Tuesday, 28 April 2026

Tuesday, 28 April 2026

The Speaker took the Chair at 2 p.m.

Start of Sitting Day

Karakia/Prayers

SPEAKER (14:00): Almighty God, we give thanks for the blessings which have been bestowed on us. Laying aside all personal interests, we acknowledge the King and pray for guidance in our deliberations that we may conduct the affairs of this House with wisdom, justice, mercy, and humility for the welfare and the peace of New Zealand. Amen.

Presentation

Papers

SPEAKER (14:01): No petitions have been delivered to the Clerk for presentation.

Ministers have delivered two papers.

CLERK (14:01): Climate Change Commission, Advice on NZ ETS unit limits and price control settings for 2027-2031.

SPEAKER: Those papers are published under the authority of the House—

CLERK (14:01): Free Trade Agreement—sorry; one to go—between the Government of New Zealand and the Government of the Republic of India.

SPEAKER: Yeah, well, that paper is also published under the authority of the House.

Select Committee Reports

SPEAKER (14:01): Nine select committee reports have been delivered for presentation.

CLERK (14:01):

Report of the Environment Committee on the Environment (Disestablishment of Ministry for the Environment) Amendment Bill

report of the Finance and Expenditure Committee on the Reserve Bank of New Zealand Monetary Policy Statement, February 2026

report of the Governance and Administration Committee on the reports of the Controller and Auditor-General: How Tasman District Council and Waikato Regional Council mitigate flood risk; Improving Auckland Council's emergency preparedness: A follow-up report

report of the Health Committee on the briefing on menopause education and awareness

reports of the Officers of Parliament Committee on the

2026-27 draft budgets for the Office of the Controller and Auditor-General, the Office of the Ombudsman, and the Office of the Parliamentary Commissioner for the Environment; alterations to the 2025-26 appropriations for Vote Audit, Vote Ombudsmen, and Vote Parliamentary Commissioner for the Environment

2026-27 draft budgets for the Parliamentary Service and the Office of the Clerk of the House of Representatives

reports of the Petitions Committee on the

petition of Barbara Kuriger MP

petition of Brian Webb

report of the Regulations Review Committee on the complaint about the Airports (Cost Recovery for Processing of International Travellers) Regulations 2025.

SPEAKER: The bill is set down for second reading, and the reports from the Finance and Expenditure, Governance and Administration, Health, Officers of Parliament, and Regulations Review Committees are set down for consideration.

Bills

Serious Fraud Office Amendment Bill

Introduction

SPEAKER (14:02): The Clerk’s been informed of the introduction of a bill.

CLERK (14:03): Serious Fraud Office Amendment Bill, introduction.

SPEAKER: The bill is set down for first reading.

Oral Questions to Ministers

Economic Growth

Question No. 1

TOM RUTHERFORD (National—Bay of Plenty) (14:03) to the Minister for Economic Growth: What recent announcement has the Government made on economic growth?

Hon NICOLA WILLIS (Minister for Economic Growth) (14:03): The Government has recently announced the signing of a historic free-trade agreement (FTA) with India. This once-in-a-generation deal will support more jobs, higher incomes, and stronger export growth by eliminating or reducing tariffs on 95 percent of New Zealand exports, with almost 57 percent duty-free from day one, rising to 82 percent when fully implemented. I note that the member is from the Bay of Plenty, where growers will be particularly interested that the agreement provides duty-free access for kiwifruit within a quota almost four times our recent average exports, with tariffs outside that quota halved. It also delivers a 50 percent tariff cut for a large quota of apples—listen up, my friends from the Bay—nearly double recent average exports, and improved access over time for avocados, persimmons, blueberries, and cherries. This is good news for horticulture, good news for regional New Zealand, and good news for economic growth.

Stuart Smith: What opportunities does this agreement create for businesses and exporters across the Marlborough region?

SPEAKER: Now, this will surprise.

Hon NICOLA WILLIS: This agreement creates significant opportunities for producers in Marlborough’s world-leading wine sector. Tariffs on New Zealand wine will reduce from 150 percent currently to either 25 percent or 50 percent, over 10 years, depending on the value of the wine, alongside a most-favoured nation commitment. That is a major step forward in improving our competitiveness in a fast-growing market. Since Australia’s free-trade agreement with India, Australia has had a significant tariff advantage over New Zealand wine exporters. This agreement, which the Government has ensured, will put New Zealand producers back on a competitive footing, allowing Marlborough wineries to compete on quality and reputation, rather than being held back by tariff barriers.

Suze Redmayne: What does this agreement mean for businesses and exporters across the mighty Rangitīkei and rural New Zealand?

SPEAKER: Where?

Hon NICOLA WILLIS: This agreement is very good news for rural New Zealand indeed. It delivers immediate tariff elimination on sheep meat and wool exports into India, removing barriers that have made it harder for New Zealand producers to compete, and putting our exporters on a more level playing field with competitors. Before the Australia - India FTA, New Zealand had 80 percent of the market share in India for sheep meat. Since then, our share has fallen while Australia’s has grown. This agreement the Government has signed eliminates tariffs and helps New Zealand’s world-class lamb win back market share. For farmers and processors in Rangitīkei and across rural New Zealand, that is practical support for growth, jobs, and higher incomes.

Rt Hon Winston Peters: With respect to the US$20 billion to go from our economy to the Indian economy over 15 years, what does she make of Prime Minister Modi’s comments “The investment commitment of $20 billion by New Zealand will further strengthen our cooperation in agriculture, manufacturing, innovation and technology”, or the Indian Government Press Information Bureau’s comment “A Rebalancing Clause is incorporated into the Agreement to provide a framework for addressing any shortfall in investment delivery, thereby ensuring robust and tangible economic outcomes.”—does she agree with those comments via those sources?

Hon NICOLA WILLIS: The agreement speaks to an aspiration for the levels of investment that will occur into India. Both countries understand this is a landmark trade agreement that expands opportunity. Different Governments, naturally, communicate to different domestic audiences, but the agreement text is what matters. The substance is clear: better access for New Zealand exporters. In terms of aspiration, I’d point out the aspirations of those who signed the free-trade agreement with China, and I’d point out the detractors were proven wrong.

Hon David Seymour: As a politician of many, many years’ experience, is she aware that usually when there is a deal, both sides talk up the benefits for their domestic audiences, or does she not find that surprising at all?

Hon NICOLA WILLIS: Well, the member makes a good point. It has also been my experience that, even in things such as coalition agreements, both sides talk up their respective contribution. So has it been, and so may it well continue.

Rt Hon Winston Peters: Is the finance Minister telling the country that what Modi is saying, what Goyal is saying, what the Indian press are saying, and what the Indian officials are saying, in terms of their checking the investment pathway into the future, is not on a contractual basis; it’s purely aspirational?

Hon NICOLA WILLIS: What I’m simply saying is that the Indian side are using a different turn of phrase to describe that aspiration—just as that member’s colleague uses a different turn of phrase of refer to Indian New Zealanders than I would ever use.

SPEAKER: Supplementary, Maureen Pugh.

Hon Shane Jones: Free speech, free speech!

SPEAKER: Just a moment. I call Maureen Pugh.

Maureen Pugh: Thank you, Mr Speaker. What will this agreement mean for businesses, exporters, and workers in the West Coast - Tasman electorate?

Hon NICOLA WILLIS: This agreement will mean new opportunities for some of the key industries that underpin the West Coast - Tasman economy. The agreement delivers immediate tariff elimination from day one on coal exports into India, improving competitiveness for West Coast producers. It also provides duty-free access on most iron, steel, and scrap aluminium over 10 years or less. For a region like the member’s, built on hard work, resources, and manufacturing capability, that means stronger export opportunities, more confidence to invest, and support for local jobs. It is another practical step toward doubling the value of New Zealand’s exports and growing the economy so that Kiwis can get ahead.

Prime Minister

Question No. 2

Hon MARAMA DAVIDSON (Co-Leader—Green) (14:10) to the Rt Hon Christopher Luxon: 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) (14:10): Yes.

Hon Marama Davidson: Is he comfortable with the fact that New Zealand workers are 60 percent more likely to die from work-related injuries than Australian workers?

Rt Hon CHRISTOPHER LUXON: Of course not, and that’s why we’re fixing it to make sure that employers focus on the risk to be managed rather than just box-ticking.

Hon Marama Davidson: How can he be confident in his health and safety reforms given officials found they will not save any of the, on average, 18 lives lost each week in this country from work?

Rt Hon CHRISTOPHER LUXON: Because when we go to talk to employers, a lot of them say they go through box-ticking exercises rather than actively managing the real risks.

Hon Marama Davidson: Can he name one intervention in his Government’s health and safety reforms that will reduce harm or save lives?

Rt Hon CHRISTOPHER LUXON: Well, again, the focus on managing on critical risks that actually cause serious harm and damage to workers.

Hon Marama Davidson: Why does he think healthcare professionals and law experts have described his reforms as “a regression in worker health protection” and “a step backwards”?

Rt Hon CHRISTOPHER LUXON: Well, you’d have to ask them but, again, as I said, we’re about managing critical risk rather than box-ticking.

Hon Marama Davidson: What does he say to Sonya Rockhouse who lost her son Ben in the Pike River mine explosion, who said of his safety at work reforms: “That’s absolutely an insult to the memories of our guys—and not just our guys but the rest of the people killed in the workplace every year.”?

Rt Hon CHRISTOPHER LUXON: Well, I empathise with all families who lost loved ones in that disaster. Again, as I understand it, there has been no change to our mining regulations.

Prime Minister

Question No. 3

Rt Hon CHRIS HIPKINS (Leader of the Opposition) (14:12) to the Prime Minister: Does he stand by all of his Government's statements and actions?

Rt Hon CHRISTOPHER LUXON (Prime Minister) (14:12): Yes.

Rt Hon Chris Hipkins: Does he stand by his statement: “We are starting our 100-day plan with a laser focus on bringing down the cost of living.”; if so, is the cost of living crisis better or worse after 883 days of his leadership?

Rt Hon CHRISTOPHER LUXON: Well, I’d actually say inflation is down from the highs of 7.3 percent to 3.1 percent; food inflation’s come down from 12.5 percent to 3.4 percent; interest rates are saving New Zealanders about $8,000, on average, per year, they’re down nine times versus going up 13 times under his Government; and we have stable rents in this country after rents went up $180 per week under your Government.

Rt Hon Chris Hipkins: Is it cheaper or more expensive for the average family to go to the supermarket now than when he became Prime Minister?

Rt Hon CHRISTOPHER LUXON: Well, again, there are lower levels of inflation and we have inflation within a band, but I do find it a bit curious: we’ve got the Leader of the Opposition arguing for something called deflation. That is essentially the arguments that he’s been running over recent weeks and, I can tell you, that is very, very bad for an economy because actually that means lower incomes and lower wages for everybody, and that’s not what we’re about. We want stable increases in inflation within the band of 1 to 3 percent, and that’s what we’re delivering.

Rt Hon Chris Hipkins: Why did his Government promise to lower the cost of living and lower grocery prices?

Rt Hon CHRISTOPHER LUXON: Well, because we have actually taken inflation down from a 32-year high, which that member ran up to 7.3 percent, back within the band. We want to see small, moderate increases in inflation but within a 1 to 3 percent band.

Rt Hon Chris Hipkins: Why has his Government chosen not to provide any additional support during the fuel crisis to nine out of 10 New Zealand households?

Rt Hon CHRISTOPHER LUXON: Well, we have provided $50 per week to working families, benefitting 143,000 households. We have provided support to health and community support workers; we’ve provided support to relief teachers in rural and isolated school scenarios. As we have said, we have learnt the mistakes from COVID. Actually just spraying a cash bazooka around, driving up huge amounts of inflation, interest rates, and putting the economy into a recession is unacceptable, but equally we have timely, targeted, temporary support for New Zealanders in need.

Hon Chris Bishop: Why did the Government chose to exclude parents who work part-time from the additional cost of living support he just mentioned?

Rt Hon CHRISTOPHER LUXON: Well, again, this Government is choosing to have timely, targeted, temporary support for vulnerable New Zealanders, particularly working New Zealanders. That’s why we delivered it through the In-Work Tax Credit. That’s why we’ve delivered support to health and community support workers and why also to relief teachers.

Rt Hon Chris Hipkins: Why are parents who go to work every day part-time not eligible for the timely, targeted support that his Government claims it’s providing?

Rt Hon CHRISTOPHER LUXON: Because our focus has been on working families, and that’s what we’ve delivered through in-work family tax credits. We’ll continue to look at how we can support other New Zealanders, but it has to be through the lens of temporary, targeted, and timely.

Rt Hon Chris Hipkins: Why does his Government adopt a definition of “working families” being only those who are working full-time and not those who are working part-time?

Rt Hon CHRISTOPHER LUXON: Again, we have focused on families where they are working full-time in order to be able to get their kids to school, to be able to go to work, and actually by delivering them $50 in support each and every week.

Education

Question No. 4

KATIE NIMON (National—Napier) (14:15) to the Minister of Education: What recent announcement has she made regarding accelerating maths achievement?

Hon ERICA STANFORD (Minister of Education) (14:16): Last week, I announced the findings from the conclusion of the year 7 and 8 maths acceleration trial. The trial was designed to accelerate maths achievement for children who are more than a year behind the curriculum. The final analysis confirmed our approach is working to bridge the gap for students who need it the most. Participants in round two also made up two years’ worth of progress across four key foundational areas in 12 weeks. The data shows that when students were tested three months later, their progress had largely been retained. When achievement is put at the heart of our education system, this is what it looks like to deliver results.

Katie Nimon: How did the maths acceleration trial boost achievement?

Hon ERICA STANFORD: Through the trial, students received maths tutoring four times a week for 12 weeks, focused on core foundational areas of the maths curriculum like basic facts, fractions, percentages, and word problems. Students achieved similar results regardless of their background, their gender, or their ethnicity. These results were achieved through quality teaching, quality resourcing, a structured approach, and a Government committed to the belief that every child should have the ability to succeed. We are providing the support and resources to do just that.

Katie Nimon: How does this announcement connect to her wider math programme?

Hon ERICA STANFORD: Following the success of the trial, we are now rolling out the maths acceleration programme to 14,000 students to set them up for success at high school. As these students progress into year 9 and 10, they’ll also benefit from the new digital teacher guides and student workbooks we’ve rolled out this year to continue to support their achievement in maths. This is all on top of the new structured curriculum, maths books for all year 0 to 8 students, and the 143 fulltime-equivalent maths intervention teachers providing small group support to accelerate learning at primary. Parents, we are committed to providing schools with the funding and the resources required so that your children experience success in mathematics.

Katie Nimon: What does this mean for parents?

Hon ERICA STANFORD: Parents can feel confident that we are delivering a cohesive approach to mathematics education: a clear, consistent, structured curriculum; an hour a day of maths; workbooks in the hands of every primary child; consistent nationwide assessment of progress, alongside clear reporting to parents; and effective, targeted acceleration supports for students who need it. We are committed to raising achievement and we’re not just talking about it; we’re doing it.

Finance

Question No. 5

Hon BARBARA EDMONDS (Labour—Mana) (14:18) to the Minister of Finance: Vinaka vakalevu, Mr Speaker. Does she stand by all her statements and actions?

Hon NICOLA WILLIS (Minister of Finance) (14:18): In context, yes.

Hon Barbara Edmonds: Is the Prime Minister correct that under her Government, New Zealand’s economy is shrinking?

Hon NICOLA WILLIS: I’m not aware of the context or quote that the member is referring to.

Hon Barbara Edmonds: Is Stats New Zealand wrong when it shows that real GDP per quarter is smaller now than when she took office?

Hon NICOLA WILLIS: In general, Stats NZ gets it right, and they also show that nominal GDP is larger.

Hon Barbara Edmonds: Does she think that 52 percent of Kiwis that are now pessimistic about the state of our economy under her leadership are in the habit of “glass half-empty economics”?

Hon NICOLA WILLIS: No, not at all. I think they’re living in the real world, where there’s a huge conflict in the Middle East and where we are experiencing the largest oil shock in history. New Zealanders are alive to the fact that those events have implications back at home, and it makes them feel somewhat pessimistic about the state of the world and realistic about the fact that New Zealand will be impacted by that. That member may be living in a delusion where she thinks that events in the Middle East don’t have an impact here, but New Zealanders are not.

Hon Barbara Edmonds: Does she agree with the Prime Minister that only full-time working families are a working family?

Hon NICOLA WILLIS: Well, no, and that’s not what the Prime Minister said. The in-work tax credit is available to families where they are not dependent on a benefit. It is often the case that Working for Families recipients have one parent working and another parent working part-time; the point is they are not dependent on the Government for benefit support.

Hon Barbara Edmonds: When Chris Bishop, on her behalf, said that the economy should be doing better, is that a reflection of how she is performing as Minister of Finance?

Hon NICOLA WILLIS: No. Attempts to divide Chris Bishop and I will always fail.

Building and Construction

Question No. 6

DAN BIDOIS (National—Northcote) (14:20) to the Minister for Building and Construction: What feedback, if any, has he received on granny flats?

Hon CHRIS PENK (Minister for Building and Construction) (14:20): The feedback on granny flats has been extremely positive. Where Kiwis used to look at their backyards and see red tape, high costs, and long delays, now they see endless possibilities, or at least up to 70 square metres’ worth. Just recently in New Plymouth, with my colleague and friend David MacLeod MP, a group of builders told us that after decades in the industry, it is finally good to see rules becoming easier and not harder for a change, and there is more where that came from.

Dan Bidois: How much interest has there been in the granny flat changes?

Hon CHRIS PENK: There’s been significant interest in granny flats, which shows that the public supports the Government’s plans to make it easier, faster, and more affordable to build. Officials have told me that there have been some 94,000 views of the granny flat guidance web page and 52,000 downloads of the supporting resources. This indicates strong demand by homeowners, tradies, and, of course, businesses.

Dan Bidois: Is the Government making any changes to the granny flat rules?

Hon CHRIS PENK: Yes, and, in fact, today the Government announced, through Mr Jones, Mr Bishop, and me, that we are making changes to the rules to make the regime even easier than we had first said that it would be to use. These include specifically allowing for off-site construction to begin before a project information memorandum, or PIM, is issued by the local council. This will be a game-changer for the off-site manufacturing of minor dwellings. In addition, we are making changes to allow for more products to be used to construct granny flats, such as structural insulated panels with a CodeMark certificate.

Dan Bidois: What are the benefits of granny flats?

Hon CHRIS PENK: Granny flats give Kiwi families more choice about how and where they want to live. They allow—

Hon Dr Duncan Webb: Keep granny out of the house.

Hon CHRIS PENK: —extended families to stay connected. They’re not just for grannies, you’ll be pleased to know, but also other old folk—Dr Duncan Webb—and for all ages, as a matter of fact, and they provide a practical housing option for workers in rural areas. By removing the need for a building and a resource consent, Kiwis will save up to $5,650 in direct costs and up to 14 weeks in paperwork.

Rt Hon Winston Peters: To put it succinctly: which party is responsible for this brilliantly futuristic granny flats policy?

Hon CHRIS PENK: The Government as a whole is responsible, but I would be remiss if I didn’t acknowledge the point that the member has prompted me to make, which is to say that New Zealand First has been very vociferous in the advocacy of the policy. I’ve been pleased to work alongside the Hon Shane Jones as well as Chris Bishop and, of course, the Government as a whole, and, I might add, we have been supported across the House in this endeavour.

SPEAKER: Yeah, no charge for the advertorial. Question No. 7, Chlöe Swarbrick.

Rt Hon Winston Peters: Point of order, Mr Speaker. That comment, sir, was totally uncalled for. It just happens to be a fact, and this country has made itself famous for being one of the great property-owning democracies of the world. We’ve tried to do that again, and it’s not a puerile sentiment; it’s a sincere belief held by a political party in this Parliament—and you’re talking to it.

SPEAKER: I think the member misunderstands me. I’m a great supporter of that particular policy, as the Minister will attest to.

Prime Minister

Question No. 7

CHLÖE SWARBRICK (Co-Leader—Green) (14:24) 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) (14:24): Yes.

Chlöe Swarbrick: Is the Prime Minister concerned about our country’s exposure to imported inflation?

Rt Hon CHRISTOPHER LUXON: We are working very hard to minimise the impacts of the fuel crisis on both inflation and growth, and that’s why we’re taking a very balanced approach to make sure we don’t repeat the mistakes of COVID—causing high levels of inflation and interest rates—while also trying to support vulnerable New Zealanders.

Chlöe Swarbrick: What does the Prime Minister understand imported inflation to be?

SPEAKER: Try and make this succinct.

Rt Hon CHRISTOPHER LUXON: I understand inflation, rest assured. To the member, I understand inflation.

Chlöe Swarbrick: Has the Prime Minister read reports from Moody’s and Fitch downgrading our country’s credit rating outlook for reasons including our exposure to imported inflation, and, if so, what exactly is his Government doing to reduce our exposure to imported inflation?

Rt Hon CHRISTOPHER LUXON: Well, look, I want to thank the member for raising the issue of the credit ratings because we have a negative outlook from both Moody’s and from Fitch. What’s quite obvious is that they are saying, very clearly, spend more, tax more, borrow more is not the way forward to manage our fiscal track. I’d just say to that member, if she took those warnings seriously, she’d backtrack from her policy of, actually, borrowing another $44 billion and increasing taxes by another $90 billion.

Chlöe Swarbrick: Has his Government increased or decreased our exposure to imported inflation as a result of his $1 billion decision to invest in a new liquefied natural gas import facility?

Rt Hon CHRISTOPHER LUXON: Well, I’d just say the single biggest thing that that member needs to take accountability for is the oil and gas ban. That is what has created a huge disfunction within our energy policy in this country. That’s what this Government’s fixing up.

Chlöe Swarbrick: Can the Prime Minister name just one action of his Government to reduce our country’s exposure to imported inflation?

Rt Hon CHRISTOPHER LUXON: I would just point to the work of fast track, which is now rapidly consenting renewable projects up and down this country, including, just in the last week, where a housing development with renewable energy was supported; including projects in the South Island that were cancelled or not progressed under the previous administration and that power up 100,000 homes with renewable energy. That’s a good thing.

Hon David Seymour: Isn’t the worst kind of imported inflation $100 billion of debt borrowed on the global credit markets and pumped into the New Zealand economy while the member asking the question was almost in Government, and is that why this Government is getting us back into surplus?

Rt Hon CHRISTOPHER LUXON: There’s no doubt about it. There has been damage done to New Zealand’s fiscal track through increasing debt by three times. It went from $60 billion to $180 billion under the previous administration—$66 billion worth of spending, half of which can’t be accounted for.

Prime Minister

Question No. 8

DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori) (14:27) to the Prime Minister: Does he stand by all his Government’s statements and actions?

Rt Hon CHRISTOPHER LUXON (Prime Minister) (14:27): Yes.

Debbie Ngarewa-Packer: Does the Prime Minister agree that the Treaty clause review will achieve the same effect as the Treaty principles bill, and, if so, will he be voting against any resulting legislation, just as he voted against the Treaty principles bill?

Hon Shane Jones: Point of order. Speakers’ rulings are very clear—I think it’s 195—Ministers are not responsible for responding to unsubstantiated allegations. That is clearly wrong.

SPEAKER: Yes, but it was posed as a question, a question to the Prime Minister, who ranges over all topics. It’s something I’m sure he can answer quite succinctly.

Rt Hon CHRISTOPHER LUXON: Well, what we’re doing is we’re making sure that there isn’t any uncertainty and that everybody’s clear with their obligations under legislation. Open ended, generic Treaty clauses cause confusion and don’t give clarity. We want them to be specific.

Debbie Ngarewa-Packer: Can he name a single piece of legislation where Te Tiriti o Waitangi protections have been strengthened under this Government?

Rt Hon CHRISTOPHER LUXON: Well, again, I’d just say the problem that we’re trying to address with this legislation are generic Treaty principle clauses that variously say, “give effect to” and “take account of” the principles. What we want is consistency so that everybody has clarity about the obligations they have to each other.

Debbie Ngarewa-Packer: Is his Government removing Treaty clauses from legislation so that they can avoid honouring Te Tiriti o Waitangi in practice?

Rt Hon CHRISTOPHER LUXON: No, and I reject the characterisation of that question.

Debbie Ngarewa-Packer: Does he deny that this is a systemic roll-back of Te Tiriti o Waitangi?

Rt Hon CHRISTOPHER LUXON: No, this is about making sure that everyone understands their specific roles and obligation to each other by having specific clauses that are relevant to the legislation.

Debbie Ngarewa-Packer: How much money is forecasted to be spend on the Treaty clause review in addition to the millions of dollars that have already been wasted on the failed Treaty principles bill?

Rt Hon CHRISTOPHER LUXON: I can tell you, a lot less than Te Pāti Māori’s taxation policy.

Debbie Ngarewa-Packer: Why is his Government prioritising erasing Te Tiriti o Waitangi from our laws when Aotearoa is facing a climate crisis, a fuel crisis, and a cost of living crisis?

Rt Hon CHRISTOPHER LUXON: In answer to the first leg of the question, we’re not.

SPEAKER: That question was out of order. It’s been answered. Is there another supplementary within the allocation? Not an extra.

Debbie Ngarewa-Packer: OK. I’ve finished.

SPEAKER: Good.

Housing

Question No. 9

Hon KIERAN McANULTY (Labour) (14:30): Point of order, sir. Whilst we do not dispute a Government’s right to transfer a question, this question was originally put to the Minister of Housing on whether he stood by a statement that he had made. It has then been transferred to the Associate Minister, and the Clerk’s Office has had to reword the question in order for it to be relevant. I’m now required to ask the Associate Minister whether he stands by the housing Minister’s statement.

Now, Speakers’ rulings 172/2 indicate that a transfer can be disallowed if a Minister concerned could be expected to have personal knowledge of the question. You have encouraged members to ask questions that are specific and are not statements and actions. If we’re in a situation where we were asking a Minister if they stand by a comment that they made and that can be transferred, naturally, that might lend itself to members simply asking statements and actions questions to try and avoid this in the future.

Hon Chris Bishop: Speaking to the point of order: this is really quite a straightforward matter. The quote in question is concerned with homelessness, which is the delegation for the Associate Minister of Housing, hence why the question’s been transferred to the Associate Minister of Housing. It’s that simple.

Hon Kieran McAnulty: Speaking to that, sir.

SPEAKER: Yeah. Well, last comment.

Hon Kieran McAnulty: Again, we’re not disputing the right to be able to do that, but I would like you to take the opportunity to think about the House’s ability to ask Ministers if they stand by statements that they made, if they can easily transfer it to other Ministers.

SPEAKER: It’s not unusual that questions of that nature are transferred. There’s quite a history of that. It would have been easier for me to make a decision on this had it been brought to my attention a little earlier in the day, perhaps before we came to the House, but it stands.

Hon KIERAN McANULTY (Labour) (14:32) to the Associate Minister of Housing: Does he agree with the Hon Chris Bishop’s statement, “Homelessness is complex and there are no easy answers, but we’re determined to take meaningful actions”?

Hon TAMA POTAKA (Associate Minister of Housing) (14:32): Āna. Yes, and particularly the full statement and comment that was made by my erudite colleague, Minister Bishop: “Homelessness is complex and there are no easy answers, but we’re determined to take meaningful actions—like our Priority One policy which has seen more than 2,100 children and their families moved from emergency housing motels into homes.” May I add that that number is now nearly 2,400 children out of emergency housing into social housing, in addition to an extra circa 1,000 children that have come out of emergency housing and contracted emergency housing since this Government took office.

Hon Kieran McAnulty: How is fining rough sleepers $2,000, as enabled under the Government’s move-on powers, a meaningful action?

Hon TAMA POTAKA: I’m not across the $2,000 matter, but what I am across are the walks that I go on with community housing providers and councils throughout the country, who have said that the actions that this Government have taken, particularly since the announcement of the Housing First 300 places, funded in September 2025, have made a considerable and material impact on the lives of many Kiwis and many New Zealanders and their whānau.

Hon Kieran McAnulty: Is the Salvation Army’s Lieutenant Colonel Ian Hutson wrong when he said, “Move-on powers don’t solve homelessness. They just shift it somewhere else.”?

Hon TAMA POTAKA: Matters to do with the move-on orders should be directed to the Minister responsible for that, but what I would say is this: the various community housing providers and transitional housing providers, including the Hamilton Christian Nightshelter, which the member of Parliament Ryan Hamilton and I have visited recently, have become far more aware of the intent of that proposed legislation and are absolutely supportive of this Government to continue to work closely with community housing providers and others to support Kiwis in need.

Hon Kieran McAnulty: Point of order. At the start of that response, the Minister said that these questions should be directed elsewhere. I just wanted to clarify, given the exchange that we had at the start of the question and given that the Minister of Housing said that homelessness falls under the Associate Minister’s delegation, can I continue to ask questions of this nature to the Minister?

SPEAKER: No, carry on.

Hon Kieran McAnulty: No?

SPEAKER: No. Which Minister are you talking about? You’re dealing with the Minister right now—

Hon Kieran McAnulty: The one I’m talking to. The Associate Minister, sir.

