supporting regulatory efficiency. It does these things by amending three existing Acts. Part 1 amends the Customs and Excise Act 2018, Part 2 amends the Waste Minimisation Act 2008, and Part 3 amends the Goods and Services Tax Act 1985 and the Customs and Excise Act 2018.

The amendments in this omnibus bill make small but important improvements to three existing revenue-collection regimes: Customs’ cost recovery charges, product stewardship fees, and goods and services tax. These types of revenue are all either currently defined as duties under the Customs and Excise Act or will be able to be defined as duties or treated as if they are duties once the bill’s amendments are in place.

The primary aim of the bill is to introduce a levy-making power so that levies can be made as an alternative to existing fee charges to recover Customs costs related to its goods management functions, including vessels. Levies are more appropriate than fees when costs are spread across a class of payers and there is not necessarily a direct line of sight between the costs and the payers. Customs’ goods management system supports trade and protects New Zealand. Trade is reliant on a small, efficient, and secure border that protects the legitimate flow of trade. The costs of Customs services and integrated goods management system, including the management of vessels, are best recovered from classes of levy payers that create the risks and costs.

This bill is enabling legislation. The primary legislation changes for Part 1 and Part 2 of the bill will require regulations of Orders in Council to implement the changes; the Goods and Services Tax Act changes in Part 3 do not. The bill amends the Customs and Excise Act to add a provision that empowers the Governor-General, by Order in Council, on the recommendation of the Minister of Customs, to make a levy order. Such a levy order would prescribe a levy that funds costs incurred by Customs in or for the purpose of performing a function under the Customs and Excise Act or other legislation relating to goods management. Later this year, in addition to the levy order, I will also be submitting secondary legislation that will include amendments to existing Customs and Excise Act regulations to reflect goods and vessel cost recovery policy decisions made by Cabinet.

Part 2 amends the Waste Minimisation Act to clarify that the Governor-General, by Order in Council, on the recommendation of the Minister for the Environment, may make regulations to specify persons that will collect funds to fund product stewardship. Future product stewardship schemes could use these provisions to provide for effective cost recovery of the product stewardship fees by agencies such as Customs. These would need to be provided for in regulations associated with those schemes.

Part 3 amends the Goods and Services Tax Act to ensure that imported goods valued over $1,000 receive the same GST treatment as other goods by broadening the criteria under which an importer can get a GST refund for returned goods.

The bill was referred to the Foreign Affairs, Defence and Trade Committee, which considered several public submissions on the draft bill. I would like to thank the select committee for its valuable consideration of the bill; in particular, they provided scrutiny of the proposed changes to GST refunds and sought confirmation that effective safeguards are in place to avoid fraudulent claims.

To summarise: this bill will modernise Customs’ cost recovery empowering provisions in the Customs and Excise Act and allow for the recovery of costs for Customs’ goods management functions through levies. This approach supports a more robust and balanced outcome. In addition, the bill makes changes to support the efficient future collection of product stewardship fees by other agencies such as Customs and makes GST refunds fairer. Again, I thank the Foreign Affairs, Defence and Trade Committee for its considered work and to those who took the time to provide submissions on the bill. I look forward to the passage of the bill. I commend the bill to the House.

Hon JENNY SALESA (Labour—Panmure-Ōtāhuhu): Kia ora e te Pīka. Ngā mihi nui e Te Wiki o te Reo Māori. I’m honoured to give a speech on the Customs (Levies and Other Matters) Amendment Bill as spokesperson for Customs for the Labour Party.

On the face of it, this omnibus bill, which deals with three different Acts—the Customs and Excise Act 2018, Waste Minimisation Act 2008, and the Goods and Services Tax Act 1985—appears to be a reasonable measure that is proposing to modernise and improve how we collect revenue on goods, as we heard the Minister describe. The Government has repeatedly assured us that this bill is about improving the system, and it doesn’t change or increase rates or existing charges or introduce new charges.

At first reading, Labour approached this bill in good faith, supporting its referral to the Foreign Affairs, Defence and Trade Committee in the hopes that these measures would indeed deliver fairness without any unintended consequences. We supported the bill, as well, at the second reading. Right throughout the committee of the whole House, we were hopeful that some of the amendments that we tabled would be taken on board. However, as we have examined the bill in detail, especially Part 1 of the bill which overhauls the Customs and Excise Act, it has become alarmingly clear that the bill takes an unusual and, unfortunately, an alarming turn. After careful analysis of this bill, Labour can no longer support this bill in its current form.

Part 1 of this legislation is really problematic to us, and we prepared the Amendment Papers to try and fix the worst flaws. Our concern is that unless the bill is amended, Part 1 hands the executive a blank cheque with sweeping powers to impose new levies without any adequate checks. This bill does this in a way that threatens both fairness and accountability. Labour refuses to stand by and allow such an overreach to proceed unchecked. This is a bill that is not a confirmable instrument—and that was one of the Amendment Papers that we tabled—so that it will come back to the House for members of Parliament to have a say.

Part 1 of the bill grants the Minister of Customs authority to create an entirely new levy regime via regulations by Order in Council, by inserting new section 414A into the Customs and Excise Act. On paper, the idea of cost recovery or spreading border management costs across a class of importers rather than individual fees may seem fair. Indeed, using levies for cost recovery can be appropriate in some cases, and it is not unprecedented. This is something that we ourselves have done, but not in the way that this bill does, which is deeply concerning. Under the new section 414A, the Government could impose levies on virtually any person or any business involved in importing or exporting goods. The scope is astonishingly broad and ill defined. The Minister may call it “cost recovery”, but let’s not sugarcoat it.

This is, effectively, a new taxation power to allow the Government to target an undefined group of people for an undefined range of services and to charge them an undefined amount in levies, all without returning to Parliament for oversight or approval. One particularly concerning clause in Part 1 which exemplifies this overreach is new section 414A(2). As currently drafted, in clause 6 of the bill, it explicitly states that Customs may recover costs “without limitation”. In other words, the power to levy charges would be without limit, unrestrained, and indefinite. The phrasing is no mere technicality; it is an open cheque, because even at its most basic principle of lawmaking, writing the words “without limitation” into taxing power is extraordinary and, quite frankly, outrageous. No Government agency should ever be told that it can extract money from the public without limit.

This Parliament should not grant an open-ended authority to levy potentially hefty charges on our businesses and our consumers. Labour tabled an amendment to delete the words “without limitation” from clause 6, new section 414A(2). Those two words might seem small, but removing them is absolutely vital to rein in the bill’s sweeping scope. If the Government truly does not intend to create limitless charges, they should have no objection to striking that language out. Keeping it in law would send a signal that Customs’ powers to tax through levies knows no bounds. Not only is the scope of the levy power too broad but there is no robust check on the balance or its use. Under this bill, levy orders would be made by Order in Council, effectively regulating regulations decided by Cabinet, without needing further approval by Parliament.

Once this bill is passed, executive could bring in new hire levies at any time and members of this House would have no say beyond the blunt instrument of disallowing a regulation. That is simply not good enough when we are talking about charges that are, in all but name, a form of tax on the public. Historically, Parliament has been very careful when delegating taxation-like powers. Often, statutes imposing levies include provisions to ensure ongoing parliamentary oversight. In fact, many Acts in New Zealand require levy regulations to be treated as confirmable instruments, meaning any levy imposed by regulation must later be confirmed by Parliament to remain in force. This is a sensible safeguard that upholds the principle of no taxation without representation in our modern legislative framework. Yet this Customs amendment bill contains no such safeguard.

Actually, it omits any requirement for parliamentary confirmation of the new levies. Essentially, this bill asks us to trust the Minister of Customs entirely, to trust that she will only ever set reasonable levies, never abuse the words “without limitations” authority, and somehow always achieve fairness with no further input from the House. That is not how democracy is meant to work. Labour believes that if the Government truly intends these levies to be fair and limited, they should welcome transparency and oversight. Labour’s proposed amendment is not radical; it is common sense and in line with longstanding constitutional practice. I urge the Government to accept that amendment.

Beyond these constitutional principles, let us talk about the real-world impacts of this bill. Who will bear the brunt when the Minister unleashes these new levies under this law? The Government argues about fairness, spreading border management costs more evenly—but fairness for whom, exactly? From where we stand, it looks like these levies will not hit everyone equally; in fact, they are likely to hit small and medium sized businesses the hardest, along with ordinary New Zealanders who ultimately purchase imported goods. Make no mistake, these costs will be passed down the line. When an importer faces a new levy, they will try to recoup it somehow, usually by increasing prices for consumers. Ultimately, everyday people are likely to pay.

Labour has withdrawn its support for this bill in its current form precisely because we stand on the side of fairness and accountability. It is really cynical to try and say that scrutiny is not something that Parliament should continue to have. Having these costs, these new levies, without limitation, charging it to importation of exportation of goods, charging it to shipment, transshipment, and transportation of goods—actually, the other worry that we have is the fact that prohibited goods is one of the things that this bill basically says that should be charged a levy. Prohibited goods is usually one of those main responsibilities of the Minister of Customs, because the Minister of Customs is tasked with ensuring that our borders are safe and secure. Having prohibited goods not come through our borders is basically a public good. It should not be paid for by a levy that is charged to private companies and our importers and exporters. We do not commend this bill to the House.

ASSISTANT SPEAKER (Maureen Pugh): The question is that the motion be agreed to.

FRANCISCO HERNANDEZ (Green): Thank you, Madam Speaker. I rise in continued support of this bill from the Green Party of Aotearoa New Zealand. While we do share some of the concerns that have been articulated by Labour members in the previous stage of the committee and by previous speaker Jenny Salesa, we do think that the potential good that this bill could do outweighs some of the potential cons that it could impose. I was a little bit assured during the dialogue in the committee of the whole House stage that the “without limitations” clause basically just referred to the subsequent subclauses that are referred to in the legislation. That being said, if this bill does confer as sweeping of powers as our Labour colleagues do suggest that it does, then we’re looking forward to bidding for the customs portfolio in the negotiations for the next Government.

I want to talk a little bit about Part 2, which is one of the main reasons we’re supporting this bill. Part 2 is the section of the bill that amends the Waste Minimisation Act. The purpose of this is to enable priority product stewardship. I guess I want to talk about why this is really important by drawing on some of my past work in the past life where I was the waste lead at the Climate Change Commission. Now, one of the things that we were looking at there is the issue of refrigerants and controlling refrigerants, and one of the ways that you can actually ensure that you’re having some level of control over refrigerants—and refrigerants are the things that act as coolants and heat pumps and air conditioners, that kind of thing—and they need to be dealt with at the border.

Laura McClure: Really? It’s bad for the environment.

FRANCISCO HERNANDEZ: Yeah, they’re bad for the environment—absolutely. They’re actually really potent—really potent in a global warming sense. That’s why one of the policy recommendations that we had that we talked to officials on and we talked to the community on when I was at the Climate Change Commission was to ensure product stewardship legislation for refrigerants. It really makes sense to have Customs as the body that actually, literally deals with the import of goods at the border—to have that be the agency that administers the product stewardship scheme. That’s why we think that this legislation is a really positive step forward. Notwithstanding ignoring the concerns that our Labour colleagues have articulated, our view is that this does make it a little bit worth it.

But we’re not supporting this bill with a kind of notion of naivety. We do know that the Minister has provided some assurance during the committee of the whole House stage that this Government does not intend for the product stewardship fees to be used as general parts of the revenue. But we do know that, sadly, during their term in Government, they have used things that have similar structures to fees or levies and then broadened them out for a general purpose. For example, one of the first things that this Government did when they came into power was to change it so that the revenue from the emissions trading scheme no longer went to the Climate Change Response Fund, which was a big loss, in my view, because the Climate Change Response Fund was a fund that was set up to fund not only climate change mitigation but also climate change adaptation measures.

The loss of that was one of the things that the Government first did when they came into office. This is why I’m a little bit sceptical when the Minister does provide reassurances like that; it doesn’t seem to accord with, sadly, the record of this Government. One of the other things that they did just right at the start of my term as a parliamentarian, actually, was to change the Waste Minimisation Act. This bill also makes changes to the Waste Minimisation Act, but they changed the Waste Minimisation Act at the start of last year to de-hypothecate the Waste Minimisation Fund and broaden the scope for that.

Now, that’s significant because, as set up, the Waste Minimisation Fund was supposed to use the waste levy and fund it and use the money to fund purely waste reduction initiatives with the objective of making New Zealand a zero-waste country. I do take on board the Minister’s feedback that this Government does not intend to use the ability to set fees through the priority product security and use it on other things, like general things—for example, subsidies to fossil fuel companies. That would be a very bad thing to do, in my book. Sadly, you know, we do have to treat the Minister’s claim with a little bit of scepticism. That’s why, while we are supporting the legislation in Part 2, and while we are supporting the overall thrust of this legislation, we are coming into it with eyes wide open.

I want to turn to Part 3 of the bill, and Part 3 is also something that potentially supports the objectives of waste minimisation in quite an indirect way. I’ll explain why it’s quite indirect, because it doesn’t directly—it’s not like the previous section, which directly amends the Waste Minimisation Act. The way that Part 3 does this is that currently, when you send goods overseas to be repaired, there’s the potential that when they come back, you’re potentially having to be paying twice for that. This legislation makes the changes so that if you pay for a good once and then you pay the GST on it and then it breaks for whatever reason and then you send it overseas and it comes back, you’re not paying a double fee for that, which isn’t really conducive to the idea of having an economy—a circular economy.

I mean, we know that certain members opposite don’t like the word “circular economy”, but that does support the objective of a circular economy, which is one of the things that is necessary to shift New Zealand into a cleaner, greener, and zero-waste future. We do have other things that, you know, while this bill will only play a very small part in enabling better repairability of goods and services in New Zealand—I don’t want to over-egg the pudding too much; it’s not going to be like a very, very big role—it is good step in the right direction, of being able to ensure that that we’re lowering the barriers for people to be able to repair products.

I mean, it’s a shame that my colleague the Hon Marama Davidson’s Consumer Guarantees (Right to Repair) Amendment Bill is not being—

Dr Vanessa Weenink: Well done. You’ve only got two more minutes. You can make it!

FRANCISCO HERNANDEZ: Yeah, two more minutes—carried on by this. Well, it hasn’t actually come to the House yet; there’s a potential that the members opposite might come to a road to Damascus moment. We’re certainly hoping that they do, and we’re certainly hoping that the objectives of this, which is to enhance repairability, does carry on to the wider programme of this Government, including supporting the right to repair legislation of the Hon Marama Davidson, because shifting to repairability is right and this bill does help enhance that slightly. It’s a really good way that we can reduce waste.

Now, finally, with only around one minute left to go, I really want to turn my attention and really make sure to thank the people who are staffing the border at customs. I mean, I think like many New Zealanders who’ve had to travel or return overseas, I was struck by the professionalism and the integrity and just how quickly you can actually go through the border these days. I think that part of this legislation is actually enabling cost recovery to support the good work of the men, women, and non-binary staff right at the front lines of customs.

With about just 15 seconds left—well, 12 seconds left of my time now—I do want to issue a note on process. I really don’t think we needed to use urgency to pass this legislation, but if we’re going to use urgency, we’re going to drag it on for as long as possible.

LAURA McCLURE (ACT): Thank you, Madam Speaker. I rise in support of this bill and ACT’s position. Look, I find it kind of ironic that the Labour Party, despite supporting this bill entirely, decided to pull the pin last minute, raising, actually, some fairly good points, but it leads me to the question of the Foreign Affairs, Defence and Trade Committee. We’re a great select committee—and I’ve got some of my colleagues over here—and these points could have been discussed and they weren’t raised with us. I think the members on that side may have just done their homework tonight and got a speech written by ChatGPT, but these are serious concerns. Maybe if the members want to engage with us on some of these matters, they should look at doing that via the select committee in the future.

I think this bill’s really sensible and makes it nice and easy. Being able to get your GST back on refunds on products over $1,000 that you import, that’s really sensible and that’s a good step forward. I commend this bill to the House.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Speaker. It’s a pleasure to take this call here in the final reading. I appreciate the support of the Green Party—even with some mixed metaphors there—but we’ll take that support. That’s the way the cookie bounces! Ultimately, this is a good piece of legislation, despite the scaremongering from the Labour Party, which, actually, was not raised at any point during the select committee consideration. I’m not sure where it’s come from now, other than perhaps a misguided interpretation of this bill. Actually, we saw them concerned for the first time about the potential of increased tax. It’s a very un - Labour Party thing. I was surprised to hear that coming from the member. Rest assured that that, indeed, is not a risk under this legislation. These are pragmatic changes that bring efficiency and, ultimately, will improve delivery, the hallmark of this Government.

KAHURANGI CARTER (Green): I rise on behalf of the Green Party to speak at the third reading of the Customs (Levies and Other Matters) Amendment Bill. Now, I did read the title because in the second reading there was a bit of confusion as to whether I was talking about the right bill—so just clarifying that, absolutely, product stewardship and waste minimisation is a really important part of this bill. For the Greens, the most important part of this bill is the product stewardship and the progress it makes on waste minimisation. This is a kaupapa that is part of our whakapapa.

The Waste Minimisation Act 2008 began its life as a Green Party member’s bill and was championed by former Green MP Nándor Tánczos, who is running currently for Mayor of Whakatāne. The Hon Eugenie Sage, when she was the Associate Minister for the Environment, did amazing things with products stewardship, bringing in six priority products including things like tyres and e-waste. I was actually on the e-waste products stewardship working group when I worked at Para Kore and then went on to work at the Ministry for the Environment, so I know how massive our waste problem is and how big the waste department at the Ministry for the Environment is.

There are some really amazing solutions happening out in the communities and product stewardship is one of those really exciting things. This bill carries that kaupapa forward. The Waste Minimisation Act 2008 was the first time Aotearoa recognised that responsibility for waste must be shared with producers and importers, not just by households, councils, and, ultimately, Papatūānuku—our Mother Earth.

By enabling the changes to the Customs and Excise Act 2018, the Waste Minimisation Act 2008, and the Goods and Services Tax Act 1985, this bill closes a crucial gap. It makes sure that when tyres, electronics, or packaging come into the country, the cost of dealing with those products at the end of their life are not simply dumped on whānau, communities, and into Papatūānuku that she cannot digest.

This is about shifting the responsibility upstream to those that design and profit from products. Now, a great example of this is in the EU, in Belgium, where Apple changed their chargers to USBCs in line with regulation to reduce that e-waste. Now, you might not have known why the iPhones now have that C charger, but it was because laws can put the onus on producers to create products that reduce e-waste and waste in general. Every step in this direction is a win for our communities, for our councils, and for Papatūānuku.