SPEAKER: Yeah?

Hon Kieran McAnulty: Their response was that these questions—

SPEAKER: Yeah, but I can’t determine his answers. It’s not my job to do that. His response was to your question about move-on orders; he was making the point that he’s not responsible for those, they’re with another Minister.

Hon Kieran McAnulty: Is Community Housing Aotearoa CEO Paul Gilberd wrong when he said, “Move-on powers do nothing to address the causes of homelessness … [they] don’t work. They haven’t anywhere in the world.”?

Hon TAMA POTAKA: I regularly catch up with Paul and others who are involved in the community housing space, and they have been absolutely enthusiastic and energised by the way this Government has actually attacked the challenges that come with rough sleeping and a wide range of homelessness, whether or not that is building more houses up and down the country, in places like Ohakune—I was there last Sunday, actually, supporting Ngāti Rangi to open more houses—or, indeed, supporting community housing providers, like the Salvation Army and like many of the entities that Community Housing Aotearoa actually represents, with community finance and the support that we’ve given them around their ability to lend funds to those that are building in this space. There are questions around how fast we can accelerate some of this building, but that’s why we’ve got the Going for Growth platform that Minister Bishop has been diligently leading over the many years, and, of course, the granny flats kaupapa alongside the papakāinga, which are going to see a range of housing typologies built around the country.

Hon Kieran McAnulty: Is the CEO of the national Māori housing body Te Matapihi, Ali Hamlin-Paenga, wrong when she said, “Move-on powers create the illusion of action while leaving the underlying crisis untouched.”?

Hon TAMA POTAKA: We’ve had three questions conflating the issue of the move-on orders with homelessness and with rough sleeping. What I can assure this House is that to see the amount of people, whānau, who have left emergency housing, that moral, fiscal, social, and cultural disaster that was fomented between 2017 and 2023—we have taken responsibility, and we’re not going to stand by and continue to spend $1.1 million a day on emergency housing.

Hon Paul Goldsmith: Is there any suggestion from anybody other than the critics that the proposed move-on orders are the Government’s only solution to homelessness; and is he aware that the Government currently has many levers with which to help New Zealanders who are homeless, including one of the most generous welfare systems in the world?

Hon TAMA POTAKA: Absolutely—I understand where the Minister’s question is going, and what I can say is this: that at the very heart of Auckland Council is a guy called Adrian Wilson who’s been working on homelessness and rough sleeping for the last 10 years, and he has assured me that the work that this Government has done over the last six months has done more for those that are sleeping on the street than over many, many years. I appreciate that endorsement from someone who works at the council of our largest city, who is working closely with those that walk down Queen Street to wake up people at 6 a.m. in the morning. I invite members opposite to get up that early in the morning and join me on those walks.

Hon Kieran McAnulty: How can he stand by the move-on powers when his own ministry said they don’t work, that they won’t do anything meaningful to improve homelessness, and explicitly advised him not to proceed with them?

Hon TAMA POTAKA: There are a range of opinions that are proffered in relation to the steps that we have taken in order to address the root causes of homelessness. I had several opinions offered to me that our work around priority one and tightening the gateway for emergency housing would not work. However, as we have heard today from me, Auckland Council staffers have assured me that the work that we have done has been very successful, alongside community housing providers and people like Barbara Browne, who runs Kāhui Tū Kaha, who I’d invite members opposite to engage with. Finally, some people say and advise of things that would work. Well, guess what? The oil and gas ban didn’t work, and you thought it would.

Hon Kieran McAnulty: Point of order, Mr Speaker. Speakers’ rulings make it very clear that Ministers are not to introduce new material into a clear line of questioning. That had nothing to do with the final comment of his question—absolutely nothing.

SPEAKER: That is quite true.

Mental Health

Question No. 10

Dr CARLOS CHEUNG (National—Mt Roskill) (14:40) to the Minister for Mental Health: What recent announcements has the Minister made about faster access to mental health support?

Hon MATT DOOCEY (Minister for Mental Health) (14:40): Our mental health plan is delivering results, faster access to support, more front-line workers, and a better crisis response. Recently, I opened two new crisis recovery cafes in Christchurch and Dunedin. This means more New Zealanders will have faster access to mental health support. I’ve heard loud and clear from people that emergency departments can be incredibly overwhelming and not the best environment. With these new services opening, there is a calm, non-clinical space where people can receive support from those with lived experience. Crisis recovery cafes connect people with community services, wraparound support, and can help refer people to long-term support. To deliver a better crisis response, we want to ensure there is someone to call, someone to respond, and somewhere to go.

Dr Carlos Cheung: Why is the Government expanding peer support workers in emergency departments?

Hon MATT DOOCEY: Improving our crisis response is a key part of our mental health plan. That’s why we’re expanding peer support workers in emergency departments. These are people with lived experience of recovery who understand what it is like to be in crisis; and can sit alongside someone, help them feel heard, and support them through the process. I recently announced that Whangārei, Hutt Valley, and Hawke’s Bay are the latest hospitals to get peer support workers in their emergency department. They will join the roll-out of peer support specialists already working in eight emergency departments around the country since coming into office. No matter where you live, this Government is committed to ensuring that the right support is there.

Dr Carlos Cheung: What progress is being made to ensure young people get faster access to mental health support?

Hon MATT DOOCEY: More good news for mental health: we’re reducing wait times and we’re growing the front-line workforce. Last month, I opened a new dedicated child mental health service in Counties Manukau. The service has been established to support young people, up to intermediate age, along with their families who are experiencing, or are at risk of developing, moderate to severe mental health challenges. The multidisciplinary team will provide wraparound support and include psychiatry, nursing, clinical psychology, and social workers to work with young people and their families. Behind every one of these new services are hundreds of Kiwis now getting the support they need.

Dr Carlos Cheung: What recognition has the Minister given to organisations that help deliver faster access to support into communities?

Hon MATT DOOCEY: I was pleased to announce Speed Freaks as the winners of this year’s Mental Health and Addiction Service Volunteers of the Year. Speed Freaks have 130 volunteer coaches and peer volunteers who are committed to supporting people recovering from addiction or mental health distress, through running. With networks across Christchurch, Auckland, Taranaki, Whangārei, and the West Coast, they’ve created an effective and welcoming community for those seeking support. I want to thank every volunteer who contributes to our health system: your commitment has a lasting impact on individuals, families, and communities across New Zealand.

Education

Question No. 11

LAURA McCLURE (ACT) (14:44) to the Associate Minister of Education: What recent reports has he seen on school attendance?

Hon DAVID SEYMOUR (Associate Minister of Education) (14:44): I’ve seen the term 1 2026 attendance data that showed school attendance rates were higher over that period than any term 1 since 2022. A student is considered to be attending school regularly if they are at school for more than 90 percent of a term. In term 1 this year, 68.6 percent of students attended school regularly, up 2.7 percentage points than the previous year. It’s also worth noting that many students will be only just below the 90 percent attendance figure and there will always be cases of non-attendance that can’t be helped, through illness or other circumstances, which, for the most part, are communicated to school leadership accordingly. This Government is focused on fixing what matters, and few things matter more to the future of our country than the number of children that get to school each day.

Laura McClure: How significant has this increase in school attendance been?

Hon DAVID SEYMOUR: In term 1, 2022, only 46.5 percent of students were attending school regularly. That means, in the term just gone, 176,000 more students attended school regularly than in the same corresponding term 1 four years ago. I’m pleased to report that, despite the cost of living pressures being delivered by conflict in the Middle East, term 2 has started promisingly. In the first week of this term, the national average for attendance was 90 percent. That is compared with 88.4 percent for the same week last year—that is, the first week of term 2, 2025. I think what that shows is that the Government taking attendance seriously, has been followed by schools, parents, and students themselves taking it seriously, and it’s important that we continue to drive this change in order that we get continued gains in the number of students attending school regularly.

Laura McClure: How does the Government intend to build on this positive momentum in school attendance?

Hon DAVID SEYMOUR: While much of the work is being done by simply reinforcing expectations by the school community, by parents, and by students themselves, Budget 2025 provided $140 million of additional funding to improve school attendance over the next four years. This has allowed us to implement a school attendance management framework that will continue that momentum. Every school in New Zealand is now required to have an attendance management plan, which allows schools and front-line attendance services to better manage cases of absenteeism. There is new case management software that allows all schools, attendance service providers, and the Ministry of Education to communicate and monitor attendance data in real time, so that issues can be addressed and resolved more quickly, and we have completely retooled and recontracted the attendance service to get better value for that money.

Laura McClure: How do schools deal with cases of absenteeism under the new regime?

Hon DAVID SEYMOUR: Schools each have an attendance management plan, as I mentioned, and that provides an escalating framework for responding to a student who is not attending. For example, if a child is absent for five days, school leadership will communicate with parents or guardians to determine the reason for unexplained absence and to set expectations for attending more regularly. After 10 days of absence, school leadership will meet with the parents, and at 15 days, the matter will be escalated further to an attendance service provider. If the absence escalates beyond this point, or for cases of non-enrolment, prosecution of parents becomes a possibility.

Laura McClure: Has the threat of prosecution been effective at getting students re-enrolled at school?

Hon DAVID SEYMOUR: Yes. For a long time, there was, really, a blind eye being turned to the possibility of prosecution, there having been none for six years. In the last year, 34 different students have been referred to the Ministry of Education for prosecution. Of those, 17 have decided they would rather go back to attending school. That has been quite effective as a deterrent. However, of the remaining 17, they are in various stages of the prosecutorial process. There was one where a case was to be heard just the other day, but, sadly, the parents in the case did not attend the court hearing, so that has had to be put back to another time. None the less, we do not give up, because we think that attendance is so important to the future of this country.

Economic Growth

Question No. 12

Hon GINNY ANDERSEN (Labour) (14:49) to the Minister for Economic Growth: Does she stand by her statement, “There will be more job opportunities in this country”; if so, how do the numbers of people employed compare to when the Government took office?

Hon NICOLA WILLIS (Minister for Economic Growth) (14:49): Yes, and there will be, as the economy recovers after a protracted downturn. The December quarter of last year saw 15,000 more people in work, compared to the quarter before, so the trend has been going in the right direction. The total was slightly lower than in the December quarter of 2023, but Treasury forecasts are for employment to rise by 60,000 this year and 240,000 by the end of the forecast period. The next Treasury forecasts will be released alongside the Budget.

Hon Ginny Andersen: Is it the case that there are 32,000 fewer jobs compared to two years ago, when she promised that “There will be more job opportunities in this country”?

Hon NICOLA WILLIS: It is the case that there are more job opportunities in this country today than there would have been in the absence of sensible policies like fast-track legislation to support new developments, housing developments, quarries, and energy developments. There are more jobs in this country than would have been the case without the introduction of the Investment Boost policy, which has supported businesses to make investments in their growth. There are more jobs in this country than would have been the case without a number of the policies that this Government has put forward.

Hon Ginny Andersen: What increased opportunities are there for people in regional New Zealand, such as Hawke’s Bay, where there are 9,400 fewer jobs?

Hon NICOLA WILLIS: If you were to visit Hawke’s Bay and speak to those people who are working in the agricultural industry, they would tell you that being part of a country where the Government supports farmers and gets red tape out of the way, promotes their wool products, promotes their dairy products, and seeks out new markets for them rather than abusing them makes it a lot easier to create jobs and incomes.

Hon Ginny Andersen: What increased opportunities are there for people who work in manufacturing now that there are 10,000 fewer manufacturing jobs in the past two years?

Hon NICOLA WILLIS: It is the case that some manufacturers have been particularly challenged by the last Government’s decision to ban the exploration of oil and gas, which has meant an acute shortage in the amount of gas available and therefore spiking electricity prices, which has been a significant challenge for manufacturers. It is also the case that there has been opportunity created in the manufacturing sector as a direct result of the Investment Boost policy, which has reduced the tax paid by those firms who have invested in new machinery. I challenge the member to commit to the Investment Boost policy if she wants to stay on the right side of manufacturers.

Hon Ginny Andersen: What increased opportunities are there for graduates, when careers expert Craig McAlpine reports, “50 percent of employers are saying that they have either stopped or slowed graduate intakes”?

Hon NICOLA WILLIS: It is the case that for new graduates, there are a range of opportunities depending on their qualification, skills, and background—but I fully acknowledge that when unemployment is higher, it is often young people who are particularly impacted, and this can be very challenging for them. As we look to the future, it is really important that we have a school system that delivers people the reading, writing, and maths skills, and the comparable international qualifications, that allow them to seek and obtain good jobs.

Hon Ginny Andersen: Why should New Zealanders trust her at all on jobs when her Government’s track record shows that job opportunities were going backwards way before the fuel crisis even began?

Hon NICOLA WILLIS: Because politics is about a choice, and the choice that that member’s party is offering is more tax, more borrowing, more red tape, fewer fast-tracked projects, less focus on improving the conditions for businesses, and more taxes swallowing those businesses. The choice that our party is offering has been one that has delivered lower inflation, lower interest rates, and fewer taxes. Those are the conditions needed for job and income creation.

SPEAKER: That concludes oral questions. We’ll take a short 30-second break while those who have to leave the House do so quickly, quietly, and without conversations on the way.

Sittings of the House

Extended Sitting

Hon LOUISE UPSTON (Leader of the House) (14:54): I move, That the sitting of the House today be extended into tomorrow morning for the continuation of Government orders of the day Nos 2 to 9.

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

Ayes 68

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

Noes 55

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

Motion agreed to.

Bills

Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill

Legislative Statement

Hon MARK MITCHELL (Minister of Corrections) (14:55): I present a legislative statement on the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill.

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

First Reading

Hon MARK MITCHELL (Minister of Corrections) (14:56): I move, That the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill be now read a first time. I nominate the Justice Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 3 September 2026.

The bill, as tabled in the House in March, underscores this Government’s commitment to restoring law and order. It will see real and practical steps taken to enhance prison and public safety, and it creates a clearer and stronger legislative framework to manage prisoners who pose an extreme risk to prison and public safety, while balancing natural justice. In recent years, Corrections has been focused on ensuring that it minimises the risks posed by a small number of prisoners who pose an extreme threat to others. For example, their history of serious violence towards others, their connection to transnational organised crime, or the risk that their ideology poses to prison or public safety. At the same time, it is important for Corrections’ legislative powers to adequately provide the necessary management tools and protections to manage these prisons.

This bill creates a comprehensive legislative framework for the safe and lawful management of prisoners who pose an extreme risk to prison and/or public safety while in prison. Currently, these prisoners are held in the Prisoners of Extreme Risk Unit in Auckland Prison. They require a high level of custodial management to minimise risks they pose to staff and others in prison and/or to the public.

This bill enables the Corrections chief executive to make both interim and final determinations about whether a prisoner should be a designated management prisoner. The final decision itself is informed by an expert advisory panel’s recommendation and the information they considered, and any other information the chief executive considers relevant. A designated management prisoner will likely be subject to more restrictions than other prisoners. For example, they are likely to receive fewer hours of unlock and fewer contact visits. Corrections is also likely to monitor their communications more intensively for intelligence purposes to identify risks to the prison or public safety.

While the bill has focused on protecting the safety of the community and good order of prisons, it balances natural justice. To ensure natural justice, the prisoner must be notified, as soon as reasonably practicable, that an advisory panel is considering whether to recommend that they be designated management prisoners. They then have the right to provide any written information to inform the panel’s deliberations. Once the prisoner has been designated, the chief executive must provide them with a written summary of the reasons why. The prisoner can request a judicial review of the decision, and the Corrections chief executive is also required to review the designation if new and relevant information comes to light, or there has been a change in circumstances that may make the determination inappropriate or unnecessary.

The bill strikes a balanced approach that safeguards public and prison safety while managing the designated management prisoners’ welfare. Designated management prisoners will be in specific cells that give them more personal space, with each cell having its own self-contained yard. They’ll also be able to make at least two hours of phone calls each week, more than the minimum five-minute entitlement for the general prison population. These important provisions aim to mitigate the potential impact of other restrictive measures.

“Designated-management” prisoners—in fact, all prisoners—will also be supported by the bill’s move to explicitly prohibit prolonged solitary confinement. The bill explicitly provides for prisoners to receive 10 hours of meaningful human contact over each 14-day period, while also requiring Corrections to aim for considerably more: 14 hours of meaningful human contact each week. For the avoidance of doubt, “meaningful human contact” is contact by the prisoner with one or more, or other, persons—for example, other prisoners, corrections staff, or visitors. That enables social interaction and stimulation. This is more than fleeting or incidental contact and could be face-to-face contact or contact via a telephone call or audiovisual link.

The bill also takes action to minimise the risk of prisoner trust accounts being used for illicit activities. I understand that some prisoners use prisoner trust accounts for activities that can undermine prison or public safety. The bill enhances Corrections’ oversight of these transactions, which should minimise the risk of prisoner-to-prisoner intimidation and influence, and financial coercion, and other illicit activities relating to prisoner trust accounts.

The bill also makes practical changes to facilitate more efficient Corrections operations in several areas. Prison managers will be able to more easily vary prisoners’ ability to associate with others, based on their risk. This greater flexibility will improve operational efficiency and allow managers to tailor association conditions to individual risk levels. It will also enable prisoners who no longer require the highest level of restriction to move from denied association to restricted association more readily. As a result, fewer prisoners should experience unnecessarily limited social contact, while those who do require strict controls will continue to have them. In some circumstances, prison managers will also be required to treat multiple subsequent segregation directions under the Act as a single continuous period, provided that prisoners move between the same direction within a five-day period. This will enhance oversight of prisoners’ circumstances over extended periods of segregation and supports the lawful and humane management of prisoners.

The bill also makes minor but important amendments to the disposal and destruction of prisoner property provisions. Currently, prisoners must be present whenever an item of the property is destroyed, which is very impractical. This bill changes that so that Corrections can destroy a prisoner’s property without them being present, provided that the prisoner has written notice that their property is going to be destroyed, with a specified period available for the prisoner to respond to that decision. This is a technical change to better reflect operational realities. The type of property that would be destroyed is already listed in the Act: alcohol, controlled drugs, as well as dangerous, objectionable, or perishable items.

A more substantive change is that the bill protects public safety by enabling the destruction of a prisoner’s property who was designated as a terrorist entity at the time of their death. The Prime Minister can designate someone as a terrorist entity under the Terrorism Suppression Act 2002 if they believe on reasonable grounds that the person has knowingly carried out a terrorist act. Currently, Corrections manages only one prisoner with this designation. There may be some situations where the property of a prisoner who has been designated as a terrorist entity may cause harm if it gets released into the community. As an example, the property may cause harm to victims even when the item is not in and of itself an inherently harmful item but is just by the fact of who owned that item. For this reason, the bill allows Corrections to apply to the High Court for an order to destroy this property when the person has passed away, provided the court is satisfied that the property may cause harm if it is circulated in the community.

I want to conclude by thanking all those who contributed to the development of this bill. It is great to see this important work progress to this stage. I look forward to seeing us debating the bill in more detail during the committee of the whole House. I commend this bill to the House.

CAMILLA BELICH (Labour) (15:04): Thank you. Mr Speaker. This is a really difficult bill in many ways, because it is dealing with the conditions of some of the people who would probably deserve the least amount of sympathy from the public.

This bill originated, as I understand, from concerns that were raised by the Ombudsman in late, I think, 2024, and there was a very strongly worded report drafted by the then Ombudsman around the conditions of prisoners who form part of this unit—these prisoners of extreme risk, who, under this bill, will be “designated-management prisoners”. When the Ombudsman looked into this unit, the findings were quite difficult for the Ombudsman to reconcile with the international agreements that New Zealand has signed up to and, additionally, with the values that he reported to recognise in New Zealand as a nation. Some of the comments that were in that report was that the unit was found to be “oppressive”; he said he found human rights abuses; he said there are examples of the use of force; and there was cruel and inhumane and degrading treatment. Obviously, this was something taken seriously by the Government, and I think it is commendable that these types of quite stark findings were treated seriously by the Government.

Since then, I understand—and I did visit this unit in the last recess, because we were aware that this bill was coming up, alongside our corrections spokesperson Tracey McLellan—that a number of the recommendations or a number of the areas have been addressed by some of the staff already in that unit. I do note and want to acknowledge the staff that do work in that unit. They do an incredibly hard job working with some of the most dangerous inmates in New Zealand, and I want to acknowledge the staff for the role that they do play. A reflection that I would have is that this does put some additional responsibilities on to those staff. I do recognise the changes that they have made, but this will legislate additional changes and there will need to be resourcing for that. One of the questions that I’m interested to hear from the Minister at select committee is whether there is resourcing put aside for these changes. So I think that will be important.

One of the questions that remains slightly outstanding for us on this bill is the people who are put within this highly controlled unit. There’s obviously the situation of people designated as a terrorist, and I don’t think there would be much debate, in any forum, that that was the appropriate place for such people to be. Of course, I understand there are around about 16 people in this unit, at the moment, and many of those people may be more of a risk from what they can organise, rather than to safety—and so I think that that’s something that I just want to put on notice, which the Labour Party will be looking into at select committee.

On the whole, though, this is a very detailed bill. There’s been a lot of work put into it. It’s been considered. I want to acknowledge that the people who are impacted by this bill have committed some horrendous crimes and there’s unlikely to be much public sympathy for them, but I do think it’s commendable as a country if those people who are under the most, probably, severe forms of public control—if we do try and make sure that the areas in which they live and they live their lives reflect our shared view of humanity. I think that that’s an important point to note, without expressing any empathy or sympathy at all to those who may be in that position.

So there are some important issues to consider here. We will support this bill through to select committee. It does provide for increased human rights for these prisoners, and it does look to address some of the various serious issues that were noted in that Ombudsman report. It is a very tricky issue, and I just wanted to note, again, the incredible work that many people do in the prison system that’s very dangerous.

TAMATHA PAUL (Green—Wellington Central) (15:09): Kia ora, Mr Speaker. I rise on behalf of the Green Party to speak to this bill. We will be supporting this bill to select committee, and it’s really important for us to explain why that is. The main reason we are keen to explore this bill further is because this bill establishes additional minimum entitlements to what is currently in the Act, and extends that to a wider number of people in prison. For those who aren’t aware, minimum entitlements are things like access to daylight, exercise, human contact, bedding—basically, your human rights and your human needs that you need while in custody in order to survive. They really are the bare minimum to keep people alive. We support establishing those really clearly within legislation, because Corrections do not have a good track record when it comes to honouring and fulfilling minimum entitlements in general.

During the COVID-19 lockdowns, there was attention on Corrections’ inability to fulfil people’s minimum entitlements, and within a COVID context, there was maybe some flexibility afforded to them because of the circumstances and the context at the time. However, this behaviour has persisted beyond the COVID lockdowns, and we actually saw the chief executive of Corrections before the High Court at the end of last year as he was issued a mandamus order because he was not meeting his legal obligations under the Corrections Act to fulfil minimum entitlements at Auckland prison. There have been ongoing issues at Auckland prison in terms of people in that prison not being able to have their minimum entitlements met, and that has been taken to the highest level in terms of the chief executive being accountable for not meeting those entitlements. We support any establishment of those entitlements, because without this bill there would be none, in terms of what it establishes. We support that.

Like the former speaker, Camilla Belich, I’ve been to the *Prisoners of Extreme Risk Unit (PERU). I did it straight away when I became an MP with the corrections portfolio. Not only have I been to PERU; I’ve spoken to psychiatrists who work in the unit. This is a unit that was established in extraordinary circumstances in order to hold, if not the worst person, one of the worst people in the history of this country in custody. That is the establishment of that unit. We understand why such a unit has to exist, and we absolutely support parts of this bill that attempt to deter or prevent any further spreading of those kinds of hateful, extremist, terrorist views that are not from here and do not belong here.

I also want to point out that following the March 15^th mosque attacks, there were a number of recommendations that were made by that commission around how New Zealand can combat radicalisation and terrorism, and those have not been fully enacted to this day, so, yes, this is a good step in terms of people who are held in custody and any of the materials that they might distribute while they’re alive or after their death, but I just want to note that in dealing with terrorism, there are a whole range of recommendations that sit there to this day that have not been implemented by any Governments following March 15^th.

I want to acknowledge the report that the Ombudsman published on PERU, and I acknowledge Peter Boshier himself, because he was really dedicated to corrections and what’s going on in our prisons and had a really good understanding and view of things. Without his report, we might not have known that there were people in PERU who were spending 900 days in prolonged solitary confinement and that this goes against so many international conventions when it comes to custody and torture experienced while people are in custody. I know that there has been a monitoring visit to New Zealand, an inspecting visit, that has looked at our prisons, our youth justice residences, jails, police cells—everywhere where custody happens—and that they are yet to report back on the findings of their visit, but I look forward to reading them.

In summary, we’re supporting this to select committee. We will be exploring what it means and how we can strengthen the bill for the safety of people in Aotearoa and to crack down on terrorism and radicalisation.

TODD STEPHENSON (ACT) (15:14): Thank you, Mr Speaker. I rise to speak on the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill. As the Minister outlined, this bill does make some important changes around establishing a regime for the management of designated management of prisoners; we’ve got the expansion of the grounds for segregation; the minimum humane treatment standards, which other colleagues across the House have referred to; some new powers relating to prisoners’ property; changes to prisoners’ trust accounts; and then some other technical and operational improvements.

Obviously, the Minister’s indicated this will be coming to the Justice Committee, which I’m a member of, so I look forward to working with my other colleagues on this bill, with the other bills we are looking at.

Look, simply, this bill is about making sure our corrections system can deal with the reality we are facing today with some of these high-risk prisoners and the risk that they pose, both to staff and the community. Kiwis expect that when someone is behind bars, they’re not operating organisations outside the prison walls. Some of the changes this legislation makes will help close that gap. There are prisoners that pose a real risk, and we want to make sure that they are dealt with in a way that gives Corrections the powers to be able to deal with them but also does maintain some human dignity and treatment for them. I think this bill will strike the right balance.

From ACT’s perspective, this is really about focusing on making sure we have a justice and corrections system that actually focuses on what matters, and that is, obviously, protecting the public, supporting the front-line staff, and making sure that all the rules regarding those who are incarcerated are clear but workable—clear but workable. That’s really, really important.

I look forward to discussions around this bill and making sure our corrections system is up to standard. I’m sure there’ll be many submissions from people. I commend this bill to the House.

SPEAKER: The Hon Tracey Costello.

Hon CASEY COSTELLO (Minister of Customs) (15:17): Casey Costello, sir. Thank you, Mr Speaker.

SPEAKER: Oh, sorry.

Hon CASEY COSTELLO: I rise on behalf of New Zealand First to speak on the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill. I’d first like to open my address by acknowledging the amazing work, in very difficult circumstances, that our corrections officers do on a daily basis. It is a challenging environment and often thankless, and I would really like to applaud and commend them for their dedication to this role.

I’d also like to acknowledge my colleague Camilla Belich’s approach in this legislation. It is, as she says, very difficult to balance the conversation around this very dangerous cohort of prisoners who it is very difficult to have sympathy for, but we should be reflecting on our message as a society in ensuring that we do provide fundamental human rights and respect and dignity to those in those circumstances. I think that considered response was very useful in this discussion.

It is a difficult piece of legislation to work through, but at its core, New Zealand First supports this bill because it is firmly rooted in our foundational belief that we need to protect community and country. The reality is that the prisoners that fall under this designation are a risk to our communities and to our country. The reality is that they do pose a threat even when incarcerated, and, therefore, the risk is not only to the prison staff and the prison itself and other prisoners but also to our community as a whole. The reality is that in the serious organised-crime space, we have had repeated occurrences of these prisoners continuing to operate criminal activity from this space. Then they have the ability to recruit to abhorrent ideologies, and this is something we need to protect our country and our communities from.

This is a balanced piece of legislation. It will be taken to the Justice Committee, and I’m sure they will do a very robust job of ensuring that we have submissions made. This is about striking a balance to ensure that our corrections officers are protected and supported in the role they do and that the expectations and rights of these prisoners are clearly balanced with the ability to ensure we maintain safety for our communities and our country. Therefore, I commend the bill to the House.

HANA-RAWHITI MAIPI-CLARKE (Te Pāti Māori—Hauraki-Waikato) (15:20): Tēnā rā koe e te Pīka, otirā tēnā rā tātou e te Whare. E tū ana ahau ki te waha i ngā kōrero mā Te Pāti Māori i te ahiahipō nei, ki tēnei o ngā pire.

[Thank you, Mr Speaker; indeed, greetings to all of us in the House. I stand to give voice to statements on behalf of the Māori Party this evening regarding this particular bill.]

While this bill prohibits the use of prolonged solitary confinement by introducing minimum requirements for meaningful human contact, the bill also authorises greater use of the segregation and separation of prisoners and new powers to manage prisoner trust accounts and to destroy property connected to and intended to prevent unlawful activity. Regarding Te Tiriti o Waitangi, the bill fails to recognise that the Crown must take positive steps to protect Māori, and it does not meet the Crown’s obligation of active protection.

The bill has been introduced within a broader policy landscape where obligations to Te Tiriti are being undermined, narrowed, and erased. The flow-on effect of this approach is that the bill does not address, nor does it provide a targeted assessment of, impacts on Māori, despite clear evidence and advocacy by justice experts since the He Whaipaanga Hou report in 1988.

The bill makes additional amendments to the Corrections Act 2004, which was recently amended in 2025 to remove explicit references to Te Tiriti. Predictably, Te Tiriti has not been revisited by the amendments proposed under this bill. Māori make up a disproportionate amount of prisoners in the current prison system. Therefore, the use of the new powers proposed under this bill is likely to have a disproportionate effect on Māori within the prison system and their whānau on the outside, who may also be subject to what are otherwise internal decisions made by managers from within prisons.

It is unclear how this bill gives effect to Wai 3060, Te Rau o te Tika, the justice system kaupapa inquiry, which discussed, among other things, the treatment of Māori prisoners, prison conditions, remand practices, rehabilitation, and reintegration to date. No comprehensive Treaty-based redesign of the justice system has been committed to, and parallel legislation on sentencing prisoners and policing has passed without explicit provisions addressing that very Wai claim.

The total effect of this Government’s harmful policy track record on justice compounded with Government inaction on other social determinants of crime that lead to imprisonment means that whānau will continue to fall victim to increased rates in remand and prison expansion. Evidence and expert advice to date highlight the fact that risk-based justice policies disproportionately affect both Māori inside the prison system and their whānau and communities living on the outside. Tēnā rā koe e te Pīka.

TOM RUTHERFORD (National—Bay of Plenty) (15:23): I thought that the Minister made a very levelled and very fair contribution in his opening remarks on the legislation. I really want to talk about the substantive amendment in the bill, which is going to establish a really clear statutory basis for the safe, lawful, and humane management of a really small group of prisoners who pose an extreme risk to the Department of Corrections, who manage our prisons, and they are prisoners whom the bill refers to as designated-management prisoners—the DMPs. It is a really pragmatic change that the Minister has outlined as to why we are bringing this about, and, therefore, I commend it to the House.

DAN ROSEWARNE (Labour) (15:23): I rise to speak on the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill in its first reading, and, just like other members here in the House, I just want to acknowledge the work that our corrections officers do. It’s a tough job, and it’s important that we acknowledge their work.

Labour will support this bill to select committee so that it can receive the detailed scrutiny that it deserves. This is a significant piece of legislation. It expands the powers of the Department of Corrections, it creates new management categories, and it alters the balance between operational control and prisoners’ rights. That means that we must examine it carefully. We approach this bill with three clear tests in mind: is it workable, is it properly resourced, and are the safeguards strong enough? Those questions matter because laws passed in this House must work not only in theory but in the reality of understaffed prisons, stretched front-line workers, and a system that is already under pressure.

The first major change in this bill is the creation of a formal category of designated-management prisoners. This would apply to prisoners assessed as presenting extreme or high risks. It will allow more restrictive conditions around movement, communications, association, and property.

This bill sets out a formal designation process to be led by the Chief Executive of the Department of Corrections, informed by an advisory panel. It also requires that prisoners be notified when they are being considered for designation and it allows them or their representatives to provide written information. It gives them the right to receive written reasons for a final decision, and to also seek a review. A final designation may last for up to two years.

Labour acknowledges that if the State is going to impose highly restrictive regimes, then a clear legal framework is preferable to ad hoc arrangements. Transparency, reasons for decisions, and review rights are absolutely important principles, but we also recognise that this is a significant expansion of the State’s power to manage individuals outside of the standard prison regimes, and we’ll be testing whether the thresholds are appropriate, whether decisions are evidence-based, and whether there is adequate independent oversight.

The second major area is segregation and restricted association. The bill rewrites and broadens the legal basis for segregation and it introduces new grounds for allowing prison managers to segregate a prisoner if they would otherwise commit an offence, recruit or radicalise others into harmful ideologies, or recruit others into organised criminal groups. Now, we understand the operational realities here. Staff must have lawful tools to manage genuine threats, but segregation is one of the most serious powers that are available inside a prison. It can have profound consequences for mental health and rehabilitation, and so Labour will be looking carefully at whether these powers are sufficiently targeted and whether they are applied consistently. We’re also keen to ensure that we do not disproportionately impact particular groups, including Māori, Pasifika, and prisoners with mental health needs, who are already overrepresented in the prison system.

This bill also includes what is known as the five-day rule: treating some repeated segregation directions as one continuous period where a prisoner is removed and returned within five days. That may improve reporting and monitoring, but it also highlights the importance of having proper oversight for extended restrictive management.

One of the most important aspects of this bill is the introduction of the minimum meaningful human contact requirements. This is the first legislative recognition of that concept, and Labour welcomes that principle. We know that prolonged isolation can cause real psychological harm. If rehabilitation is to mean anything, then prisons must maintain that basic human dignity. Having this bill set out a minimum of 10 hours of meaningful human contact over 14 days, with an aspirational target of 14 hours a week, is a good move, and so, overall, despite some scrutiny at the select committee, we commend this bill to the House.

KATIE NIMON (National—Napier) (15:28): The Minister has covered this all very well, and I’m really pleased with where this bill has got to. Ultimately, we are in a changing environment, and we need to change the law to suit. I commend this bill to the House.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (15:29): Thank you, Mr Speaker. As Dan Rosewarne noted in his excellent speech, we do support this bill. This bill has arisen largely out of an Ombudsman’s report into conditions at the most maximum security unit at Pāremoremo and his finding, essentially, that the conditions there were inhumane. One of the real challenges for that unit was that, essentially, it was governed by administrative order, rather than by any clear legal framework.

The fact that the corrections system could so significantly curtail prisoner rights, not because of something that this House had done but largely because the corrections executive thought that it was the best way to go about things, was concerning. Absolutely, the Christchurch terrorist is a dangerous person and needs to be kept in the most secure circumstances.

One of the things that this bill does—and I’m not sure it does it well, but that’s for the select committee—is to, essentially, set a threshold for when people are deemed to be prisoners that need this designation of—a most serious designation. What that gets around is this facility being used, essentially, as a holding pen or an overflow pen when the prison muster is a bit high or people being put there because they’ve been difficult or because they’ve got connections within this prison or that prison that are not helpful. It’s entirely appropriate that the threshold for designation is high, because the kind of conditions that people are put in are very challenging indeed.

That’s the other thing that this bill does, which I think is a good thing, which the Corrections Act generally doesn’t do, which is talk about meaningful human contact. We have constraints on solitary confinement, but actually having interactions with people, meaningful interactions, is kind of a human necessity. I mean, we are a social animal—I think was Aristotle who said that. The provision for, I think it’s 14 hours a week is modest, but it’s something. The idea that there will be those kinds of benefits extended to these prisoners—even though it’s actually quite hard to manage, even though you might have to do it with corrections officers present to ensure that nothing goes awry—it’s a good thing. At the end of the day—actually, the minimum is 10 hours, and 14 is the aspiration, but of course we know that in Corrections, when resources are strained, as they very much are at the current time, aspirations are rarely achieved. But, ultimately, this is about public safety.

The other important thing with this bill is that the designation can be reviewed. It’s not a put them in this most significant security setting and that’s it forever. If circumstances change, which mean that that security designation is no longer appropriate, then it is possible for that to be reviewed and for the prisoner to be put back into maximum security or some other setting. What this essentially is is putting into the law a set of rules to more carefully prescribe what Corrections can do, rather than leaving it up to the administrative discretion of the corrections system and corrections officers and, ultimately, prison managers. That’s got to be a good thing.

Now, whether we’ve got it quite right, that’s absolutely a matter for the select committee. We do need to have a good look at that, because it’s important to make sure, particularly the designation, that the test for designation is an appropriate one. That’s what we’ll be doing at select committee. I look forward to it. But making sure we’ve got some rules around prisoner conditions in the most extreme settings is a good thing.

Dr VANESSA WEENINK (National—Banks Peninsula) (15:34): Thank you, Mr Speaker. I rise in support of the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill. This bill has had very wide support across the House, and I also add my support. I commend the bill to the House.

A party vote was called for on the question, That the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill be now read a first time.

Ayes 117

New Zealand National 49; New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; ACT New Zealand 11; New Zealand First 8.

Noes 6

Te Pāti Māori 5; Ferris.

Motion agreed to.

Bill read a first time.

Referral to Select Committee

SPEAKER (15:35): The question is, That the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill be considered by the Justice Committee.

Motion agreed to.

Bill referred to the Justice Committee.

Instruction to Select Committee

Hon MARK MITCHELL (Minister of Corrections) (15:36): I move, That the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill be reported to the House by 3 September 2026.

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

Ayes 68

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

Noes 55

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

Motion agreed to.

SPEAKER: I declare the House in committee for consideration of the Local Government (Auckland Council) (Transport Governance) Amendment Bill, the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill, the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill, the Regulatory Systems (Transport) Amendment Bill, the Ngāti Hei Claims Settlement Bill, and the Building and Construction Sector (Self-certification by Plumbers and Drainlayers) Amendment Bill.

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

Committee of the whole House

Debate resumed from 31 March.

Part 1 Amendments to Parts 1 and 2 (continued)

CHAIRPERSON (Barbara Kuriger): Members, the House is in committee on the Local Government (Auckland Council) (Transport Governance) Amendment Bill, the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill, the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill, the Regulatory Systems (Transport) Amendment Bill, the Ngāti Hei Claims Settlement Bill, and the Building and Construction Sector (Self-certification by Plumbers and Drainlayers) Amendment Bill.

We come first to the Local Government (Auckland Council) (Transport Governance) Amendment Bill. Members, when we were last considering the bill, we were debating Part 1. Part 1 is the debate on clauses 4 to 11, amendments to Parts 1 and 2 of the principal Act. The question is that Part 1 stand part.

TANGI UTIKERE (Labour—Palmerston North) (15:39): Kia orana, Madam Chair. It’s great to be able to pick this particular bill back up. I think the Minister in the chair was the Minister who was answering questions the last time we had this in front of us. One of the questions that I think, to be fair to the Minister, he did seek to address last time was around the disability access to long-term planning documents. Just keen to get the Minister’s reflections since we last raised this issue about whether there’s any change in that particular space. The Minister may recall this is a particular item that was changed as a result of submissions to the select committee from members of the disability community about ensuring that they were able to engage with the long-term planning prospects for Auckland City. I’ll just park that there for the Minister.

I want to move on to the decision-making capacity that’s contained specifically in clauses 6 through to 11. A lot of what has been couched around this bill is the ability for the governing body and local boards to be able to either retain or, in some circumstances, actually gain, as a result of the changes that this bill will deliver, decision-making opportunities. Now, with decision making comes the framework for accountability, as well. There has been a little bit of ambiguity, perhaps, in the past, around where the responsibilities lie—who is responsible for making particular decisions? Now, when we look at the context of other transport decisions that are taken elsewhere around the country, there are regional land transport committees that, effectively, have representatives from across the region that make these decisions.

Arena Williams: That’s good.

TANGI UTIKERE: It’s a very good move. That’s a lot of the genesis behind this particular bill—is being able to introduce something similar, moving that away from the Auckland Transport model, across to responsibilities where elected members, or appointed members through ministerial appointees—and we’ll get to that in due course—are empowered to make those particular decisions.

The first question in this area, for the Minister, is: whether he can explain to the committee how these particular clauses will seek to resolve what is, in some regards, longstanding ambiguity when it comes to the role of local boards in decision-making opportunities.

Now, we all know—and those who are from Tāmaki-makau-rau, more than anyone else in this House, will know—that the local government arrangements for Auckland are, effectively, bespoke. There are no other parts of the country where there is this set-up. There are community boards elsewhere, but there are no local boards anywhere else in the country. Many of those local boards do have significant responsibilities—financial and otherwise—more so than other councils around the motu.

The question for the Minister is: where is the comfort around that balance of local boards being involved in this decision-making opportunity but also striking the right balance in terms of, I guess, local autonomy, to be able to make those decisions as elected members, but also the accountability that they have? On the one hand, it’s fine to say, “Well, we’re going to give local boards this responsibility”—and some colleagues might have questions around where that responsibility actually lies and where the line is drawn, but there’s also an accountability aspect to that.

Minister, is it that those decisions taken by local boards—they’d be held accountable every three years, through the ballot box, or is it in association with the annual and 10-year plan opportunities that exist for Auckland Council and the associated boards, or are there other accountability mechanisms that exist that either the public, the community, or the elected members could avail themselves of to ensure that they’re able to, effectively, deliver on that accountability frame?

Hon JAMES MEAGER (Associate Minister of Transport) (15:43): Thank you, Madam Chair. I think the accountability question one is straightforward. Along with what the member has outlined, decisions by officials and elected representatives are always subject to judicial review—so if there’s anything that the local boards, councils are doing which would fall foul of natural justice, for example, or the empowering provisions of statute under which they are enabled to make those decisions, those decisions are reviewable through judicial review.

ARENA WILLIAMS (Labour—Manurewa) (15:44): Thank you, Madam Chair. This clause 4 is really a lot of the impact of this bill, because it changes the status of local boards under the Local Government (Auckland Council) Act 2009 and gives them much greater power. We need to really understand from the Minister what his policy programme is to make sure that Aucklanders have the right kind of say in local transport decisions if they’re being made at the local board level.

I’m going to step through what this change, which is new section 4B, inserted by clause 5, means for the old section 12, with the Minister, because, say, the old section 12(3), says, “A local board does not have separate legal standing from the Auckland Council” and that the function there is that it’s not a local authority in and of itself. I’m asking this because, for decisions by Auckland Transport’s transport committee, for example, which makes hundreds of decisions every time it meets, I’m told, on a Friday, those decisions impact region-wide, if those powers are to be divested to the local boards, as this intends, then that will have a pretty significant impact on how local boards operate. That is the natural reading of his new clause 7, which amends section 12(4).

The natural reading of this, and most submitters would think, is that what’s being devolved to local boards here is a new power to determine transport decisions, like where heavy trucks can park. Those decisions, at the moment, are made by local authorities, though, and that’s not what the bill actually says, because these local boards are not becoming a local authority, so they’re not empowered to make bylaws in the way that Auckland Council is at the moment—and its council-controlled organisations are—however, they will be empowered to be able to make those kinds of transport decisions.

What I want to ask the Minister is about the outcome for citizens. If I am a resident in Manurewa, and I live across the road from Anderson Park—as the people I was doorknocking this weekend do—how do I now, under his new law, raise a complaint with Auckland Council that I want heavy vehicles not to be able to park there? Currently, they go to Auckland Council and they raise an issue, and it’s the transport committee at the Auckland Transport level that would make that decision. There are hundreds of decisions like this every week. If it is the local board that is empowered to do that, that makes more sense for the local residents—it makes more sense because they know those representatives and it is a representative who makes that decision. In what we are comparing it to in the old system, there is no elected member who sits on that current committee.

Is it the case, now, that local boards will be empowered with that kind of decision, and, if it is, are they playing the role of a local authority? Have we got the empowering legislation right so that they can make decisions as if they are the local authority? If that is the case, then it’s fair to ask the Minister: how are we going to provide further resourcing for local boards to do that? Nothing in the legislation allows for provisions for Auckland Council to make that immediate, and yet, immediately, under law, these changes will have effect. How can the person on the street, raising this query with their local board, because now their local board are empowered to do so, under legislation, to make those rules, know who the person to talk to is? Because, actually, there is not a lady in the office who you can go and speak to about this, because they’re not provided to do that kind of work, they don’t make these decisions currently, and they are not local authorities, and yet this is a role that they will be provided with.

This really gets to the nub of the problem about the Minister’s new clause 7. It allows for two things at once. It says that nothing in the provision will limit the ability of local boards to exercise that power, and yet they are limited from exercising that power because they’re not local authorities under the new law and they don’t have the resourcing to do it.

Which is it, Minister, is it the old section 12, which says “A local board is not a local authority”, or is it the case that nothing now precludes them from playing the role of the local authority in decisions like that? There are several other kinds of decisions that I’ll ask the Minister to take us through, but this is the first and most obvious one that is not provided for in the law and it’s not clear at what level the local boards will be accountable to the people for these kinds of decisions and how they will undertake those kinds of decisions.

Hon JAMES MEAGER (Associate Minister of Transport) (15:48): Thank you, Madam Chair. I think, regardless of whether there is a lady or a man in the office, any constituent who has questions about local transport policy, local roading policies, any of that stuff, they’ve got a number of avenues they can go to. They can go to their local board member, in the case of Auckland; they can go to their councillor, they can go to their MP, they could even write to the Minister and seek legislative change. There are plenty of avenues for locals to go and have a say, and, of course, every three years, they get to have a say at the ballot box.

In terms of the crux of the question, local boards make decisions as though they are the local authority. They act as Auckland Council. That is outlined in clause 7, replacement section 12(4) “Nothing in this section limits—(a) the responsibility of a local board to make the decisions of the Auckland Council that are allocated to it in accordance with section 16:”. Section 16 of the Act is the “Decision-making responsibilities of local boards”, which set out what local boards are responsible and democratically accountable for, including carrying out responsibilities that comply with sections 76 to 82, identifying and developing bylaws specifically for local board areas, under section 24, agreements reached with the governing bodies, identifying and communicating interests. It’s all there in the existing statute.

TANGI UTIKERE (Labour—Palmerston North) (15:50): Thank you, Madam Chair. I thank the Associate Minister of Transport for his earlier response to my question about accountability, but I have to say that I am somewhat concerned at his answer, because my question was about where the accountability lies and if people who are in Auckland, who have an issue, not too dissimilar to what my colleague Miss Williams has touched on, but maybe something different in nature. I asked and offered up some suggestions around perhaps the accountability lay at the ballot box, perhaps at it lay through other processes. But to hear from the Minister that judicial review is the option that’s available to people as a form of accountability, that is extremely concerning. Let’s just step through what that would mean because someone—and let’s be frank about this, not many people in our community are familiar with judicial review because they don’t themselves go through it. Because it is a very timely—well, not necessarily sort of timely, but a very expensive process for people to go through. So I’m interested to hear from the Minister now—and this is not something that came in front of the Transport and Infrastructure Committee about the opportunity for judicial review. I am surprised because this is a Government in the environment space that is making a lot of changes when it comes to people’s ability, through the courts, to be able to access that avenue or not.

I’d be interested in the clarity from the Minister around what he was referring to when he talked about judicial review; people always have the opportunity for judicial review. I think most people who engage with either a local board or the governing body would not have to expect to rely on judicial review if they have an issue or they have something to do with accountability. So I’ll leave that with the Minister. Maybe I just didn’t quite get that as clearly as I should have, but given the Minister has raised it, I’m interested in his response around that.

I also note that one of the changes that the select committee also made was around some of the terminology. When we’re looking at clauses 7 and 8, there is a lot of kind of change between the words “allocated” and “conferred”. So, what is basically the difference there between what is allocated and conferred? Would we expect that the transportation options and choices that would be available to either the local board members or the local board as an entity or the new regional land transport committee that’s going to be stood up—where does the conferment come? Where does the allocation come and where does that sit? Given that there have been some changes made in that particular space, it’s important to understand—for consistency—why one can’t be just the terminology used for all of those changes as opposed to separating them out as two separate ones?

Hon JAMES MEAGER (Associate Minister of Transport) (15:53): Well, in the member’s first question, he outlined a whole range of opportunities for ratepayers to hold their decision makers accountable where he’s included things like elections at the ballot box, the annual planning process, advocacy to their local councillors. I added on top of that, I agreed and I said they are all relevant places that you can go in order to hold your decision makers accountable. I added on top of that the underlying resort that one can take, which is judicial review, which is, I guess, the most legal, formal process of challenging a decision made by a decision-making body. That’s obviously one of the last steps you can do, apart from appealing to legislative change, as well.

In terms of the difference or the removal of the term “allocated to” and replacement with “conferred on”, my understanding is that’s just essentially a technical drafting change to make it very clear that the local boards must undertake their conferred responsibilities and they may exercise any of the conferred powers under clauses 47A to 47D. I’m advised that it’s a drafting reason rather than any particular change in power.

ARENA WILLIAMS (Labour—Manurewa) (15:54): Thank you, Madam Chair. I want to ask the Minister to confirm what he said. I think he has said that local boards act as if they are the local authority in setting of the rules such as truck parking. That would be a change in the position that it is currently. I’ll refer him to Land Transport (Road User) Rule 2004, which is the rule which most of these bylaws and other rules are made under, that confers ministerial power to set rules by regulation, and then local authorities are the bodies which are delegated to, within that, to make the rules.

The question I’m asking here is: is his new clause 7 confusing whether the local board is the local authority, and I think he’s confirmed what that is. So if they are the local—he’s shaking his head. He might need to confirm it because I think he’s saying that the local board is the local authority. So, if the local board is the local authority then, firstly, what is the status of the Vehicle Use and Parking Bylaw 2025 which was set by Auckland Council? Does that continue until local boards set their own rules? Is it the case that the Manurewa Local Board could have a completely different rule for the parking of trucks to the Papakura Local Board? Would that be a sensible situation given that the Land Transport (Road User) Rule, which is the national rule, is quite permissive if all local authorities to set a rule? And yet, you know, one would not imagine that within a metropolitan area for the same carriers, the same providers, a different rule would apply to one side of the street as for the other. That is why Auckland Council has been able to set these rules as a body for all local authorities. What does his new rule mean in that context? If we need one rule for Tangi as the truck driver to park in Papakura and Tangi—

CHAIRPERSON (Barbara Kuriger): Tangi Utikere.

ARENA WILLIAMS: Tangi Utikere as the truck driver to park in Papakura, as required to park in Manurewa, then who is the appropriate local authority to do that? I ask that not as a—it’s not frivolous. This is a live issue which Auckland Transport is considering at the moment because there are several business districts who are calling for more stringent rules around this, and they would like for local boards in certain areas to be able to set more stringent rules than the rest of the city. But you can see the values judgement that a Minister is being asked to make here around localisation for certain communities, say in Manurewa where the trucks are parked outside the local schools, and that wouldn’t fly in some central urban suburbs, where residents would vociferously complain, and yet that’s not what happens in some poorer communities where people aren’t as availed of their rights and, as the Minister says, they’re not as likely get in touch with their local board members and their councillors.

Isn’t it fair, then, that we would set more stringent rules so that residents can be assured that their sight lines won’t be compromised to their children in the park, or that at night, trucks won’t park in areas that cause near misses and fatalities and crashes. That’s what this issue is about. I think the Minister has said that local boards will now set those rules. That is what some of those businesses associations are asking for. But it’s not necessarily a rule which is going to serve the needs of those commercial users and indeed manufacturers who have different sites around the city and are trying to get their vehicles from one place to another.

It’s not just about trucks. There are several of these rules which have a level of consistency across Auckland, and yet what is being done by new section 12 is a further devolution to local boards, where I think the Minister has said that they will be treated as if they are the local authority for the purpose of the secondary regional legislation, which is the rule that applies nationally. Things like can you sell food that has been made from a home kitchen if you have a certification that is set at a national level, that is a national rule; and then local authorities set the rules around those; things like can you sell alcohol from a corner store in a domestic area—

CHAIRPERSON (Barbara Kuriger): As I understand it, this bill is related to transport.

ARENA WILLIAMS: That’s right, that’s right. But this is about local decision making and how you would enact that. So the question for the Minister is: is what he has said about local authorities and local wards being synonymous because of his change, at his new clause 7(4)(b), the case for all of these rules, and how will they interact with the national rules?

Hon JAMES MEAGER (Associate Minister of Transport) (15:59): Thank you, Madam Chair. Under the existing statute, local boards are able to make decisions as if they are the governing body where they are allocated those decisions and those powers. So, the bill itself, as far as I can tell, doesn’t actually outline which decisions should or should not be made by local boards. They are decisions for the council to allocate to it, in accordance with section 16. All I can say on this matter is that if local boards are given decision-making powers, they do so as if they are the local authority. They act as the Auckland Council when making those decisions because they are part of the Auckland Council, and they have been given the power by the governing body to make those decisions. That’s what the law is currently and what new subparagraph (4) says is that nothing in this section or new section 12 as amended or clause 7 in the bill—nothing in the section limits that ability that already exists currently.

HELEN WHITE (Labour—Mt Albert) (16:00): Thank you, Madam Chair. I am going to ask you some specific questions about the streets that are going to be around the Eden Park precinct. The Eden Park precinct belongs in Part 2, but my understanding is the streets that surround that will be in this part. They are part of the same things that Arena Williams is talking about because they are the streets that the local board will have determination over.

I had a meeting the other day with the residents in that area and it’s actually the outer streets outside of the traffic precinct that have issues because there isn’t the same control. My understanding is the proposal here is that that control over the area that is controlled traffic—and I’ll ask some questions about what the Eden Park precinct contains in the later part—but beyond that, we have an area that’s going to have control of the local board.

I would like the Minister to confirm that those streets that are beyond it will be controlled by the local board and what assurance people can be given that there will be communication between the group that is controlling the area of traffic management, which is smaller, with the local board, because if the local board is making those decisions, it’s going to have an impact in terms of what happens next.

For example, I’d like to know what discussions there will be and what freedom there is to make rules over parking in those areas. What I’m told by residents is you’ve got a spillover effect where people can’t park within the zone and so they park just out of it, and so we get all these issues just out of the zone where people park on the curbs and it makes it really a very different thing to live in those streets. I’m not sure what those arrangements are between the two groups or does the local board simply have to react?

Then my last question on this is really about conflicts of interest. I love the idea of local boards having more control over roads. I think it’s a really sound one. But what I want to know is: what happens when you have people with a conflict of interest in terms of determining what happens to a local street? For example, the local board member themselves might live in that street. That might be an obvious one that’s dealt with, but it’s more about the issue of people having conflicts that are about the connections. Now, they’re naturally going to have connections in those areas. It’s the nature of what they’re doing; they’re local. But what kinds of protections are there around that?

Now, we’ve heard Tangi Utikere talk about the issue over judicial review. Obviously, that whole concept is based on something that’s a really high watermark in terms of appeal. So what is the story here in terms of the normal navigation of conflicts of interests, for example, if your grandfather lives in the street, if your auntie lives in the street, or your best friend lives on the street, and you are making decisions about what happens in those situations? Thank you. I’d really like the answers.

Hon JAMES MEAGER (Associate Minister of Transport) (16:03): Thank you, Madam Chair. If the member goes to new section 48, inserted by clause 14—well, it’s not technically new in some pieces. But anyway, section 48 is the section which says that the council must develop Auckland roading classification framework. Within that framework will be the roads and areas that local boards will or will not be responsible for. The bill doesn’t set those decisions; that’s up to the council when they develop the roading classification framework.

Then just on the questions of conflicts of interests, in the same clause 14, at new section *40(a), there’s a conflicts of interest section, which states that Schedule 3 of the Act applies to the Auckland Regional Transport Committee. When any conflicts do arise, both Schedule 3 applies but also the existing policies and procedures that the Auckland Council would have for managing conflicts generally would also apply. There’s nothing really, I think, in the bill which would address that apart from the obvious robust and thorough processes that the leadership of Auckland Council already undertakes to manage the conflicts of interest with arise.

ARENA WILLIAMS (Labour—Manurewa) (16:04): Thank you, Madam Chair. As the Minister will know, some of these devolution powers to the local board—look, they are welcomed by all parties in Parliament and many stakeholders outside of it. The ability of local boards to exercise power in his new section 4B, inserted by clause 5—has he managed to capture the frustration of Aucklanders that infringement fees for land transport offences are set under the Land Transport (Offences and Penalties) Regulations 1999 and not at the council level or at the local board level? Is it possible for the conferment of powers under those rules to local boards to set locally relevant fees for parking infringements?

The problem here is huge in that Aucklanders have fees—for instance, $100 for inconsiderate parking. There were 7,000 traffic incidents concerning heavy vehicle parking in the Wiri Business Association’s district alone, including two fatalities last year. That is serious, and yet the top infringement fee is $100. The call for much of this devolution was based on the lack of local accountability for things like fees. Has the Minister managed, through his new section 4B, to include infringement powers as something that Aucklanders can have a say on through their local boards?

Hon JAMES MEAGER (Associate Minister of Transport) (16:06): I’ll seek some advice on that.

CHAIRPERSON (Barbara Kuriger): The Minister has just indicated he’s seeking some advice. I’m going to call Arena Williams, but I will also say at this time that Part 1 is quite small, so we want to hone in on that from here on in.

ARENA WILLIAMS (Labour—Manurewa) (16:06): Thank you, Madam Chair. I also want to refer the Minister to the purposes for local boards in the original legislation. Those are at clauses 152, 153, and 157. They specifically mention those things that the local authorities can set rules around. These also include things like the discharge of pollutants into the environment and things like when you are fixing a heavy truck on a local road or on a national highway. The rules are different, but for different areas, they are resulting in the flow-off of pollutants through fixing vehicles into, say, the Manukau Harbour, which is a significant issue for local residents and is a continuing source of frustration for Aucklanders.