This bill also makes GST rules fairer for repaired and replaced goods. I want to shout out to my colleagues here Ricardo Menéndez March and the Hon Marama Davidson for their work on the right-to-repair bill—which I actually helped with before I was an MP. This is something that is core to our beliefs as the Greens. It is that belief that we should honour. When we extract something from the Earth, we should honour it; we shouldn’t just produce it into something, consume it, and then throw it away—a straight line all the way to the rubbish dump. What we need to do is move back into circular systems. That means making sure that producers are responsible for the products that they make at the end of their life. We are so far behind the rest of the world on this. I mean, you only have to look at European nations to see that we really, really need to catch up.

People are making conscious decisions to reduce their carbon footprints, but the throwaway system—that linear system that we live in—does not allow them to do this. The technical changes like this can help us move towards a system of sustainability. The Green Party is proud to support this bill, even though it is a small step and there is so much further we need to go. Thank you, Madam Speaker.

TIM COSTLEY (National—Ōtaki): I never thought I’d say this but I’m looking forward to hearing from the Hon Peeni Henare in a minute, I would assume. The last Labour Party’s “Penny”—“Henny Penny” thought the sky was falling with this bill. It’s ridiculous.

It’s a great bill. It’s about a Government getting on with the business of running a country, going for growth so that we can make life more affordable and deliver more opportunities for Kiwi families. I commend it to the House.

Hon PEENI HENARE (Labour): That member’s in luck, and I can guarantee that member that my speech will be longer than his tie!

Madam Speaker, I thank you for the opportunity to speak on this bill and want to reiterate a few points that I thought my colleague the Hon Jenny Salesa spelled out quite clearly in the House, and I want to touch on a number of those points.

One of the terms that I didn’t hear from the Minister throughout the entirety of the process of this bill in the House was something that I think would actually resonate with the community out there, which is “fiscally neutral”. We kept hearing from the Minister how this is designed so that it can be a cost recovery, so that we’re literally paying for the management system that will look after the management of goods at the border. But what we didn’t hear was that it would be fiscally neutral. I think that’s one of those terms that is really important when we look towards whether it’s a tax or a levy, something that’s being explained to the people as simply being cost recovery for the management of goods at the border should be something that’s fiscally neutral. Something that tells New Zealanders, tells small to medium sized enterprise business owners that actually they’re getting good value, they’re getting an efficient service, they’re making sure that when they’re looking towards importing goods here into this country and exporting—in a case which I’ll touch on very shortly—that it is fiscally neutral and gives the public the reassurance that those systems are in place to protect our borders.

I’ve just returned from Papua New Guinea where they celebrated the 50th year of independence. One of the matters that was raised with myself in the discussions in and around the functions and the ceremonies that I attended from the Pacific Islands were the challenges of transnational crime—and the fact that we need to make sure we have strong borders, and, for the most part, we do a good job. The New Zealand public want to know that whenever we’re looking towards taxing or putting a levy on something, that those costs will go to something that will make sure that things like our borders are protected, that transnational crime is something that’s taken seriously—and for the most part it is. But what we need to do is make sure we take the public on this journey. There are still some unanswered questions, and one of those is from the Minister on whether or not there will be a fiscally neutral pathway forward on this particular bill.

The amendments to the bill that were proposed by my colleague, I thought were, at least, reasonable. I’ve heard members from the other side of the House say that it should have been raised in the Foreign Affairs, Defence and Trade Committee. Well, that’s why we still have the committee of the whole House. That’s why we have that opportunity, so that we can bring these matters once again, after hearing from submitters, after going through the processes of the bill, we can still make a bill better. That’s the point I want to leave on members of that side of the House. The reason we don’t have that opportunity is because this bill’s being pushed through under urgency, and now we find ourselves going through all stages of the bill. That’s the challenge that we put in front of the Government and also the public out there, who I’m sure will have some very clear and strong views and some expectations when we look towards the passing of this bill.

I want to acknowledge my colleague the Hon Damien O’Connor, who spoke to the amendments to the Waste Minimisation Act, which is amended in Part 2, and I think they’re really good. They do ask some questions though, and I want to acknowledge the comments of my colleague the Hon Damien O’Connor, who actually had thought that this Government had given up on any green initiative in this country, and now, all of a sudden, we’re trying to make amends. We’ve heard the term “road to Damascus” several times during question time, and I think that might be one of those opportunities to use the same phrase to say it is about time that the Government under its leadership looks towards parts like the amendment to the Waste Minimisation Act—something that says “To those that provide products, there must be some kind of recourse or some kind of pathway that shows that we can make sure that our environment is looked after into the future.” I think the example of the charger, the universal charger for Apple iPhones, is a really good example of that.

I do think that there were some questions about today’s and tomorrow’s technologies which I wonder will have to come up through secondary legislation or at least be defined more clearly in the bill. One of those was lithium batteries, and we know with electric vehicle cars and all that, there are concerns about the way that lithium battery is disposed of, etc., and I think those are all questions that New Zealanders have on their minds. When we look towards anything to do with the Waste Minimisation Act and the way that we might present ourselves as a progressive country, I think those are some serious things that we all have to consider as a House of Parliament and as representatives of the people.

I mentioned in my contribution in the second reading and in the committee of the whole House, the Legislation Design and Advisory Committee of 2021 and the recommendations that they make around ensuring that good legislation and good process is undertaken to make sure that we have good and strong and robust legislation. I made the points earlier about some of the questions that, from their perspective, needed to be answered in order to ensure that we aren’t simply using this House to impose taxes, which is why there is a separate pathway for very clear taxations. Then there is another pathway which talks about levies. It does make a distinction between the two, which I think is important, but also it speaks to the kinds of questions that the House needs to ask itself if it’s going to do either one of those two. Some of those questions, I think, are quite reasonable and quite simple.

The terms of empowering provisions is the first one, and whether or not the appropriate circumstances for secondary legislation are in place. I’m sure some of my colleagues in their contributions to the House this evening can talk towards how secondary legislation is important and can’t simply be seen as a process whereby we can have efficiencies. We heard from members on the other side of the House on how this is making things more efficient. While we are all for efficiencies, when it comes to matters like this, the Legislation Design and Advisory Committee made it clear that secondary legislation had to make sure that there were appropriate circumstances in place in order for those to happen. Otherwise, what we see is an erosion of democracy. What we see is the power being put into the hands of a few, and that’s not what we want in this country. I’m sure the public can make an argument that, actually, they’re not being heard in this case because we acknowledged during the process of this bill that this bill affects quite a large number of people in our community.

Some of the other questions that they asked and need to be answered to make sure that our legislation is good and robust, are things like the costs. What we’re saying here is the cost of providing the service and whether or not it’s relative to the income that’s being taken in. While there were some assurances from the Minister, I come back to my point about fiscal neutrality and making sure that it’s clear to the New Zealand public that what’s actually being taken in is reasonable and covers the costs of the service to take that money in or to levy that particular service. That’s important because otherwise what is often the case is the perception in the public and in the community is, once again, that this Government is using underhanded tactics to continue to tax or levy communities.

Those are questions coming from the community, and while members on the other side might not like those questions, they are real questions. The other one is: who do the changes apply to? Who do the changes apply to? I think there is some really good questions put forward by my colleagues on this side of the House about not just small to medium enterprises and the changing nature of the way that New Zealanders purchase their goods online, etc., and the origin of purchase or the origin of certainly the company selling as opposed to the distribution point. I’m not an expert on the matters, but I do shop online, and I know others in this House do. We’ve got to ask questions about where that comes from. Do these matters apply to those who are selling? Are those companies offshore or are they companies here in New Zealand? The Minister made a point about the threshold being at $1,000. Well, that’s quite clear to me, but still, these are the questions that need to be answered to make sure that we have robust law.

Why is that important? Because, ultimately, it comes down to a constitutional matter. Constitutional matters that say this is the House of the people, this is the House that represents the views of the people, and the more and more I’ve seen over my 11 years here in Parliament is that often there are attempts to make sure that the power rests in the hands of the few. That can’t continue. If we want to make sure that this House continues to represent our country today and into the future, we’ve got to make sure that democratic processes are strong, robust, and sound.

On that matter—in the last five seconds—we won’t be supporting this bill. We’ve tried to make it better. Sadly, we couldn’t.

DANA KIRKPATRICK (National—East Coast): Look, I’m pleased to stand and take a call on the Customs (Levies and Other Matters) Amendment Bill in this, the third reading. I do find it extraordinary that many of the questions raised were not asked in the select committee process by the other side. I think that is the place where they should have been asked, and if they weren’t, then that is something that could be addressed by them in the future.

This is a levy regime. It’s more appropriate and best practice when costs are to be spread fairly. It’s a good bill and it helps us to make collection fairer and more effective. We need to be faster as a country. We need to be more effective and more efficient, and this will do that. As a result, I commend it to the House.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe e te Mana Whakawā. Look, this is an exemplar for lazy lawmaking. It’s just sloppy.

Laura McClure: Lazy homework!

Hon Dr DUNCAN WEBB: Yeah, because I’ve had a good look at this piece of legislation, and a good starting point is the regulatory impact statement. A good regulatory impact statement steps through the policy problem, puts forward a range of options, and measures them against each other on a number of fronts. It’s not easy, but it’s good policy work. I’ll be honest: I feel for the officials who might look at this, but this is one of the worst regulatory impact statements I’ve ever seen. I mean, the options it has presented are to do nothing—the status quo—or to do what the Minister says. There is no challenging, there’s no testing, and there’s no going forward and saying “What other ways are there to address the problem?”, because the problem here is that the current fees regime isn’t working quite right.

When you import goods and, for example, they have to be inspected and there’s a cost to that inspection, that is a classic example of where a fee should be charged, because we know what the job is and we know what it costs. But that’s all a bit too hard—they don’t want to explore how to improve that framework; they want a levy system.

Now, a levy system is used where it is impossible to differentiate who bears the benefit of any particular piece of work. A good example is marketing by produce boards like Zespri and the levy for kiwifruit owners: you can’t charge a fee for the marketing for any given orchardist; or there is border protection against Mycoplasma bovis: you can’t say “This work benefited that farmer.” That’s where a levy is suitable. That is what a levy is for—to spread the costs across a population of people who benefit from a particular Government activity—but this isn’t it.

That’s why this is lazy lawmaking. There has been no genuine exploration of what the best fix for this fees regime is, and we do have real concerns that what this really is is a money-grab, because we know that that Government over there has put up Government fees across the board. A good chunk of the inflation in our economy is being driven by increasing costs in Government sectors. Whether it be car registrations, fuel taxes, court fees, or whatever it might be, that’s administered inflation, and they’re administering it. Here we have another opportunity where the Government is grabbing unto itself the ability to impose more cost that, ultimately, New Zealand consumers will bear, without there being any accountability to this House.

Jenny Salesa had her amendment on the Table that said that if you’re going to do that, make it confirmable. Make it so that it has to come back to this House and say that we approve that legislation, and then we can examine it. At least the Minister would have to front up and answer the question as to how it was justifiable.

Now, I’m concerned that these levies will be put through without the appropriate consultation. There was no consultation on this bill before it came to the House, and that’s shocking. This directly affects importers, exporters, and consumers, and yet the regulatory impact statement is quite up front and says, “No, we didn’t do any consultation. We’ll do that when we impose the levy.” That is sloppy and it’s lazy, and, quite frankly, from a Government department, which is, in fact, our oldest—the Customs Service, I think, if I might have this right, is our oldest Government department—I expect more.

That’s not good lawmaking from Customs, and I’m really concerned that what we have here is a situation where the Government is like “Oh, I can’t really be bothered doing the work to charge fair and accurate fees. Let’s just have a blanket levy. It’s so much easier, and”—as my friend and colleague Peeni Henare said—“we can be a little looser about it. It doesn’t have to be cost-neutral. We can make a little bit on the side. We can have a bit of an uplift there, as well.” That’s not good lawmaking; in fact, it’s unconstitutional.

A levy, as the Legislation Design and Advisory Committee says, should only recover the cost it needs, and that’s not what this bill does. It’s bad lawmaking, it’s going to increase costs, it’s bad for importers, it’s bad for consumers, and—most importantly—it’s bad for New Zealanders. We will not support this bill.

Dr VANESSA WEENINK (National—Banks Peninsula): Thank you, Madam Speaker. It’s a pleasure to take a call on the Customs (Levies and Other Matters) Amendment Bill. It’s a useful piece of legislation, and I commend the bill to the House.

Hon Damien O’Connor: Madam—Madam Speaker?

ASSISTANT SPEAKER (Maureen Pugh): Are you sure?

Hon Damien O’Connor: Yes, Madam Speaker.

ASSISTANT SPEAKER (Maureen Pugh): The Hon Damien O’Connor.

Hon DAMIEN O’CONNOR (Labour): I wouldn’t miss it for quids. Thank you, Madam Speaker. No, look, it’s a privilege to get up and speak on this bill, a piece of legislation that has been through the Foreign Affairs, Defence and Trade Committee, but things have moved on a little bit—things have changed, and I guess we have every reason in the Opposition to just scrutinise the legislation one more time. There have been some excellent speeches from my colleagues who, rightfully, have pointed to a number of concerns. I have to acknowledge the Minister who stood up and answered most of the questions that we had.

I want to thank her for that, but she is still part of a coalition Government that has actually increased fees wherever they can and taken as much money from people as they can back into the consolidated fund to pay for tax cuts. It’s as simple as that: increasing vehicle registration fees back into the consolidated fund, increasing the international visitor levy from $35 to $100 into the consolidated fund. Indeed, we’ve moved away from it, and we, in Government, of course had a philosophy—and it’s been one that has been generally accepted across the parties—of user-pays. I think that’s a fair way to go. We don’t want taxpayers money subsidising particular areas. We’ll assist when necessary, but not subsidising areas of the economy.

When it comes to import and exports, then those people who are moving goods should pay, and this is what this bill is about. It’s designed to, I guess, update and modernise the legislation, but what it does do is shift from a process in Parliament of oversight to a process with the Minister, where there are obligations to consult but they are not that robust, and we say they are at risk of being abused by a Minister who just decides to cover costs and a bit more, as my colleague previously said. Indeed, this goes on all the time.

There is a memorandum account or a structure like that, we are told, and that will be reviewed and audited. So, you know, there are some checks and balances, but, as I say, in an environment of suspicion because of other pieces of legislation that have either been rushed through—indeed, we’re in urgency, so we have every reason to be a little bit suspicious—or designed, as I say, to shift costs often from industry on to taxpayers or ratepayers; in this case, people who are importing and exporting things. This is a core part of our economy, and we need to make sure that we’re not kind of lumping them with additional costs.

The reality of these changes—from submitters and from our observation—is this will likely shift more cost on to small and medium enterprises. At a time when the Government says it’s wanting to kind of boost the economy, they are at the heart of our economy. So it is possible, because of the new systems that Customs might impose upon them for payment, that it might indeed increase or it’s likely to increase their costs. That’s certainly what all of them said when they came to the select committee.

But, hopefully, it might make the collection process a little more simple, given that it’s through Customs. They have a track record of collecting fees through alcohol and through imports, and so they have the capability to do it. Do they have the resources? In fact, it was very rarely raised or spoken of in the Minister’s reply here to questions that we asked. We see across all areas of Government service that the squeeze is on. All those agencies have been asked to claw money back and put it back to pay for tax cuts, and that has come at considerable cost and, we say, risk. We’ll just see what that delivers over time.

The second part, Part 2 of the bill is the Waste Minimisation Act amendments, and where there is an ability to, I guess, take a product stewardship fee. In Government, we had proposed six of these fees. One of them has been implemented for tyres. We had an assurance from the Minister that the others will be progressing. We shall hold our breath and hope that they do come through because the one for tyres was indeed a charge on tyres that helps with the disposal and the processing of them.

There are many other areas, as was spoken of, of course—that might be plastics, it might be batteries that we’re seeing more of across the economy. It is important that the Waste Minimisation Act amendments that pass through this piece of legislation do work effectively. Again, concern from small to medium sized enterprises that this is going to be an administrative cost on them when the Government says they’re getting out of the way of business and letting them get on with it. Well, this is not the situation here, so let’s just talk about the reality.

The third part of the legislation is GST amendments for imported goods, and it’s a slightly complex, technical issue around goods that someone might purchase for over $1,000 from offshore, bring into the country, and then find that they are faulty, send them back out, and then the replacement goods incur another GST charge, and so this bill will allow that to be offset.

In summary—and I won’t go on and take the full time—it is important that pieces of legislation passed through this House in urgency are given the full scrutiny, are tested by the Opposition. Otherwise, we end up with—and, actually, even with full process—faulty legislation because the reality is that the world moves very, very quickly and moves on. We struggle to keep up with innovation through regulation, and so when you kind of do stuff like this in a rushed manner, the chances are that you might make some mistakes.

Labour sees the general value of this, but we do have some questions around, I guess, the potential and the temptation for the Government of the day—that is, the coalition Government—to screw more money out of importers and exporters through the Customs (Levies and Other Matters) Amendment Bill. We, in Opposition and when we’re in Government next year, will make sure that this is a very fair process for all of those people who are engaged in small to medium sized enterprises and in enterprises across our country. It’s a pleasure to speak and, as I say, to keep the Government honest in a very important area of our economy.

Dr HAMISH CAMPBELL (National—Ilam): I rise in support, in this third reading, of the Customs (Levies and Other Matters) Amendment Bill. Of course, a lot has been said about this bill in the previous readings. We’ve had some of the Green Party members say that they’re just filibustering, even though they support it. I don’t think there’s much more to say on this bill. I commend it to the House.

ARENA WILLIAMS (Labour—Manurewa): Thank you, Madam Speaker, for the opportunity to take the final call in this important debate. We are in urgency, and we find ourselves here considering a Government introducing a boundless taxation ability for a Government department. We are back to the 1980s where New Zealand will be governed by a capricious and voracious executive Government and someone in the deep bowels of the bureaucracy will decide what New Zealanders pay for their consumer goods and their alcohol and their cigarettes—somebody who is not accountable to them. It won’t be the member for Northland sitting there. He’s a local representative. He gets down to the pub, talks to his constituents, and works hard—it’s not him. He won’t be responsible for these new levies and their very tax-like powers. Laura McClure, who is accountable to her constituents and works hard as a list MP, won’t be accountable for these decisions. No. It’ll be someone somewhere at an office deciding what to levy next.