Has the Minister given some thought to the way that local environmental protections for road users will be something that local boards can have a say on? Why is it the case that over the last 10 years of the Auckland super-city, when local areas have been raising these issues like run-off into local streams and local harbours, local boards will seemingly not be able to be devolved powers to set locally relevant rules and solutions to these hazards?

When you have the regular practice of some truck operators in Wiri fixing trucks on the side of the street and not only taking up the road space, which they can be fined for as a dangerous use of the road, but they are also emitting oil and other run-off straight into the drains—which is not caught; it flows straight into the Manukau Harbour—why is it that the local board can’t step in when residents are raising these issues? The Wiri Business Association has petitioned Auckland Transport about this. Auckland Transport says that they need a consistent rule around the city, but that is something that has been raised consistently over the last 10 years and hasn’t been able to be implemented because it doesn’t fit for the rest of the city.

Because this isn’t a huge problem for the residents in rest of the city, is it the case that with local boards expecting to receive more power because of the result of this legislation, that they will, in fact, be stymied once again? For people who are looking at this legislation and hailing it as a big step forward for Aucklanders and their democratic control over their elected members and their transport functions, will they once again see that actually things that matter to them like where people can park, like the infringements that can be levied against people who park inconsiderately and cause safety hazards, and to those people who would pour pollutants down the drain because of fixing their vehicles in the wrong kind of way—will all of that actually not be devolved to local boards?

So we see this increase on expectations of local boards once again undermining people’s faith in their local democracy and seeing more and more of a stepping back from the need to vote in their local democratic elections and their need for local board members to be accountable to the community.

Hon JAMES MEAGER (Associate Minister of Transport) (16:09): Thank you, Madam Chair. I’ve been helpfully advised that if we dig all the way through the bill to Schedule 2, and we look to what will be Schedule 4 in the Act, that lists the local board’s powers, functions, and responsibilities in relation to local roads and collector roads. Hopefully, that will answer most of the member’s questions about what local boards will have the power, function, or responsibility to do. It’s on page 46 and 47 of the bill, for reference. I’m advised that does not include fees. Fees are set by the governing body, not local boards, and they are subject to, obviously, the primary legislative constraints on that as well. As far as I can tell, unless there’s some clever interpretation of those powers in Schedule 4, it would not include discharge of pollutants into the environment. Of course, those are all valid arguments to make about how much you devolve power to local boards, particularly in Auckland. I’m sure that many Aucklanders would agree with some of it and disagree with some of it, but in this instance, we’re talking about particular transport responsibilities. With these changes, local boards will have some powers to make some decisions around transport-related issues.

CHAIRPERSON (Barbara Kuriger): Tangi Utikere—one more specific question on this part.

TANGI UTIKERE (Labour—Palmerston North) (16:10): Yes. Thank you, Madam Chair, and I take your direction in terms of where we’re heading. I want to ask the Minister a very tight question, which is about clause 8. It is in relation to the responsibilities and the functions that are conferred to a local board, and they relate to new sections 47A to 47D, which we’ll get to in the next part. It seems to me that there are often funding implications and resourcing implications for any decision that a local board may take, so a very quick question to the Minister is: is he satisfied that the ability for the local boards to be able to be responsive to their communities in making these decisions? Does he have any concerns about the lack of resourcing or empowerment of the local boards to be able to actually go ahead and deliver that? If we’re looking at maintaining or preserving some form of regional coherence as a structure with the regional land transport committee in place but also enhancing local responsiveness, does he have any concern that decisions will be driven around transport to do with an inability for the local board to receive adequate resourcing from the governing body?

Hon JAMES MEAGER (Associate Minister of Transport) (16:12): No, I don’t have any concerns. I haven’t had any concerns raised with me. With the excellent leadership of Auckland Council, I’m sure they’ll maintain a close eye on their rates and how they’re spent appropriately.

Part 1 agreed to.

Committee of the whole House

Part 2 Amendments to Part 4

CHAIRPERSON (Barbara Kuriger): Members, we now come to Part 2. Part 2 is the debate on clauses 12 to 14, amendments to Part 4 of the principal Act. The question is that Part 2 stand part.

TANGI UTIKERE (Labour—Palmerston North) (16:12): Thank you, Madam Chair. Look, this is really the meaty part of this bill, which outlines all the different steps that need to be taken in terms of appointments and all of those sorts of things—how much these members will get paid and who decides and who’s going to chair and all those sorts of things. The Transport and Infrastructure Committee spent a lot of time working through these particular issues, so I want to just move to the first question that I have, which is in relation to new section 38A. This is still within clause 14, because clause 14 talks about the fact that all of the items contained from 38 onwards are effectively uncertain. This is the functions and the membership of the Auckland Regional Transport Committee, and this is where a lot of the work will be undertaken in terms of setting direction and guidance.

Now, new section 38A talks about the functions of that particular committee that is going to be stood up. We support the standing up of that committee; it will provide consistency across the country in terms of regional transport committees. The function of this committee, first and foremost, is to prepare what is a 30-year transport plan under section 42. It’s interesting that in the Auckland regional deal that’s been announced, they talk about the 30-year transport plan—which I don’t think many people were surprised about, because it’s already on the agenda and it is effectively business as usual. One of the responsibilities that is outlined here is not just preparing that transport plan over the 30-year horizon but also monitoring the delivery of it.

The question for the Minister is: can he confirm to the committee that the regional transport committee is actually intended to take a long-term stable view beyond electoral cycles? What concerns might the Minister have around chopping and changing potentially every three years if there is a change of Government or a change in membership at a local government level. What does he see as that long-term stability in terms of that 30-year transport plan, and how will our local decision makers be able to, in his mind, feed into the development of what is going to be a pretty significant and important plan? How is it that the standing-up of this committee will look to align the sense of Government investment through the 30-year plan? It is largely a joint initiative between local Aucklanders and central government by way of the Minister of Transport’s appointees to this committee. How does that improve the alignment of that investment and the priorities and also meet Auckland’s growth needs, which are obviously pretty important?

What we see in new section 38A(d) is actually just a move away from just saying, “Well look, what this committee’s going to do is it’s going to undertake all the functions.”, but, actually, it narrows it down to transport responsibilities, duties, functions, or powers. Again, is this intended to be a catch-all opportunity to ensure that the regional transport committee can do what it needs to? Or is that going to compromise any particular aspects that the committee, over a 30-year horizon—albeit, the expectation is there would be iterative approaches to planning, and that’s obviously to meet the changing demographics and the changing needs that would arise in Auckland. Is he comfortable that those changes to be made by the committee are able to deliver on that? Also, does he have any concerns that the approach that’s been amended by the committee is actually just to focus on transport functions rather than strategic transport functions?

Hon JAMES MEAGER (Associate Minister of Transport) (16:17): Thank you, Madam Chair. In regards to whether or not the Auckland Regional Transport Committee (ARTC) should have a long-term view beyond political cycles, I think there’s an agreement across the country that when it comes to infrastructure, critical transport infrastructure, we need to take a long-term view of these things. There is a lengthy number of new sections that will be in the Act and that outline specifically what this could look like, and I will draw the committee’s attention to, for example, Subpart 2. We’re still in clause 14, but we’re in new Subpart 2: new section 42 outlines a 30-year transport plan must be prepared; 42A the publication of it; 42B the preparation; 42C outlines the content. The statute itself creates some guard rails for the content this plan needs to contain. It also outlines who must be consulted and who must agree on it. For example, in 42B(1)(a), “the ARTC must—seek direction from the Ministry of Transport and the mayor;”, so there is a balance between a long-term approach to this.

Also, we live in a democratic country, and those who are elected to make change or to move the country in a different direction should be entitled to do so within the statutory guard rails that we put in place. I think, with the regular free and fair elections that we have, that people can reflect the democratic will of the public, then these long-term plans are a good thing. It’s balanced against some of the stricter statutory guidelines in place. For example, there was a point in here, 42C(e), outlining the “detailed investment priorities for the first 10 years of the period covered by the plan:”. I think, on the one hand, we want to reflect the will of the Government or the council of the day—that being the voters, ratepayers, taxpayers of the day. On the other hand, we want to have some certainty in forecasting over a long-term period about the kinds of critical infrastructure projects we believe in and then we are going to invest in.

I think the committee meets a pretty good balance for them both, and I think the member asked and answered his own question in and around the amendment made to 38A(d), which is essentially to provide—my reading of the new subsection, a relatively wide catch-all in and around transport responsibilities, duties, functions, or powers that the Auckland may delegate to it, and leave the, I guess, wider strategy to the elected officials, the governing body itself.

CAMERON LUXTON (ACT) (16:19): Thank you, Madam Chair, and thank you, Minister, for that contribution. It was good to hear you outline the importance of democratic decision making in these 30-year plans in such a way as being outlined in the entire purpose of this bill: providing local accountability to the way Auckland’s roads and roading designers and the feedback that people who are road users have on that, and bringing that to local decision making. So we have, in here, a 30-year transport plan, which is quite core to what we’re doing here today, Minister, and it’s got direction. So the purpose of the plan is to align the Government and the council’s priorities and set a strategic direction. The plan must promote the following objectives—and there are three listed here—productivity and economic growth, the safe and rapid movement of people and goods, and efficient asset management.

There is a part in there that I have an Amendment Paper on, which I’d like to draw your attention to, which is that the 30-year transport plan in Auckland must seek direction from the Minister of Transport and the Mayor. That seems fair enough. But there is, in the co-design of the plan, one more section, which is “establish and maintain processes for Māori”—parentheses nondescript in this particular piece of legislation—“to contribute to the development and preparation of the plan.” Minister, as the select committee noted, there are other interested groups who have a large amount of interest in the way the transport plan in Auckland works. The select committee had listed a couple here: businesses, the freight sector, and general road users. I’d add to that core nodes in New Zealand’s connection to the world for our economic and trade relationships, which is the Port of Auckland. So these are prime users of the roads. The transport network really, really matters, you would think, Minister.

So if there was going to be a move beyond the democratic accountability that is being talked about here, away from just the Minister of Transport and the Mayor to Māori, nondescript, in this particular bill, I would recommend, Minister, that you adopt my Amendment Paper, which would edit clause 14, new section 42B, so it was a bit simpler—it would only be one part; there wouldn’t be a paragraph (a) and a (b). And it would say, “(1) When preparing a 30-year transport plan for Auckland, the ARTC must seek direction from the Minister of Transport and the mayor.”, and that’s where it ends right there. Because, at the end of the day, the design needs to be democratic, and co-design is but a species of co-governance, Minister. I put it to you that this Amendment Paper would solve that problem. That you very much.

ARENA WILLIAMS (Labour—Manurewa) (16:22): The ACT Party has one trick: they’ve found “Māori” in the legislation and they want to take it out. We will not be supporting that amendment, because that is a silly amendment. Not content with new section 42(3), inserted by clause 14, which, effectively, enshrines three political objectives that would usually be found in a Government policy statement (GPS) in the legislation, which is a very unusual move for the Government—and I will invite the Minister to explain why he is lifting up his three values-based judgments from the GPS, which are, frankly, the wrong values, but they are his values, and he has put them into primary legislation here, which will be difficult for a future Government to change.

Because, I think, when you ask most Aucklanders, “What kind of transport system would you want?” They would say, “I want less congestion. I want to get home to my family.” or “I’m a tradie and I want to do my jobs faster.” And they would say, “I want a grown-up city that has good transport from the airport to the rest of the city. I want to live in a place where there is rapid transit and it is quick and it is cheap.” That is not what the values here say. It says in new section 42(3)(a), inserted by clause 14, that the plan must promote “productivity and economic growth:”. Does our transport system provide for a productive and economic city? No. But the key problem here that we should be trying to address, both long-term and in the medium-term, is congestion. Does this bill have anything that reduces congestion in it? Absolutely not. It has prioritised three statements from some neoliberalism textbook that Cameron Luxton found at the back of his shelf. The third is, “(c) efficient asset management.” That is not speaking to the aspirations of Aucklanders about the kind of transport and roading systems that we need.

We need to build roads for our communities to get around, we need a bus system that works for people, and we need a train system that works for people. Those are not the hopes and dreams of Aucklanders that have been reflected here in the primary legislation. It’s one thing to have a GPS which sets out what the National Party thinks is significant, which is roads, but it is quite another thing to put it in this legislation. I would invite the Minister to comment on that before he disavows the Committee of any notion that he’ll be voting for the amendment that Cameron Luxton has put up, I hope.

I want to jump back—Madam Chair, because we are going to move through this section in an orderly fashion—to the appointments of members by the Minister. I need some guidance from the Minister here, because what assurance can Aucklanders have that there will be a long-term view taken by these ministerial appointments of the kind of skills that Aucklanders can expect around the table when the Government is saying different things about its transport priority?

Yesterday, with the fuel crisis as the rationale, the Government announced an intention to allow heavier vehicles on New Zealand’s roads. That includes letting freight trucks carry heavier loads and giving them more access on the roading network more of the time. This is ostensibly to boost fuel efficiency, but at the same time, the same Government is running a campaign run by the Energy Efficiency and Conservation Authority about fuel-saving advice for stretching a tank by up to 20 percent. They are telling New Zealanders and spending New Zealanders’ money on a campaign about more fuel efficiency and about lightening the load by removing roof racks. The irony will not be lost on most Aucklanders, when they see a Government that can’t work out what its own priorities for transport are, let alone the priorities in the medium or the long term.

How can Aucklanders be assured that this new section 38F, inserted by clause 14, does not allow the Minister of Transport to appoint ministerial representatives who are straight from the freight and trucking industries, as the ACT member asked for particular consultation rights for those industries? How can the Government say that it is going to have a long-term view of who is appointed around the table, when Aucklanders might have two or three members appointed by the Minister who will come from backgrounds and have professional expertise in trucking and freight, when that is not the aspiration of most Aucklanders for a fair and efficient transport system that reduces congestion over the long term and invests more in transport solutions which get people home to their kids faster?

Hon JAMES MEAGER (Associate Minister of Transport) (16:27): Thank you, Madam Chair. I’ve had a look at the so-called values in new section 42(3)(a), (b), and (c), inserted by clause 14, which actually says, “A plan must promote the following objectives:” and it doesn’t outline a values set in this section. Those objectives are, “(a) productivity and economic growth: (b) the safe and rapid movement of people and goods: (c) efficient asset management.” There’s nothing, I think, in those objectives that would preclude a focus or an emphasis on public transport, a focus or an emphasis on mass rapid transport, a focus and emphasis on safety, on road, rail, light rail—whether it be on paper or physically on the ground. So I would just encourage all members to look at the actual text of the bill we are putting in place and not to go too far with imprinting their own values on to that text, and just read it in plain English, as has been passed by the Parliament of the day.

Now, when it comes to the appointment of individuals to the Auckland Regional Transport Committee (ARTC), the bill outlines the appointment process, the length of term, their duties, etc. But the key thing is that these individuals will be bound by their obligations under the Act. The Act says that part of their obligations is to prepare a 30-year transport plan for Auckland. Now, if the best people or best person or individual to be appointed to a committee at a particular time at a particular place is someone who has expertise in the roading, transport, logistics, trucking, freight sector, then nothing in the legislation should preclude that; in the same way that nothing in the legislation should preclude someone who might have expertise in multimodal transport or—

Arena Williams: Te ao Māori.

Hon JAMES MEAGER: Te ao Māori or any other demographic, cultural input if that was relevant to promoting the following objectives on productivity and economic growth, the safe and rapid movement of people and goods, and effective and efficient asset management.

Now, I’ve got the utmost faith in those making these appointments; that they will appoint the right people to the positions, but we’re not going to be outlining in the statute a green list or a red list of which particular background or profession you should or should not have when entering this process. It’s hard enough, I think, as it is, to find highly skilled, capable people with the time to sit on public entities already, without limiting it to those groups of people who come from a particular favoured industry or background, so we won’t be doing that.

ANDY FOSTER (NZ First) (16:29): Thank you, Madam Chair. I’m a bit surprised to hear some of the questions coming from the Opposition, because those particular things that I’ve been hearing are things that could have been traversed, but were not traversed, at select committee. I am a bit concerned about those questions, but the question that I want to pursue is, as Cam Luxton has raised in his amendment, the issue of co-design and consultation with “Māori”—it’s not “iwi”; the word is “Māori”—and the practicality of that. As you see in the select committee report-back, some of us were concerned about that. I am going to explain why, and I really would like the Minister’s response to that.

This is about a new activity. It’s about the 30-year transport plan. It’s a new thing, and in this new activity we are saying there needs to be, as Cam Luxton has said, consultation with the mayor, with the Minister, and with Māori. Now, given we are told that roughly one in five New Zealanders has some element of Māori whakapapa, that means that one in five - odd Aucklanders is likely to have some Māori whakapapa. That means you are looking at something in excess of 250,000, probably getting closer to 300,000, and this bill then says you need to consult in the design—the design—of the 30-year transport plan. This is not in the consultation about the 30-year transport plan—because that’s in there as well. We do the design first. Then we do the engagement on that design, when we consult with the wider public, etc. In the design of that, you are required to identify who are Māori and to have a consultation with, roughly, one-fifth—20 percent—of your population. Now, I ask you whether that is practical, and whether that is a reasonable thing to do.

Bear in mind that this is a new responsibility. It’s not that we’re taking anything away; it’s a new responsibility which is being established. I would say, Madam Chair—Mr Chair now, because you’ve changed.

Hon Member: Ha, ha!

ANDY FOSTER: The Chair has changed while I’ve been speaking.

CHAIRPERSON (Greg O'Connor): The Chair knows what you mean, Mr Foster.

ANDY FOSTER: There is an issue of practicality there, as I said.

I would also like to draw the Minister’s attention to some of the things we have in our coalition agreements, which are sometimes referred to. One of those, between the National Party and the New Zealand First Party, is that the coalition Government will defend the principle that New Zealanders are equal before the law, with the same rights and obligations, and with the guarantee of privileges and responsibilities of equal citizenship in New Zealand. It seems, to me, that we should be treating everybody equally, and that’s what the coalition agreement between New Zealand First and National says. Then, in the coalition agreement between all three parties, there is the element there, which is pro-democracy, to uphold the principles of liberal democracy, including equal citizenship, parliamentary sovereignty, and the rule of law and property rights, especially with respect to interpreting the Treaty of Waitangi. I am really interested in how this fits with those agreements within our coalition Government, because, as I said, it’s a new activity.

The one thing we were advised—this is the second time this particular thing has come up in front of the committee; the first time, we didn’t do anything we it, but this time there is an amendment to do something with it—is that this comes from the Land Transport Management Act 2003. It’s an Act that has been around for 23 years, and it has just been put in there. The question is whether it should have been put in there, whether it’s a practical thing to do, and, also, whether it’s a fair and reasonable thing. As the select committee observed, we didn’t say to other people who are really materially involved in the transport system, the people who are moving freight, etc.—they don’t get a look-in at that stage. They only get a look-in when they are consulted. In fact, as we heard from the Opposition, what do most people want? They want the ability to be able to get around their city. They want—

Cameron Luxton: No congestion.

ANDY FOSTER: They want no congestion. They want to be able to use a good public transport system. Those things affect all of us. They affect all people, regardless of whether they are Māori or whether they are non-Māori. The question, Minister, is why it is that, at the moment, it appears, you are not supporting this amendment, because it would be consistent with the coalition agreement to support the amendment.

TANGI UTIKERE (Labour—Palmerston North) (16:34): Thank you, Mr Chair. One of the interesting things that the Minister referred to was multi-modal representation, potentially—rail representation, and the like. Now, the Auckland Regional Transport Committee that this bill establishes will have a mix of voting members and non-voting members, and the non-voting members are limited in number, to a total of three, and that’s contained in sections 38D, E, and F. The non-voting members are specifically identified as either appointed by the New Zealand Transport Agency–—Waka Kotahi—or by KiwiRail or by the transport council-controlled organisation. The question for the Minister is: is he satisfied, given the changing dynamics of transportation in this country, and indeed around the world, that that descriptor futureproofs the 30-year horizon? We’re talking about individuals who, as a collective, will be responsible for monitoring the delivery, after preparing it, of a 30-year horizon. Is he satisfied that the definition there is not too discreet to avoid what might come in the future?

Often when we have these committees that get stood up, there are often opportunities to co-opt. Whether we’re talking about school boards or local government, there are certainly a number of committee opportunities where the governing body or the council or a committee can co-opt members where there is a lack of skill or expertise. Now, this particular bill, under new section 41D, identifies the fact that this committee will be required to adopt a set of standing orders. That can identify whether an entity can co-opt for that purpose, so maybe that’s what this particular committee could do. However, in front of the Parliament at the moment is another bill—and why I’m referring to this is relevant—the Local Government (System Improvements) Amendment Bill. If that bill is passed, as currently recommended by the committee by majority, that would allow for a consistent set of standing orders that would apply across local government. My question for the Minister is: whilst Part 2, specifically new section 41D, under clause 14, talks about the fact that the Auckland Regional Transport Committee must adopt a set of standing orders, where does that sit if the Government’s other piece of legislation is passed? Will a consistent set of standing orders override this provision, or will this provision stand and, effectively, trump any form of consistent set of standing orders that the bill that I mentioned would actually present?

This is a very important point. It wasn’t actually covered by the select committee, but when we’re talking about standing orders, and members of this committee are obviously familiar with that as well, where does the mechanism in this bill align? There’s a possibility that the Local Government (System Improvements) Amendment Bill may not pass, but in circumstances where it does, is this a stand-alone piece of legislation that will not be overridden by one consistent set of standing orders that might apply within local government. This is relevant, because we are talking about a bill that is seeking to amend the Local Government Act, just like the system improvements bill is also seeking to override this. It may be that the Minister needs to seek advice on that. It is something the select committee at the time did not turn its mind to, but it will be important. It might be, if there’s a risk that a non-bespoke set of standing orders can’t effectively exist, that there might need to be some change in this particular space. I’ll leave that with the Minister, and I’ve got a couple of other points.

Hon JAMES MEAGER (Associate Minister of Transport) (16:38): Thank you, Mr Chair. Actually, it’s quite practically impossible to say whether something applies if another piece of law does or does not pass. This bill applies for the Auckland Regional Transport Committee to adopt a set of standing orders for the conduct of its meetings and those of its subcommittees. If the subsequent piece of law that the member Tangi Utikere referred to passes and overrides those standing orders, and provides a consistent set of standing orders, then it overrides those standing orders. If it doesn’t override those standing orders, it doesn’t override those standing orders. It’s an impossible question to answer, because you’re talking about a bill that is before the House and that hasn’t passed and the final form of which is unknown. All I can say is that, if a subsequent piece of legislation says there is to be a consistent set of standing orders that overrides other standing orders, it will override them. If the subsequent bill does not provide that, it will not override them. That’s about as much as I can say in terms of the question.

CELIA WADE-BROWN (Green) (16:39): Thank you, Mr Chair. I have got some questions about the membership of the Auckland Regional Transport Committee. While I was on the Transport and Infrastructure Committee and I generally support the direction, I just wanted to tease out some of what I would say were apparent inconsistencies.

Much has been said by this Government about localism and much has been said about this bill giving Auckland the say over transport that Auckland wants, but when I actually look at the voting members, it has potential for a tie with no tiebreaker in that there are three appointed by the Minister, three appointed by the mayor—and we understand that already that power of the mayor is quite different from other councils around the country—and then they’ve got to agree on the chairperson. I’m interested in what happens if there is a radically different either central government or local government.

At what point are there opportunities to replace those people? Do they all get replaced at once, is there opportunity, perhaps, to change the chair earlier than their term would otherwise dictate, and how does this potential tension between the previous Government’s appointment of a chair and the new Government—it won’t get much done before November with this committee, but whoever. There must be some opportunity, or will that only be—as was referred to earlier—through the new Government setting a different Government policy statement?

The other area that I was interested in is the appointment of members. I don’t think we raised it at select committee, but it’s occurred to me since, with the very interesting Infrastructure Commission report and the acknowledgment, I think, from both sides of the House that the Infrastructure Commission has got a much more serious role to play in having some common path forward so that we don’t waste so much money starting things but not finishing them. It is so that things don’t get thrown out, whether it’s the Auckland rail or the harbour bridge or a cycle path alongside a motorway—whatever—and they’re not thrown out just because it was the other side that started them. I’d be interested to see how the Minister sees the input of the Infrastructure Commission into the Auckland Regional Transport Committee. Thank you.

Hon JAMES MEAGER (Associate Minister of Transport) (16:42): I’d encourage the member, if she would like this committee to see some action before November, that we should hurry along and get this bill passed into law as quickly as possible. But in regard to her question, I’ll just refer to clause 14 again and the provisions around new section 38D, which outlines the membership—which the member referred to—which is the chairperson, and then three members appointed by the Minister and three members appointed by the mayor. The chairperson is jointly appointed under new section 38E, and the terms of those offices are under new section 38G.

New section 39A is the provision around the removal of members, and I’ll note that in regard to the chairperson: “(1) The mayor and the Minister of Transport may, jointly, at any time and entirely at their discretion, remove the chairperson of the ARTC from office.” Then, when it comes to the Minister of Transport’s appointments, under subsection (2), the Minister, at their discretion, may remove a ministerial appointee at any time and at their discretion, from office. As well, there is subsection (3): “The mayor may, at any time and entirely at the mayor’s discretion, remove a mayoral appointee from office.”

Now, the member raises relatively valid concerns about politicisation of appointments, but this process happens across a myriad of boards and entities—thousands of them, actually—across the country. There are processes that are followed through, whether that’s through a Cabinet appointment or whether it’s through a mayoral appointment, and, on the whole, I think both sides of the House would agree that it’s worked generally quite well over the years. I would just look to the appointment processes that are in the statute and have some faith in our elected representatives to do the right thing because, ultimately, that’s what we elect them for, and if we weren’t all here to do the right thing, then we should probably walk out the door and go get another job.

ARENA WILLIAMS (Labour—Manurewa) (16:44): Thank you, Mr Chair. I have some further questions on the functions of the Auckland Regional Transport Committee (ARTC) in relation to the 30-year transport plan. As my colleague Tangi Utikere has said, this was well canvassed. There was no surprise around the introduction of this, but there will be some confusion about what it actually is. Minister, is this plan a different sort of instrument to the Government policy statement (GPS)? Is it a planning instrument? Does it give rise to secondary legislation? What is it, and why is the Auckland Regional Transport Committee tasked with preparing the plan but its objectives are set by Government?

Why is it that its objectives have been lifted up into this new section 42(3) here in clause 14 when we have a new body which is tasked with responding to the needs of Aucklanders, and it has a mechanism for the Minister to remain closely involved in not only the production of the plan but to receive regular reporting from that body? Why is it necessary, then, for the Government to have such a level of central planning as to impose on Aucklanders the three objectives there? Would he not consider then, if those objectives are going to be imposed on Aucklanders, the insertion of a new subsection (3)(aa) that would read “reducing congestion” as one of the objectives of that plan, given that most Aucklanders tell pollsters and local politicians alike that congestion is their number one problem in Auckland’s transport system, and they say that that is what they’d like politicians to be focused on—elected members—and the bureaucrats who support them to do that work in order to respond to the needs of Aucklanders?

The reason I’ve asked the question about why the objectives have been set here is because it is an unusual thing. This isn’t a GPS, this isn’t an ordinary planning instrument, and its objectives have been set in the primary legislation, which is difficult to change later on.

I also wanted to ask him a different question, which is about the role of local boards in contributing to the plan. That’s not set out at the primary legislative level, but, as we know, I think that all parties in this House support having more local democracy in the planning and governance for Auckland’s transport system. If that is to be achieved, why is it that there is not further guidance in primary legislation about how the ARTC is to give effect to the aspiration of local boards for their local transport systems? Why is it that they don’t have an enshrined mechanism to input into the design of the wider plan, given that we know that local inconsistencies will come up if they have complete free reign to operate as local authorities, as the Minister alluded to in his answer to my previous questions in Part 1.

I also want to ask him about this. There’s been an addition in new section 42C in *clause 14. I’m at the bottom of page 16, and it’s paragraph (g). It says that the 30-year transport plan for Auckland must include “the likely sources of funding.” I want to ask him how this interacts with the GPS. Usually, local authorities would set out their funding intentions in quite strictly formalised ways, and their funding options are either their rates and their rating income—and that is hotly debated and contested by the people they represent—or through funding from central government, which is provided for in the design of the plan and the appointment is made at the committee level by the Minister. But this is a new thing. What power does the Minister envision for ARTC to canvass and then consult on its intentions for other sorts of funding? Does this allow for the ARTC, for instance, to canvass its intention to sell off some transport assets and to use the proceeds of those to buy other transport assets?

That would usually be contested through the budget. It is a very well-understood process and it is a process which is governed by the Local Government Act and Auckland Council’s particular legislation, but is this a different mechanism by which Auckland Council can canvass different sorts of uses of its assets?

Usually, if those decisions around funding sources are going to be, say, the levying or tolling of certain routes, the how and why of that is also a well-established process of consultation, and then they are creatures of primary legislation and those kinds of arrangements. Is this a different route for the Auckland Regional Transport Committee to be able to, effectively, consult on and then gain public support for some sort of system which is not provided for in another piece of legislation? Minister, I’d welcome your advice on that.