That is the proposal in this bill, a boundless power that will be used at the whim of Customs to introduce some sort of levy, and we don’t know what it will be. It might say that these might be cost recovery related. We might hear from the Minister that these are intended to be fiscally neutral. If that was the intention in the legislation, perhaps the legislation would say that. Perhaps it would be in the law that the intention of this would be to spread costs more fairly or to present them in a fiscally neutral way. That is not what the provisions say. The provisions allow an open-ended levy-making power on goods coming into New Zealand.

Let’s just think about that. Let’s think about a Government that is proud of its record on intervening in the supply side of things, like housing and the cost of living, making more things available, making the crisis of affordability something that families can get through because they’ve intervened on the supply side and made more things available. This does the exact opposite.

I hear the contributions of the ACT Party members in this House worried about the Labour Party members now raising this with them. Is it because, if they had had this pointed out to them, they would have realised that this is completely at odds with their ideology? We have an ACT Party here who has gleefully voted for a boundaryless taxation power where nobody knows what New Zealanders will be charged. Now, they raise with us, the Labour Party members, that we did not ask these questions in front of them adequately. That is what a committee stage is for. Page 493 of McGee is the place where members on that side were confused about the role of the committee of the whole House, especially in urgency. They might like to refer to it about how these questions are raised and how amendments by our spokesperson for Customs, the Hon Jenny Salesa, would be put to solve this problem in a way that is cross-partisan and in a way that you might expect for a piece of legislation like this, which is serious and will cost New Zealanders tens, hundreds and, in some cases, thousands of dollars a year.

We might be able to agree in a cross-partisan way, at the committee stage, that there should be an amendment to at least look back at the function of these levies—as democratically elected representatives, as hard-working members of Parliament who go down to the pub and talk to people about how these things are affecting them. But, no, the Government voted that down. The Government has actively voted against any accountability for these levy-making powers, which are extremely tax-like in nature.

I ask the ACT Party members: what if this was on the other foot? What if the left had come to the House today and introduced a bill to introduce a random tax that could be levered by a Government department? There would be outrage on the other side. We would have decrying that we were going back to a system of executive Government that we have well passed.

Just in this House tonight, we had the Rt Hon Sir Geoffrey Palmer up on the podium talking about the need for more cross-partisanship around this style of executive Government. He has been a great advocate for regulation being a real worry for New Zealanders that we need to deal with and that there is goodwill to continue to deal with in this term, because of this interest from people around the world in supply side economics and the need to get rid of unnecessary barriers and tricky fees like this, which are built into our economy and which are costing people more. Families in New Zealand know it. Under this Government, administrative inflation has hit a 30-year high at 10.8 percent. This will do it more. This will make it worse. This will make it harder for working families.

A party vote was called for on the question, That the Customs (Levies and Other Matters) Amendment Bill be now read a third time.

Ayes 88

New Zealand National 49; Green Party of Aotearoa New Zealand 15; ACT New Zealand 11; New Zealand First 8; Te Pāti Māori 5.

Noes 34

New Zealand Labour 34.

Motion agreed to.

Bill read a third time.

ASSISTANT SPEAKER (Greg O’Connor): I declare the House in committee for consideration of the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill.

Bills

Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill

In Committee

Part 1 Restrictions on registration as participant (forestry conversions)

CHAIRPERSON (Maureen Pugh): Members, the House is in committee on the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill. Members, we start with Part 1. This is the debate on clauses 4 to 16A, “Restrictions on registration as participant (forestry conversions)”. The question is that Part 1 stand part.

Hon NICOLA GRIGG (Acting Minister of Agriculture): The Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill amends the Climate Change Response Act 2002 to limit whole-farm conversions to exotic forestry registering in the New Zealand emissions trading scheme—otherwise known as the ETS. The bill follows through on a key election commitment and delivers on the action in the Government’s second emissions reduction plan. It takes a balanced, practical step towards protecting our most productive farmland, and will support our climate goals.

The primary sector is vital to the success of our economy. Our farmers feed New Zealand and the world. Forestry helps drive our economy, providing regional employment, sustainable wood products, and helping us meet our climate targets. However, the current seatings in the ETS mean that it can be more profitable to convert farms to exotic forests than using the land to produce food.

We’ve heard those concerns from the rural sector about whole farms being converted into exotic forests under the ETS. This Government’s position is that there is a place in New Zealand for both forestry and for agriculture to be growing our economy from the rural heartland, but doing so in a balanced way. This bill will protect our most productive land for food production while still allowing sustainable growth of the forestry sector.

The bill introduces four key changes to forestry in the ETS. The first is restrictions on exotic forestry ETS registrations on actively farmed Land Use Capability (LUC) classes 1 through to 6, which is our most productive land. Secondly, a 25 percent allowance providing farmers flexibility to plant up to a quarter of their land-use class 1 to 6 land in exotic forestry and register it in the ETS if they choose to do so. Thirdly, establish ballots to allocate up to an additional 15,000 hectares of exotic forestry on class 6 land to be registered in the ETS each year, providing for sustainable growth of the forestry sector while minimising full-farm conversions. Finally, temporary transitional exemptions for those who invested in good faith before December 2024.

Grounding these changes in the Land Use Capability classification system, which is a well-established tool that reflects the productivity of land, allows these restrictions to protect our most productive land. Importantly, the bill doesn’t limit ETS registrations on less productive land, on certain types of Māori land, on unfarmed land, or on native forests.

Following select committee, the House agreed to amend the bill to lift the bar to qualify for a transitional exemption. We agree that to be eligible for a transitional exemption, you must demonstrate both a clear interest in the specific land as well as evidence of a qualifying investment prior to 4 December 2024.

This House has also agreed to make minor amendments to the definition of “unfarmed land”, the way mapping standards will be issued, the exemption for offsetting land, and enable unused hectares in the portion of the ballot reserved for small-scale applications to be reallocated. These changes make this legislation stronger, fairer, and more future-focused while supporting the direction that this House has unanimously agreed to during the first reading.

Today, I have tabled Amendment Paper 363 proposing further changes to improve the ballot system in the bill. The ballot process is intended to support economic growth in the forestry sector by enabling additional afforestation in the ETS on Land Use Capability class 6 up to an annual limit. However, the forestry sector has raised concerns that the ballot system, as currently designed, may reduce investment in afforestation on LUC class 6 land because of increased uncertainty.

The Amendment Paper proposes to improve access to permits by running two ballots each calendar year rather than one. It will support the annual hectare limit to be fully allocated each year by allowing unallocated hectares to be reallocated between ballots and rolled over between years, and that’s capped at a proportion of the annual hectare limit prescribed by regulations. It will simplify the ballot’s design so that there is only one live permit for any title, and enable permit holders to cancel their permits if their intentions change. Finally, it will enable earlier refinement of the annual hectare limit by bringing forward the first review to 2028 rather than 2029.

Together, these changes simplify the ballot allocation system and enable greater opportunity for landowners and forestry investors to plan afforestation with confidence. This bill is a necessary and timely response to changing land use in New Zealand, driven by the ETS, one that reflects our climate ambitions, our commitment to rural communities, and our vision for a balanced, resilient future for New Zealand.

Hon Dr DEBORAH RUSSELL (Labour): I do want to start working clause by clause through this bill in just a moment. There is something to be asked about many of the clauses in it. However, I first of all want to ask the Acting Minister of Agriculture about this Amendment Paper that was dropped just today, and dropped with no notice to the Opposition. It just arrived on the Table. No one bothered to contact us to say that there was an Amendment Paper coming. There was no attempt to consult with us over the nature of the changes. It’s just arrived now at this very late stage of debate.

We find out from the Minister in the chair that, in actual fact, the Amendment Paper has arrived, following consultation with the forestry sector. That’s fine, but if there was time to consult with the forestry sector, there was time to pick up the phone and inform the Opposition that, in fact, an Amendment Paper was coming on this bill. I am, quite frankly, appalled by the process there, and I’d like the Minister to explain why no one bothered to tell us that this Amendment Paper was coming, because it does contain some quite important changes to this bill.

They’re changes that haven’t been examined through select committee, but they’re now going to have to be examined under urgency at the last minute in a debate where who knows where it will go. I think that’s a disgraceful process and I think that we at the very least deserve the courtesy of an answer as to why we weren’t at least given some notification of the substantial nature of this Amendment Paper. Minor amendments, sure, that happens; this is a little bit more substantial than that. I think the Minister owes us the courtesy of that explanation. I note that the Minister in the chair is not the Minister whose name is on this Amendment Paper; however, I appreciate that the Minister in the chair is acting as that Minister for the time being, so I really do want that answer and I will keep on asking for it until I get it.

Moving on to the bill itself, I do want to start working, as I said, clause by clause. I want to draw the Minister’s attention first to—now, it’s going to take a while now because we’ve got to flip back and forth between the two sets of stuff—clause 4. Now, clause 4—and I’ve just got to now check that that hasn’t somehow changed between the Amendment Paper and the bill as it came back from select committee. No, we’re all good on that. It amends section 3A of the original Act. It’s around the regulations for changing the annual hectare limit.

Now, the original Act requires the Minister to consult with iwi before making secondary legislation. There’s a set of regulations that have to be consulted on. Under the Treaty of Waitangi clause in this legislation—the one where we try to ensure that we govern appropriately in partnership with iwi, with Māori, as promised by the Treaty—it has said that if we’re going to change the annual hectare limit that then there has to be consultation with iwi. I want to know from the Minister whether New Zealand First and ACT were consulted on this clause in the process of drafting this bill and whether they are happy with it, given their known stances against the Treaty of Waitangi. That would be the first substantive question to the Minister: were New Zealand First and ACT aware of this new Treaty provision—well, not the whole provision but the need to consult when new regulations for changing hectare limits come into place?

STEVE ABEL (Green): Thank you, Madam Chair. Yes, it’s quite exciting to get all these new Amendment Papers with no notice. It’s a pity, because this is a bill that we had some substantive conversations on at the committee, and certainly the Green Party deliberated at length in determining whether we would support or oppose the bill because it addresses a very serious problem, a very real problem of conversion of arable land to forestry, and it attempts to make a step in the correct direction on that. There were some serious challenges with how to try and create a piece of legislation that meaningfully addressed that problem. It would have been great to understand the logic behind the amendments and to have been included in that process—but, sadly, that is not the case.

I am, like my colleague Deborah Russell, going to be scrambling through this Amendment Paper to understand what the actual changes are. In the meantime, I’d like to draw the Minister’s attention to Part 1, clause 6. In section 4 (1)—this is the section which basically designates that there will be a 25 percent allowance in relation to an individual farm for areas where forest plantations will be restricted up to 25 percent of all the areas of land use classification, classes 1 to 6, within the farm boundary.

I have, for simplicity’s sake, an amendment to that clause which would extend that 25 percent restriction into land-use classification class 7 and 8 also, and let me express why I think that’s an important thing to do. Land-use class 8, for a start; if you read the definition of “land-use classification 8”, it is “Very severe to extreme limitations to all productive land uses, arable, pastoral or commercial forestry. Suitable for erosion control, water management and conservation.” My question for the Minister would be: why would it be a good idea to have any percentage of carbon forestry permitted on Land Use Capability (LUC) 8? And just to repeat, the classification is “Very severe to extreme limitations to all productive land uses, arable, pastoral or commercial forestry.” This is exactly the LUC which is likely to be unharvestable, and understanding the practical reality of having plantation forestry on these higher classes of land 7 and 8, particularly in far-flung places, these are the forests that will become abandoned, that will not be commercial to harvest, that will become the future fuel for forest fires when we get worse drought conditions.

I’ve got more on this, but I’ll start by asking: why should there be any allocation in LUC 8? Similarly, why was the restriction on allocations to 25 percent, which has its problems in and of itself, stopped at LUC 6? Why not also restrict LUC 7 and LUC 8? Also, in a later question, I’ll invite the Minister to express their response to the very clear concerns of the sheep and beef industry, that the engine room of that farming sector is LUC 6 and LUC 7. So my proposed amendment is that if you’re going to choose this figure of 25 percent, apply it to all our LUC classes.

Hon NICOLA GRIGG (Acting Minister of Agriculture): Thank you, Madam Chair. I’ll just respond to the Green Party member’s questions. I think, as I made clear at the outset, this bill is about striking a balance between two very important sectors to the national economy, one being the forestry sector, the other being agriculture. We think this is striking a balance between protecting and preserving our most productive food-growing land, as well as allowing for our forestry industry to be successful, as well.

To answer the member’s question, the bill very clearly does not distinguish between production and carbon forestry. It does not restrict emissions trading scheme registration on Land Use Capability classes 7 and 8, because of the very principle that it is aiming to protect our most productive land for that food production that I’ve explained, but also allowing for sustainable growth in the forestry sector. It is not an anti-forestry bill. It is not an anti-farming bill. It is actually pro both industries.

To respond, also, to the Labour Party member’s questions—and I can sense her outrage about the consultation—but, you know, this bill has been widely canvassed. It has been through the proper parliamentary process. It has had a thorough hearing at the select committee process. In fact, the amendments made in the Amendment Paper that we’ve put forward today—there’s been plenty of hours since it was put forward—are as a direct result of industry feedback that the select committee heard. I can confirm that all parties have been consulted on the changes in the bill during that parliamentary process, and I would have thought that those parties who are making grand statements of outrage at the moment would have had something to say about that during the select committee process.

Hon PRIYANCA RADHAKRISHNAN (Labour): Thanks, Madam Chair. I’m not sure how the Minister in the chair, the Hon Nicola Grigg, thinks that hours of notice for an Amendment Paper that is reasonably significant and that we got no heads-up about is proper process in Parliament, because it’s not. While she says that this has gone through the select committee—yes, it went through the Environment Committee; many of us are on that select committee—the Amendment Paper obviously hasn’t. That was the point that my colleague the Hon Dr Deborah Russell was making in her contribution.

I want to also point to a couple of points that the Labour Party members have raised a few times through the select committee process and subsequently in this House during the second reading, as well. One of those is the fact that it has been pointed out during submissions to select committee and also by the Parliamentary Commissioner for the Environment that really what we should be doing here is looking at a full review of the role that forestry plays within these years. That has not been done and this has been raised by a number of people.

I do want to ask the Minister in the chair why, given that there’s a fair bit of sentiment expressed by many that this piece of legislation could have gone further and that would have been that review of the role of forestry—the Climate Change Commission, for example, has suggested that if we allow these farm conversions to forestry, there is potential further down the track that New Zealand’s 2050 emissions target under the Paris Agreement will be put at risk. Of course, there is that report by the Parliamentary Commissioner as well. I do want to ask the Minister why that wasn’t done, why the Government made the choice not to go the whole hog and to review the role of forestry within the emissions trading scheme (ETS) but instead to come up with this option.

I also want to point to some of the concerns that have been raised. Many of us met with Federated Farmers just today, as well. I know that they’ve put out a press release. They have expressed some concern and, I guess, a little bit of anxiety around the fact that this doesn’t go as far as it should. They have said that as it stands, the bill allows a lottery system for Land Use Capability class 6 land with up to 15,000 hectares. I understand that with the Minister’s Amendment Paper, the amount of land—the quantum, the 15,000 hectares that is mentioned—doesn’t change. I would like some clarification or confirmation from the Minister on that. I understand that instead of an annual ballot, the change is for two ballots per year, but that the 15,000 in total remains the same. That is still the amount that is eligible for full conversion. They have said that, meanwhile, classes 7 and 8 remain unrestricted. They have expressed the view that it is then open slather for conversion there, and they have said that 88 percent of previous conversions were on classes 6 and above. For those carbon farming, that means it’s likely to be business as usual.

I would like a little bit of explanation from the Minister with regard to the specific land-use classes that are being restricted here. I know that Beef and Lamb New Zealand has also mentioned that up to 26,000 hectares of whole farm on land classes 6 and 7 could be converted each year. They feel that it’s too high and are keen to get a sense of where the 15,000 came from as well.

Beef + Lamb New Zealand has also said that class 6 is often the most productive land when it comes to sheep and beef farming. So there are questions around why the restrictions there are the way that they are in the bill. They’ve also mentioned that class 7 land is also economically viable.

Also, I do want to just quickly point to some of the flow-on effects that my colleagues have mentioned at various points in this House, but also in our differing view to the select committee, some of those flow-on effects for schools and for communities where these changes are being proposed, as well. Thank you.

Hon Dr DEBORAH RUSSELL (Labour): I would just point out that two of my questions are still outstanding. One is on whether or not New Zealand First and ACT were aware of adding the regulations around changing the annual hectare limit to the requirement for consultation with iwi. For the first one, on why we weren’t informed about the introduction of this Amendment Paper, the Minister in the chair, the Hon Nicola Grigg, tried to say that it was because there was a select committee process. The absolute truth was this Amendment Paper arrived yesterday—well after the select committee process—and there are these three provisions in it, which are actually quite a bit different from the bill as it came out of the Environment Committee.

I would like to have some understanding as to why there was no consultation with us on the Opposition. It would have been simple to do, to just do a quick sense check with the Opposition to ensure that we were on board or could understand what these changes are and perhaps come up with any changes that might be necessary or give the Minister of Forestry some assurance that we didn’t see a problem with them. That’s part of what happened through the select committee process. I would like to still have answers on those, please.

I want to go to clause 5 of the bill, and that is consultation about certain regulations, orders, and so on. In particular, it’s in the same space as the previous one where I was asking about why iwi weren’t consulted. The original Act, when it comes to the matters that the Minister must consult—not with iwi, but, actually, more broadly with people in the industry, with the community, with stakeholders.

Section 3B of the original Act has a list of matters that the Minister must consult on, and to that is added—so that’s with respect to forestry generally or climate change generally—the regulations for changing hectare limits as something that the Minister must consult on.

But as well, in this bill, there is a process of setting up new mapping standards. Now, that’s done through Land Information New Zealand (LINZ)—I think, is where it’s going to be done through—but there are some new mapping standards to be developed for application to farms or to pieces of property where people are considering conversion to forestry. Why are those new mapping standards not being included in the consultation as well? It does seem to be something that ought reasonably to be consulted on. I appreciate it’s quite a technical matter, but that is also something that could possibly have been consulted on. Why was that possible consultation not included in the list of things that the Minister must consult on? Maybe it’s somewhere else—maybe it’s sitting somewhere else where LINZ routinely carries out consultation anyway. It would just be interesting to know exactly what that is. That would be a bit of help. Maybe it might even be the New Zealand Institute for Bioeconomy Science that does that. Who knows? But it would just be good to know why that isn’t included in the list of consultation.