Hon JAMES MEAGER (Associate Minister of Transport) (16:49): Without wanting to overstep the respected boundaries of the Regulations Review Committee and delve into whether or not something is secondary legislation by virtue of being legislative in nature, I am advised that the document, the 30-year transport plan, is a document created by the Auckland Regional Transport Committee (ARTC). It is not legislative in nature; it is a planning document, and so it wouldn’t classify as signed legislation—but, of course, those are some questions for the likes of the Regulations Review Committee and other more practiced legal minds than I to take into account.

In terms of where it fits in the planning framework structure, the Auckland Council’s long-term plan (LTP) has to take it into account. That’s under new section 42G, inserted by clause 14: “When preparing [a long-term plan], Auckland Council must take the 30-year transport plan for Auckland into account.”—apply the relevant legal test for what “taking into account” means. Then, at the same time, new section 42B: in preparation of the 30-year transport plan, “the ARTC must take into account—(a) the GPS … issued under section 66 of the Land Transport Management Act 2003”.

In terms of what this could do to help guide the budget-setting priorities of the Auckland Council, I think it would be common sense to think that if you’ve got a 30-year transport plan agreed to by central government and local government, some of the funding decisions being made at a council level would reflect some of the priorities and the projects in that plan. Again, ultimately, those are decisions up to the Auckland Council and their leadership to make, and the various constraints and funding constraints that they—like central government—are under, as well.

Then, just to go right back to the very start of the member’s questions, why are objectives set by the Government—well, there is always a trade-off between making things like this so prescriptive as to make them very unworkable or so broad as to make them very unreliable and unpredictable. We think, as a Government, we should set some frameworks and some structure for local councils to operate within and then provide them the scope within that to meet some of the primary objectives in this, which are, of course, productivity, economic growth, safe and rapid movement of people and goods, and efficient asset management.

I’ll just take the point around congestion into account: it would surprise me if anyone could interpret “safe and rapid movement of people and goods” as anything other than addressing issues around congestion. Of course, it’s wider than just addressing congestion; it could take into account distance of people from where they live to where they get to work or to main transport hubs or to critical infrastructure. I would put to the member that there, under new section 42(3)(b), congestion is front and centre of one of the problems of getting the safe and rapid movement of people and goods around Auckland.

CAMERON LUXTON (ACT) (16:52): Thank you, Mr Chair. In light of those questions about new section 43B and the principles of what the Auckland Regional Transport Committee must take into account, it’s interesting—there’s another part of my Amendment Paper 568 that the Minister has had two calls on now from two different parties in the Chamber and hasn’t yet addressed, so I’m hoping he does take this opportunity to address it.

That is under new section 43B; there is a whole lot of sections about what the principal objectives of the council-controlled organisation (CCO) will be: operate in a financially responsible manner, use its revenue efficiently, ensure revenue expenditure is accounted for—all very sensible things. There’s one part in there that goes back to the previous question about Māori, which is what was raised by the chair of the select committee that examined this bill, Mr Andy Foster, who talked about, again, what is Māori specifically, and do you think, Minister, that either “establish and maintain processes for Māori to contribute to its decision-making process” needs to be defined by your good self either here or in legislation, or you need to at least, Minister, tell us what Māori means in this piece of legislation? Is it iwi? As the chair of the select committee that examined this bill raised, there’s roughly, say, off his numbers, about 300,000 people who whakapapa Māori in Tāmaki-makau-rau, in Auckland. How are they to be engaged with? Is this being left to the CCO to discover? How is that going to play out?

I’d appreciate if you, Minister, would take a call and would do this, because I would also point you to the commentary from the select committee, in which some of us consider that the bill should define what consultation with Māori would entail to ensure that obligation is clear. I think that deserves to be addressed by the Minister, and, as I outlined at the start of my contribution, we are still waiting for a reply to this Amendment Paper from the start of this part of the committee stage. Thank you.

Hon JULIE ANNE GENTER (Green—Rongotai) (16:55): Thank you, Mr Chair. I had some questions that are related to the topics that have previously been discussed, but I just wanted to ask the Minister: in defining “productivity and economic growth” under new section 43A in new Subpart 2—I’m just wondering how that will be accounted for. I think we can all agree that productivity and economic growth might be useful if it leads to higher living standards and less waste. However, I guess the key question about a transport plan is: how do we know it’s delivering on these objectives, and what’s the definition or measure that we’re using to measure productivity?

Then my other question is around disabled access. New Zealand really doesn’t do well on disabled access for buildings or transport systems. In prior terms of Government, we’ve had a requirement for regional land transport committees to have some representation from groups—like people who are living with different disabilities—to feed in. That’s often been a really useful level at which to get that input, because when the regional committee is looking at specific projects and long-term planning, they’re getting those concerns. If none of the members specifically have that angle on it and there’s no legislative requirement that I can see in this for consideration about universal access, is that something that the Minister expects will occur just out of goodwill, or is it the case that the Government is simply, kind of, giving up on that perspective?

I’ve been unable to see any part of this bill which mentions a requirement for the Auckland Regional Transport Committee to have that input from specialist groups who have lived experience of trying to access the city, often through the public transport network but also through the streets and the design of it, and if there is no specific requirement to think about disabled access then it will often get missed and it will be more expensive to remedy later. I’m just wondering if the Minister is open to—or how he sees that working.

Finally, just a comment—and look, I don’t expect the Government to change their position on this, but I do think it’s richly ironic that half of the members will be appointed by a Minister of the day. Surely if we trust the local community to prioritise the transport projects, they have the best information. It’s the locally elected representatives at that local level who probably best express the views and concerns and aspirations of the city. It would make a lot more sense to me to have maybe one ministerial appointment and have the rest of the regional committee be from the council, and not just at the whim of the mayor. The mayor is elected at large, but it’s very, very low participation in that election. If we want to truly get good, sensible transport outcomes, I think we need the 30-year plan to be predominantly put together by people who are elected at that local level—because let’s face it: most people are just voting on vibes, whether it’s for the mayor or the Government of the day.

When you look overseas at cities that have really good outcomes, most of the power and the funding is devolved to the city to make the decision about transport priorities. It’s not done at a national level. Maybe in Australia it’s a combination of state and city, but we’re very—like, a Minister of the day might be very far removed, and even the mayor and a Minister working together might be able to choose a few members of the committee that aren’t actually representative of the whole city. In a way, it’s like, why isn’t the 30-year plan just being developed by Auckland Council and signed off by the governing body? I don’t understand why this Government feels such a need to control what a local city is doing, but it’s apparent in every step that they’ve taken—is pretty much about how the Government of the day and the Minister of the day has a lot more power than the 1.5 or 2 million people who live in Auckland.

Hon JAMES MEAGER (Associate Minister of Transport) (17:00): I thought I would address a couple of points before I’m unceremoniously dumped out of the Chair at about 5 o’clock by my more than able replacement.

Tangi Utikere: Who?

Hon JAMES MEAGER: Well, we’ll see. There’s an owl in here! I’ve got some business to attend to, unfortunately. Look, just to address Julie Anne Genter’s—[Interruption]—well, it’s actually a ministerial meeting with the children’s Minister, so he apologised having to go to that.

The questions from Julie Anne Genter—one is around a definition and how we’re going to be defining “productivity” and “economic growth”. Look, it’s the age-old question of: when you put something in a statute, how’s it going to be defined without putting some sort of descriptive, long, interpretative section? Ultimately, sensible people will apply this statute to their roles and responsibilities. If other people think that they are not applying that in the correct way, they can challenge that application through the courts, and the courts can make a decision as to what the correct interpretation of a particular piece of statute is.

I think the terms being used in there are both clear enough to point the committee in the direction of meeting those objectives around productivity and economic growth but also provide some space and some flex for those committees to say that, “Well, in order to get the safe and rapid movement of people and goods around the country or around Auckland, safe would include taking into account particular characteristics or disabilities that individuals might take.”

That could be one interpretation that the committee might take, but I’m not going to get ahead of that because I don’t want to be on the other side of a court case at some point that says, “Oh, the Minister said this in the chair, and he meant that, and then we’re going to take what’s in the Hansard as being the intention of Parliament.”, when, actually, the intention of Parliament is the words that are written in the statute, supported by the context and the interpretation and purpose of the text and all that kind of stuff, not the ramblings of Ministers and members in the Chamber.

Moving on to the last point, where the member said, “Well, what if these appointees are just made at the whim of the mayor?” I will point to the guardrails set out in new section 38F, inserted by clause 14, “Appointment of members by Minister of Transport or mayor”, and particularly new subsection (3)(a) which is in there, “the mayor must consult the governing body before making an appointment:” So there are some guardrails put in place there for a mayor who may be going rogue—although, I’m sure that’s never happened in the history of Auckland Council.

Arena Williams: Never.

Hon JAMES MEAGER: Never—never happened.

In terms of Mr Luxton’s questions around the use of the word “Māori”, look, I can’t answer that directly; all I can appoint to is a couple of things. First, that term was in the bill as introduced, and so my assumption is, in the absence of any agree to disagree provisions, was supported by members of the governing parties through that process, so I can only take that process as word. If there was an agree to disagree provision put in place, I’m happy to hear it, but all I can do is put my interpretation of the text of the bill as was introduced and put through to the Transport and Infrastructure Committee.

The second thing I can point to is, yes, the differing views are inserted within the main commentary of the report, but I would note that, at the top of the report, the committee does agree to all of those amendments unanimously. So I can’t speak any further to the deliberations of the select committee but to comment on what’s in front of me in the particular report.

HELEN WHITE (Labour—Mt Albert) (17:03): Thank you, Mr Chair. I would like to ask a question that’s very practical and comes from a meeting I had with my constituents who live around Eden Park. And that is: what is the Eden Park precinct? If I have a look at the interpretation section amended by clause 12, it talks about that precinct as being defined, and we go to new section 48(2)(e), inserted by clause 14, where it says “an Eden Park precinct road, being a road that is within the Eden Park precinct (see subsection (3))”, I go to subsection (3), and I get (3)(b), “the area that is the Eden Park precinct.”, and I’m none the wiser. I have absolutely no idea what the Eden Park precinct is, and I just can’t tell my constituents what’s in and what’s out.

Now, the difference for them is that there are ones within that area that is, probably, I suspect, the area of traffic management at the current time, that are treated quite differently. Residents have permits. They are the only people who are able to go into the precinct during the times when the park is being used at a certain capacity, and then the ones beyond that precinct get treated differently. What this does is it treats the area that is the Eden Park precinct under control of a central body, in a way that the streets around it won’t be.

I’ve already asked questions about the communication between the two parts who will be making decisions on these places where there is an overflow, and I haven’t really had an answer on that. I just want to know what is intended by that precinct. It’s not a trick question. I had a meeting the other day. It was a public meeting. It was well attended. People didn’t know what was in or out. I’ve done surveys in this area. The biggest issue I get is not actually any feeling that is particularly anti the park developing, but it’s about this—it’s about the transport issues around the park. I would be very grateful for an understanding of what that precinct looks like—or, if there is no such definition, how will it be defined, how will we decide what the precinct is, and will that change over time? Thank you. I’m grateful for the answer.

Hon SIMON WATTS (Minister of Local Government) (17:06): I thank the member for the question. To clarify: Auckland Council will define the Eden Park precinct area when it develops the Auckland roading classification framework. I’m advised that this work is currently under way and that the local boards are being consulted with on the framework. The Minister of Transport must agree to the roading classification framework that I’ve noted, and this provides a safeguard to ensure that the Eden Park precinct is appropriately defined.

TANGI UTIKERE (Labour—Palmerston North) (17:07): Thank you, Mr Chair. It’s good to have the Minister of Local Government and Minister for Auckland in the chair, because, obviously, it’s very salient to what the committee is working through.

Minister, at new section 38E, inserted by clause 14—this is around the appointment of the chairperson, and it’s identifying that the chairperson of the Auckland Regional Transport Committee would be jointly appointed by the mayor, and there’s a process that the mayor needs to go through, and the Minister of Transport. I just wanted to clarify: is it the Minister’s view that those are two equal parts of that particular equation, that if there’s a circumstance where there is disagreement between those two office holders, how is that brokered? Is it his expectation that it is going to be an equal partnership around that?

In terms of the process that the mayor needs to step through in appointing their particular mayoral appointments to the transport committee, a change that the Transport and Infrastructure Committee did make was a requirement for the mayor to not just make those mayoral appointments themselves but they would be required to have some form of consultation with the governing body. This is actually something that the select committee did spend quite a lot of time on: how far that consultation should go, should it be more prescriptive than what is here, or whether it should exist at all. Now, there are some members in this House—I know Mr Foster is one—who have had the experience of being able to exercise mayoral powers, and there are certain things around the appointment of a deputy mayor and setting up a committee structure, and all those sorts of things. A question for you, Minister, is: are you comfortable that that select committee change is kind of the right balance, that the mayor is still required to consult, as opposed to just the mayor making those determinations by themselves?

If I could just cover a couple of other areas, as well. New section 39F, inserted by clause 14—we haven’t talked about this yet—this is about the expenses, and 39E, the remuneration of members. There is a differential between the remuneration that would be paid to mayoral appointees, and the remuneration that would be paid to ministerial appointees. The Cabinet Fees Framework would deal with one, and the existing sort of allowances and expenses, or existing remuneration, through the Remuneration Authority, would deal with the other. Now, members of the committee are still undertaking the same type of work; it’s not like one gets paid more and they get more of a vote, or thereabouts. Again, is he comfortable that whilst undertaking the same amount of work, there, effectively, would be a potential differential in remuneration levels that would exist there?

The only other area that I wanted to touch on in this exchange—well, actually, no, I’m interested in new section 41D, inserted by clause 14. Before you took the chair, Minister Watts, Minister Meager identified that this is about the standing orders. This is a particular bill that would create a set of standing orders that the Auckland Regional Transport Committee would be required to adopt.

Now, you will be familiar with your own bill that’s currently before the Parliament—the Local Government (System Improvements) Amendment Bill—so I think you are the right person to provide a response, if possible, around this. That bill, if passed as amended, would allow for one set of standing orders to apply across the country. I’m just interested in your view on how that applies alongside this particular bill. Minister Meager indicated that it’s something for the future and that, if it happened, the potential is that this could be captured as a result of this. Firstly, is that your expectation—that it would? Secondly, if so, are you concerned, in light of the fact that the committee spent some time putting into this bill a reference to the fact that there needs to be some standing orders? I’ll pause at that point.

Hon SIMON WATTS (Minister of Local Government) (17:11): Just in regards to the questions on the process, there absolutely is the expectation that it is a joint process shared between the mayor and the Minister, and “joint” is what it says on the tin.

In regards to the question about whether I’m comfortable with what the select committee has recommended: yes, I think, primarily, the purpose here is very much one that is aligned with expectations, which is restoring democratic accountability for transport and Auckland transport matters back with Auckland Council. That is the intent of the legislation, and that is what will flow through as a result.

Dr LAWRENCE XU-NAN (Green) (17:12): Thank you, Mr Chair. I just have a few questions for the Minister regarding new section 42D, “Consultation on plan”, noting that Auckland Council currently has a number of community-based consultation groups, such as seniors, youth, small businesses, etc. I want to check—specifically we’re looking at new sections 42D(2)(c) and (d)—in terms of clear information and members of the public being given reasonable opportunities. I want to check, first, in terms of whether there have been any conversations between the Minister and the mayor regarding how these community-based groups potentially will be able to feed into the consultation process?

I specifically want to address it from a senior’s perspective. One of the really important exercises that Auckland Council and Auckland Transport did a little while ago, under the advice of the seniors community group, was to get policymakers to, essentially, go from the Ferry Building in Britomart to, I believe, the Auckland War Memorial Museum without their smartphone and have to navigate public transport without that. Part of the issue that we’re having, when it comes to seniors, is the rapid change in technology and how consultation may not always be accessible for them. I want to check with the Minister regarding clear information in paragraph (c) and the reasonable opportunity in paragraph (d). How would seniors be captured in a lot of this? At the same time, when we’re looking at Tāmaki-makau-rau Auckland having a third to 40 percent Asian population, how are the voices of the Asian community going to be captured as a part of this as well?

Those are my two questions on new section 42D(2), and for 42D(3), it does say “consult Māori”, which is fantastic, but I wanted—just so we have it on record that, when it comes to “consult Māori”, we’re specifically referring to mana whenua. We’re specifically referring to Ngāti Whātua Ōrākei and Ngāi Tai, etc., with regards to that. I’m just checking on those few questions there. Thank you.

CAMERON LUXTON (ACT) (17:14): Thank you, Mr Chair. I wasn’t looking to take another call, but the answer from the previous Minister in the chair, the Hon James Meager, leaves a lot to be desired. This was in regards to my Amendment Paper 568—

Tom Rutherford: That’s a bit harsh.

CAMERON LUXTON: Well, it is a bit of a harsh statement, but I think it’s fair to say that saying there was no use of “agree to disagree” when the bill was introduced and so it must be fine is not really, in a parliamentary process, a suitable answer when members from parties across this House are raising legitimate questions for Aucklanders engaged in the process of a 30-year transport plan that has been through a select committee, had issues identified, and had them flagged in the select committee report.

I’m hoping for a more substantial answer from this Minister in the chair, the Hon Simon Watts, because what we’re talking about here is the preparation of a 30-year transport plan. There is a co-design element at the start, which is between the Minister of Transport, the mayor, and nondescript “Māori” in this legislation. We need, as a committee, to understand what that means. If tradies, transport users, and ports are not involved in the pre-design of a plan, what is that definition of “Māori” in this part?

If we go to the next part—consultation on the plan—it says the Auckland Regional Transport Committee (ARTC) must follow the following consultation process: the process must be “available to the public in any manner and format (which must include an accessible format) that the ARTC considers appropriate to the preferences and needs of the persons who will or may be affected by, or have an interest in, the plan.”

Aucklanders, people who are using the Auckland roading and transport network, have a part in this bill where consultation is done on the plan which, if my amendment was adopted, would be prepared with direction from the Minister of Transport and the mayor. This leads to a question that Lawrence Xu-Nan has just asked. We’ve got public and we’ve got Māori without a definition of whether that’s individuals, iwi, what sort of entity we’re talking about. I’m very concerned, based on the answers that we’ve received in this committee stage, that that is left undefined. Therefore—I shudder to even mention this—but is this creating a separation in legislation between people if we’re going to allow such a term to remain undefined in this important part of the committee stage? Thank you.

Hon SIMON WATTS (Minister of Local Government) (17:16): I just want to make a comment and then I’ll also come back to some other questions in regards to new section 41D, inserted by clause 14, around standing orders as well that was raised by the member Tangi Utikere before. In regards to the question here around the broad term “Māori” used in the bill, the term “Māori” is intentionally used in the bill as an inclusive term, given that there are 19 iwi groups within the Auckland area, and obviously a significant number in that context.

This is also the term used in the Land Transport Management Act 2003 and also the Local Government Act 2002, and in the principal Act, the Local Government (Auckland Council) Act 2009, so there is a consistency in that regard. It is a challenge to replace the term “Māori” with a particular group, as there is no one group that represents Māori in Auckland, noting the 19 different iwi groups there that I’ve referred to.

More broadly, to the Amendment Paper that the member Cameron Luxton has noted in regards to that point, the bill does carry forward existing requirements in both transport and local government legislation that relate to Māori and/or in the case here of new structures and instruments like the Auckland Regional Transport Committee (ARTC) and the 30-year transport plan for Auckland.

There are three clauses in the bill that relate specifically to Māori and the transport system in regards to new section 42B(1)(b), inserted by clause 14; 18HI(a), and 81IA in particular, and also new section 42D(3) which relates to the ARTC to consult with Māori on the 30-year transport plan and new section 43AB as well.There are a variety of provisions that do deal with that. I’m happy to cover off more detail in regards that amendment.

ARENA WILLIAMS (Labour—Manurewa) (17:19): Thank you, Mr Chair. I seek to engage with the Minister now on his new sections 44 through 44AB, inserted by clause 14. These relate to the new transport council-controlled organisation (CCO). It’s good to see a new entity that will be charged with something which is really important to Aucklanders. The provision of public transport is set out there in its primary functions at clause 4(1).

My first question, though, is can he explain why he has allowed significant straying from what he’s written at clause 1 that it will provide for public transport—that seems clear—but then at clause 2 any other transport functions are something that can be delegated to it? So how should Aucklanders expect to see this council-controlled organisation (CCO) developing? Is it a public transport CCO or is it something else?

My next question to him is about who owns public transport assets under the new legislation, because at new section 44(4), inserted by clause 14, there’s no vesting of land interests—that’s well understood. At the current time, you have some assets which are associated with public transport infrastructure in Auckland for which Auckland Transport is the primary interest holder in those, and then you have some assets which are not associated with Auckland Transport, which would be council. Shouldn’t this legislation give some clarity in the project for reforming Auckland transport’s governance arrangements that the public transport CCO should hang on to those assets that are associated with the provision of public transport services, because those are the assets that it will need to continue to perform the public function which is being set out at new section 44(1) inserted by clause 14.

Moving on to new section 44A, inserted by clause 14, the delegation powers here are very broad, and it would be helpful to give us an indication of, for one, there is no mention of delegation to local boards. That was something that Auckland Transport had provision to engage with local boards quite closely. That was important under the old regime, where local boards didn’t have transport powers. Now they will have some transport powers, but there will be functions within the provision of public transport services—bus routes, for instance—which local boards have a very direct interest in, and, in fact, probably the most popular thing to petition a local board or local board politician about is the provision of where the bus service is going to go, especially for those new developments in Auckland. That is something that isn’t provided for at all here.

What is the requirement and what is the expectation on a public transport CCO, which, reminding members, is an organisation which doesn’t have that level of accountability to the public that is being given in other ways in the rest of the transport system by this bill to Auckland Council. How is it then that this new body will be accountable at that local level? The old legislation gave local boards a voice in things like this. This doesn’t seem to have those same protections for delegations, or at least engagement and proactive engagement with local boards. What happens, for instance, if the local board wants to have an active plan for its provision of local bus services, but doesn’t have the statutory mechanism to make sure that those things are on the agenda with a CCO that doesn’t want to listen to those local boards? How do we guarantee the democratic accountability and a way and a mechanism for local people to have some oversight over the provision of local public transport services, like they do in other transport services, because now governance will be shifted into a more publicly accountable mechanism?

I also want to ask the Minister a more general question about these powers. The public transport CCO, most of its powers are granted to it by the council through the long-term plan. That is a well-understood mechanism by Aucklanders, but then we’ve got this other document, which is a creature of his legislation: the 30-year transport plan. One would guess that there will be some overlap and some inconsistencies between those two documents—things like capturing in the 30-year plan the aspirations of Aucklanders for a decongested city will run right up against the long-term plan, where the rubber hits the roads for how to actually fund that. And if Government isn’t making provision in this legislation or in other legislation to provide for Auckland’s long-term reduction in congestion, then there will be some inconsistencies there. How do these two documents match up for the public transport CCO?

ANDY FOSTER (NZ First) (17:24): Thank you, Mr Chair. Look, I wanted to return to the issue which has been raised by Cameron Luxton, which the Hon James Meager partially answered, but he actually didn’t answer it accurately in terms of the select committee proceedings. I do want to pursue this just a little bit more, because what he said is that he implied that the parties which we’ve got the commentary from the select committee which said that “Some of us are concerned that the bill requires the ARTC ‘establish and maintain processes for Māori to contribute’ ”. Now, the implication from his answer was that, in fact, that was some of the opposition parties; actually, it wasn’t. It was ACT and New Zealand First who said, “Actually, we are concerned about that, because we don’t like the wording there and we think it is impractical.”

We also noted above that we say that we agree—and this was all of us—as a select committee that providing for consultation with Māori in the new section 42D(3) inserted by clause 14 is appropriate. So the concern that we had here—and the other thing is that the Minister who was then in the chair said, “Well, look, the select committee said at the front end, ‘We recommend all amendments unanimously.’ ” Well, of course, in that particular instance, that amendment, having not passed, it’s not an amendment which is reflected in what we passed. Therefore, every amendment that was agreed by the select committee was unanimous. The one that wasn’t agreed, just simply has not got through there. I think that was a misread of what was being said there.

Our logic in part was that we are saying that we’ve got this situation set up in the legislation, which says, “You’ve got to have the Minister and the Mayor being involved in the process and Māori.” Now, Māori, actually, it doesn’t even say it’s in Auckland. Essentially, it could be one fifth of the entire population of New Zealand. In fact, it doesn’t even say you’ve got to be in New Zealand. You’ve got a very, very large number of people who need to be consulted. This is in the design. This is not once you’ve designed it. It’s not going out to the public. When you go out to the public, then, by definition, you’re going to capture all Māori as well, because the bill is very, very clear that we need to make sure that we provide really good information to everybody. You’ve got the time and the information there to respond to, that’s great, and Māori will be able to respond in that situation.

The problem is that the bill as it is at the moment, says—and this is a new issue, because this is a new responsibility. The Auckland Regional Transport Committee (ARTC) and the 30-year transport plan does not exist at the moment—so it’s a new instrument. It says that we’ve got to “establish and maintain processes for Māori to contribute to the development and preparation of the plan.” That is an awful lot of people. If somebody feels that they don’t like what’s in the plan or somebody feels that they haven’t been given the opportunity—maybe they missed something—is there the opportunity for them to therefore in process challenge the plan? There is an issue there because it is so loosely defined.

Now, the Minister has already said that the intention was to be inclusive because there are 19 iwi groups in Auckland. Great. Well, why now say, “19 iwi groups”? Why not list them? Why not have a Schedule there? Because that’s not what it said. The previous Minister who was in the chair said it’s what’s in the law that matters, not the utterances are of the Minister on the Hansard. Now, if that is the case, then saying, “Well, Māori means 19 iwi”, well, actually, no it doesn’t. It says “Māori”—that’s what’s in the law. So if we mean 19 iwi, let’s say 19 iwi. If we mean something else, let’s say something else.

The Minister also said that it’s been used in the Land Transport Management Act (LTMA) 2003—a piece of legislation which is 23 years old. There are a few things which have changed in 23 years. The Local Government Act 2002, 24 years—few things that have changed there—and in the Local Government (Auckland Council) Act of 2009. So I would put it to you, Minister, that quite a few things have changed in terms of the relationship between Māori—there’s certainly been a lot of settlements which have occurred since then—and the interpretation may be tighter now than it would have been in those days before. The question really is: is that appropriate language to be used at the moment?

The note that I made is, because we’ve had that issue, particularly with the LTMA, which, of course, this relates to in some way—because it said it in 2002, we should just keep on following that up essentially forever and a day until the LTMA one day maybe gets replaced or repealed. I would suggest to you that that is a fairly lazy way of doing things. If we mean something specific, we should define something specific. Māori to me means Māori. It does not mean iwi. I think we need to be really, really clear, and that is really what the concern is that’s being expressed, that if we mean iwi, we should be saying iwi; if we mean Māori, it’s a very, very large number of people. As I said, roughly one in five New Zealanders, we are told, have some element of Māori whakapapa alongside any other whakapapa that they might have. Of course, that excludes people from Australia or wherever it might be. I will leave it there. I’ll look forward to the answer.

Hon SIMON WATTS (Minister of Local Government) (17:29): Thank you. I’ll come back on a number of questions that have come across the House. I mean, first and foremost in regards to the Amendment Paper by Cameron Luxton, the point in which I am reinforcing here is that, in practice, Auckland Council will support the Auckland Regional Transport Committee to engage with Māori, using Auckland Council’s well-established processes, staff resources, and existing engagement forums.

The reality is that Auckland Council already has existing mechanisms by which to undertake that task, and this legislation is simply replicating that existing mechanism and not looking to introduce a new mechanism or a new definition over and above what is already in play. For example, in regards to the requirements for new section 42B(1)(b), inserted by clause 14, the provisions in this legislation will impose the same requirements that apply to the New Zealand Transport Agency in relation to decisions about the National Land Transport Fund, under section 18H(1)(a) of the Land Transport Management Act 2003. In new section 42D(3) of the bill, again, the committee is required to consult with Māori on the draft 30-year transport plan. That, again, is modelled on the existing section 82(2) of the Local Government Act 2002, which requires consultation. Again, we’ve used consistent mechanisms. New section 43B requires consultation, again, based on the Local Government (Auckland Council) Act 2009, which requires Auckland Transport to “establish and maintain processes for Māori to contribute to its decision-making processes”. Again, that process has been replicated. We’re not looking to introduce new mechanisms; we’re looking to utilise existing mechanisms.

To the questions raised by Julie Anne Genter in regards to the disability community, the requirement that the Auckland Regional Transport Committee must consult on the 30-year transport plan, that needs to be made available in an accessible format, and that is outlined in new section 42D(2)(a) on page 17 of the bill, if the member would refer to that.

Arena Williams’ questions in relation to the relationship between the 30-year plan and the long-term plan: the 30-year plan must be taken into account by the long-term plan under new section 42G.

In regards to questions raised by Tangi Utikere around standing orders of the Auckland Regional Transport Committee, new section 41D, the passing of the local government bill versus this bill, as answered previously by Minister Meager—well, basically, the short answer is this: we’re going to monitor and ensure that they are aligned between those two bills.