In the few moments I’ve just got left on this particular call, I do want to move on to the definition section of this bill. The bill, in clause 6, amends section 4 of the original Act, and to that it adds a considerable number of definitions.

My colleague Steve Abel has talked about the 25 percent allowance. My question around the 25 percent allowance is just how that figure of 25 percent was arrived at. Why not a third? Why not 10 percent? What was the work done behind it to show that that would be an appropriate amount? Was that sort of the amount that typically goes into forestry if a farmer is converting only part of their land? So exactly where that 25 percent came from?

This next definition I’d like to ask about is the definition of “actively farmed”. It’s actively farmed: it says in the bill that the definition of it is that “all or part of the land described in a record of title is in use for farming purposes”. So “all or part”—how much “part”? Is 10 percent enough? Is 5 percent enough? What is enough for a part there? Is it 50 percent? It is left rather ill-defined. What does it mean to be actively farmed? Does that mean farmed as a business activity; or is it, maybe, farmed as a hobby activity? These are both possible. Now, I’m not much for hobby farming. I feel as though people who engage in hobby farming should perhaps, you know—

Hon Priyanca Radhakrishnan: Get another hobby.

Hon Dr DEBORAH RUSSELL: Get another hobby. Even so, does it include that?

Hon SIMON WATTS (Minister of Climate Change): Thank you very much, Madam Chair. Just in response to the questions asked by members. First and foremost, the question asked was: why didn’t the Government do a full review of forestry of the emissions trading scheme (ETS)? Well, if we go back to the cold, old, dark days of 658 days ago when we came into Government, we inherited a scenario where the ETS market was in a state of massive volatility. Why? Because the prior Government had initiated a review of forestry in the ETS and it completely shocked the market. The first thing we did was stop that review. To say, “Well, why don’t you start that again?”, well, the reason is we want a credible ETS market, so we’re not into that.

Questions in regards to the Land Use Capability (LUC) classes 6, 7, and 8 and the concerns noted, particularly around land-use class 7 and 8—in terms of proportion of forestry going into those areas, approximately one-third of forestry goes into land-use class 7 and 8; around about 60 percent, circa, goes into land-use class 6—6 is the bread and butter area, obviously, and hence which is included within the broader cap that we have placed. Classes 7 and 8 are what you would refer to as traditional forestry areas and it is not subject to the cap. That’s the rationale in regards to that.

There are questions in regards to consultation and feedback on the Amendment Paper 363. I think, in fairness to the members, in the context of the changes that have been tabled by amendment, they are primarily remedial in nature, they are improvements to the bill, they are improvements in response to feedback that was received from the Environment Committee, and they enhance the bill. There’s nothing in there that actually makes the bill weaker or worse, in that context, from what was tabled. It strengthens and they are improvements and, in that context, the amendments are in good faith.

In the context of the questions around mapping standards for the ETS, obviously, the mapping standards are actually issued by the Environmental Protection Authority, and those definitions and requirements are concluded under that entity.

Hon Dr DEBORAH RUSSELL (Labour): I just want to go to, again, another issue in the definitions, and I’m looking at some of the definitions around land-use class. Now, if I can direct the Minister—Minister, may I just ask which version of the bill you’re working off? Is it Amendment Paper 363, or off the paper as submitted by the—it’s just that we’ve had this issue once before, Minister, and so I want to make sure we’re on the right—

Hon Simon Watts: The Amendment Paper.

Hon Dr DEBORAH RUSSELL: The Amendment Paper—thank you. I’ll make sure I work to the same thing then, as that kind of helps, doesn’t it? I’m looking at the definitions of Land Use Capability (LUC) class 1 to 6 land, and then land-use class 6 land—this is on page 7 of the Amendment Paper. We’ve got “LUC class 1-6 land”, which means “land identified as land use capability class 1, 2, 3, 4, 5, or 6”, and then we’ve got a separate definition of “LUC class 6 land”, which means “land identified as land use capability class 6”. So there’s kind of two separate definitions for the same thing.

The land underlying it is Land Use Capability 6, but we’ve got two definitions for the same thing. I wonder if the Minister could just talk about why we need two definitions for the same thing. I guess that my concern would be that something is going to get confused later on and someone will get confused somewhere along the way by that and there’ll be court cases for wahoo, and so the lawyers will have a good time with that.

Minister, while I’m talking definitions, I also wanted to say that I was taken by the definition of “mapped land”, which means land that is included on a map, but, in particular, it’s “on the NZLRI map”, and so it’s a particular map. But I don’t know, Minister. I just cast my mind back to the days when President Trump was drawing the trajectory of a hurricane to make sure it went in the direction that he wanted, and I sort of had that image running through my mind. I just wanted to know if you could draw on the map for yourself—and does that change around what’s going on there?

This mapped land is “land that is included on the NZLRI map”. I appreciate that it’s a common phrase—“mapped land”—but, obviously, it’s serving a particular purpose in this bill, and so if the Minister could just speak to the particular purpose in this bill. Oh, and just for the benefit of those who are watching at home, all three of you—and I’m sorry about my croaky voice; it sounds worse than it is—the NZLRI map is just the New Zealand Land Resource Inventory map, which is published by the New Zealand Bioeconomy Science Institute Ltd.

Just on that point, Minister, of course, the New Zealand Bioeconomy Science Institute Ltd is one of the new science institutes. It’s one of the four new public research organisations created from the merger of some of the previous Crown research institutes. To be honest, I just can’t recall the legislation for that coming through the House, or whether it had to come through the House in the first place, and so I just wanted to check that that entity actually legally exists.

Hon SIMON WATTS (Minister of Climate Change): Thank you very much, Mr Chair. In regards to questions on clause 6, definitions around where did the 25 percent number come from, I acknowledge that the member may not have read the National Party manifesto for the last election, in regards to this specific policy, but it was very clearly outlined that 25 percent was the number, and that was based on a range of feedback that was received in regards to what would be the appropriate number for this point. That’s where that number comes from.

Questions raised in regards to definitions on page 7 of the tabled amendment, as to why there looks to be two definitions of Land Use Capability class 6—in simple terms, that is to avoid confusion. One of them is in the context of the generic definition; the other is specifically for the context around the 25 percent. Through Parliamentary Counsel Office drafting, it is to ensure that there is not confusion around those two points. The point is, though, when you do look, they are very similar.

CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti): Tēnā koe e te Māngai o te Whare, otirā tēnā rawa atu tātou katoa i tēnei, Te Wiki o te Reo Māori.

Nā te mea ko tēnei Te Wiki o te Reo Māori, ka whakahua i aku kōrero me aku pātai i roto i te reo Māori i tēnei pō. Reo Māori: tuatahi ka mihi atu au ki te Minita tuatahi i noho i roto i te tūru me āna kōrero ki a mātou i tēnei pō. I kī mai ia kāre rātou o tērā taha e pīrangi ki te takatakahi i tēnei mahi, te mahi ngahere, ā, kei te pērā tonu te whakaaro o tēnei taha o te Whare. Kei te pīrangi mātou kia whai oranga ngā kaipāmu me ngā kaimahi ngahere katoa, otirā Aotearoa whānui. Heoi anō rā, e te—kei te pai?

[Thank you, Mr Speaker, indeed true greetings to all of us this week, Māori Language Week.

Because this is Māori Language Week, I will express my statements and questions in the Māori language tonight. Māori language: first I would like to thank the first Minister to sit in the chair and his comments to us tonight. He said that they on that side do not want to denigrate this endeavour, forestry, and we have a similar opinion on this side of the House. We want all farmers and forestry workers, indeed wider New Zealand, to achieve wellbeing. However, to the—is everything OK?]

CHAIRPERSON (Greg O’Connor): Could you just hold on for one second while we catch up with the technology, please.

CUSHLA TANGAERE-MANUEL: Ka pai. Ka tīmata anō. I kī mai te Minita tuatahi i noho i roto i te tūru, ehara tēnei i te kaupapa i te pire takatakahi i ngā mahi ngahere. Kei te pērā tonu ngā whakaaro o tēnei taha o te Whare. Kei te pīrangi mātou kia whai oranga ngā kaipāmu, ngā kaimahi ngahere hoki.

Heoi anō rā hei tāpiri atu ki te pātai a tētahi o aku hoa i tēnei taha ki ngā karaehe whenua, tēnā koe e te Minita, mō tō whakahoki i tana pātai e pā ana ki te karaehe tuawhitu me te karaehe tuawaru. Heoi anō rā ko taku pātai hei tāpiri atu ki tāna, me pēhea rā koutou e aukati i taua āhuatanga? Nā te mea kei te tino māharahara ētahi ka huri katoa ngā whenua karaehe tuawhitu, tuawaru hoki ki te ngahere.

Nā reira me pēhea rā koutou e aukati i taua āhuatanga?

Ko tētahi atu pātai, kua kōrero koe mō te kōrero tahi mō ngā iwi Māori e mahi ana i te mahi ngahere. Heoi anō rā ki te tiro mātou ki ngā whakamārama o te whenua, arā Māori freehold, Māori customary, me te general land nō te tangata Māori, ka ōrite tō kōrero tahi ki a ratou katoa, ka aha rānei?

Ki tua atu, ka kōrero anake koe ki ngā iwi? Ka kōrero rānei koe ki ngā hapū, ki ngā whānau, ki te tangata tonu hoki?

Koirā hoki aku pātai mō tēnei wā.

[I’ll start again. The first Minister to take the chair said that this programme is not a bill to denigrate the forestry industry. The opinions on this side of the House are the same. We want farmers and forestry workers to achieve wellbeing.

However to add to the question of one of my colleagues on this side regarding whenua classifications, thank you, Minister, for your response to his question regarding class 7 and class 8. However, my question, supplementary to his, is how are you going to prevent such an eventuation? Because some people are very worried that class 7 lands, and class 8 also, will be converted into forest, and so how will you prevent that from eventuating?

A further question: you have spoken about consultation for iwi Māori that are involved in the forestry industry. However, if we look at the descriptions of the land—Māori freehold, Māori customary, and general land owned by Māori individuals—will your consultation be the same with all of them, or what will it be?

Furthermore, will you consult with iwi only? Or will you speak with hapū, with families, and with individuals?]

Hon SIMON WATTS (Minister of Climate Change): Yeah, thank you very much to the member for the questions. Two aspects in particular were raised there around, in effect—well, I guess the question was being asked around the concerns around planting on land-use classification 7 and 8 and, in effect, what the mechanisms are around restricting that. As I noted before, the significant proportion of forestry that is going on to land that is captured by this legislation is particularly in land-use class 6, in the context of around 60 percent, and it is the assessment that in the context of when we’re looking at productive farmland in particular, that is the area and below that are the areas that are most heavily affected. The context around 7 and 8 is not an area that has been at issue.

I think it’s important to recognise that the legislation on the Table today is providing for the first time a cap on the amount of forestry going on to productive farmland in this country. At the moment, as it stands before this, there is no restriction. That has been highlighted as an area that we are looking to. As the context is set in terms of the classifications and the cap, obviously that will be reviewed as this programme rolls out over the years to come. But at this point, we’re comfortable with where the settings have been made.

STEVE ABEL (Green): Thank you very much, Mr Chair. I’m wanting to ask questions to the Minister regarding erosion-prone land. It’s now page 5—I think it was page 5 before—clause 6. I have an amendment in this regard. Minister, given the acknowledgment of the challenges in planting in Land Use Capability (LUC) 6 and LUC 7 and LUC 8 particularly, erosion susceptibility is a major challenge, and one of the things that was very well canvassed in the submission process was the fact that the LUC class system is not designed for the purpose it’s being used for, for this legislation, but the argument was that it’s the best we’ve got.

Now, the Parliamentary Commissioner for the Environment pointed out the very useful work that Manaaki Whenua has been doing on more granular Light Detection and Ranging (LiDAR) - based mapping of erosion-prone land in the Hawke’s Bay. You can jump on the website and see the erosion mapping. It is far more granular than the LUC system. The Hawke’s Bay and Gisborne have already done this mapping—the regional council has paid for it. It is publicly available data. My amendment simply suggests that in those areas and regions where this more granular and accurate mapping of erosion-prone land has been done, that should be the default basis of the erosion classification. Now, that is not a difficult thing to do.

Grant McCallum: Have you done the sums?

STEVE ABEL: There are no sums to be done in that instance, sir, because the mapping has been done and it has been paid for by the—

Dana Kirkpatrick: Who’s going to pay for the implementation?

STEVE ABEL: OK. You’ve already got restriction on erosion-prone land. Perhaps the Minister could elucidate to his member what the requirements are around erosion-prone land. [Interruption]

CHAIRPERSON (Greg O’Connor): The members might like to take a call if they’re—

STEVE ABEL: Take a call. I think that’s a great idea, Mr Chair. All I’m saying is that if erosion-prone land is an issue, here we have an opportunity to inform land users with a more granular and effective way of understanding that erosion-prone land.

I note that the current wording says “land that is spatially identified as a high or severe erosion risk layer in a regional plan or district plan.” It may be as simple as requiring or requesting that the likes of the Hawke’s Bay include their erosion mapping in their regional plan. But if it is not already done, then my proposal is an amendment that does exactly that.

To finish that question—and I’ll leave it there and, hopefully, the Minister will respond straight away—let’s understand that the Hawke’s Bay and Gisborne are two areas where the question of erosion, the impact of that in terms of forestry, has been absolutely devastating. Getting this right is very important. That erosion-prone land is not land that it is appropriate to have plantation, commercial forestry on that will be harvested and cause more erosion. I appreciate your response. Thank you, Minister.

Hon SIMON WATTS (Minister of Climate Change): I thank the member for the question. In regards to the way in which erosion-prone land is assessed, currently that is the task of the relevant local government entity to undertake that classification. In many cases, such as the one in which the member has noted, there is no restriction on the mechanisms which they use in order to determine what erosion-prone land is. I would expect, potentially, that they may consider using such technology if that’s of better quality than other sources available.

At the point at which the local governments deem that the land is erosion prone, at that point—under the legislation on the Table—that would be exempted as part of this mechanism. In effect, the bill on the Table does not restrict the use of such tech availability; it is for the role of local government to determine and do so. But as and when it is zoned erosion-prone land, then it is exempt from the bill and that’s, in our view, the most appropriate way to deal with it.

Hon Dr DEBORAH RUSSELL (Labour): The Minister in the chair said that one of the reasons that we didn’t get any notification of these amendments that were coming through is that they were minor and remedial in nature. I just disagree, Minister. I mean, in the original bill as it went through select committee—as it was presented to the House and then went through the select committee process—there was going to be one ballot a year, and now we have two ballots a year. That’s a difference. It makes a difference as to the way it is allocated.

More importantly, in the original bill, as it went through the Environment Committee, if the annual hectare limit was not reached, if it was not all allocated, then those hectares just kind of disappeared, as it were, and now they are included in rollover relief. In effect, what this bill is now saying is that 15,000 hectares a year of farmland is going to be available, and if it’s not used up one year, if only 10,000 is used up, well, then there’ll be 20,000 available the following year, and so on and so on and so on.

I do want to focus on—sorry, there was one other thing that was changed in there: it was the timing of the annual reviews. In the bill as presented, the annual reviews were going to be, first of all, in 2029 and then every five years thereafter. In this bill, as now coming before us, a change—it’s an interesting one. The first review of a hectare limit is now going to be—sorry 2028, then 2034, then every five years thereafter. That’s a wee bit of a change. Now, bringing that first review forward to 2028 is interesting because it makes it happen in three years. Is that enough time? I do want to have a look at that when we get to it. I’ll be asking the Minister that question.

In the meantime, I want to focus on rollover. Sitting in the definition section—it’s clause 6 of the bill, which amends section 4 of the original Act; I’m looking at page 8 of the Amendment Paper—there is now a definition of rollover limit. The rollover limit is the prescribed proportion of the annual hectare limit for a calendar year. There’s the maximum that can be reallocated in the second ballot of that year to the next calendar year. What I want to hear from the Minister is: what is the prescribed proportion? Is that anywhere set in this bill or is that going to be set in regulations? If it’s going to be set in regulations, that’s fine. It’ll be subject to consultation and review, but it would be helpful to know from the Minister just around about what that prescribed proportion might be—are we talking 50 percent; are we talking 10 percent? There needs to be something in there that just says what that prescribed proportion is going to be.

STEVE ABEL (Green): Thank you, Mr Chair. Yes, I’m jumping to new section 167B—added by clause 11—page 11: “Regulations relating to LUC class 6 land permits”. This is the ballot requirement. Now, the ballot is probably the most complex and difficult part of this legislation. It’s suggesting that 15,000 hectares be designated annually through a ballot process in land-use class (LUC) 6 land. This is one of the things that has been widely criticised by certain in the pastoral sector, sheep and beef, among others, have pointed out that over the course of a decade, that’s 150,000 hectares of land, which is a significant amount of land to still be going into forestry.

The ballot requirements are complex. The means by which the ballot will be accessed is complex. My question for the Minister of Climate Change is: how did you strike upon the determination of 15,000? Why not 10,000? Why not 5,000? Why not 30,000?

Secondly, given how concerned the sheep and beef sector are, describing LUC 6 as the engine room of their production, and how opposed they are to this ballot system, I have an amendment which proposes to remove the ballot system entirely. That would vastly simplify this legislation and get away the uncertainty for land users—and for foresters, for that matter—that the ballot system represents.

My first question is: what is the logic behind the choice of hectarage that has been put into that ballot system? Oh, I have one other question in that regard: there is due to be a designation of small land holders, a guaranteed minimum percentage that will be balloted. That has not been designated. It’s strange because my memory, from the Environment Committee, was we did have a discussion about it being a minimum of a third of the 15,000—[Interruption]

CHAIRPERSON (Greg O’Connor): Some of these members—inside voices, please. I can hardly hear. Thank you. Carry on, Mr Abel.

STEVE ABEL: Thank you, Mr Chair. We did have a conversation about whether it should be a guaranteed minimum third of that 15,000 designation, and there is no number given to that. I have proposed another amendment which does in fact require that that designation to small landowners be a third, at minimum, that is 5,000 hectares annually. That’s another question, so I’d appreciate the response.

Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Chair. I’ve got a few questions for the Minister in the chair around the changes that are outlined in the Amendment Paper 363 that was recently tabled as well, and they also relate to the ballot system. I want to know the reason or the rationale behind the amendment here, which is to allow for two ballots instead of the one annual ballot. The Minister hasn’t explained the rationale for this amendment, as far as I’m aware. While I’m a permanent member of the Environment Committee, I made way for colleagues who heard the submissions to the select committee. I don’t recall this particular change being one that was submitted on but if it was—and there’s a reason for this—then I invite the Minister to clarify that and to share what that rationale is for the two ballots within the period, given that the 15,000 hectares remains the same. Why two ballots instead of the one?

The second question is also around the rollover provision that is outlined in this Amendment Paper; the rollover of unallocated hectares. It does state here that hectares of the annual hectare limit that aren’t fully allocated within a specific class—Land Use Capability (LUC) class 6 land permits—in a year could be rolled over for use in the next year but then cannot be rolled over further. I’m keen to hear the rationale for the eligibility for it to roll over into the next year but not the second year.

Also, if the intent of this legislation is to restrict the amount of farmland that can be converted into forestry, then why the rollover provision at all? I would be grateful if the Minister could clarify that change that has been recently introduced, as well. That relates specifically to new sections 190KHB and 190KHC, that relate to the two ballots: the first and the second ballots.

The third area of questioning that I have is around the third change that is outlined in the Minister’s Amendment Paper. I’m still, to be fair, trying to get my head around it, but it’s around—the heading for that section of the amendment is: “Permits not for same records of title”. It says here that this particular Amendment Paper that has been introduced by the Minister quite recently provides a new section 190KLA for the “application not to be eligible for entry into the ballot if it contains a record of title that is already included in an LUC class 6 land permit.” The new section 190KLB then “provides that if an application is drawn that contains a record of title that is included in other applications, those other applications are then cancelled.” I’m just keen for some clarity around that from the Minister as to why that’s been introduced through this Amendment Paper. What is the rationale for that? What is the intent behind this particular change?

Subsequent to that and related to those changes, there is also a new section 190KY, which then allows a permit holder to cancel their permit by informing the Environmental Protection Authority (EPA). The EPA then notifies the landowner using their last known contact details, as supplied to the EPA. It just seems really clunky to me and I’m trying to get my head around the rationale for this entire section. I’m just keen to get some clarity from the Minister around all of these changes that have been introduced through the Amendment Paper.

Hon SIMON WATTS (Minister of Climate Change): Thank you very much, Mr Chair. I’ll go through the questions that have been asked. There was a question earlier asking what the basis was for the 15,000 limit and the context and background in addition to it being something that was considered as part of the manifesto commitment. The historical plantings was also a factor in our considerations in terms of ensuring that that limit was set slightly below what was seen as the historical pipeline of planting. Also, a factor was input from the sector, also acknowledging that we have implemented a number of review steps, going forward—the first being in 2028, that will consider the appropriateness of that limit.

In the context of the question around the small applications pool—in effect, the exact number that is going to be allocated to that grouping through the ballot is something that will be set in regulations. It has not been set yet but it needs to be set at a level that will support flexibility and certainty. I welcome any input on that between now and when those regulations are considered.

In regards to the question around the unallocated hectares in the ballot process—and there are two ballots and I’ll come back to why there are two—in effect the two ballots are in place primarily to improve the access opportunity to ensure foresters have multiple opportunities to participate in the ballot. Having two instead of one gives more opportunities to participate, and that’s it. The volume is split between two so that doesn’t have any material impact in terms of that; it just gives more optionality.

In regards to the unallocated portion, again that will be set in regulations, and while it has not been set yet, consideration around what that is will be thought-out. I guess the context is you don’t want a significant rollover consideration happening year on year, which would, in effect, have a dilution effect similar, I guess, in terms of the emissions trading scheme unit settings but in a different conceptual model. Again, I’m signalling that that is something we will consider and take feedback on as well.

Hon Dr DEBORAH RUSSELL (Labour): Mr Chair, sorry, I’m not sure how much longer I’ll be able to speak for, which I guess some of my colleagues might find a blessed relief. But I do want to—

Hon Member: You’re not losing your voice?

Dana Kirkpatrick: Keep going, Deborah!

Hon Dr DEBORAH RUSSELL: Yeah, yeah, ka pai.

I do want to focus on some issues around the ballot, as we’re talking about the ballot now, because it is an interesting piece of legislation. I just want to focus, first of all, on—let me see if I can find it. It is new section 190KN, inserted by clause 16. I just feel as though there’s a missed opportunity here, Minister. It says that “The EPA must conduct a ballot by random selection—(a) in accordance with the Act … and (b) by using electro-mechanical drawing equipment or any other equipment that the EPA may determine.” I just feel as though there’s a missed opportunity, here, to tell them that they should use a biscuit tin, which might have done the job just as well. I invite—if anyone wants to, you know, they could have done a biscuit tin.

But there’s a couple of things where I think it may be a little bit difficult. If we go to new section 190KL, inserted by clause 16—that I have a serious questions around—there’s some conditions of eligibility. Of the things, to be eligible to put in the application, is you might have to pay a prescribed fee, if any. Given that this is a ballot, it does seem a little hard that a person might have to put together a whole application and have it ready to go into the ballot and then pay the prescribed fee, and then they might not get drawn out of the ballot. I think that does seem a little harsh. It does seem to me that, rather than that being a condition of going into the ballot in the first place, maybe it might need to be a condition of being successful in the ballot. That might be a better place to charge a fee. Now, I appreciate it does say “if any;”. I just invite the Minister of Forestry to take that thought on board with respect to drawing up the regulations, when it comes to working out the regulations around the ballot.

The other section I want to look at is new section 190KO, inserted by clause 16, and that’s “Review and appeal are not available for decisions about entering the application into ballot”. Now, going through the bill, as drafted, there are a series of criteria that people must meet in order to put an application into the ballot, or bits of information they must give; that all seems perfectly reasonable. But then it says the Environmental Protection Authority can decide whether or not to enter an application into the ballot and, in fact, there’s no review or appeal of that. Now, it says, “under any of sections 144 to 146” of the original Act. Now, section 144 is just asking for a review—as far as I can call it, the EPA itself. To be fair, sections 145 and 146 go on to the District Court and, I think, the High Court, and that does seem a little bit far down the track.

However, it does seem to be reasonable to me that if someone’s application is rejected from the ballot, there should at least be some capacity to ask for a review of that. Or is the Minister intending to ask the EPA to set up a system whereby they review applications in the first place so that a person can correct an application if necessary or add information to it as needed so that it can go into the ballot? Otherwise, having no right of appeal does seem to be at least a little unfair—and something that could easily be corrected.

STEVE ABEL (Green): Thank you, Mr Chair. I have a follow-up question on the ballot after my colleague Deborah Russell, who is persevering bravely through the winter challenges—

Hon Dr Deborah Russell: Brave, courageous, and not afraid of anything.

STEVE ABEL: —courageously. In terms of the entry into the ballot, does it function the same as our entry into the biscuit tin here—you enter once and you remain there for every subsequent draw—and there’s two annually? Or does one have to enter each time there’s to be a draw, like buying a Lotto ticket? That would indicate the challenges, potentially, for the cost of entry to the ballot, if one has to enter the ballot twice a year, or does one enter the ballot once and remain there until such time as they withdraw themselves from the ballot?

My other question is—I think it’s page 21 of Amendment Paper 363 also—on section 190KZ, inserted by clause 16: “The EPA may report publicly on processes under this subpart, including information regarding receiving and approving applications and allocating the annual hectare limit.” Now, why is it that it’s “may”; surely, “the EPA must” would be better because from a point of view of transparency about the ballot allocation, “must” must be better wording. So that’s an amendment that I’ve proposed, also.

Further down, in section 190KZA, “Review of annual hectare limit”, subsection (1) states, “The Minister of Climate Change and the Minister of Agriculture, in consultation with the Minister of Forestry, may initiate a review of the annual hectare limit.” Again, I propose that it should be “they must initiate a review of the annual hectare limit.” I’ll jump down and come back with another one in a minute.

CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti): Tēnā koe, te Heamana. Ka pātai anō awau i roto i te reo Māori. Tēnā anō tātou; tēnā koe e te Minita. I a au e tipu ana, he rārangi paina kei tērā taha o tō mātou taiapa. E toru tekau mita pea te tawhiti mai i tō mātou whare. E hoa mā, ngā ngārara paina, arā pine beetle, i tau mai ki roto i tō mātou whare!

[Thank you, Mr Chair. I will again pose my questions in the Māori language. Greetings to all of us. Greetings, Minister. When I was growing up, there was a line of pine on the other side of our fence. It was maybe 30 metres from our house. My friends, the pine beetles that landed in our house!]

Arena Williams: Ngārara paina. [Pine beetle].

CUSHLA TANGAERE-MANUEL: Kupu hou: “ngārara paina”.

Ehara tērā i te kōrero noa iho, e te Minita, he pātai anō kei roto. Kei te kōrero au mō te wāhanga tuatahi, rārangi tuaono, me kī, Part 1, clause 6, e pā ana ki ngā taha whenua, me kī, arā farm boundaries. Ki te kōrero mātou mō ngā taha whenua, kei te whakaaro au ki ngā ripa a ngā tāngata noho tata, arā neighbours. Kua whakaritea he ture e kīa nei, he aha te tawhiti o te ngahere o tētahi kaipāmu ki te whare, ki te taha whenua, ki te pātiki rānei o ngā tāngata noho tata?

[New vocabulary: “pine beetle”.

This is not just a story, Minister, but there is in fact a question in there. I am speaking about Part 1, clause 6, regarding farm boundaries, I should say. If we speak about farm boundaries, I am considering the boundaries of the neighbours. Has legislation been prepared that says: what is the distance from a farmer’s forest to the house, the farm boundary or paddock of the neighbours?]

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

Hon Dr DEBORAH RUSSELL (Labour): Oh, thank you, Mr Chair. Sorry, I was busy listening to my colleague, so I wasn’t quite up on my feet as soon as I needed to be.

Hon Member: Oh, excuses, excuses!

Hon Member: Were you listening?

Hon Dr DEBORAH RUSSELL: Well, you’re not listening.

I want to go to new section 190KT, added by clause 16. It’s on the bottom of page 21 of the Amendment Paper, and it’s about whether or not permits can be transferred between people. A person can win a permit in the ballot; can that person then transfer that permit on? It says no because, actually, the permit is in respect of a certain set of land, so that’s where it has to go—it has to go with the land. It does mean that the permit, in effect, does attach to the land rather than the person, or maybe both.

But it can be transferred by way of inheritance—that seems fair enough—but then the other one is in terms of unincorporated bodies. An unincorporated body, of course, could acquire a permit, and, then, members could move in and out of the unincorporated body. We have to sort of work out—it’s the standard bridge of Theseus problem from philosophy: at what point does taking one member out, one at a time, actually change the nature of the person? The Minister of Forestry has, quite sensibly, stipulated the limits and said we’ve got to have 60 percent of the original members of the unincorporated body still there. Minister, why 60 percent? Again, is it drawn from another piece of legislation? I would have thought the obvious place to go to would be the income tax legislation, but if you could just clarify exactly why it was going to be 60 percent of people continuing in place was enough for an unincorporated body.

There was another one: if we just go on to new section 190KU, added by clause 16—that’s on page 22 of the Amendment Paper—it says, well, you can’t use a land-use permit other than in respect of the land specified in the permit. That’s kind of a bit of a belt and braces section, because you would have thought that would be a no-brainer. But if the land is subdivided, then the permit is no longer valid. Now, I couldn’t quite see why that had to be the case. Surely, if the land is subdivided, the permit could be determined to go where the bulk of the forestry was. It could go across the subdivision if the land was subdivided in such a way that—say it was a 20-hectare permit, and 5 hectares of it was on one side of the subdivision and 15 on the other; surely that could be a way.

I guess there is some mischief that this particular rule is trying to prevent. If the Minister in the chair could just give us an indication of what mischief that particular rule is trying to prevent. It does seem to be reasonable to be able to subdivide land, and why shouldn’t the permit go with it? But, clearly, there could be some trouble there.

Hon SIMON WATTS (Minister of Climate Change): Just a response to those two questions: the 60 percent number is actually—the proxy for that is within the Climate Change Response Act. There is a precedent around that percentage being used there. Around the mandatory aspect of not being able to, in effect, transact beyond or outside the scheme: we don’t want to create a secondary market mechanism in this context, for these units, so hence why that was done.

There was a point raised around cost recovery, before, in the context of whether there will be a fee. Regulations haven’t been set in terms of what that fee will be, but the precedent will be to ensure that the costs are covered for the Environmental Protection Authority to, in effect, administer the ballot.

There was also a question in regard to, in effect, if you make an application into the ballot, does that remain even if you are unsuccessful, and in effect carry forward. The answer is no. You will need to reapply each ballot if you are unsuccessful, and a precedent for that is to ensure that at each ballot, then, everyone has a consistent starting point in terms of ability to get an allocation of hectare limit.

LAN PHAM (Green): Thank you, Mr Chair. It’s great to be able to ask questions on this bill and particularly on the amendment, which, as we’re aware, has not gone through a select committee process. So I’m very keen to hear some answers about this.

The area I’m interested in hearing about from the Minister in the chair is about the rollover of unallocated hectares. Now, this is in Amendment Paper 363, which we got earlier today, and it refers to new sections 190KHB and 190KHC, which are on page 18 of the Amendment Paper. This is about, as I understand it, the hectares that are under that annual hectare limit, which, I believe, is 15,000 hectares per year and that if they’re not fully allocated for that land-use class—class 6 land—they can now be rolled over for use in the next year, up to a prescribed rollover limit.

What I’m interested in with this rollover is that the rationale for that 15,000 was to provide some flexibility for landowners who want to register their hectares in the emissions trading scheme. Is this rollover, essentially, deeming the 15,000 more of a target than offering flexibility, and is that something that was discussed with the forestry industry and then resulted in these changes that we’re not aware of? I’d be really interested in hearing the rationale, because, presumably, it takes it from being something that did provide flexibility and could be up to the 15,000 to then, essentially, saying, “Well, to provide more flexibility we’re, essentially, aiming for that 15,000 and allowing a greater time period, now two years, to achieve that.” I’d really be interested to hear from the Minister what the rationale was with that and how it’s actually going to apply in practice.

STEVE ABEL (Green): Thank you, Mr Chair. I’d first like to speak to a quite specific issue in clause 16, inserting new section 190KZA. I have an amendment there. There currently is a requirement, “Review of annual hectare limit”. I see this new amendment proposed for reviews to take place in 2028, 2034, and at intervals of five years after 2034. That is an improvement, because the original date was 2029, so it makes it a bit sooner.

I’m proposing, Minister, that a third point be put, which is that the review must also be done in consultation with the forestry and farming sectors, and the Ministers should have regard to the outcomes of any consultation. They are the two most impacted sectors. If we’re going to do these reviews only at five-yearly intervals by 2034, then let’s make sure we include the opinions of those farming and forestry sectors, who are most impacted. It’s a pretty basic amendment.

A much broader question, Minister, is—and you raised this at the start of your commentary—what is your advice, or what advice have you received, on the impact of this legislation on the carbon price? You spoke about the challenges with the carbon price. A collapsed carbon price, as we have in the regularly failing market, means that the market is basically not functioning as an incentive for people to invest into carbon-reducing technologies or practices.

What advice did you get on the effect of this legislation on the carbon price? There seems to be very little analysis provided in the regulatory impact statement, which was only released last week, and there hasn’t been any substantive independent analysis of the detail of that.

What would be the impact also, Minister, on production forestry in a more general sense? Last year’s Ministry for Primary Industries Afforestation and Deforestation Intentions Survey shows that there was a dramatic slowdown in planting, which was linked to uncertainty around this very bill. Now, we already know we have real challenges with the impact on the supply of timber; we have huge challenges with the closure of mills. What analysis or what advice have you received on the impact on forestry production? If forestry investment continues to decline, we are potentially sandwiching that industry to the point of closure.

I’d love the Minister of Climate Change to give us some clarity on that—on the concerns that the forestry sector have around how this impacts them.

Hon SIMON WATTS (Minister of Climate Change): Thanks very much, I’ll answer those questions quickly. In the context of the question around the Emissions Trading Scheme (ETS), obviously I can’t comment as climate Minister in that capacity on the specific price of the ETS, but what is clear is that, versus the status quo, a cap on the amount of forestry being able to go into the ETS versus the status quo of a non-cap does provide, in effect, a limit on the amount of units going into that market. By virtue of that, in the context of supply and demand, it has some impact in the context versus the status quo.

In regard to production forestry, obviously that’s a long-term investment area. The consideration and the most important aspect that they note is around having enduring certainty and confidence in that market, not only in terms of the broader ETS price but also around Government policy. That’s why the concerns around the review of the role of forestry in the ETS, as noted previously, created such significant volatility because of the long-term horizon of forestry as a business area. We took on board that consideration and feedback as part of the drafting of this.

There are other policy areas outside of this bill that the Government are pursuing around afforestation on Crown land that also provides opportunities as well. Just to cover off the member’s points, I won’t be accepting the amendment because, by virtue of any review, we will be taking feedback from related, impacted, and consulted parties that do have an interest in that, and that would be normal practice.

CATHERINE WEDD (National—Tukituki): I move, That debate on this question now close.

CHAIRPERSON (Greg O’Connor): I’ll be looking for new material now.

Hon Dr DEBORAH RUSSELL (Labour): Oh, well, Mr Chair, I want to draw the committee’s attention to new section 190KV, inserted by clause 16, which has not been discussed at all yet, and that is about the duration of a class 6 land permit: three years. Once a person gets a permit through the ballot system, they’ve got three years from the date that it is drawn until really, basically, 31 December—three years thereafter. That’s a pretty good length of time. That seems to be a reasonable length of time. However, the interesting bit is new section 190KW, when a person actually can get an extension of time. Instead of just three years, it’s out to six full years. It says, in the case of when there’s, say, a “temporary adverse weather event”—that makes sense. You imagine getting ready to plant and, as we’ve had happen, a cyclone comes storming through. It does make sense to allow extra time. But then it says “or similar circumstances materially disrupted the occupant’s ability to register forest land”. I’m interested in the similar circumstances. Does it have to be a natural event that occurred? Is, say, for example, a drought sufficient? Probably not. It’s hard to know. But what’s, say, a typical one: a relationship breakdown where something goes wrong and things have to change? What’s going to count as being sufficiently similar to extend to six years?