The point raised around expenses of members, mayoral versus Ministers, was also raised previously, new section 39E(4), and it’s appropriate in this instance for the Remuneration Authority to determine the remuneration allowances and expenses of Auckland Council members. This is consistent with the functions of the Remuneration Authority under the Local Government Act 2002.

Arena Williams: who owns the public transport assets? Well, all the assets and other matters currently owned by Auckland Transport will shift to Auckland Council. During the transition period, Auckland Council will determine what remains with the transport council-controlled organisation (CCO). However, obviously, Auckland Council will become the road-controlling authority for which Auckland—most of the assets will shift to Auckland Council.

Arena Williams’ question around transport CCOs and why does it allow further functions: the primary function is public transport, under new section 44(1), allowing for future proficiencies. Also, related functions will be determined to be added. It is the CCO of Auckland Council, and therefore any delegations by Auckland Council must be agreed to by the Minister of Transport, safeguarding future functions.

Dr LAWRENCE XU-NAN (Green) (17:34): Thank you, Madam Chair. First of all, just signalling to the Minister of Local Government, I’m still waiting for my responses on new section 42D(2), inserted by clause 14. Potentially, I think, maybe if the same response for the disability response that the Minister answered regarding the question from my colleague the Hon Julie Anne Genter—that may clarify, but it would be good just to get a confirmation from the Minister regarding the questions I had for consultations with seniors but also consultations with migrant and especially Asian communities as part of the consultation plan.

I do want to move on to Subpart 3, which is “Transport CCO for Auckland”. I take the note of one of the previous speakers, Arena Williams, around the way that Auckland Transport (AT) transitions to the transport council-controlled organisation (CCO) and some of the questions that she had. I want to focus on new section 43B in terms of operating principles of the transport CCO, and I just cross-reference it with section 59 of the Local Government Act. I’m curious to know why the service that the CCO provides is actually not an operating principle of the transport CCO. At no part here—maybe tangentially in one of the parts in section 59 of the Local Government Act—does it actually mention the requirement to actually provide the service, which I assume is a really fundamental aspect of the transport CCO.

The reason I want to pick up on that as an operating principle is that one of the things that frustrates Aucklanders the most—and maybe the Minister also has personal experiences of this—is the lack of train service at certain times. Particularly, whenever there’s a game, we know, in Eden Park, half of the time the train isn’t taking place. The reason for that is because Auckland Transport, along with KiwiRail, along with One Rail, like, have an over-the-top complicated process in terms of who owns what. For those who are not from Auckland who are interested, Auckland Transport owns the trains and the train stations, but KiwiRail owns the tracks, and so even though the tracks—sometimes, KiwiRail will maintain them, which then takes out all of the trains; Auckland Transport may not be able to do that. That is a huge source of frustration for Aucklanders.

I want to check, under this new transitional plan, and also the transition from Auckland Transport to the transport CCO, whether the Minister has sought any advice or any guidance around what that would mean in terms of the complexity created in terms of the Auckland rail network, and whether there is going to be some way of managing the availability of trains as a part of a genuine core service that AT—now the transport CCO—provides. Again, I think, you know, the Minister may remember this, but often when, particularly, there’s a game on at Eden Park, etc., if the trains are not available, we do request that. The one time that I can think of in recent history where it was actually successful in terms of getting the service put on when the service wasn’t supposed to be available actually wasn’t done by the Government or by the council but by FIFA, when they held the FIFA Women’s World Cup. FIFA actually managed to convince KiwiRail to actually put the service back on. So—

CHAIRPERSON (Maureen Pugh): Could I just ask the member, please—sorry to interrupt—which clause are you speaking to?

Dr LAWRENCE XU-NAN: This is new section 43B, and this is to do with the question series around the operating principles and around the service that the transport CCO would be providing for Aucklanders, and that brings in the broader issue that we’re experiencing in Auckland around the availability of rail as a part of that.

CHAIRPERSON (Maureen Pugh): OK, so it sounds to me like you’re talking about operational decisions rather than the clauses in the bill.

Dr LAWRENCE XU-NAN: What I’m focusing on, Madam Chair, is in 43B, in terms of the operating principles, if you’re looking at new subparagraphs (a) to (e), not a single one of those principles actually talks about the service that the transport CCO should be providing for the public and for the population of Auckland. I mentioned that I cross-referenced it with section 59 of the Local Government Act, and that also is very loose when it comes to the operating principle of providing a service. I want to check with the Minister: if that’s not an operating principle, does that mean that—they can talk about in terms of efficiency and cost-benefit, etc., and seeking value for money, but none of this actually talks about providing the service that one would assume the transport CCO should be providing. That’s all. Thank you.

TOM RUTHERFORD (National—Bay of Plenty) (17:39): I move, That debate on this question now close.

ARENA WILLIAMS (Labour—Manurewa) (17:39): Thank you, Madam Chair. I wish to bring the Minister of Local Government to Subpart 4. These are the provisions that relate to the council-controlled organisation (CCO), and I’ll start at new section 45C, inserted by clause 14. His answers to my previous questions were quite helpful because they were not what I had assumed. Under this provision, it says that Auckland Council must specify in the long-term plan the activities that the public transport CCO is going to be delegated with. So, as I understand it from his previous answer, he said that the meaning of new section 44(2) isn’t that council can sort of thwart the intention of the Government to create a public transport CCO with a public transport function, because the Minister needs to OK that delegation. However, then when we come back to what it says in 45C(1), all of the delegation powers are framed as delegating powers around the management of public transport. Is it that the Auckland Council could delegate broader powers, if the Minister was OK with that, to provide for something that was not public transport at the council-controlled organisation (CCO) level? All councils are able to create CCOs, which have delegated functions that sort of remove them from the realm of publicly elected members and into the realm of technocrats and officials. So you would expect that power, but it seems to be that under new section 45C(1), inserted by clause 14, the CCO can only receive delegations that are to do with the provision of public transport, buses, trains—that’s it. Perhaps there are other provisions, but as I understand it, that is what it is quite limited to.

I also want to ask how is it that—does new section 46(1)(b), where the Minister approves the proposed delegation, create an anomaly whereby Auckland Council could have, like every other council in the country, gone through its process to create a long-term plan (LTP) and then have a Minister essentially disallow part of the instrument? Is this a disallowance power for the Minister in a planning instrument and we should understand it as such, or is it that there would be an iterative process where a Minister would negotiate the LTP and then the LTP would have to be reconsulted with Aucklanders? How is it the case that once you had specified in the LTP, then the rule would need to go to a Minister for further approval? But that is what the legislation says.

I also want to ask him about his new section 46(3). This section suggests to me that it doesn’t have to be in the LTP. The reason I ask him about this is because to specify that it must be in writing would suggest to me that we’re talking about other kinds of written delegations here which might not find themselves to be in the LTP, and that might be his provision for allowing for the Minister and the council to agree on another sort of delegation. Is that what he’s thinking of when he’s talking about delegations which are not public transport delegations that are defined in new section 45C? It’s important that we get to the bottom of this because I think most Aucklanders think that what they’re getting is the public transport CCO, and I think that, as the Government has billed this as more democratic accountability in Auckland’s transport system that is a good thing that is well supported by parties of this House and by Aucklanders. So, if they’re not getting that; if they’re getting a sort of back door to further delegation in the future that is things that aren’t public transport, or if we actually have a system where there is more ministerial control over what is than the long-term plan, then it’s a useful thing for us to appreciate.

The last question I have is around new section 46(7), which is around how the delegations affect or prevent Auckland Council from performing their duties. This very clearly says that Auckland Council isn’t prevented from doing the things it delegates. This is a well understood sort of delegation power where you say that the delegator retains the powers to do those things. But, in a council context, that is a little bit unusual—where you would have an elected body delegating to a CCO but retaining the powers to do exactly the same things that it has asked the CCO to do. In this context, I have asked the Minister about bus routes. They are the thing that public love to write to us and locally elected members about—and so they should—but for that person on the street who is writing to us about bus routes, are they meant to write to Auckland Council? Are they meant to write to the CCO? Are they meant to write to the local board? That is a fundamental question. It should be really obvious, but it isn’t from this legislation, so could the Minister please clarify that?

Hon SIMON WATTS (Minister of Local Government) (17:44): The point that was raised was around the operational performance and where does that sit around what time the bus turns up or that level of detail. That will be delegated through to the public transport council-controlled organisation (CCO). That’s the entity which will deal with that. In regards to the question around delegations, there’s concerns that potentially this is a back-door mechanism for other things; yeah—absolutely not. There is clear joint responsibility in terms of the appointment of the individuals that go on to the broader Auckland Regional Transport Committee; that’s between the Minister and the mayor, and those individuals will then have delegated power in regards to decision making, and they are the group that will make the decision.

In regards to the clause, more broadly as well, and again, with delegations, the determination of public transport activities in the long-term plan are different from a delegation which could be broader than public transport under new section 46, which I think is what the member was referring to in her question. It is not a disallowance power in the context of the broader long-term plan. I think, if I heard the question right in the context of the way in which the member was asking, that’s to clarify that point. That should cover off the points that were raised.

CAMERON LUXTON (ACT) (17:45): Thank you, Madam Chair. Look, I rise to take a final point on the Amendment Paper 568, which I have raised. The reason for this is I’d like to give the Minister a chance to respond to something that is a concern for the people of Auckland. The concern is that what we’ve heard here is a defence. This bill talks about the people of Auckland and their transport system and the governance thereof, and there is a concern that there is, by not adopting my Amendment Paper, which specifically says that the people whose direction should be followed are the elected representatives of New Zealanders and Aucklanders, being the mayor and the Minister of Transport, that the current bill has also in there “establish and maintain processes for Māori to contribute to the development and preparation of the plan”: co-design of a 30-year plan, Minister. There is concern that by not supporting my amendment, it is not clear that you do not intend the section not to be interpreted as a co-design or co-governance of Auckland’s transport 30-year plan. I would invite you to support my Amendment Paper or to respond to concerns that by not doing so means that co-governance is being written into this bill.

TANGI UTIKERE (Labour—Palmerston North) (17:47): Thank you, Madam Chair. I really do want to thank the Minister for his succinct answers in addressing the questions that have been raised because it means that we can just move on. So I do want to thank him for that. I want to have a look at new section 46A, inserted by clause 14. This is where the council has a legislative ability to make the operating rules for the transport council-controlled organisation (CCO). Now, when we look at what’s been inserted there by the select committee—and there is new paragraph 4A(1)(ac)—this talks about the Auckland Council being able to make rules in relation to the procedures for dispute resolution between the Auckland Council and the transport CCO. My first question to the Minister for this one is: why is that needed? I think that this bill coming to the House is very clear about where the responsibilities lie, and I think that perhaps there is a view that’s held that the view of Auckland Council on matters outside of public transport is that it should be the Auckland Council view that prevails if there is some sort of dispute between the CCO and the council. I’m just a little bit perplexed as to why the council needs to turn its mind to putting in place some procedures around dispute resolution between the two when the expectation, I think, is pretty clear around that.

One of the things that we haven’t actually talked about yet is the Government’s own Amendment Paper: Minister Bishop’s own Amendment Paper 564. Relative to Part 2, as I understand it, that Amendment Paper will introduce two additional changes that haven’t been covered yet. The first relates to new section 46AB. When I was looking at that, it identifies that the Auckland Council must not perform the functions of the CCO related to things that are delegated and the public transport activities. So the public transport activities—that make sense because what this bill does is it’s basically transferring responsibility for public transport over to the new transport CCO. So, I mean, I had a question for the Minister, which is: why should there be a requirement for the CCO, or the council in this respect, to not actually perform those other functions? I assume the Minister’s amendment to new section 46AB is seeking to clarify that and that it is basically, “Well, no, the only responsibility that the CCO will have will be public transport.”

On new section 46B, which is a restriction on borrowing for the transport council-controlled organisation (CCO), Minister, is the intention there to, effectively, protect—well, at the end of the day, ratepayers who will be footing the bill and the costs for this from any unmanaged financial risk that may arise as a result of a capacity to borrow? That, I think, would be very, very helpful.

I want, also, to turn to new section 47B, which is about the governing body and the local boards having to consider certain matters when exercising their powers. Now, I would like the Minister to perhaps respond to this particular section, because this is the second part of the quinella in this part when it comes to Minister Bishop’s Amendment Paper 564. This is seeking to, basically, instead of what’s outlined there in existing section 47B, which says when the governing body or a local board exercises certain powers and things, that they need to think about or to have regard to freight through the area, frequently running public transport networks in the area—so it’s basically saying, as I understand it, those decision makers need to have regard to and to think about those sorts of things.

Now, what’s quite a significant change in the Minister’s Amendment Paper is actually, well, no, what needs to be inserted there in new section 47B is actually that when those powers are being performed, a local board—so not the governing body, but a local board—basically needs to go about those duties and responsibilities in a way “that does not obstruct regionally significant transport projects”. That is actually quite a significant change there, and I think—well, the responsible thing would be for the Opposition to be asking the Minister, well, why is there that quite significant change that he’s seeking to advance, given that that hasn’t been addressed at this stage?

Hon SIMON WATTS (Minister of Local Government) (17:52): Thanks very much, Madam Chair. I want to respond to some of Cameron Luxton’s statements. First and foremost, the Amendment Paper by Cameron Luxton is not an Amendment Paper on behalf of the broader Government. The points that I have noted previously is that the legislation applies similar requirements that are already in place in other legislation that exists today, and while there are mechanisms within that clause that allow for Māori to be able to input and provide advisory and opinions and context through, the definitive and the final decision making lies with the Auckland Regional Transport Committee, who are jointly appointed by both the mayor and the Minister. That is the decision-making body which makes decisions in regards to the way in which this entity will operate. The interpretation or implication that this is somewhat introducing terms such as “co-governance” and that are simply not the reality reflected in the requirements, which are consistent with other aspects of legislation.

Dr LAWRENCE XU-NAN (Green) (17:53): Thank you, Madam Chair. I want to move on and ask the Minister a couple of questions around new section 48, and this is under “Miscellaneous provisions” regarding the Auckland roading classification framework. I have a couple of questions for the Minister. Regarding 48(2), and especially some of the classifications regarding arterial roads for traffic, freight, public transport, or a local road, etc.—would this have potentially any implications for the type of vehicles that will be able to travel in certain roads? For example, when we’re looking at “a road that collects and distributes traffic to and from properties within a specific area”, does that mean that certain vehicles, particularly freight and etc.—there will be a limitation on what can travel? And again, this comes down to the fact that we do see in Tāmaki, in particular, a lot of, I guess, heavy vehicles travelling down residential roads. I was just curious if that’s something that the Minister has considered.

I’m also curious to know when we’re looking at new section 48(e) and (f)—noting that I was not part of the select committee when this was heard and I have read some of the departmental reports—but I’m interested to know why other really key stadiums, for example, Mount Smart, to give an example, weren’t also considered as part of that, and why Eden Park was specifically and explicitly stated in this. I’m going to actually just leave it at those two questions for now.

DAN BIDOIS (National—Northcote) (17:55): I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): I think we are getting close to the end of this part anyway—Arena Williams.

ARENA WILLIAMS (Labour—Manurewa) (17:55): Thank you, Madam Chair. I want to clarify with the Minister his answer around the Amendment Paper 564 in the name of his colleague, Chris Bishop. Is he saying that the operation of 46AB in its new form, that Auckland Council mustn’t undertake the transport activities that it set out in its long-term plan (LTP)—when he says that there isn’t an allowance for the Minister, does that mean that anything in the LTP, because that’s the document that delegates to the CCO its functions, is something that is then prohibited for the council to be able to undertake?

I ask that because we know now that the Minister needs to agree to that power; and so, is it the case that if anything’s in the LTP and delegated by Auckland Council, even if the Minister hasn’t agreed to it, that council mustn’t undertake that function? The LTP isn’t just a document that Auckland Council can change; it’s a document that has to be consulted upon and is well signposted for the Auckland public, so it can exist for years before the Minister could get to the point of being asked for a yes or no answer. Is it the case that then there is a prohibition on Auckland Council to undertake those things which are set out in that?

I also want him to just—hopefully—explain the local board now being prohibited from making decisions which could be impacting city-wide routes, particularly for freight. Freight was something that was enshrined in his new section 48(2)(ii), and that is significant, but it is also important that those local boards have some say over that. The new provision for this is that decisions that are made at local board level would be delegated to do it from Auckland Council specifically for the purpose of having a local flavour to them. Local boards now don’t have a mechanism for consulting or inputting into the decisions of the new public transport council-controlled organisation (CCO), and, therefore, what is the ability of local boards to have a say around those larger roads and the provisions for them that are made when they go through the area of a local board?

It seems that local boards now have far fewer powers than they did under the old system of delegation by their governing body to impact on what kind of road usage can be applied to roads, given that they don’t have the statutory functions of inputting into transport plans that Auckland Transport would have made, where it would have been relevant for not only arterial routes but local roads to be used by freight and heavy trucks. The Minister will recall earlier in this committee of the whole House stage, I asked questions not only about the movement of freight but also about the parking of trucks and the levying of infringement. How is it, Minister, that in the clause 14 of Amendment Paper 564, new section 47B, local boards have any ability to impact upon those rules if they have to take into account the regional framework that is enshrined in the primary legislation?

CHAIRPERSON (Maureen Pugh): The time has come for me to leave the Chair for the dinner break. The House will resume in committee at 7.30 p.m.

Sitting suspended from 5.59 p.m. to 7.30 p.m.

CHAIRPERSON (Greg O'Connor): Good evening, members. When we stopped for dinner, the House was in committee for the Local Government (Auckland Council) (Transport Governance) Amendment Bill. The question is that Part 2 stand part.

Hon SIMON WATTS (Minister of Local Government) (19:30): Thank you very much, Mr Chair. I’m just going to answer a few questions that were raised before the dinner break.

First and foremost, there was a question in regards to the Government’s Amendment Paper 564, and particularly around the purpose of that. The Government’s Amendment Paper introduces a safeguard. If the governing body believes that a local board decision obstructs a regional project or service, it introduces a dispute resolution process modelled on that already contained in the Local Government (Auckland Council) Act.

Arena Williams asked a question in regards to “Why should Auckland Council be able to perform powers delegated?” Well, retaining the powers to perform or exercise a specific power that is delegated is standard for local government delegations in the Local Government Act 2002. Auckland Council are responsible for any powers delegated.

Tangi Utikere asked a question around Amendment Paper 564—the removal of clause under new section 46AB(a). The removal of this new section 46AB(a) is to remove an inconsistency between the provision and the power for Auckland Council to perform functions it delegates to the transport council-controlled organisation (CCO) under new section 46.

Tangi Utikere also asked a question in regards to new section 46B, inserted by clause 14. This clause carries over from the previous restriction of CCO borrowings in the Local Government (Auckland Council) Act. It helps with the financial management factors related to the CCO and also reflects the accountabilities of Auckland Council.

TANGI UTIKERE (Labour—Palmerston North) (19:31): Meitaki maata, Mr Chair. Thank you to the Minister in the chair for those responses. I want to move now to what is new section 48A, under clause 14. This is about the review of the performance of the transport functions. Now, this is a significant change for Auckland in terms of who will be responsible for aspects of transportation. Public transport will sit with the new transport council-controlled organisation (CCO), whereas local boards take up a particular responsibility in other areas.

When it comes to this particular clause, this is, effectively, a review clause that’s been inserted that kicks in after five years. I’m interested in a couple of things: whether the Minister thinks that the five years is appropriate as a time frame. We’re talking about progress on a 30-year transportation plan that has a longer-term approach, we also know that the life of terms of local government are around three- by three- by three-year sort of chunks, so five years, effectively, might see through to the end of the next term of the local government sort of context there. When we look at what is actually expected under that review, it only talks about the performance of the powers, functions, and responsibilities under this part for the CCO and for the council. It’s important that it’s not just the governing body but it is also the local boards that are included here as well.

Does the Minister see any gaps in that review opportunity? I know that, under subsection (2), it talks about the council being able to consult any person that they consider appropriate in undertaking that review and that the review itself needs to be presented to the Parliament by way of the Minister of Transport. Can the Minister confirm that the review report to the Parliament will provide a checkpoint on whether these forms of reform are delivering the intended outcomes that he and his predecessors have been referring to there?

It’s not quite clear in the bill itself, but will the review consider things like the effectiveness of the governance arrangements? Will it consider the effectiveness of the way in which the transport services have been delivered? I’m not just referring to the CCO, because that’s purely going to have a focus on public transport, but also the public confidence that may or may not exist in the entities in terms of what it is that they’re going to do. It’s not uncommon—from time to time, there are aspects in legislation that relate to a review process—but this is very, very discreet in terms of a review of Auckland Council’s service delivery approach and the CCOs. Does the Minister see any particular gaps as part of that review process?

Maybe the Minister doesn’t see any gaps as part of that particular process, we’re not quite sure. We haven’t talked about the review option as of yet in this particular committee. Maybe we need to think about the different time options that could be available to undertake a review.

Earlier, I touched on the three by three by three. Is it the expectation that the five-year review period—I mean, it won’t necessarily align with the parliamentary term, and I guess that’s not so much of a big deal, because the report will land in front of the Parliament when it does. If we’re talking about decision makers who might be on a local board and there may have been an election, and the five year kicks in just after that, and you’ve got new individuals sitting around the table, considering what works and what doesn’t work, why is it that the five years might actually be the particular figure that the Minister is or isn’t comfortable on? Given that we didn’t get a response on that, we can only really infer why some of these reasons might be.

The interesting thing is that the way in which local boards undertake different responsibilities—and this was the point, I think, that my colleague Arena Williams was making to the Minister—there is an opportunity here for there to be quite a lot of discretion amongst the local boards. She used the example of heavy truck movements in particular parts of South Auckland, where there might be a number of local boards that make a determination based on what the local view or perspective is, what the local pressures are, and what the local resourcing opportunities might be at a particular time, in a particular place. It might be that, actually, there are different—and it’s likely to be—transport decisions taken by different local boards. Actually, it’s highly probable that that would be the case, because, otherwise, you wouldn’t devolve the responsibility to local boards. How is there going to be some consistency around the way in which this actually functions? Again, when we’re talking about 48A, it identifies the Auckland Council. It says here “(including the governing body and local boards):”.

Now, there will be some aspects in this suite of options—

Shanan Halbert: A lot of decision makers.

TANGI UTIKERE: —where a lot of decision makers—and, actually, that’s a very good point, Mr Halbert, because local boards, there are many of them through Auckland. We don’t have, again, them anywhere else in the country. It’s a bespoke form of local government sort of arrangements for Tāmaki-makau-rau. Is the five years still appropriate, and, if not, why not?

Hon SIMON WATTS (Minister of Local Government) (19:38): Thank you very much, Mr Chair. Yes, in regards to new section 48A, inserted by clause 14, on page 28 of the bill, the five-year term is appropriate for all of the new transport arrangements to be bedded in Auckland. The transport council-controlled organisation’s (CCO’s) new role, the Auckland Transport committee structure, and the Auckland Council has a roading controlling authority for Auckland.

In regards to Dr Lawrence Xu-Nan’s questions earlier, before the break, in regards to consultation with migrant and Asian communities, new section 42D(2)(a), inserted by clause 14, on page 17 of the bill, outlines the mechanisms in regards to engaging with those who may be affected by the plan.

In regards to the question by Tangi Utikere in regards to “Why is new section 46A(1)(c) needed?”, in reference to page 43, Auckland Council’s ability to set disputes resolution procedures are intended to ensure the relationship between Auckland Council and its CCOs are clear from any issues that are resolved officially.

The other questions I had already covered previously.

DAN BIDOIS (National—Northcote) (19:39): 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 74

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

Noes 48

New Zealand Labour 34; Green Party of Aotearoa New Zealand 14.

Motion agreed to.

CHAIRPERSON (Greg O'Connor): The question is that the Minister’s amendments to Part 2 set out on Amendment Paper 564 be agreed to.

Amendments agreed to.

CHAIRPERSON (Greg O'Connor): The question is that Cameron Luxton’s amendments to clause 14 set out on Amendment Paper 568 be agreed to.

Amendments not agreed to.

Part 2 as amended agreed to.

Committee of the whole House

Part 3 Amendments to Part 8 and other matters, and Schedules 1, 2, and 3

CHAIRPERSON (Greg O'Connor): Members, we come now to Part 3, the debate on clauses 15 to 21, which is amendments to Part 8 of the principal Act and other matters, and Schedules 1, 2, and 3.

TANGI UTIKERE (Labour—Palmerston North) (19:41): Thank you, Mr Chair. The questions that I have are around the transitional arrangements, and the Transport and Infrastructure Committee has commented in its report—we’ve covered this in the second reading, so I won’t go too far into it, but one of the concerns that we did have was the ability of Auckland Council and Auckland Transport (AT) to deal with the transition of the staff that were involved. This was actually something that the Public Service Association also brought to the select committee’s attention in making sure that the transitional arrangements that were in place were comprehensive and would ensure a smooth process, because it’s at times like this that there can be some uncertainty around what might be happening and what the positions might be.

I think it’s fair to say that the committee had a degree of confidence with some of the comments that were made, but does the Minister have his own confidence in the abilities of Auckland Council and, indeed, AT to oversee or manage that transition process for staff? We’re talking about a change to the way in which transportation will be delivered in our country’s largest city, and ensuring that that transition is able to be done in a smooth way is really, really important. That’s the first question for the Minister.

The next one is around ensuring there is no gap in the accountability aspects for anyone who is making decisions, and it is important for us to identify what the current approach is. Those decisions for transportation are largely taken by unelected members. This bill seeks to significantly change that, to put the accountability back with those who are publicly elected to these particular roles, so how will the Government ensure that there is no gap in accountability as the process of transition gets under way?

I’m not too sure how much time I’ve got left. The clock says that it’s zero, but I’m sure I haven’t—

CHAIRPERSON (Greg O'Connor): Sorry, no—you can carry on. We’ll say that you’ve got three minutes.

TANGI UTIKERE: Have I got three minutes? Thank you, sir. This sort of confirmation of accountability for employees is really important, and ensuring that the organisation is in a really robust way so that they’re able to look after the staff—which was of real concern—is part of the reason why these transitional arrangements have been alluded to and have been put in place.

Now, the schedules that have been identified as part of this outline a number of different aspects in terms of the process that will need to be followed. It’s not my intention to go through all of that, but ensuring that at the end of the process of transition the staff are protected and there’s confidence from the Government that the entities involved will be able to manage that transition smoothly and in a way that is appropriate is, I think, important for some assurance to be given.

Hon SIMON WATTS (Minister of Local Government) (19:45): Yes, I do have confidence that they are going to work their way through this process in an appropriate manner when dealing with the HR matters. Actually, Auckland Council has already released a transition plan in regard to how it’s going to manage the risks related to this mechanism, so that will cover the questions in regard to the schedules.

CHAIRPERSON (Greg O'Connor): The question is that the Minister’s amendment to Part 3 set out on Amendment Paper 564 be agreed to.

Amendment agreed to.

Part 3 as amended agreed to.

CHAIRPERSON (Greg O'Connor): The question is that the Minister’s amendments to Schedule 1 set out on Amendment Paper 564 be agreed to.

Amendments agreed to.

Schedule 1 as amended agreed to.

Schedule 2 agreed to.

CHAIRPERSON (Greg O'Connor): The question is that the Minister’s amendments to Schedule 3 set out on Amendment Paper 564 be agreed to.

Amendments agreed to.

Schedule 3 as amended agreed to.

Committee of the whole House

Clauses 1 to 3

CHAIRPERSON (Greg O'Connor): Members, we come now to our final debate, on clauses 1 to 3, which is the debate on the “Title”, “Commencement”, and “Principal Act”.

TANGI UTIKERE (Labour—Palmerston North) (19:46): Thank you again, Mr Chair. Well, we’re finally getting to the end of this particular debate, and it’s not my intention to ask the Minister any questions about the appropriateness of the title. Some other colleagues may have some other views, perhaps—particularly colleagues who are based in Tāmaki-makau-rau might have some views as to what might be appropriate, but I’ll leave that for them if they choose to do that.

My question, though, is really around clause 2. This is the commencement clause and, put quite simply, the Minister will be aware that what’s proposed there is not an uncommon approach when it comes to when the Act, once it is given Royal assent, should come into play. What is proposed here is that it would come into effect or come into force on the day after Royal assent is given. Now, given there are a number of transitional arrangements and a number of changes that need to take place, I guess what I’m seeking from the Minister is whether he is comfortable—I guess it’s a guarantee, really—that the commencement date as indicated here provides sufficient certainty not just for Auckland Council but also for the current Auckland Transport arrangement to begin the transition planning immediately.