Just if we could answer those questions but, Minister, in addition to that, I do want to draw your attention to new section 190KY. You assured us that the amendments in this proposed Amendment Paper were minor and technical and remedial in nature. I have to say that this doesn’t look minor and technical and remedial in nature to me. So 190KY, there’s a bit of gobbledygook and I was going to ask about it, but seeing as it’s now disappeared, that’s quite good.

But it says, “If, in the same ballot year, a LUC class 6 land permit is issued to more than 1 person, and those permits have a record of title in common, all other permits with that title in common expire in their entirety when one of those persons registers as a participant or adds a carbon accounting area on the basis of their permit.” It sounds like it’s to do with lots of people being involved in something. That clause is entirely deleted. Here comes the “minor and technical” amendment. It’s actually an entirely new clause with the same number or the same “190KY”. It goes on to how “The holder of a LUC class 6 land permit may cancel the permit by notifying the EPA in the prescribed form.” Basically, you’ve won your land class permit, you’ve decided not to use it, you cancel out. The question here is does that then go back into, say, the next ballot? Let’s say you’ve got it in ballot one, does it then go into ballot two, or is that unused permit then eligible for the rollover provisions? There’s just a little technicality there that would be good to clear up, and if the Minister in the chair could clear that up, that would be very helpful. I think that’s almost my last question on the ballot, actually, so I’ll leave it at that.

CHAIRPERSON (Greg O’Connor): The Hon Dr Deborah Russell.

Hon Dr DEBORAH RUSSELL (Labour): I’m just going to give the Minister in the chair a little chance to answer those questions because they are good questions, Minister.

Hon SIMON WATTS (Minister of Climate Change): Well, the reason why I didn’t answer was because I’ve already answered that question in regards to the rollover questions that were answered before. I said that the amount of rollover is going to be set in regulations. We haven’t set it at this point. There is a balance of making sure that we don’t create a big bow wave of rollover that dilutes and increases the number of units. We’ll take feedback on that, but, again, I’m repeating myself.

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

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

Ayes 68

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

Noes 54

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

Motion agreed to.

CHAIRPERSON (Greg O’Connor): The question is that the Minister’s amendments to Part 1 set out on Amendment Paper 363 be agreed to.

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

Ayes 102

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

Noes 20

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

Amendments agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Steve Abel’s tabled amendment to clause 6(1) amending the definition of “25 percent allowance” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Steve Abel’s tabled amendment to clause 6(1) amending the definition of “erosion-prone land” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): Steve Abel’s tabled amendments to clauses 11 and 16 to delete new section 167B and new Subpart 4B are out of order as being inconsistent with a previous decision of the committee.

Steve Abel’s tabled amendment to clause 16, new section 190KK to insert “of 5,000 hectares” is out of order as being inconsistent with a previous decision of the committee.

The question is that Steve Abel’s tabled amendment to clause 16, new section 190KZ to replace “may” with “must” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): Steve Abel’s tabled amendment to clause 16, new section 190KZA to replace subsection (2) is out of order as being inconsistent with a previous decision of the committee.

The question is that Steve Abel’s remaining tabled amendment to clause 16, new section 190KZA(1) to replace “may” with “must” be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

CHAIRPERSON (Greg O’Connor): The question is that Steve Abel’s tabled amendment to clause 16, new section 190KZA to insert new subsection (3) be agreed to.

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

Ayes 54

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

Noes 68

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

Amendment not agreed to.

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

Ayes 102

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

Noes 20

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

Part 1 as amended agreed to.

Part 2 Other amendments, and the Schedule

CHAIRPERSON (Greg O’Connor): Members, we come now to Part 2. The debate is on clause 17—“Other amendments”—and the Schedule. The question is that Part 2 stand part.

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

Ayes 102

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

Noes 20

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

Part 2 agreed to.

CHAIRPERSON (Greg O’Connor): We come now to the Schedule. The question is that the Schedule stand part.

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

Ayes 102

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

Noes 20

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

Schedule agreed to.

Clauses 1 to 3

CHAIRPERSON (Greg O’Connor): Members, we come now to the debate on clauses 1 to 3—“Title”, “Commencement”, and “Principal Act”.

STEVE ABEL (Green): Thank you, Mr Chair. On the title and the commencement, taking into account that we recognise the challenge we have with the dramatic loss of—well, it’s not a dramatic loss; that’s overstating it. There is a distortion created by the emissions trading scheme where we are seeing arable land converted to forestry. That is well recognised. The obvious solution is to take forestry—carbon forestry—out of the emissions trading scheme.

This legislation has attempted to take a step in the right direction, and that’s the reason that we as the Green Party deliberated at length as to whether we should support this legislation, because we did recognise that it was an attempt to address what is a genuine problem. It has, however, created a whole lot of complexity, particularly with the ballot system.

In terms of the title, Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill, we suggest that it could be the “Forestry Conversion Ballot Bill” because one of the most damning characteristics of it—or challenging characteristics, if we’re to use a slightly less forthright piece of language—would be the ballot. I believe, Minister, in the course of time, the part of this bill that will be seen as problematic is that bit that has the ballot. There has to be another way of doing it than that if the Government or subsequent Governments are not prepared to bite the bullet and take forestry out of the emissions trading scheme.

My second point in this regard, is genuine concerns expressed by the forestry sector as to the impact it will have on confidence in that sector. This is where the balance has to be struck, because the Climate Forestry Association, among others, said that without changes to the bill, investment in afforestation will drop below current estimates, and, certainly well below the levels needed to meet New Zealand’s afforestation emissions reductions targets and the Nationally Determined Contribution.

When we have this massive challenge of climate change, when we have a Government, with all due respect, that is heavily reliant on forestry for dealing with climate change net offsets—which are a fiction—then it is concerning that we have a piece of legislation that adds further complexity and disincentive, you could argue, to the forestry sector.

So reiterating, I propose that we change the name of the bill to “Climate Change Response (Emissions Trading Scheme—Forestry Ballot) Bill”. I think that would be a greater reflection on what the bill primarily does.

Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Chair. I have a quick question for the Minister in the chair around the commencement date that is laid out in clause 2 of this bill. It says here that “This Act comes into force on the 31 October [this year], except as provided in subsections (2) and (3)”. So that section—in subsection (2)—it lays out that “sections 6, 7, 10, 11, and 12 come into force on the day after Royal assent”. Then there is a third date that is laid out there as well, and that is: “Subpart 4B of Part 5, as inserted by section 16, and all other provisions that relate to LUC class 6 land permits, to the extent that they do so, that have not come into force under subsection (2), come into force on 1 January [next year].”

The sections that are mentioned in subsection (2) are the interpretations. In clause 6, there is a whole list of interpretations of various terms that are integral to this bill. Clause 7 is around the regulations on infringement offences, and then you’ve got the regulations about fees and the charges there. Clause 11 is around regulations, as well as the regulations around methodologies and mapping standards. So I’m little bit confused as to why the regulations come into force ahead of the whole Act coming into force, and I would be grateful if the Minister could clarify that.

There are also some issues around the definitions of permanent forestry and standard forestry that now sit in the definitions section for the whole Act, instead of the part that they specifically relate to; and clause 12 is repealing the definitions. That’s the bit that I’m talking about in terms of the definitions of “permanent forestry” and “standard forestry”; that’s relevant to clause 12, which also comes into force ahead of the Act, and that’s about repealing the definitions there that I mentioned that are now in clause 6. New Subpart 4B, which is also mentioned in that list in subsection (2), is about the new balloting system for land use of class VI land.

Why has the Minister made the decision not to have the balloting system come into effect at the same time as everything else in this bill? I’m just wanting some clarification around the staggered dates that are mentioned here, when it comes to the commencement of this piece of legislation.

Hon SIMON WATTS (Minister of Climate Change): Yeah, I thank the member for the point. In effect, the timing of when the ballot will come in is 1 January 2026. There needs to be adequate time in order to put in place some regulations that will enable that, so the empowering provisions, therefore, will come into force the day after Royal assent.

LAN PHAM (Green): Thank you, Mr Chair. I would just like to pick up on the title of this bill. I want to do so because we had in Parliament tonight this really fantastic and valuable event put together by Wellbeing Economy Alliance Aotearoa. It invited MPs from across the House, and we were all represented there apart from one party, I think. We had very clear encouragement from two former Prime Ministers, Jim Bolger and Sir Geoffrey Palmer, who were all about encouraging us to look to the long term and deal with the actual issues together.

What I’m interested in hearing from the Minister in the chair on the title of this bill is whether he believes that it is actually solving a problem. If we were actually trying to solve this problem, which we know is a problem, we would be addressing it directly; we wouldn’t just be tinkering around the edges. We would, for example, be taking forestry out of the emissions trading scheme because of the way it has influenced it and is, essentially, ineffective. It’s not dealing with the issues that we so desperately need it to.

A term that was coined, and I propose to the Minister to see if he agrees with this, is the term “poly-crastination”. That was about, essentially, doing anything but deal with the real issue. The title that I propose for this bill, which I’d be interested in hearing the Minister’s comments about, is the “Climate Change Response (Emissions Trading Scheme Forestry Conversion Poly-crastination) Amendment Bill.” We heard very clearly across all sectors in their submissions on this bill that it was not dealing with the actual issues, it was not going far enough, or it was doing things that quite unexpectedly and perhaps quite unintentionally impacted the forestry sector in ways that perhaps this amendment has gone some way to address, but it’s really hard to know when it’s so last minute and has not had adequate scrutiny. That’s really the key question about the title that I’d like to hear from the Minister on.

Hon SIMON WATTS (Minister of Climate Change): Mr Chair, thank you. I think, when one reflects on what the member just noted, what we’re doing is the complete opposite of what the member is implying. Actually, we’re taking the initiative in order to take action on an area, which is required in terms of putting a cap on the amount of forestry going into the emissions trading scheme (ETS).

The member has a notion that created significant volatility in the ETS market because of the shock that that placed on to the market of removing forestry from the ETS, which put the whole ETS market into a tailspin. We had the second-oldest and most mature ETS marketplace in the country, which does the heavy lifting in terms of carbon reduction. The policy positions of simply saying, “Well, let’s just remove it” when it’s a long-dated sector and industry is just simply market-destructive - type language.

One needs to be cognisant of the impact of that on the reality, which is it’s a long-term market that requires certainty. What we’re doing is taking the initiative: we’re putting a cap in place, which deals with the underlying issue; and put in plenty of opportunities for review, which will ensure that the settings are set at the appropriate level.

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

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

Ayes 68

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

Noes 54

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

Motion agreed to.

Clause 1 agreed to.

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

Ayes 102

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

Noes 20

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

Clause 2 agreed to.

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

Ayes 102

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

Noes 20

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

Clause 3 agreed to.

Bill to be reported with amendment.

House resumed.

CHAIRPERSON (Teanau Tuiono): Madam Speaker, the committee has considered the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill and reports it with amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: The Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill is set down for third reading immediately.

Third Reading

Hon SIMON WATTS (Minister of Climate Change) on behalf of the Minister of Forestry: I move, That the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill be now read a third time.

This bill is about preserving choice: the choice to farm, the choice to grow, and the choice to sustain rural communities for generations to come. It’s about restoring balance to our land-use system so that we can continue to support our climate goals, without losing some of our most productive land to food production for decades, if not permanently.

This Government’s position is that we can strike a balance to enable both forestry and agriculture to grow sustainably and contribute to doubling our exports and continue building our economy. The bill puts in place sensible limits to place that support, meeting our climate commitments, provide the clarity needed to support ongoing forestry investment, and, importantly, protect our best land for food production.

We appreciate, though, that farms are often a mosaic and that there are areas on some farms that are better suited to forestry than other activities. We also recognise that, and we need to provide flexibility within the bill for farmers to use the emissions trading scheme (ETS) to support forestry on less productive land, and in places where it makes sense to do so.

The bill has four key components. Firstly, restrictions on ETS registrations for exotic forestry on land-use classification classes 1 to 6, our most productive farmland; a 25 percent allowance to provide farmers flexibility to plant and register up to a quarter of their land in exotic forestry if they choose to do so; two annual ballots allocating up to an additional 15,000 hectares of exotic forestry on land use classification class 6 land; and transitional provisions for those who invest in forestry in good faith before December 2024. These changes give our farmers and foresters options, but within a framework that protects our land, our communities, and our climate.

I want to acknowledge the contributions from members across the House during the debate on this bill and the committee of the whole House stage, this evening. The discussions have reflected the importance of getting the balance right between, on one hand, supporting forestry investment and, on the other, our climate commitments and safeguarding our most productive farmland so that our farmers can continue feeding 40 million people a year.

The Amendment Paper introduced at the committee of the whole House stage responds directly to concerns raised by the forestry sector. It simplifies the ballot allocation system and, importantly, provides greater clarity and flexibility for foresters to plan both afforestation with confidence. These updates strengthen the bills design, to deliver certainty for both foresters and farmers, not just today but into the long term.

This bill is much more than being just about land use; it’s about people. Whole-farm conversions affect more than just landowners; they affect schools, local businesses, local communities, and the services that lie within those communities—rural heartland, rural communities. They have a significant implication and this Government has heard that feedback loud and clear and we are taking action in order to get that balance right.

This bill is about balance; it is also about choice. We are delivering certainty, as a result of this bill. We are backing our farmers, we are supporting our foresters, and we are protecting the future of rural New Zealand. I commend this bill to the House.

ASSISTANT SPEAKER (Teanau Tuiono): The question is that the motion be agreed to.

Hon Dr DEBORAH RUSSELL (Labour): In the first reading of this bill, I said that the Labour Party, on balance, supported this bill, but it was very much an “on balance”. It was really driven by, I guess, our concern for rural communities, which is a concern shared across the House by the sense that we do need to do something about forestry and that perhaps this could offer some solutions. But there were some real negatives as well.

Let me talk about, first of all, our concern for rural communities, and let me start with a story from many years ago when my parents travelled to Scotland. They were right up the top, Land’s End, and preparing to go over to Orkney the next day, staying in a bed and breakfast, and talking to the woman who ran it. She was deeply involved with the local school, and they’d just gotten news of a family moving into the area, and she said, “Oh good, three more children for the school.”

It’s a common story in rural communities—I’ve heard it in New Zealand too—where members of the community anxiously count the families in a district. Will there be enough children to keep a school, because a school is often a hub of a community. What we’ve heard—anecdotally, and perhaps with some evidence as well; rather more than anecdotal—is that families are moving out of rural areas because of the growth of forestry, and in particular because of the conversion of whole farms into forestry. That has meant a depopulation. With depopulation the school goes, the services go, the rural community itself is under threat, so there’s good reason to support this bill. As someone who was born in a small rural community myself and visited that small rural community frequently as I was growing up, I’ve seen what it means when the local school closes, so we did want to do something about this.

On the other hand, in many ways this is a band-aid. It’s not a real solution, as it were; it’s a temporary fix and a pretty, sort of, immediate and swift fix. The real fix that is needed is a thoroughgoing review of the role of carbon forestry in the emissions trading scheme (ETS). The emissions trading scheme has worked in such a way that people are incentivised to put land into carbon farming. At the time when the emissions trading scheme was first set up, it seemed like a sensible thing to have forestry in the ETS, and, of course, it would be wrong to take existing carbon forestry out of the ETS, but we do need to have a think about what happens with carbon forestry in the emissions trading scheme in the future.

The Labour Party put a differing view into the select committee report here, because we were concerned by the analysis that came from the Climate Change Commission that showed that if the use of forestry carbon credits in the ETS remains unchecked, then by the late 2030s, the sectors covered by it will reach net zero and then negative emissions. That leads to a very low carbon price, which leads to a new wave of deforestation. That kind of leads to large booms and busts in carbon forestry, and, ultimately, it’s going to put our 2050 Paris goal at risk.

We do need to review the role of carbon forestry because of that, but we also need to get people to understand that we cannot plant our way out of the climate crisis. We actually need to reduce gross emissions, not just grow more trees to result in a reduction in net emissions. We actually need to bite the bullet on this one.

This particular restriction on carbon forestry is not really about the ETS; it’s actually much more about the effect on rural communities. I do want to see that thoroughgoing review of the role of carbon forestry in the ETS. The current Government stopped the review that was under way. There has to be a way to do that review without freaking out the market but actually signalling that we need to review the settings of the ETS.

That is why the Labour Party has a differing view on this, and it’s why we end up in this very considered position. Perhaps it’s not the right one; it’s going to be hard to know. We’re going to have to wait and see how this all works out. I think all of us are a little bit in that position, thinking “Is this really going to create the fix we wanted?” We don’t quite know yet; we hope that it will. We’ll give it a go. On this side of the House, and in particular in the Labour policy, I think it’s pretty clear that we’ll give it a go, but, actually, much more work needs to be done, and really thoroughgoing work needs to be done on our emissions trading scheme. I hope this Government will consider doing that, but, if not, I hope that a future Labour-led Government will kick off that thoroughgoing review of the ETS that we so very much need.

STEVE ABEL (Green): Thank you, Mr Speaker. Climate change is the existential challenge of our time. On the front line of the worst impacts of climate change are our farmers, our food producers, and our fibre producers. We have a distorted system, through the emissions trading scheme (ETS), whereby only those emitters of fossil fuels are required to offset their emissions, and their primary means of offsetting their emissions is through pine forestry in this country. The biggest-emitting sector in this country does not have to offset its emissions—the farming sector, and, more specifically, the dairy sector.

The consequence of the distortion that is created by the current emissions trading scheme is that that land that is pastoral land—predominantly sheep and beef farm land—is being sacrificed for the emissions of the fossil fuel sector. In terms of that mosaic landscape that the Minister referred to: the ideal setting in our regulatory systems and our legislative systems sees appropriate land use across the country so that we minimise the harm we do to the environment, we minimise the pollution of fresh water—noting the recent declaration of a nitrate emergency in Canterbury—we minimise the climate emissions that come from land use, and we protect our most valuable biodiversity. That is a vision that we all should be able to agree with.

What this legislation is attempting to do is to fix the distortion that is taking out that pastoral—predominantly Land Use Capability (LUC) class 6—land from the high country. But does it fix the problem? It is our view that it doesn’t fix the problem, because what really creates that distortion is an incomplete emissions trading scheme that only deals with fossil fuels and doesn’t deal with the other emissions that we’re dealing with and puts the burden of the offsetting mechanism—which is a false mechanism for dealing with gross emissions—on to farmland.

The obvious solution is to take forestry out of the emissions trading scheme. I made the analogy that offsetting to pine trees is sort of like an alcoholic paying someone else to drink water and thinking that they’ve solved their drinking problem when they haven’t. This legislation doesn’t fix the actual problem; it tinkers, and, in so doing, it creates greater complexity—the actual thing that farmers tell us constantly they don’t want. They don’t want greater regulatory complexity and compliance costs with that complexity. This legislation, unfortunately, does this.

The most challenging part of this is the ballot system—the 15,000 hectares—which has been widely criticised by the pastoral sector. Beef + Lamb are at pains to point out that the engine room of their production, that LUC class 6 land, will be impacted by 15,000 hectares of land converted to forestry just through the ballot system alone. As my colleague Lan Pham said, it’s a “poly-crastination.” It’s not actually dealing with the real problem; it’s creating a kind of superficial fix that doesn’t really deal with it, and actually adds a whole lot of complexity.

There’s a broader challenge that we face, which is that we have got a country that, over the course of the last 30 years, has become heavily dairied at the cost of other forms of agricultural production. The challenge with that intensification of dairy is that it has taken out arable production in Canterbury, it’s taken out sheep and beef farming in parts of the country, and it’s taken out forestry as well. The challenge with that is it’s overwhelmingly our most polluting sector. It wins the prize for the biggest causer of water pollution, the biggest causer of climate pollution, and the biggest causer of land compaction and marine coastal environment pollution.

We don’t want a situation, which has been highlighted by modelling done by the Parliamentary Commissioner for the Environment, where, on the current settings, we end up with a country that is dominated by pine trees and dairy cows. That takes us away from this vision of a mosaic landscape, which is the one that we should all be aspiring to. How does this legislation impact that? I would argue that the problem wasn’t primarily with that really high-value LUC land—that is not the main place where the large-scale farm conversions are happening; it’s mainly happening in the higher land-use categories. This legislation doesn’t really deal with that problem at all.

Further, there is concern from the forestry sector, who, rightly, point out that the idea that there’s this dramatic loss of land to forestry—when you look at the actual hectarage going into forestry, it’s still a tiny fraction of our total land use. Of New Zealand’s land area, 40 percent is pasture; less than 5 percent is forestry. They legitimately pointed out to us at the Environment Committee that the sort of moral panic around us planting too many trees doesn’t really stack up in terms of the numbers. That’s a point that needs to be taken into account as well.

One thing that I will give credit to this legislation for doing is recognising that, in terms of Māori land and Māori forestry, there should be no restriction on what is able to be put into the emissions trading scheme—so long as there is forestry in the emissions trading scheme. Why is that? Because much of the land that Māori have had returned—a tiny fraction of what was lost—is marginal land, or the land that they were able to retain through the process of the raupatu, the confiscations and other means of colonisation and acquisition of land by settlers or the State, is marginal land. About all you can do with it is plant trees on it. It would be a particularly cruel blow if Māori had a further imposition placed on them in terms of legislation that restricted their use of forestry in the emissions trading scheme. I do commend that the Government has recognised that and created that exemption for Māori land.

What we would like to see, on this existential challenge of climate change that we are grappling with as a planet, is that we are able to work across party lines to come up with lasting legislative systems that actually deal with it. We embarked on this legislation in good faith as Te Pāti Kākāriki. We voted for it to go to select committee, and we engaged thoroughly at select committee; we put up a number of amendments to try and improve it. But, when push comes to shove—and it was very much a line call, I would say—we have determined that we will be voting against it because we do not think, on balance, that it makes things better.

I should hope that—to echo the sentiments of my colleague Deborah Russell—we are able to continue working in an intergenerational sense on how we deal with our land use in this country, how we create an ecosystem of food and fibre production that protects the common interest and the common good, that keeps our rivers clean and swimmable, reduces the emissions to the climate—

Grant McCallum: Well, work with people rather than accuse them of—

STEVE ABEL: We worked very much with you on this. If you’d been at that select committee, Mr McCallum, you would have seen that we spent a lot of time trying to make this legislation stronger. We’re very happy to work with you. In fact, I seriously think that’s the only way we’re going to get lasting legislation in this space. But when you have a Government that seems hell-bent on doing everything against what the climate needs—in fact, we’ve got 15,000 more dairy cows consented on the Canterbury Plains, and that is making the climate challenge worse. When you’ve got a Government that is going to mine and build roads and dig up oil and gas and coal, then you have to question seriously whether they are actually concerned about climate change or whether that is all merely rhetoric. We will work on serious propositions. Thank you.

SIMON COURT (ACT): Thank you, Mr Speaker. The ACT Party will be supporting this bill. The current emissions trading scheme (ETS) incentives encourage planting pine trees over producing food, and that’s simply not right. Productive farmland is being bought out for carbon farming, and that’s undermining rural economies across New Zealand, particularly the sheep and beef sector. Farmers are competing with speculative land use on land bought for carbon forestry. You can’t eat pine trees, people. This Government knows that, and that is why we are fixing the emissions trading scheme so that pines en masse cannot be dumped into the system.

Hon Damien O’Connor: They can do what they like.

SIMON COURT: Now, the gentleman from Motueka, the orchardist Damien O’Connor—he’s got a view on this. But—

Joseph Mooney: No, he’s from Dunedin.

SIMON COURT: Oh, he’s from Blenheim.

Joseph Mooney: I said Dunedin.

SIMON COURT: Oh, Dunedin. Well, look, so many people have had an opinion on this, but here’s the opportunity: you can vote for changing what we need to change, you can vote to fix what matters, or you can sit there on the Opposition benches criticising, like, unfortunately, Mr Steve Abel has. He sat with me on the same Environment Committee and heard the same evidence, and he, no doubt, recognises that we’re shifting the system as far as we can right now in, essentially, a predictable way so that people who are intending to plant some trees at least have a good steer on what’s coming. This bill, Mr Abel, reins in some of the worst distortions of the ETS—and I know that you would agree with that—but it still relies on rigid caps and centralised controls, rather than fixing the underlying problem.

The emissions trading scheme rewards land-use change over producing food for people to eat, food that is affordable, and food that we need our supermarkets and other stores to be supplying to our communities, and that’s why rural communities need policies that support farming, not financial engineering. ACT supports this bill’s direction, but real reform means returning to a system that values food, fibre, and farming.

Make no mistake: the proliferation of pine trees that we are trying to address with this bill, and that the Government will address with this bill, is a consequence of the international climate ideological of previous Governments jet-setting off to places like Glasgow and declaring that New Zealand would reduce its emissions by half by 2030. That’s a goal that either we meet and go bankrupt and cover the country in pine trees, or we don’t meet and, apparently, we’re going to have to get our cheque books out or drain the ATMs to pay some global corporation or the UN for failing to meet our target. This Government doesn’t sign up to that, and that is why we are changing the way that forestry enters the ETS.

If the Paris Agreement is delivering the kind of outcome where good food-growing land is converted to pine trees, then the Paris Agreement has to change or New Zealand has to leave—that’s where we’re going. The emissions trading scheme must reflect practical land use, and not penalise farmers for producing the food that people need to eat. This bill can’t be the end of the conversation, though, especially while forestry offsets are worth are more than food. But ACT is a practical party. We are fixing things that matter, and that is why we will support this bill. I commend this bill to the House.

ANDY FOSTER (NZ First): I rise on behalf of New Zealand First to support this bill. It was interesting listening to some of the previous discussion during the committee of the whole House stage. Lan Pham asked whether we are actually solving a problem. I think, when I listen to what the Opposition are talking about, they are seeing the problem that they think we are trying to solve as being the climate problem, but that’s not really what this bill is about; this bill is about the afforestation and the impact on our rural communities.

Just in terms of the catastrophisation which we heard, particularly, I guess, from the Green Party: just remember, a few extra emissions from New Zealand, OK, it’s going in the wrong direction, maybe, but we are 0.17 percent—0.17 percent—of global emissions. Unless the big emitters are going to make a significant dent in their emissions, we could absolutely wipe our entire economy out and it’s not going to make a jot of difference to the world as a whole.

Steve Abel: You’re doing a good job of wiping the economy out!

ANDY FOSTER: Yeah, right! Well, I’m glad you guys aren’t in charge of it, because you’d kill it stone dead very, very quickly.

What this is about is about too much land conversion. Steve Abel has said that it’s overblown, but certainly when I travel around parts of the country, particularly places like Southland, they are seeing large amounts of land being bought up to be converted from sheep and beef farming into forestry. That is a real concern for that community. To be poo-pooed, I think that is quite wrong.

This bill is about protecting our farming communities because if forestry doesn’t produce as many jobs as sheep and beef farming and other forms of farming do—and what that does is it means, we heard from the Labour Party there, a few less kids in the schools, the schools start closing down, the dairies start closing down, the other businesses in the villages and towns start closing down, that hollows out our rural communities. That is what this bill is trying to prevent happening. It’s supporting our rural communities so that they are sustainable over the longer term.

What this bill does is it’s a balance—and you might argue about what the balance is. It allows for forestry, but it is limited on those class 1 to 6 lands. It allows it to continue in class 7 and 8 land.

Of course, I think many of us have also heard the concern—and, in fact, we heard that from Simon Court in his speech just before—about overseas buyers, particularly, coming in, buying some of this land, foresting it, and, essentially, they are not managing. They are managing it from afar and they’re not looking after it. What we’ve heard also is concerns about things like pests getting into those forested areas, not being looked after, and, of course, that causes further problems in those areas.

The irony is this conversion, in a way, has been triggered by low red meat and wool returns over a period of time—and the irony now is that those returns have improved, which is great news. But then, of course, we have questions after questions during today and earlier this week where the Labour Party, in particular, expresses concerns about the high cost of meat. Why do we get the high cost of meat? We get the high cost of meat because farmers are getting good returns on that meat and that is actually good news.

Just to finish off, the one thing in terms of the balance—it’s an interesting question to say that it allows for some forestry but not wholesale forestry on land which is class 1, 2, and 3. I ask you: why would anybody want to put forestry on that valuable land? It just does not make economic sense.

Steve Abel: Well, there’s hardly any going there.

ANDY FOSTER: Well, yeah, that’s exactly right, because it doesn’t make economic sense. “Why do we provide for that in the legislation?” is the point that I’m making.

Just for your information, class 1 is for 0.7 percent of all the land that we have; class 2, 4.5 percent—so that is the really precious land we should be really looking after—and class 3 is 9.2 percent. It is very, very important that we have wise use of that land and that it is used economically rationally to feed our people and be able to export produce from those areas and to create jobs in our rural communities. I commend this bill to the House.

SCOTT WILLIS (Green): This bill sort of sounds good, doesn’t it? It’s an attempt, and I think we did hear that the Government wanted to take some action. When we heard this at Fieldays, we were really interested in what the bill was going to look like.

We all recognise that we need to maintain productive farmland. Productive farmland is also at risk from wilding pines, which have expanded since the Government ended the Jobs for Nature programme and the funding to stop wilding pine spread, which is now spreading through the Wakatipu Basin, Mackenzie Country, etc. So there are some good reasons that we could have supported this bill. We certainly don’t want to see farmland turned into forestry and just see forests and dairy. That’s not our vision for the future. So we really do share the concerns of our rural community where this is happening, and the bill held some promise.

As my colleagues have mentioned, it is really problematic in that, for a start, it doesn’t know what it’s trying to achieve. We’ve heard that it is going to fix the emissions trading scheme (ETS), so it’s going to work on the climate impacts. Then we’ve heard “No, it’s not going to do that. It’s going to support food and fibre. It’s going to support sheep and beef.” Which is it? Is it going to do both or is it going to do nothing? Actually, what this bill looks like is that it’s what my colleague Lan Pham referred to. It’s what my colleague Steve Abel referred to. This is “poly-crastination”. It’s an attempt to do something, to make something happen while not solving the real problem, while avoiding the real problem. Unfortunately, it’s something that we’ve come to see from this Government—just poorly thought-out legislation.

We need an ETS to focus on reducing actual emissions, and this bill does not deal with the fundamental issues of the use of unlimited forestry offsets. The Parliamentary Commissioner for the Environment has done some great work and they’ve said that this policy will not meaningfully alter forestry activity; it will just move it around the landscape. We’ve got a bill here that simply addresses the symptoms. It’s not the cause and it is something that we urgently need to be talking about.

This evening, I attended the Wellbeing Economy Alliance work with some colleagues from across the House called Tomorrow Together. They’re talking about what would it take to move from scattered efforts to a shared long-term vision, one that connects and strengthens Aotearoa’s diverse approaches to intergenerational wellbeing. This bill does not meet that target. This bill is simply a little stopgap. It’s a reaction to what we’ve been hearing, but it’s the wrong approach.

That’s unfortunate because, as we’ve set out in our Green Budget—and I do encourage members opposite—to look here, to remove forestry from the ETS, replace it with a biodiversity credit for native afforestation in, I’ll have the members note, with a Parliamentary Commissioner for the Environment’s recommendations. Now, which party did the Parliamentary Commissioner for the Environment come from? It came from a party that used to have some proud representation of our rural communities. Not anymore. That’s the problem—that’s the problem. Not anymore.

What we need is some real leadership instead of this little ad hoc, stuff-it-up approach. Unfortunately, what we know, and what the Parliamentary Commissioner for the Environment’s told us, is that this is a complex bureaucratic solution. It will have high administrative costs. It will lead to perverse consequences. It’s based on very poor information and a land-use tool that is not fit for purpose.

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

CATHERINE WEDD (National—Tukituki): This bill will stop the blanket planting of pine trees across our beautiful food-producing land. In Hawke’s Bay, it’s been absolutely heart-wrenching to see those beautiful Hawke’s Bay stations blanket planted in pine trees in the race for carbon credits. This bill stops that. It’s about food security, it’s about protecting our farmland, and it’s about protecting our rural communities. I commend this bill to the House.

CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti): Tēnā koe, e te Māngai o te Whare, otirā tēnā anō tātou katoa. Tō tātou waimarie ki te noho tahi i tēnei pō ki te whakawhiti whakaaro mō tēnei kaupapa nui, arā, te tiaki i ngā kaipāmu, te tiaki i ngā tāngata e mahi ana i ngā ngahere, me te tiaki i te oranga o te tangata.

Kua rongo mātou i ētahi o ngā whāinga o tēnei pire. Ahakoa kei te tau ētahi, mā tēnei pire ka ora rawa atu te tangata. Ka whai kai mātou, ka heke iho te utu mō te kai, engari, ahakoa koirā te whāinga, kāore mātou e taea te kī ka pērā hoki i raro i tēnei pire. Nā reira, kua rongo koutou i ngā kōrero a tō mātou māngai i ngā mahi taiao, i a Deborah Russell, ahakoa kei te tautoko a Reipa i tēnei pire, ā, he maha ngā whakatūpatotanga nā tēnei taha o te Whare.

Heoi anō rā, kua rongo mātou i ngā āwangawanga mō ngā tāone iti, arā rural communities. Kei te mōhio pai au ki aua āhuatanga. I tipu mai au i roto i tētahi tāone pakupaku, ā, kei reira tonu awau e noho ana, ā, ko Rangitukia te ingoa. Hoi anō, i a au e tipu ana kī ana ngā whare tapahi wūru i ngā pēre. Kāore e pērā i ēnei rā. I rongo au, i marumaru te whenua i ngā kau. Kāre rawa atu e pērā i ēnei rā. I whakakorengia te mahi kerēpe, ara ngā vineyards, kāre rawa atu e pērā i ēnei rā. I katia te poutāpeta, ā, nā reira kei te mōhio pai au ki ngā raruraru ka puta mēnā kāore te tangata e whai mahi— ka hūnuku ki tāone kē. Mēnā kāre he tangata kāre he oranga mō te tāone. Kāre he tamariki hei whakakī i ngā kura, kāre he tāngata ki te hokohoko i ngā toa, ka pōuri rawa atu te tāone. Nā reira, kei te mārama au ki taua āhuatanga.

Heoi anō rā, ko tētahi atu whāinga, ehara ēnei i te tīmatanga me te whakamutunga o tēnei āhuatanga, he whāinga anake i tēnei wā. Ko tētahi atu whāinga, whakaritenga, me kī, kāre e taea te whakatō rākau paina i runga i ngā whenua karaehe 1 to 6. Ā, ko tētahi atu ture i raro i tēnei kaupapa, tēnei pire, ka taea e ngā kaipāmu ki te whakatō rākau i runga 25 paihēneti o tō rātou ake whenua. Ki tua atu, kua kauparehia ētahi whenua Māori i raro i tēnei, nā reira he āhua pai tērā, tēnei te mihi atu ki te Minita, otirā te Komiti Whiriwhiri Take Taiao, nā te mea ko te āhua nei kua whakarongo rātou ki ngā hiahia a te hunga Māori.

Engari ko tētahi pātai ko tēnei: ki te kōrero mātou mō ēnei mea te Māori me te iwi, kei te kōrero rātou mō wai? Kei te kōrero rātou mō ngā hapū? Kei te kōrero rātou mō ngā whānau? Kei te kōrero rātou mō te tangata tonu nāna tana whenua e mau, e whakahaere? Ko wai rānei? Kei te kōrero rātou mō ngā ahuwhenua? Kei te mōhio pai mātou i ēnei wā te pai o te haere o ngā ahuwhenua, ā, nā rātou kei te ora rawa atu te ōhanga Māori. Mēnā kei te ora rawa atu te ōhanga Māori, kei te ora rawa atu te ōhanga o Aotearoa.

Heoi anō rā, kua rongo mātou i ētahi kōrero e pā ana ki te, me kī, kia āhua ōrite balance. Kei te mōhio pai mātou i tēnei wā ki tērā kōrero e kīia nei kō te rākau tika i roto i te whenua tika—right tree, right place. Heoi anō rā, ki te kōrero mātou mō te whenua Māori, ko tētahi āhuatanga e pā ana ki a rātou, ko ētahi o ngā whenua, ko te paina anake te hua tika mō taua rā whenua. Kei te mārama au ki ngā kōrero o tēnei pire, otirā ngā kōrero, e te Minita, kua wātea ngā whenua Māori, engari, ki tua atu o tērā kei hea rā he whakaaro hei tautoko i a rātou kia rahi ake ō rātou ake pūtea, kia rahi ake ngā hua ka puta i ō rātou whenua. Nā te mea ko ētahi o ngā pāmu e kōrero nei au i roto i Te Tairāwhiti, i muri i ngā āwhiowhio, hau āwhio rā, kua whakakorengia ngā rori, kāre e taea te tae atu ki ō rātou ngahere kia tapatapahi, kia tukuna ki wāhi kē. Arā kei te tino māharahara rātou, ā, kāre au e kitea he oranga mā rātou i roto i tēnei pire.