What I think is really interesting is that, actually, with the Auckland Regional Transport Committee, there are already calls out there for members to join that committee before the Parliament has even kind of given its approval, so there are already in train some proposals or suggestions that are already under way. I guess the alternative, really, is only a particular calendar date, rather than anything else. It’s very straightforward, and the simple question is whether the Minister can give some confirmation that the commencement date outlined in clause 2 is such that it is sufficient for Auckland Council in terms of the transition, and also whether or not the Minister intends to outline how central government will support Auckland Council during this initial post - Royal assent set-up to ensure the continuity of transportation services. We are talking about decisions that are taken at a local level, but in terms of public transport provision, I also ask whether it is able to maintain some form of continuity.

Hon SIMON WATTS (Minister of Local Government) (19:49): Thank you very much, Mr Chair. Yes, I can provide that assurance. Both the Crown and Auckland Council have been working very closely together. It would be fair to say that there is significant appetite from Aucklanders to see the governance of transport-related matters being, in effect, returned back to those who are democratically accountable for transport, which is Auckland Council. The broader reform of this programme effects that change. It better aligns between Auckland Council and the Crown the way in which that entity is governed.

The timeline, really, is let’s get on with this. It’s going to be a significant win for Aucklanders and it’s great to be able to pass that through legislation and keep it moving tonight.

HELEN WHITE (Labour—Mt Albert) (19:50): Thank you. I just note that the title, actually, of this bill talks about it being an Act of 2025 and we’re in 2026. It says that it’s going to commence the day after Royal assent, but in fact it’s set out as a bill from 2025, and so I’m wondering whether that’s an accident and it needs an amendment.

Hon SIMON WATTS (Minister of Local Government) (19:50): Yes, that is done by the Clerk, and that refers to when the bill was put through.

SHANAN HALBERT (Labour) (19:51): Thank you, Mr Chair. It’s my first opportunity to speak to this, but I will be brief. I think it is important that this piece of legislation moves beyond this House. There is a sense of urgency that Auckland does prioritise transport. When I look at the title of this legislation before the committee and with the Minister today, the Local Government (Auckland Council) (Transport Governance) Amendment Bill, one of my biggest concerns is that under the last couple of years there have been major cuts to Auckland Transport, in particular. Up to $120 million, I understand, has been cut annually since the last Labour Government. That is not to be political tonight; that is to clearly say that while we can change legislation, the outcome of moving Aucklanders in and around our congested city doesn’t change without adequate investment.

In particular, I note that in this piece of legislation, it does bring some in-house to Auckland Council. I think there are benefits to that, but it does leave within the existing council-controlled organisation public transport only. We know in order to grow our city and to get on top of congestion, public transport has to be a major priority in that, and we haven’t seen good investment. In fact, we’ve gone backwards in investment in public transport in Auckland because of this Government. My suggested title here for the Minister is the “Local Government (Auckland Council) (Transport Governance) (Show me the Money, Minister) Amendment Bill”.

DAN BIDOIS (National—Northcote) (19:52): 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 74

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

Noes 48

New Zealand Labour 34; Green Party of Aotearoa New Zealand 14.

Motion agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 agreed to.

Bill to be reported with amendment.

Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

Committee of the whole House

Part 1 Amendments to Anti-Money Laundering and Countering Financing of Terrorism Act 2009

CHAIRPERSON (Greg O'Connor): Members, we come now to the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. We begin with a debate on Part 1. This is the debate on clauses 3 to 28, “Amendments to Anti-Money Laundering and Countering Financing of Terrorism Act 2009”. The question is that Part 1 stand part.

Hon NICOLE McKEE (Associate Minister of Justice) (19:55): Thank you, Mr Chair, and thank you to the members of the House for joining me for the committee of the whole House stage for the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill, which I’ll refer to from here on as the supervisor and levy bill.

I’m honoured to be leading the supervisor and levy bill through the committee stage after the broad support it received at its second reading, and I look forward to hearing your views as we debate the bill. This bill will make a range of structural enhancements to the anti - money laundering (AML) system. Firstly, it will streamline the AML supervision by moving to a single supervisor, the Department of Internal Affairs, from the current three supervisors. The DIA has vast experience in intelligence-led investigations, with a current track record in supervising casinos, money remitters, and other high-risk sectors.

Under a single supervisor, businesses will benefit from improved and more responsive guidance and reduced cost and complexity where the risk is low. Businesses will be supported to apply risk-based compliance, lighter compliance when the risks are low, and more intense supervision for higher-risk sectors and situations. As our front line of defence, we want businesses more focused on compliance that identify suspicious activities to detect and deter potential crime, rather than spending time on low-risk transactions that do nothing to tackle crime.

Second, the bill introduces a new industry levy to improve the functioning of the anti - money laundering countering financial terrorism system. It is estimated that over $1.6 billion is laundered annually through New Zealand’s financial system, money that is tied to serious harm in our communities from drug trafficking, fraud, and organised crime that exploits vulnerable people. Industry is telling us they want better intelligence from Governments so that they can be more effective in helping tackle financial crime. Government agencies have not been resourced well enough to address the requests from industry to improve the system, and this change forms part of these reforms.

Finally, the third component of this bill updates some flexible regulation that can result in ineffective use of our resources and undetected crime. Organised crime syndicates are becoming increasingly innovative, using new methods and emerging technologies to outpace regulation. This bill will allow agencies to make regulatory changes through alternative forms of secondary legislation, such as rules and notices.

Cushla Tangaere-Manuel: Point of order, Mr Chair.

CHAIRPERSON (Greg O'Connor): Sorry, Minister. I believe the point of order will be in relation to which bill we’re talking about. Now, there are two very similar bills, Minister. This is the one we’re on: Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. That’s the next—

Hon NICOLE McKEE: My apologies. I was told that this was the first bill that we were debating.

CHAIRPERSON (Greg O'Connor): It’s a very understandable mistake; they’re very similar.

Hon Dr Duncan Webb: Speaking to the point of order, Mr Chair. If the Minister has skipped over a bill, she’s fully entitled to do that; she just can’t go back to it. It would appear that she’s chosen to miss an item off the Order Paper.

CHAIRPERSON (Greg O'Connor): No, she hasn’t skipped over a bill. I read out this bill. She is speaking to another bill and I’m now bringing her back to the bill that she needs to be speaking about, but nice observation there. Just to confirm, we’re now on the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill and the bill that the Minister is discussing will be the next bill. The Minister can stand and speak, as long as she’s in the bill, so there we go.

Hon NICOLE McKEE: Thank you, Mr Chair. I may start with a new introduction. This time, I’m going to speak to the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill and I’m very pleased to be leading this particular bill through the committee stage. I’m pleased to say that there was broad support across the House for this bill at its second reading and I look forward to hearing the views of the other parties as we debate the bill. This bill will make a range of targeted enhancements to the anti - money laundering (AML) regime.

It focuses on amendments that make continuous improvements and repairs without major policy or system design changes or significant financial implications, ensuring that the anti - money laundering and countering financing of terrorism legislation remains fit for purpose. This bill carefully balances the objective of delivering regulatory relief for businesses and people in New Zealand with the effectiveness of the system.

One of the changes in the bill that will make the most difference is relaxing the requirement for businesses to conduct customer due diligence for low-risk trusts. Currently, businesses must apply the same enhanced customer due diligence requirements to all trusts regardless of their risk, even though in New Zealand there are many low-risk trusts like small family trusts. This bill will allow for the application of customer due diligence measures for low-risk trusts that are more proportionate to the risk that they represent. We are also removing the requirement for people to submit a border cash report if they have received cash from someone who physically moved the cash into New Zealand, as this is needless duplication. This change will streamline the process.

This bill is a practical demonstration of the Government’s focus on regulatory stewardship. We must progress this bill as it will help to ensure New Zealand’s regulatory systems remain up to date, fit for purpose, and beneficial for businesses and the public. I welcome debate on this particular bill, but I will also mention that there is an amendment paper on the table, Amendment Paper 572. There will also be an amendment paper on the following bill—that will be Amendment Paper 573. Effectively, what I’m looking to do is delete clauses 23, 24, and 28 from this particular bill and then insert them into the bill that we are going to debate next. It’s not gone, it’s just removed from this bill and being placed into the next—that’s what those two amendment papers are about. I look forward to the upcoming discussion.

CAMILLA BELICH (Labour) (20:02): Thank you, Mr Chair, and thanks to the Minister for the fulsome introduction. I think these bills do have quite similar names, and then obviously the two amendments are also working between these two bills. We did have them read as one during the last reading, so it is understandable that there is some overlap between the two of them.

I did want to go back to the original legislation, the 2009 Act, and just start at the beginning, as it were, with clause 3, which refers back to that principal Act. I’ve got a copy of that here, and I wanted to just check with the Minister—she’s made a few comments around what this bill will do, and I wanted to check with her that it is her intention, through the passage of this legislation, to make it more difficult and the systems to be more robust in order to prevent money laundering in New Zealand. The reason that I ask that question is when you look at—it happens to be clause 3 of the principal Act as well—the purpose of the primary bill which is being amended, and there isn’t a subsequent amendment to the purpose, as I understand, in this bill.

The main purpose of the primary piece of legislation is to detect and deter money laundering and the financing of terrorism and to maintain and enhance New Zealand’s international reputation by adopting, where appropriate in the New Zealand context, recommendations issued by the Financial Action Task Force and to contribute to the public confidence in the system. It’s also got subclause (2) there that I won’t read out.

The Minister, in her opening comments, made comments regarding the proportionality of reporting requirements, indicating that some—and I’m interested to know if this was her intention—of the reporting that is required at the moment may be, and this is my interpretation of what she said, more arduous or more stringent than necessary in terms of the use of the word “proportionate”. I want to know: is it her intention to water down this purpose in the primary legislation at all, or not?

The other thing that the Minister mentioned was the need for reports and the fact that this bill will remove a need for a report to be done in certain instances. I wanted to check with her, in terms of the primary piece of legislation which I’m referring to in clause 3, will that support these goals—which are, I think we can agree across the House, important. It’s important that we have public confidence in the financial system; it’s important that we detect and deter money laundering; and, of course, financing terrorism is obviously something that we have to be very, very concerned about.

I just wanted to allow the Minister to answer those questions, especially with those initial opening comments, which did indicate, perhaps, a lessening of the stringent nature of this regime. In terms of my opening question, I just wondered if the Minister may be able to respond to that.

Hon NICOLE McKEE (Associate Minister of Justice) (20:05): Thank you, Mr Chair, and I thank the member for asking for some clarity around what this regime change will actually do. Quite rightfully, you’ve asked, “are we lessening or weakening some of these holds?” and my answer, hand on heart to the member, is no we’re not. What we’re looking to do is ensure that when we go after the dirty money, so to speak, that we’re going after it in the right place—that we’re not targeting every single person who is moving money as that potential organised crime prospect.

To give you an example of that is looking at the trusts, for example. We do have, I believe, around 700,000 trusts in New Zealand, and—I might have this transposed—400,000 are high risk and 300,000 are low risk. It’s making those low-risk trusts—basically, your standard family trust—to not have to go through the same rigmarole that some of those higher-risk trusts do. It’s allowing the agencies to be able to determine what is their risk factor.

Another example would be, say, buying and selling a house. You’ll be interacting with a real estate agent, with a lawyer, and with a bank, and at the moment, all three of those entities are asking you to provide the same information. We’re basically saying if it’s the one transaction, let’s have one entity get all of that information and confer to the rest that it’s all OK because they have already received that information. This will cut costs. It will enable people to just be able to move on without having to jump through the hoops. In that respect there is some relaxing, but it’s not relaxing on behalf of organised crime or our ability to chase organised crime—we very much will continue to go after the dirty money and protect as many people as we can within New Zealand.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (20:07): Thank you, Mr Chair. Just moving deliberately through the legislation, just looking at clause 4. It inserts a new definition of “beneficial owner”, and on my reading of it, paragraph (a) is the existing definition—so there’s no change there—but paragraph (b) is, in fact, new. I’d invite the Minister to explain why the additional paragraph (b) is needed, because it would seem that paragraph (a) is fairly broad. The one that does the work is a beneficial owner, so the definition of “beneficial owner” is a person—individual—*“who has effective control of the customer or person on whose behalf a transaction is conducted”. That’s a broad test but it’s a clear one, and it’s not any particular, it’s just effective control.

In paragraph (b), we’ve got, essentially, a repetition of that: *“and (b) includes an individual (i) with ultimate ownership or control of the customer … or”—and then you’ve got this really odd clause which just seems to muddy the water—“(ii) who is a customer of a customer, and on whose behalf a transaction is conducted, but only if the individual meets the requirements set out in subparagraph (i)”, so it goes up again to ultimate ownership. It seems to be a really convoluted way of saying “effective control”, because it doesn’t matter if you’re a customer of a customer or not if you’ve also got to have ultimate ownership or control, which is effective control. I’m not sure if there’s a case out there which triggered this or there’s some notional gap in the law, but I must say, I find it really frustrating when the law seems to just populate itself—it breeds, and words just multiply before our eyes. And so, I’d be really interested to know what the thinking behind this one is.

Also, just whilst we’re here, I’m interested to know, because new paragraph (a)(ii) talks about “prescribed thresholds”—we see that a lot in company law, that if you’ve got 25 percent of a company, you’ve got certain restrictions; 50 percent, other takeover rules apply; and once it gets to, sort of, 95 percent, you get a compulsory takeover framework; and so on and so forth. I get all that. I’m interested to know what the prescribed threshold is, because I’m presuming that that’s in regulations already. Control is assumed when you own such and such of a company. That may change depending on how large the company is, but I’d be interested in that.

My real point is simply that one around, why do we need a rule about “a customer of a customer”, which then also includes “ultimate ownership or control”, when you’ve got a very effective test that simply talks about “effective control of a customer or person on whose behalf a transaction is conducted”? I’d be interested to know what’s the gap, what’s the fix—what’s the mischief?

Hon NICOLE McKEE (Associate Minister of Justice) (20:11): Thank you, Mr Chair. I think the member was referring to section 5, not section 4, so I’m going to answer it—I’m pretty sure it’s section 5. Clause 4, amending section 5?

Hon Dr Duncan Webb: Oh, yes. Clause 4 of the bill, section 5.

Hon NICOLE McKEE: OK, thank you. Clause 4, “Section 5 amended”, is amending the principal Act to update the definition of a “beneficial owner”, update the definition of “designated non-financial business or profession”, replace the definition of “trust and company service provider”, and insert a new definition of “money or value transfer service”.

The reason why we’re making these changes about the “customer of a customer” is because the statutory review found that there was an issue that the definition of beneficial owner in the Act is capturing some people that it shouldn’t, and that referred to the customers of a customer. It also identified gaps in the definition, in that it did not include a person with ultimate ownership or control. The definition was initially amended in the regulations, and this amendment brings those definitions into the Act. The new definition will include “a person with ultimate ownership or control” and exclude “the customers of a customer” unless they’re the ones with the ultimate ownership. Ultimately, this amendment provides clarity and relief by ensuring businesses do not have to undertake the Act’s obligations on customers of customers.

In relation to the member’s second point, if the member could, please—he said “(a)(ii)”, but I don’t understand where that is. If the member was able to point me to—

Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (20:12): I can do that, if the Chair will allow me. The prescribed threshold is referred to in clause 4 of the bill, “Section 5 amended”: “beneficial owner” means an individual who “(i) has effective control … or … (ii) owns a prescribed threshold”. My question was: what is the prescribed threshold of a company?

CHAIRPERSON (Greg O'Connor): Just while the Minister’s taking advice—Dr Lawrence Xu-Nan.

Dr LAWRENCE XU-NAN (Green) (20:13): Thank you, Mr Chair. Thank you for joining us, Minister. I have two broader, policy-based questions also in relation to what we’re seeing within the regulatory impact statement as well. I think the first question is: when this bill was first introduced and then when the second bill was introduced, it was supposed to be one part of four, in terms of some of the changes. I just want to check in terms of how this one’s going to be tied into the broader things, when some of these are now—one and two, once past third reading, will be in effect, and then, you know, just checking with the Minister if there’s any intention around when the subsequent bill is going to be introduced.

The second question I have is: a lot of the things we’re seeing here are the result of the Financial Action Task Force recommendations, as well. I’m noting in the regulatory impact statement that it mentions there were some limitations around the ability to consult because of the mutual analysis between the Financial Action Task Force and, also, in terms of the bill being introduced with a 2028 limit. I just want to check with the Minister, again, with some of the things we’re seeing here, how that would then be implemented and, in terms of that potential, whether that’s a review in 2028 again by the Financial Action Task Force. If you wouldn’t mind just elaborating on what that interaction is going to be like.

On to the bill: I’m actually going to talk about clause 4, “Section 5 amended”, but subclause (3). This is the definition of “trust and company service provider”. Again, noting what the Hon Dr Duncan Webb mentioned before, what we’re seeing with new paragraph (a) is that (a) is the existing definition, but new paragraph (b) is what the Minister mentioned is the new thing. I totally understand in terms of, let’s say, you have a single transaction and you have three people asking the same thing—it’s easier if it’s just one person. But, in this particular case, when we’re looking at the definition of “designated non-financial business or profession carried out by the financial institution”, I’m interested to know, if it’s one point of contact, who, then, out of the three—the example that Minister gave—would then be responsible for getting that, or is it going to be transaction based? If the client is, in this case, having that single transaction, that means the client will provide the same document to all three, so where would the onus for that be? I don’t know if I’m making any sense, but if the Minister understands it, that would be great.

I guess the context for that is: I remember when the Anti-Money Laundering and Countering Financing of Terrorism Act got a major update in 2018, and one of my previous jobs, when it comes to working in international education, was helping students open a bank account. One of the challenges we hit over there was the requirements that were needed for students, as a client, trying to go to a bank and open a bank account, because there was a potential worry that international students were using the same system to launder money from various locations. I want to check, in this case, with the single source, if it’s a single transaction and now we’re reducing, for example, from three to one, would the same, I guess, compliance lens by all of these agencies be able to be placed on the client to make sure that there’s nothing going on in the background? Again, if I’m making sense. Those are my questions for the time being.

Hon NICOLE McKEE (Associate Minister of Justice) (20:17): Thank you, Mr. Chair. I’ll start by answering Hon Dr Duncan Webb’s question, The prescribed threshold set out in section 5 of the anti-money laundering (AML) definitions—it says “R5 of AML definitions regulations 2011”—is greater than 25 percent, if that makes sense.

Moving on to the member from the Green Party’s questions: the first question the member asked was around the four AML bills that we have going through. The first one’s already done; we’ve passed that. This one and the one that we’re debating directly after this are two more, and then the fourth one will be under way this year. It won’t be completed this term, but the most important parts of what we need to do to meet our Financial Action Task Force obligations for the evaluation, which starts to take place in 2027 and finishes in 2028—we need this to go through in order to be able to say to them that we have addressed the issues they raised at their last mutual evaluation in 2021 and that this is what we have put into place.

They may turn around and say, “Well, you haven’t done it fast enough.” or they might say, “Actually, this looks really good. We want to see what is occurring as a result of that.” By the time we get to that evaluation, we would be 12 months, possibly even 18 months, into a regime to be able to actually show some outcomes for the changes that we’ve had. We won’t know until we actually get to that evaluation point. That’s one of the reasons why we are putting through four AML bills and three of them in this term: so that we can look to meet those Financial Action Task Force obligations, which would benefit everybody in New Zealand—including every political party, as well. I’m grateful for that cross-party support there.

The member asked me about who does what when I gave my examples. You’ve got three entities collecting the information; who’s going to be doing that? One of the main confusing aspects about AML is that people don’t know who has to do what, and this is partially because we’ve had three supervisors who couldn’t agree on the type of information that needed to go out to the different regulators or agencies.

From 1 July, we will have one agency. It will be up to them to give advice to all the different users of the anti – money-laundering to tell them what their obligations are and help them to work within the new regime that we’re putting in place. If I were to say, today, that it’s the banks that are going to do it and not the real estate agents, well, there may be an area where the supervisor might say, “Actually, we may need someone to capture this, and someone else to capture that.”; or it may be fine for one entity to capture the lot, but they need to work it through and, more importantly, they need to work it through with industry.

This is where the national strategy comes in as being so important—and that’s in the following bill—because we need to understand from industry what it is that they might have an issue with or what it is that is being duplicated that shouldn’t be, so that we make sure that our response doesn’t create more issues for them and actually just gets to the crux of the problem that we’re trying to address, which is the money-laundering and the organised crime within New Zealand. I hope that one made sense.

CAMILLA BELICH (Labour) (20:21): Thank you, Mr Chair, and thank you to the Associate Minister of Justice for her engagement and for her answers to members’ questions and to my previous question. As the Minister has alluded to, this has received support throughout the House. It’s good to have that assurance around the stringent requirements and the fact that we’re not diverting from the purpose of preventing money-laundering, or weakening or watering that down. Thank you for that reassurance.

I just wanted to, as colleagues have also been doing, stick to the initial clauses that we’re looking at and stick to the definitional clauses and the interpretation that had been changed. We’ve had a couple of questions on that, but I wanted to bring up a few questions which haven’t been covered yet. There are a few of these, and they’re small things, but I might just go through them, and then if the Minister wishes to respond to them or get some advice, that would be excellent.

The first one, if we’re looking at the clauses, is clause 4(2)(b). In this particular change, there’s a change from “engaging in or giving instructions” to “carrying out, preparing to carry out, or giving instructions”. I just wanted to query with the Minister—and apologies, I wasn’t on the Justice Committee when this was being debated, so it may be that there’s an obvious answer—what the effective intention from that change was. It appears to be a little bit similar but also has the intention of, I think, “carrying out”, as well, “preparing to carry out”, which is maybe the fundamental change. I just wanted to clarify with the Minister if that was her intention in that clause.

The next question I have, in relation to the definitional section, is that because the select committee, I understand, has deleted the clauses in relation to a specific definition of “life insurer”. I just wanted to understand how, following that change, if the Minister agrees to that change from the select committee, and where those obligations would otherwise be reflected in the bill.

The third definitional question that I wish to ask is in relation to, I think, clause 4(4)(a)(ii), and that’s just under that “life insurer” section in the bill. It specifies here that payments can be in “a corresponding sum in cash or in other physical forms.” I’ve looked at the primary piece of legislation in relation to whether that is, in fact, defined in the definition section of the principal bill. Therefore, I just wanted to know from the Minister what other physical forms of payments were envisaged. Obviously, we can think of a few that might come to the top of our head—so, for example, gold would be one, I’m interested to know whether that is intended in that physical form; cryptocurrency might be another form. That is something that I just wanted some clarity on in terms of the nature of those types of transactions as to what that might be applied to.

I did have some other questions that have been covered by Dr Duncan Webb and Lawrence Xu-Nan—I won’t repeat those. Those are my questions in relation to that definitional section.

Hon NICOLE McKEE (Associate Minister of Justice) (20:25): Thank you, Mr Chair. Yes, crypto, gold, precious metals are all to be in there, as well.

Just looking at what the member had mentioned about clause 4(2), “definition of designated non-financial business or profession”, and the member was talking about the carry-on provision. The businesses find that the definition of a “designated non-financial business or profession” is quite unclear for them. The amendment will modify the definition to clarify that anti – money-laundering obligations will also apply in those situations when a designated non-financial business or profession assists its client but has no direct involvement. The two specific situations that the amended definition captures are to do with managing client funds and preparing to carry out activities.

Managing client funds is an activity that carries anti – money-laundering obligations, except where the client funds are sums paid as fees for services provided by the designated non-financial business or profession, and the updated definition also makes it clear that preparing to carry out certain activities is itself considering an activity and carries the corresponding anti – money-laundering obligations.

When it comes to clause 4(4), providing a new definition of a “life insurer”, this amendment was intended to just address a gap that was in the Act. The upcoming changes in the next bill will mean that it’s no longer required. My officials recommended, through the departmental report, that it should be removed, and the Justice Committee agreed to that removal, but it will be removed in the next bill.

VANUSHI WALTERS (Labour) (20:27): Thank you, Mr Chair, and thank you to the Associate Minister of Justice for her engagement thus far. I also had a couple of questions in relation to the interpretation section. Just as a supplementary to Dr Duncan Webb’s comment on “beneficial owner”, I do wonder whether there is the possibility for an unintended consequence in terms of the addition to that definition. As Dr Webb pointed out, the initial definition is current legislation is quite broad, with the specificity in amended section 5(1), amended by clause 4, both (i) and (ii), it just seems that there might be a potential risk that that will be seen to be the stretch of the definition. For example, a beneficial owner could be a customer of a customer, but it doesn’t look at whether it’s possible for that chain to be longer. I just want the Minister’s view about whether there’s potential for the addition of that section not to provide more specificity but, actually, to limit the scope of what effective control could be.

The other issue that Dr Webb raised was on the prescribed threshold. He asked about what that was. My question is about where that threshold should be—so whether the Minister considered that it may be more appropriate for that threshold to be in primary legislation, as opposed to secondary legislation.

My third question is in relation to clause 4(3). This is the one that replaces the definition of “trust and company service provider”. It also uses part of the current definition and adds on a new paragraph (b). My question to the Minister is about the effect of excluding a person that is a financial institution in those additional circumstances, and the rationale for that.

My fourth question is in relation to the definition of “money or value transfer service”. Clause 4(4)(a)(i) says “accepts, or is involved in the acceptance of, funds or value”. My question is about the broad framing of using those words “or is involved in the acceptance of”. Is there a risk that that language is too broad, and did the Minister consider either a more defined scope of that to ensure that individuals who shouldn’t be caught in that transfer aren’t caught who might have a very peripheral role but may still be involved in the acceptance?

Dr LAWRENCE XU-NAN (Green) (20:30): Thank you, Mr Chair. While we’re waiting for the Minister to get some advice on the previous questions, I do want to move on to—we’re looking at some changes from clauses 6 to 8, particularly when it comes to the replacement of customer with person. Noting the definition of customer within the anti - money-laundering and countering financing of terrorism (AMLCFT) legislation, particularly in section 5 of the principal Act, I want to check: in general, “customer” is referring to a physical person in most cases, but “person”, for example, could include a legal entity. Noting that clauses 6, 7, and 8 amend sections 14, 18, and 22, I want to check with the Minister on what are the potential implications of changing “customer” to “person” and “person” being interpreted as a legal person—ergo, potentially a company. Would that affect how we interpret that particular clause overall? Also, in the same way that we’re changing from customer to person, yet I don’t see the cross-heading being changed. What is the implication, then, of not having the cross-heading updated to say customer or person, regarding any of those sections as well?

Hon MATT DOOCEY (Minister for Mental Health) (20:31): Thank you, Mr Chair. Just in response to the member, Dr Lawrence Xu-Nan, why are we replacing the word “customer” with “person” in the sections of the Act dealing with customer due diligence requirements? Why is it not appropriate to use “customer”? The word “customer” is defined in section 5 of the Act as “(b)(ii) a person conducting or seeking to conduct an occasional transaction or activity”. Customer due diligence requirements refer to a customer seeking to conduct an occasional transaction or activity—well, this creates a circular and confusing requirement as a person seeking to conduct an occasional transaction is already a customer.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (20:32): Thank you, Mr Chair. Keen to just ask a couple of questions of the Minister. The first relates to the amended section 5(1), inserted by clause 4, in particular clause 4(a)(ii) of that. It’s been touched on, but I want to raise a different matter, particularly the section that talks about a service that “pays, or arranges for the payment of, a corresponding sum in cash”—this is the definition of “money or value transfer service”. Now I’m just concerned about the word “corresponding” in there, because if I give you $1,000 worth of gold and then you transfer to someone else $1,000, that is a corresponding amount of value—that’s what corresponding means. But, in fact, that’s not how money-laundering works. The way money-laundering works in nefarious places is you give me $1,000 worth of gold and I give the person you nominate $800 worth of cash. In fact, by definition, the number doesn’t correspond because I skim my money-laundering commission off the top. So “corresponding” is the wrong word. Now, there might be some relationship between the amount of gold I give you and the amount of cash you pay to a third party, but it’s not a corresponding amount. I would hate to see someone get off because they say, “Oh, no, I wasn’t doing money value transfers services because I took a 50 percent commission and it didn’t correspond with it.” That’s the first point—a really narrow point about why are you using the word “corresponding” when money-laundering numbers don’t correspond with each other. They’re always taxing it on the way through.

The second one is new section 24(4), inserted by clause 9. This is customer due diligence, and the Minister in charge of the bill has made clear that she wants to make it easier for people who are low risk. But my concern is that this clause essentially enables a person to be low risk if they think they’re low risk, because what it says is: “[the] reporting entity is not required to comply with subsection (1)(b)”—which is the upgraded disclosure requirements—“if the customer or person is a trust described in [such and such] section and the reporting entity is satisfied”—the “reporting entity” is the person who’s regulated by this legislation—“that any risks have been mitigated by conducting [certain due diligence]”. So the test is not whether there is a risk; it’s whether the reporting entity thinks there’s a risk. It’s not objective at all. It’s entirely subjective and it’s subjective depending on the mind of the person whose subject to these regulations.

If you if you think—mistakenly or unreasonably or stupidly—that any risks have been mitigated by standard customer due diligence, then you don’t have to do this next enhanced step. Now, that can’t be right because there are plenty of stupid entities out there that will make mistakes about that. The test should be an objective one, so why has the Minister introduced a subjective test into something that is as black and white as money-laundering?