Ko tētahi atu kaupapa kōrero ko tēnei mea, mēnā kei te whai mātou kia āhua ōrite, kei hea rā ngā kōrero e pā ana ki te “kia whai āhua ōrite te kaitiakitanga o te whenua ki tā te whai pūtea o te whenua”? Kei te mōhio au, āe, kei te wātea ētahi wāhanga whenua Māori, engari kāre au e tino kite kei hea rā te tautoko kia puāwai tonutia tēnei āhuatanga mō ngā kamupene Māori. Kei te kī hoki ētahi kia kōwhiria, kei a koe, māhau e kōwhiria me pēhea tō mahi i tō whenua. Engari kei te māmā rawa atu te kite atu kāre e pērā ai. Kei te kī mai tēnei pire me pēhea rā, tēhea wāhanga o tō whenua ka taea e koe te huri ki rō paina.

Hei whakakapi i tēnei wāhanga mōku, tuatahi, i roto i tēnei, te Wiki o te Reo Māori, kua ako au i tētahi kōrero hou i tēnei rā, arā, he “kaupapa hokohoko tukunga”—emissions trading scheme (ETS). Nā reira me ako tātou i ngā wā katoa. Ko te tino kōrero o tēnei taha o te Whare mō tēnei āhuatanga e pā ana ki tēnei mea te ETS, ahakoa e tautoko mātou i tēnei pire, kei te mōhio pai, ki a au nei, tātou katoa o tēnei Whare, he maha tonu ngā mahi e toe ana i runga i tēnei kaupapa. Kia tino āta tirohia mātou i tēnei kaupapa. Tuatahi kia mārama te katoa he aha ngā ture o tēnei kaupapa, and me pēhea e whai hua ngā tāngata, ngā kaipāmu, me te mea hoki tō mātou māmā, a Papatūānuku, i tēnei kaupapa. Kia kore tātou e wareware, ehara tēnei i te kaupapa anake kia whai hua ngā pāmu, ko tētahi tino kaupapa kia tiakina a Papatūānuku, kia tiakina te taiao.

Nā reira, koirā āku mō tēnei wā. Ahakoa kei te tautoko a Reipa i tēnei pire, kia tūpato tonu tātou. Kia ora.

[Greetings, Madam Speaker, greetings to all. We are fortunate to be here together tonight to discuss this great matter: protecting farmers, protecting forestry workers, and protecting the wellbeing of people.

We’ve heard some of the objectives of this bill. Some have decided that with this bill, people will thrive. We will have food—the cost of food will decrease. However, although that is the objective, we can't say that is how it will be under this bill. You’ve heard from our representative on environmental issues, Deborah Russell, that although Labour supports this bill, there are a number of cautions from this side of the House.

We’ve heard the concerns about small towns; that is, rural communities. I am well versed in those aspects. I grew up in a small town, where I still live, called Rangitukia. As I was growing up, shearing sheds were full of bales. Not so today. I’ve heard that the land was covered with cows. It’s nothing like that today. Vineyards were closed; that work doesn’t happen today. The post office was closed. Therefore, I know quite well about the issues that arise if people can’t find work—they move out of town. If there are no people, then the town will not thrive. There will be no children to fill the school, no people to buy things in the shops, and the town will be very sad. I know all about those issues.

Another objective—and these aren't the be all and end all in regards to these issues; they are just objectives at this time. Another objective, or regulation, you may say, is that pine trees cannot be planted on class 1 to 6 land. Another rule under this scheme, this bill, is that farmers can plant trees on 25 percent of their own land. Beyond that, some Māori land has been exempted under this, so that is a good thing; I thank you, Minister, and the Environment Committee, as it seems that you have listened to the needs of Māori.

However, one question is this: if we are talking about Māori and tribes, who are they talking about? Are they talking about subtribes? Are they talking about families? Are they talking about the people who own and operate the land? Or who are they talking about? Are they talking about agricultural workers? We know how well the agriculture is going, that is the reason the Māori economy is thriving. If the Māori economy is doing well, so is the economy of New Zealand.

However, we have heard some discussion about balance. We know well now about that phrase, the right tree in the right place. However, if we talk about Māori land, one aspect that relates is that for some of the land, pine trees are the only trees appropriate for that land. I understand what this bill says, Minister, that Māori land will be exempt, but beyond that, where has any thought been given to supporting them to improve profits for their lands? Some of the farms that I’m referring to on the East Coast, after the storms, the roads have been closed, and they aren’t able to access their forests to cut trees for distribution. As such, they are very worried, and I can’t see a solution for them in this bill.

Another topic of discussion is whether we’re working towards achieving balance. Where does it talk about “achieving balance between environmental protection of the land and generating revenue from the land”? I understand that, yes, parts of some Māori land are exempt, but I can’t see any support for this aspect so that Māori companies will continue to thrive. Some are saying that you can choose—it’s up to you, you can choose how your land will be used. However, it is clear to see that that is not the case. This bill says how that will happen, which part of your land can be put into pine.

To conclude this part: firstly, as this week is Māori Language Week, I’ve learnt a new phrase today, “kaupapa hokohoko tukunga”—emissions trading scheme (ETS). We should be learning all the time. The predominant position of this side of the House on this issue in relation to the ETS, is that although we support this bill, everyone in this House understands, in my opinion, that there is much work still to do on this scheme. We really need to have a close look at it. Firstly, so that everyone understands its rules and how people, farmers, and indeed our Earth Mother will benefit from this scheme. We should not forget: this scheme is not just for the benefit of farms but a major aspect is protecting our Earth and protecting the environment.

Therefore, those are my views at this time. Although Labour supports this bill, we must still be cautious. Thank you.]

GRANT McCALLUM (National—Northland): Thank you, Mr Speaker. As one of the few farmers in the Parliament, I’m heartened to hear the actual [Interruption]. I said one of the few. They are all on this side, in the Parliament. I’m heartened to hear the support for the rural Nats—oh, did I say that?—support for rural communities in New Zealand; I really am.

Glen Bennett: Oh, the rural Nats.

GRANT McCALLUM: Oh, the support for rural communities from all around the House. You know, I just wish that support had been there before the election, because there’s only one party that campaigned on fixing this problem, and that was the National Party. No other parties campaigned on trying to deal with the excesses of carbon farming in this country. We did; we’re delivering on it. I commend this bill.

Hon DAMIEN O’CONNOR (Labour): Thank you, Mr Speaker. Can I just acknowledge the accurate and true words of the previous speaker, Grant McCallum. He is right. It was only the National Party. The ACT Party wanted the property rights so that people could do anything, anytime. The New Zealand First Party—in fact, Shane Jones—had negotiated to keep the door open for afforestation. A billion trees.

There’s a hell of a lot of bull manure on the floor here tonight when it’s supposed to be a forestry bill. I’ve never heard so many inaccuracies in all my life. In 2003, after the 1990s surge in afforestation, there were 1.8 million hectares of exotic forest. At the end of last year, there was 1.7 million hectares of exotic forests—less now than was in the ground in 2001, 2002, and 2003.

Hon James Meager: What’s happened in between?

Hon DAMIEN O’CONNOR: Well, that’s the facts, you see. Let’s just stick to that. In 1980, there were 70 million sheep in the country. At the end of last year, there were about 23 million. There are a hell of a lot less sheep in the country. In all that time—and I’ve been in farming and around it for all that time—we’ve had massive land-use change. Governments haven’t wanted to intervene too much, because, for the most part, it’s delivered a whole lot of innovation. We had dairy cattle in 1990 at about 2 million. At the end of last year, there were almost 6 million. I didn’t hear the cries of “outrageous shifting from sheep to dairy”. No, I didn’t, because that was a normal part of land-use change. In beef, we went from about 3.2 million in 1980 to about 3.7 million, so it stayed pretty stable.

I’ve been around the country too, and I’ve seen a lot of farms planted in trees. I get a bit concerned because a lot of them are on easy, rolling farmland. In fact, I flew as Minister over the Wairarapa. The fact that it was a terrible drought and the fact that the farmers couldn’t make any money on that land from sheep or grazing and it had been purchased by someone for I don’t know what sort of amount of money and planted in trees is something I was personally very uneasy with. The Government of the day wasn’t prepared to say to the farmers selling—these are farmers selling, not Government—the land, “No, you take $5 million for your property because that’s all it’s worth as a dry-stock property. Don’t take the $10 million being offered by the forestry company.”

In fact, it was New Zealanders buying farms to go in for carbon credits. The door had been left open—at Minister Jones’ insistence—for production forests if foreigners wanted to come in. These are the realities. Can I just clarify a few facts in this highly emotive debate. The fact is that this coalition Government has no plans to reduce emissions other than to plant more trees. They’re kind of hoisted by their own petard a little bit. On one hand, they’re saying, “We don’t want to.”; then, on the other hand, they’re saying, “We have to.”

I have concerns for rural communities.

Grant McCallum: Really?

Hon DAMIEN O’CONNOR: Well, yes, I do. At the moment, 22 percent of the workers in Canterbury are migrant workers. Most of those will be single, and some will have families. There’s been a massive shift in the people working in rural New Zealand because farmers are employing migrant workers over New Zealanders. Most of them come without families. That’s why the schools are seeing less people.

The 20,000 to 25,000 workers across New Zealand has meant that we’ve had a change in schools and rural communities. Now, if we stick to the facts, then we can get on and help rural communities and address the issues. If the ACT Party is now saying they’re going to intervene and tell people who they can sell their farms to and who they can’t, then be honest about that. We don’t want to do that. Labour in Opposition want to see innovation across New Zealand. There will be changing land use. We don’t want to see good farms planted in forests, but those are the decisions of farmers, not of Government.

Hon JAMES MEAGER (Minister for Hunting and Fishing): It’s obvious that the Opposition haven’t visited a rural school in the past two decades, because when you visit rural schools, usually they are full of diverse, rich cultural backgrounds from our wonderful migrant communities who make an enormously great and valuable contribution to our dairy sector, to our sheep and beef sector, to our farming sector, and we should acknowledge the contribution that they make to help get food on the table for New Zealanders.

This is a really good bill, and it was really disheartening to hear about the lack of plans from the other side, of course. For the two years that we’ve seen them so far, they’ve planned to do absolutely zip, zilch, nothing apart from wait for Scott Willis to lend them a copy of his budget.

Madam Speaker, it’s lovely to have you, a farmer, in the Chair as we wind up the rest of tonight. We’ve been here for a while—not as long as I expected. Some people ran out of energy—not us. We could be here all night, but we’ll be finishing up very soon. I commend the bill to the House.

Hon PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Speaker. As many others have traversed in the House or laid out in the House today, this is a bill that the Government has introduced that aims to reduce the amount of farmland that can be converted to forestry. We know that New Zealand is one of only two countries in the world that allows unlimited forestry offsets in its emissions trading scheme (ETS). As has been pointed out, it was something that the Hon Shane Jones in New Zealand First had pushed for as well and made worse.

This Government is bringing in this bill to try and address that, but as we have outlined, submitters from various industries, various sectors actually agree and feel that this bill doesn’t go far enough for different reasons. We’ve heard from Federated Farmers, we’ve heard from Beef + Lamb New Zealand, they don’t feel that this goes far enough because they’ve made the point, they’ve made the case quite clearly that, actually, 89 percent of farm conversions to date have occurred on Land Use Capability class 6 to 8 land. We know that the limitations in this piece of legislation don’t really apply to class 7 and 8 land—that can be converted willy-nilly or open slather, and the 25 percent and the 15,000 apply only to the other classes of land.

So they feel that this doesn’t go far enough because the moratorium should be extended to all land classes. We say that it doesn’t go far enough because this is the Government, as usual, just tinkering around the edges. This is a band-aid solution.

Joseph Mooney: Your Government did nothing—literally nothing.

Hon PRIYANCA RADHAKRISHNAN: The member who resumed his seat claims that we did nothing in this space. We actually initiated a more comprehensive review into the ETS. The Climate Commission has also agreed that that is actually what the direction of travel should be, but, of course, this is not a Government that actually wants to do anything of substance. [Interruption]

DEPUTY SPEAKER: All right, cut the shouting.

Hon PRIYANCA RADHAKRISHNAN: All they want to do is tinker around the edges. It presents to this House a band-aid solution, but we say on this side that perhaps that’s better than them doing nothing and so we will cautiously support this bill, largely because what it does is benefit rural communities, as my colleague the Hon Damien O’Connor pointed out as well. We know that that wholesale shift to forestry has led to a loss of employment, a loss of jobs, and that has then had flow-on impacts on rural communities when it comes to the closure of schools and the closure of services. We don’t agree with that, and, for that reason, we are cautiously supporting this bill.

I do want to make two more points before I resume my seat and end my contribution. One of them is the process of the Amendment Paper that was tabled today, a very short while before this House went into committee stage to consider this bill clause by clause. I do take the Minister’s point—the Minister in the chair made the point that the remainder of this bill went through a select committee process, and that is true, but the Amendment Paper that was tabled today was tabled very late. It was significant. It made some changes to the bill that we still don’t quite get—we actually think on this side of the House that it has confused the bill further in terms of the way that it is laid out and the fact that we didn’t really get any answer for the rationale behind two ballots per year rather than the annual ballot that was considered by the Environment Committee. The Minister made the point that that increases choice for those who will be applying through the ballot but didn’t give us much of an explanation as to why that was required, and there’s still some confusion around how that plays out.

The final point that I want to make is back to the point around—

Hon David Seymour: The member should have prepared a speech.

Hon PRIYANCA RADHAKRISHNAN: —from the heckling from the other side, who clearly don’t really care about what is being discussed. [Interruption] The point that I will make is that the reason that I talked about this Government tinkering around the edges is that there’s literally—

DEPUTY SPEAKER: Sorry to interrupt the speaker. Interjections are fine, but barrage is not. There’s another speech expected from the other side, and maybe we’ll make the next one a speech and then the other side can have their say.

Hon PRIYANCA RADHAKRISHNAN: Thank you, Madam Speaker. It would be good if members opposite would actually take a call and maybe lay out their position rather than just speaking for a couple of seconds to try and hasten the passage of this bill, given that we are sitting in urgency that the Government has brought about.

The point that I wanted to make, and the reason that many of us on the side of the House have basically said that the Government is just tinkering around the edges here, is because we had initiated a review into the ETS. That is the broader issue at play here. We know that the Climate Commission has made the same point. We know that Federated Farmers has agreed with the Labour Party’s differing view at select committee. The view was that we need a more fulsome review into the ETS. This isn’t it. This doesn’t go far enough from that point of view. To that end, we had initiated a review that this Government then put an end to. To the member who then says we did nothing about it—there was a review. All the Government needed to do was to continue that and actually bring it to its conclusion, but, no, the decision was to stop that and to go with a band-aid solution instead.

What they’ve done is to reduce climate financing commitments from their side, delays in adaptation planning. All we are doing as a nation as a result of the decisions made by this Government is to drift off course when it comes to actually reducing emissions, which is what we should be reviewing the ETS for.

The Parliamentary Commissioner for the Environment has also made the point that we need to look at the role of forestry in ETS entirely as well. Yet this Government persists in removing initiatives that we put in place to decarbonise sectors, particularly sectors that significantly contribute to New Zealand’s emissions profile. As a result, what people are going to cotton on to is that the lack of action by this Government when it comes to addressing climate change is actually a cost of living issue, because at a time when we’re seeing things like power, food prices, and transport costs increase because of this Government’s decisions, their lack of action on addressing climate change will only increase all of those costs for New Zealanders.

For a Government, for three parties that campaigned on reducing the cost of living to then make decisions and lack thereof that contribute directly to the increasing cost of living, I think New Zealanders are going to see through this Government pretty soon.

Hon DAVID SEYMOUR (Deputy Prime Minister): I rise on behalf of ACT in support of this wonderful bill by our coalition Government. It is the product of getting out and listening and hearing the hopes and the concerns of people in rural New Zealand. They say our communities were founded on a diverse economy, not just on silviculture. They say we see our schools shutting down and that there aren’t enough kids in the schools, and the reason for that is that people don’t come out of trees, with the possible exception of Steve Abel. People say there are not enough kids in the schools, but there’s not enough community and there are not enough jobs in a society that has nothing but trees being grown to absorb carbon dioxide for the benefit of others. People resent seeing their community taken over in that way, and they asked us for action.

We’re also a Government that believes in property rights. We believe that if you own the property, it should be your choice what you do with it. How have we managed these conflicting concerns in the community? We’ve said, “You can convert.”, but we have reduced the artificial incentive in the emissions trading scheme to only 15,000 new hectares per year so that there will not be a rapid and rapacious reduction in the amount of community that comes from traditional agriculture in rural New Zealand. That is the mark of a Government that listens. It’s a tribute to our climate Minister, Simon Watts, and it is the symbol of three parties working together in order to get a better outcome for the people who pay the bills and gave us the ticket to be here.

It makes me very proud to be part of a Government with sophisticated policy-making. For those people in the heartland of rural New Zealand, it is a massive win tonight. I commend this bill to the House.

JOSEPH MOONEY (National—Southland): Thank you very much, Madam Speaker. It’s a true privilege to rise and speak on this bill and make the final speech before it passes into law. I had a role in shaping this policy before the election and took this to the election, and I’m very pleased to have a coalition Government that has delivered on a very difficult piece of legislation that respects, honours, and acknowledges the importance of farming in New Zealand; respects and acknowledges the importance of forestry in New Zealand; and acknowledges that carbon forestry had skewed the balance.

We are stopping the full conversion of farms with this bill tonight. We are restoring balance, which is incredibly important for the people of New Zealand, and the people of Southland will be very pleased to see this. I commend this bill to the House.

Scott Willis: Madam Speaker—

DEPUTY SPEAKER: You’ve already spoken on this piece of legislation. You can’t speak a second time. That is why, when there was competition for Te Pāti Māori call, there was only one applicant—because you’d already spoken. I’m about to put the vote so we will now have quiet. I know it’s getting late but we will have quiet.

A party vote was called for on the question, That the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill be now read a third time.

Ayes 102

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

Noes 20

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

Motion agreed to.

Bill read a third time.

DEPUTY SPEAKER: This concludes the business of urgency. The House is adjourned until 2 p.m. tomorrow.

The House adjourned at 11.14 p.m.