CAMILLA BELICH (Labour) (20:36): Thank you, Mr Chair. I’ve got some questions that follow on from the sections that Dr Duncan Webb was referring to. The Economic Development, Science and Innovation Committee in this case has decided to delete the originally proposed clause in relation to “politically exposed person”, however, no need to panic, that is retained in the existing piece of legislation under section 26. The question I had was—and it may be a similar issue to the one that the Minister mentioned before, that some of that is going to be included in a new piece of legislation, but if the Minister could elucidate on whether the Minister agrees with that or not, that would be helpful.

I do have some questions in relation to the following subclauses. I believe that it might be subclauses 10(2) and (3), which essentially talk about changing the wording from “established” and “conducted” to “establishes” and “conducts”. That indicates a move to look towards something that is actively happening as opposed to something which has happened in the past. I wanted to understand that in terms of the nature of the bill and, obviously, in wanting to understand if there’s any retrospective element to the bill, why that particular language has been chosen.

The next two points I want to make are more substantive to the purpose of the bill—sorry, I did have a question in relation to clause 10(1), and it is an important one because in clause 10(1) it amends section 26(1): after “reasonable steps”, “according to the level of risk involved” is added. That has been added by the select committee, but it does have the effect of probably slightly watering down the impact of section 26(1). Rather than just having “reasonable steps”, it’s “according to the level of risk involved”. So “reasonable steps according to the level of risk involved” is obviously a little bit weaker than “reasonable steps” in and of itself. The Minister has said that the intention isn’t to water that down, and so I just wanted to probe that further with that question.

The second question I had is in relation to clause 11 and this is along similar lines to my previous point. In clause 11, there is a proposal to look at the primary section 29(2)(c) and to delete “and effective”. Essentially, at the moment, we have a requirement that—I’ve got the primary Act here—“the anti - money-laundering and countering financing of terrorism controls to ascertain that those controls are adequate and effective”; this bill deletes “effective”. So I would really like to know why “effective” is being deleted, because it does strengthen the requirements of this bill. In fact, does the Minister agree with that, given the comments that were made earlier about the fact that, obviously, we want a proportionate bill. We are supporting this bill, we want it to be a good piece of legislation, but it does appear that that’s been weakened.

I think especially those last two questions in relation to clauses 10(1) and 11 are quite important to the purpose and the functionality of making sure that this is still consistent with the purpose of the primary piece of legislation. I’d be grateful if the Minister could address those.

Hon MATT DOOCEY (Minister for Mental Health) (20:40): Thank you, Mr Chair. I just thought I’d gather up a few questions there. There was a question around thresholds. I’ve been advised that the threshold in place is 25 percent in 2011, amended to be more than 25 percent in 2013. Not identified as problematic in the statutory reviews—they haven’t looked to change. I’m comfortable that this remains in regulations.

The question was asked about why other enhanced customer due diligence checks are still required for low-risk trusts. Low risk is not the same as no risk. Completely removing the requirement for enhanced customer due diligence for trusts does not align with the risk-based approach. The intent is to remove the requirement to verify the source of fund or wealth, not to remove the requirement to collect the information on the source of funds or wealth.

The question that was asked: why is it not practical for banks to confirm whether banks they correspond with have effective anti - money-laundering and countering financing of terrorism controls? To effectively carry out this requirement, a bank would need to complete an in-depth assessment on whether the controls are functioning as intended. That requires access to the other banks’ internal information.

The final question—I think it’s clause 10(1)—what is “politically exposed person”? Politically exposed persons are people who hold or have held important public roles in another country—for example, presidents, senior politicians, top Government, military, or court officials, heads of State-owned companies, or key political leaders. The definition also includes their immediate family members and beneficial owners. It allows business to apply the requirement proportionately to their level of risk.

Dr LAWRENCE XU-NAN (Green) (20:42): Thank you, Mr Chair. I’ve got a couple of questions for the Minister, also noting that the question might be quite specific. The Minister can feel free to take some advice around that as well.

On to clause 9—and after clause 9, I’m going to move on to clause 13. In terms of clause 9, I note that the Minister mentioned before in terms of synthesising from, potentially, three different supervisors to one supervisor, and that particular supervisor will be the Department of Internal Affairs (DIA). I want to check with the Minister: in the regulatory impact statement, both the Reserve Bank of New Zealand (RBNZ) and also the Financial Markets Authority (FMA) actually do not support the changes that are being proposed. I do note the Minister of Justice’s response to the RBNZ and FMA, but I want to specifically focus on a couple of things in paragraphs 136 and 137 of the regulatory impact statement. This is on page 28.

The three areas I want to address are, first of all, that the RBNZ’s concern is around the depth of the analysis. I just want to check, because that’s not part of the response by the Ministry of Justice, whether the Minister believes that the level of analysis or depth of analysis for this change has been met. The second question is around the suggestion by both the RBNZ and FMA that there should be legislative improvements at the same time, prioritised over the structural changes, such as reducing from three supervisors to one. Noting that this is a series of bills, does the Minister think that that legislative improvement has also been met, alongside the structural changes that are being proposed?

My final question, again, was that in the response from the Ministry of Justice to the RBNZ and FMA, in paragraphs 140 to 143, the RBNZ specifically mentions costly and disruptive structural changes. I just want to check with the Minister what is meant by “costly”. With the changes we’re looking at, how costly would that be? Have there been any figures that the Minister has received from officials on that?

On to clause 13—this is “Section 52 amended (How records to be kept)”. I know this is something that, as a select committee, we did discuss, but I want to check with the Minister. For this particular one, I’m assuming that the person who is required—I can’t remember if this is something we discussed in select committee, and it definitely is not in the commentary of the select committee. The person who is meant to producing that record or is keeping that record—is that record being kept now by DIA as the single agency, the single supervisor, that’s responsible for all of that? That’s my final question around clause 13. I’m happy, based on the Minister’s response, to move on to subsequent sections.

CHAIRPERSON (Greg O'Connor): I call the honourable Minister. But, just before that, can I just say that the noise and the volume of the attempts to close down do bear no relationship to the chance of getting it—can I just remind members. Sorry, Minister.

Hon MATT DOOCEY (Minister for Mental Health) (20:45): There is excitement in the Chamber.

CHAIRPERSON (Greg O'Connor): There is—perhaps because you’re in the chair, Minister.

Hon MATT DOOCEY: Understandably with this legislation—very excitable. I do want to acknowledge Dr Lawrence Xu-Nan with his persistent and detailed questioning. It’s always important to keep Ministers on their toes—always impeccably dressed. When I think of the member Dr Lawrence Xu-Nan, I think of someone who’s ahead of his time in a way, and that’s because the questions he’s just asked are about the bill that will come after this one.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (20:46): Thank you, Mr Chair. I wonder if I can move ahead a little bit to a concept that’s been troubling me. That is in new section 67B, inserted by clause 17. I know I’m jumping ahead, but I really want to give officials an opportunity to have a think about this, because it’s got this concept of a stored value instrument, and it’s got this bizarre phrase. It says it’s a “portable device”. Now, I would have thought my iPhone or Game Boy was a portable device, right? But the use of the word “portable device” bears no relationship to what it then goes on to say, because it’s “for example, a voucher or a casino chip” or something else “that can be redeemed for cash”. It might include, in the old days, a cheque or a promissory note as well. It includes gold, silver, precious metals, but doesn’t include a debit card or a credit card.

Now, with “portable device”, there’s a real danger, it strikes me, using the phrase “portable device”, where it just seems to be a random, made-up phrase that bears no resemblance. What it seems to me is it means “personal property, including documents and tokens which can be redeemed for cash.” Now, if that’s what you mean, that’s what you should say, but a “portable device” just doesn’t mean that. The risk is when you get something which isn’t one of the named things, such as precious metals—when you get, for example, a cash-bearing card which isn’t a recognised debit card; an Air New Zealand travel card, for example, which carries cash on it. Is it a portable device? Well, I don’t know, because I don’t know what a portable device is. If we really mean “personal property, including documents which can be redeemed for cash”, I think that’s probably what we should say, rather than this made-up phrase there.

Going backwards, if I can, to clause 13, amending section 52, which sets out time limits for reporting, there are some strange things that go on there. If I look at the new subsection (2)(b), it says you’ve got to report or provide records “(i) by any specified date given in the notice that the person who requires the records considers reasonable…”. Now, why does it have to be that the person giving the notice requires? It should just say, “that is reasonable”. Once again, we’ve got this “What the regulator thinks becomes the rule.” Either it’s reasonable or it’s not. The thought processes of the regulator should not affect whether it’s reasonable or not.

The other point is this: that you’ve got this strange thing going on, because you’ve got any specified date that is reasonable in subsection (2)(b), and when you go to subsection (3), if the production is a matter of urgency, you can require them to be produced as soon as possible. Now, “as soon as possible” might be different from any specified date, and it might be later than a specified date. You’ve got a bizarre situation where, if it’s urgent, you’ve got to do it as soon as possible but not on a specified date, whereas if it’s not urgent, you can provide a specified date, which could be tomorrow.

The whole section is, frankly, a bit of a mess, but the worst thing about it appears to be that, when you’re giving a particular date, it has to be reasonable in the mind of the regulator, and there’s no place for the subjective views of the regulator as to what is reasonable or not in such a situation. I’d appreciate some clarity on both of those things.

CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti) (20:50): Tēnā koe, Mr Chair. I know we’re stepping through this quite well, but I do want to revisit one of the responses from the Minister in the chair earlier, Matt Doocey, which—I believe he was referring to clause 9, which talks about enhanced customer due diligence.

The reason I’m revisiting it is because, frequently, I get feedback from people involved with Māori incorporations—post-settlement governance entities—about the requirements. While the intention of this bill is to streamline the process, often Māori governance entities are still encountering the barrier of the onboarding process—i.e., they still all have to attend in person, they’re still fulfilling extra identification requirements because they’re perceived as being high risk, etc.

My question to the Minister tonight is, number one: because, ultimately, it’s still at the bank’s discretion, will there be a move to streamline processes specifically around Māori governance structures, and will there be a move, whatever decisions are made at the completion of this bill, to enforce these with banks rather than make them at their discretion?

VANUSHI WALTERS (Labour) (20:52): Thank you, Mr Chair. My question for the Minister in the chair, Brooke van Velden, is around clause 18, the amendments to section 68. This is “Reports about movement of cash into or out of New Zealand”.

New subsection (4) says, “For the purposes of this Act, a person is to be treated as having moved cash or stored value instruments out of New Zealand if the person—”, and then there are a number of defining sections: “intends to leave New Zealand on an aircraft craft or a ship … goes towards an aircraft or a ship through a Customs-controlled area … [or] takes cash or stored value instruments into [that] controlled area … or has cash or stored value instruments in their baggage;”.

My question to the Minister is whether there was consideration of the fact that this section might be drafted too narrowly and that it could be possible for someone to be moving such cash or stored value instruments either through another person, with or without their knowledge, or in another person’s luggage. The section itself appears to me to be drafted quite strictly. I just want to have the Minister’s views on that.

I just also did want to make the point that, when the Minister in the chair spoke earlier about the replacement of “customer” with “person”, I do agree with that change, because I do think that it recognises that they can be secondary beneficiaries. But, again, it goes to the point that I made earlier: anything in the Act that talks only about “customers” or “of customers”, effectively, limits that chain, whereas it would be much more beneficial to just leave it open to “persons” more generally. I don’t know if the Minister wanted to reflect on that as well.

In terms of new section 52, inserted by clause 13—this is the one about how records are to be kept—there are some specifics around making records available urgently, and there’s a process in the existing legislation about the individual required to produce the information being able to respond within, I think, 10 working days, but there’s nothing specific about the decision maker needing to consider the response. Just in terms of due process, I’m wondering whether the Minister considered having a more robust process to ensure that the decision maker was considering the response for the production of information before making a decision. Thank you.

CARL BATES (National—Whanganui) (20:55): I move, That debate on this question now close.

CAMILLA BELICH (Labour) (20:55): Thank you, Mr Chair. There are a few questions which I think have still not been responded to and, I think, a few more clauses in Part 1 to go. In respect of the ones that I’m still waiting for an answer on, the Minister did respond to tell the committee about the definition of “politically exposed person”, but I didn’t receive a response to the reason “according to the level of risk” is inserted by clause 10(1), which I think was when the Minister replied to the other response. Also, in clause 11, the deletion of “and effective”—I’m still waiting for an answer on that, and that goes to the desire to not want it to be watered down.

I will skip forward, obviously, because the debate has moved on since I asked the Minister those questions. I just want to check—in respect of clause 19 of this bill, which amends section 69 of the primary Act, there’s an institution here of new subsection (2) and also a reference back to new subsection (1). Now, when I look at the primary Act, there doesn’t appear to be a subsection (1) in section 69. Sometimes, there are subsequent amendments; I think there were, when I was looking at this bill, maybe some unincorporated amendments. That might be why. It would be good to just clarify that, because, if not, it might be important to insert, before (a), a subsection (1) in there to make subsection (2) make sense. If the Minister could get some advice on that. It’s a drafting matter, really. It might be that there’s been an unincorporated amendment from a more recent bill—I think this version was 2025 that I was looking at. That would be helpful.

I also wanted to just go back to—and I know my colleague Vanushi Walters has touched on this slightly in terms of the specificity of new subsection 68(4), inserted by clause 18, but just the purpose here. I mean, it is quite an illustrative subsection, 68(4). You’re imagining a money launderer kind of walking towards an aircraft and they’ve got cash on them and they haven’t made a report. It does seem quite specific, so what I just want to clarify with the Minister is: is the intention here to ensure that before someone actually completes the actual act of that cash or similar value moving outside of New Zealand—is the intention with this clause really to kind of provide for the commission of a crime, I suppose, or for this Act to be breached prior to that actually occurring? The intention of the mischief itself, I suppose, in this particular section appears to occur before the actual act of removing the money or stored value instrument from New Zealand. Some clarity around that would be good.

I do have some further questions in relation to clause 20 about accompanied cash, but I’ll just see if the Minister has an answer to some of those questions.

Hon BROOKE VAN VELDEN (Minister of Internal Affairs) (20:58): Thank you, Mr Chair. Look, I’ll respond to a couple of the queries that have come through from the floor. Firstly, there was a question in regard to Māori governance structures, from Labour. Māori trusts are already exempted under Class Exemption Notice 2018 Part 2. There was also a previous question in regard to record keeping. Record keeping is required for reporting entities and not supervisors.

Dr LAWRENCE XU-NAN (Green) (20:59): Thank you, Mr Chair—I will be quick. I guess we do have quite a few quite specific questions, and, again, both this and the next bill are quite technical bills, and I do apologise to the Minister for getting the two bills muddled up, because—well, to be honest, the Minister also did that, so I feel like it’s OK for me to mix the two bills up.

I have a question around clause 17, which is “New section 67B inserted”. The Minister before has mentioned that when it comes to stored value instruments, which is the new insertion that we’re looking at here, it does include non-physical currency—bitcoin, for example, and cryptocurrency is something that is mentioned. The question I want to ask specifically is around, for example, non-fungible tokens (NFTs).

Now, NFTs are an interesting case study because of the way that it got hyped up and then went away just as quickly. Particularly when it comes to the way that economists explained it, people bought into the hyping up, the inflation, the financialisaton, and it’s very much unmoored from the physical economy. The question with that is: when you have something that gets pushed up, like NFTs, quite significantly, how would we consider that in the context of money-laundering, or using NFTs for the purpose of money-laundering? Again, cryptocurrency and NFTs, like bitcoin, operate quite distinctly, even though some of the underlying technology is similar. I just want to check with the Minister, specifically in the case of the phenomenon that we saw with NFTs, how that would work and what happens when people use that for money-laundering purposes.

Moving on to clause 20, which is “Section 70 amended”—I know that my colleague Camilla Belich also has a question on that. I want to check specifically with the replaced paragraph (d) when it comes to “Unaccompanied cash”—this is subparagraphs (iii) to (v). It’s the same question I had before regarding when we’re looking at cryptocurrency or when we’re looking at NFTs. I want to check, in terms of the underlying blockchain technology that underpins cryptocurrency but also NFTs, how would that work in conjunction with the reporting requirement that we see here, and at what point of that blockchain, if it can be described as such, would we start seeing some of the requirements there?

The follow-up question from that is: when we see things like cryptocurrency and when we see things like NFTs, and, potentially, things overseas could develop quite fast, is what we’ve done here in terms of reporting requirements or any other kind of compliance requirements agile enough to anticipate new forms of stored value instruments? That is my final question to the Minister.

Hon NICOLE McKEE (Associate Minister of Justice) (21:02): Thank you, Mr Chair. My apologies, colleagues, for having to leave the chair, but upon my return, I have a whole lot of notes. I’m going to read these notes out, having not heard the question, and invite those members who do not understand my answer to ask the question again. I don’t know who asked these questions. I’m going to refer to new section 67B, inserted by clause 17.

CHAIRPERSON (Teanau Tuiono): I only got here 15 minutes ago as well, so we’re in the same boat on this one.

Hon NICOLE McKEE: Ha, ha! A portable device captures cards and objects that are not related to debit or credit card mechanisms. The latter includes many of the systems used by cell phones and mobile devices, so are already captured by the Act.

Clause 17, NFIs can do the same with shares, not in and of itself money-laundering. It is for other regulators.

Clause 19(3) does not exist.

Hon Members: Ha, ha!

Hon NICOLE McKEE: Just saying!

Section 69(a) does exist and contains the word “cash”. It’s a drafting error that can be picked up at proof assent. The error is in clause 19(4): 68 should be 69.

CHAIRPERSON (Teanau Tuiono): I can confirm that clause 19(3) doesn’t exist, so congratulations to whoever asked that question.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (21:04): Thank you very much. I just want to ask a couple of questions. I think they might be my final questions for the night. The new section 90A, inserted by clause 25, is the first question: the court must order that recovery from pecuniary penalty be applied to the supervisor’s actual costs. This is a little confusing, because I had a look at some of the cases when I was preparing for this, and the court already orders costs. The court orders court costs at a given rate, which won’t be exactly the costs incurred, but that is in addition to the pecuniary penalty. They get penalty and court costs, and now you’ve got this strange situation where you’re going to take court costs from the pecuniary penalty, so the court might not award additional costs. Has the department, the Associate Minister of Justice, considered the relationship between court-awarded costs, which are routine when these cases are won, and what the relationship will be when you’re saying we’re taking full costs from the penalties imposed?

My second point relates to the amendment to section 132 in clause 26, which adds a power to cooperate with foreign counterparts conducting inquiries. Now, this is very tricky, because we have a comprehensive framework for cooperating with foreign Governments on investigations, and it’s the Mutual Assistance in Criminal Matters Act 1992. That Act is an important one, because we cooperate with particular Governments whom we trust, and we don’t simply allow our enforcement agencies to be the arm of any foreign Government, for obvious reasons. But here it doesn’t appear that there’s any checks on that. It’s also the case that the Mutual Assistance in Criminal Matters Act identifies that some civil proceedings can be treated as if they are criminal. This regime is a classic example where, essentially, you have civil penalties, but it’s a quasi-criminal regime.

My question is: does the new supervising agency have just unlimited powers to cooperate with North Korea or Russia in money-laundering matters, or is it subject to the Mutual Assistance in Criminal Matters Act, which has a very careful regime about how we deal with foreign Governments? I hope it’s the latter, because I wouldn’t want to see decisions about what foreign Governments we cooperate with, essentially, in the hands of people within departments—bureaucrats, for want of a better word—because it’s actually a matter of high national importance.

Hon NICOLE McKEE (Associate Minister of Justice) (21:08): Thank you, Mr Chair. To the member from the Greens, Dr Lawrence Xu-Nan, I actually meant to say “NFTs”, not “NFIs”, when I mentioned before that you can do the same with shares—not in and of itself money-laundering. It was meant to be NFTs that I said, which apparently was the question from that member.

To Dr Duncan Webb, the pecuniary penalties, the supervisors looking to recover penalties and costs—this provision just clarifies that supervisors can bring recovery proceedings to those penalties. In other words, it’s also saying that they themselves are entitled to receive their penalties that have been awarded to them and allowing that. It’s, effectively, bringing the Anti-Money Laundering and Countering Financing of Terrorism Act into alignment with similar Acts, such as the Financial Markets Conduct Act, where they too are able to look for costs to be awarded to them.

Clause 26 is amending section 132. The member spoke about international collaboration, and I guess the thing we’ve all found is that money-laundering is international. It’s coming here. We’ve got drugs coming here, money leaving. We’ve got money transiting through here. In order to stop this worldwide use of the internet, I guess, and other forms of getting money and cash in and out of different countries, we have to collaborate with other countries. This is about improving our international relations, improving our international collaboration, so that we can stamp down on organised crime, stop the illicit trade of drugs and money coming through our country, and be able to work together with other countries to be able to stop that flow transiting through New Zealand. Clause 26, amending section 132, is about improving that international collaboration.

There’s a supervisor penalty recovery also in clause 26(2), because it’s not currently clear in section 132 whether the AML supervisors have the power to recover their penalties and costs. We are establishing that in clause 26(2) in order to help with clause 25, providing for court orders—a penalty can be applied to the supervisor’s actual costs that have been incurred, as well.

CHAIRPERSON (Teanau Tuiono): I’d just note that we have been moving methodically through the bill and the Minister has been engaging, so there’s not that much left to go unless there are further questions, but I will go to Camilla Belich.

CAMILLA BELICH (Labour) (21:11): Thank you, Mr Chair. Thank you to the Minister for her engagement on this. There are a few other bits which I think haven’t been covered to date, which I can move through quite quickly under this Part 1 section.

I just have some questions, as I think I indicated earlier, around clause 20, just jumping back there for now. Lawrence Xu-Nan asked some questions about this, so I won’t go into this in too much detail, but I just wanted to check with the Minister that the main purpose of the “accompanied cash” and “unaccompanied cash” definitional changes appears to be the change to the definition to ensure that stored value instruments are covered by the accompanied and unaccompanied provisions there, as well; so just some clarification on that.

Then, I just wondered if we could briefly touch on the civil liability changes that have been included in clause 22. These are adding to the existing civil liability definition, and we’ve been talking about the pecuniary penalties that follow from that, but I just wanted to ask the Minister if this meaning of civil liability—it appears to me to be bolstering this, in providing a few other areas in which the civil liability will be met. I just wanted to check that was the Minister’s understanding—that it was, in fact, expanding that definition.

The final question I wanted to ask, which I don’t believe has been touched on, is just to look at the censure process which is outlined in detail in section 80A, and that was changed from section 80 by the select committee. I’m just wanting to understand the process, really, for appeal. There’s quite a detailed process about the imposition of a censure and how that would work. Then, of course, there is a provision here in new section 80B to allow that to be appealed to the District Court. There’s no time frame issued here, so I just wanted to check with the Minister if that was intentional, and what date the appeal would need to be raised if there was an appeal against a censure—obviously, the District Court has its own limitations, but if it was intended to be simply from the date they received that censure or if there were any other applicable time frames, because it doesn’t appear to be as detailed as some of the other provisions in this part. Those were the quick questions that I don’t think have been touched on.

Hon NICOLE McKEE (Associate Minister of Justice) (21:13): Thank you to the member for her questions. With the unaccompanied and accompanied cash at the border—the border cash report—transportation of cash that’s $10,000 or more needs to have a border cash report that’s done, and it’s currently not specified when this report must be made for unaccompanied cash or stored value instruments. The amendment sets the timing requirements that, basically, say that the report has to be made 72 hours before the cash or stored value instrument is moved. This will clarify that the border cash reporting obligations and improved customs enforcement capabilities will actually happen.

When it comes to the civil liability acts that the member mentioned in section 78, all breaches of an obligation are a civil liability act. Section 78 provides a specific list of such breaches. The member asked whether or not we’re making it more rigorous, and we certainly are. The amendment explicitly adds three breaches to the list: failing to submit the suspicious activity report, failing to undertake a risk assessment in accordance with regulations, and failing to submit an annual report to an Anit-Money Laundering and Countering Foreign Terrorism supervisor. Those ones, in themselves, are making it a more robust regime, so that we can capture people.

Dr LAWRENCE XU-NAN (Green) (21:15): Thank you, Mr Chair. I have one final, tiny question for Part 1, and that’s to do with the Minister’s Amendment Paper.

Now, in the Minister’s Amendment Paper, it actually does transfer clause 24 from this bill to the next bill, but the explanatory note says “to ensure that the provisions relating to censures come into force at the same time…”.

Noting we can discuss this a little bit later, those two have got two different commencement dates. But it says, “in that Bill relating to the making secondary legislation.” My understanding is that censures are not secondary legislation. Would that be correct? Or is it secondary legislation?

Hon NICOLE McKEE (Associate Minister of Justice) (21:15): Thank you. My understanding is that we have pieces of secondary legislation that are actually coming into the Act, so, effectively, we’ve got regulations—information sitting in regulations—that we will be taking out of regulations and putting into the Act. That’s why we’re doing this manoeuvring.

SUZE REDMAYNE (Junior Whip—National) (21:16): 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 14; Te Pāti Māori 5; Ferris.

Motion agreed to.

CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendment to Part 1 set out on Amendment Paper 572 be agreed to.

Amendment agreed to.

Part 1 as amended agreed to.

Committee of the whole House

Part 2 Amendments to secondary legislation

CHAIRPERSON (Teanau Tuiono): Members, we now come to Part 2. Part 2 is the debate on clauses 29 to 37, “Amendments to secondary legislation”. The question is that Part 2 stand part.

Dr LAWRENCE XU-NAN (Green) (21:18): Thank you, Mr Chair. I actually only have one question for the Minister regarding Part 2, noting this amendment is secondary legislation but not necessarily a consequential amendment. I just want to check—yes, I did get the right bill this time! I do want to check with the Minister: you just mentioned that, for the censure, for example, it is taking it out of secondary legislation and putting it into primary legislation, and the difference of that being by Order in Council, but also the fact that primary legislation would rightly require a parliamentary instrument or a bill to make any further changes.

I just want to check with the amendments—the secondary legislation here—if the changes being made are genuinely consequential changes, based on what we’ve done in Part 1, and if not, is there anything in here that has been highlighted, because we’re using a Parliament bill to make changes to secondary legislation? It would also elevate the change to a principal or a primary legislation level. That means that any further changes to things that we’re seeing here in Part 2 will now require another Government bill to change, because they’re no longer secondary, if that makes sense.

I don’t think I’m explaining myself very well, but yeah, just checking it out. Like, are they consequential to what we saw in Part 1?

Hon NICOLE McKEE (Associate Minister of Justice) (21:19): To the member, my understanding is that this was originally a regulatory systems amendment bill (RSAB), so they’re minor, inconsequential changes to tidy up. Effectively, that’s what we were originally going to do—just tidy it up—and we’d put it in the suite of those RSABs that were there. But, because we were doing other changes in order to meet our obligations, we’ve pulled it out. Therefore, my understanding is that the amendments you see here are minor and inconsequential, and if there was anything that was substantial, I would have mentioned it to the member.

CAMILLA BELICH (Labour) (21:20): Thank you, Mr Chair. Not, obviously, wanting to drag this debate out, I just wanted to double-check the two provisions in Part 2 that I looked into and kind of caught my attention when I was reviewing this, which were: clause 30, which revokes regulation 7; and also clause 33, which revokes regulation 5AA. I know that they’re different sets of regulation. I’ve just had a look at both of them, and I just wanted to double-check with the Associate Minister of Justice that regulation 7 deals with, I think, unaccompanied cash or accompanied cash, and I just wanted to check with her that the reason that that’s been revoked is not actually to lose anything, it’s just because the “cash” and “unaccompanied cash” definitions have been included in there. I see the Minister nodding.

A similar question for clause 33 for regulation 5AA. This, I believe, covers the definition of “beneficial owner”. Obviously, back to the original beginning of this bill, there is a different definition of “beneficial owner”, but, obviously, a new definition. So just wanting to double-check with her that the reason that’s been revoked is because its intention is to be replaced by not a part of the regulations, but part of the primary definition of “beneficial owner” within the new Act.

Hon NICOLE McKEE (Associate Minister of Justice) (21:21): That is correct. We’re, effectively, taking it out of regulations and putting the new definitions into the Act.

CARL BATES (National—Whanganui) (21:21): I move, That debate on this question now close.

Motion agreed to.

Part 2 agreed to.

Committee of the whole House

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”.

Dr LAWRENCE XU-NAN (Green) (21:22): Thank you, Mr Chair. Just apologising to the Chair, and also the Associate Minister of Justice. Now, I am going to sort of step outside and break the fourth wall of this bill because, again, we’re kind of looking at these two bills—this and the next one—together.

I’ll ask it now, so I won’t ask again later on in the next bill. Noting that the commencement date for the two are different: for this bill, the commencement date is the day after Royal assent, but for the next bill, it’s 1 July 2026. I just want to check, if the Minister wouldn’t mind, I guess, elaborating on why the different dates and how that would work in terms of the mechanism we’re seeing in the two bills with one being affected ASAP and one being affected in a few months’ time. That’s all.

Hon NICOLE McKEE (Associate Minister of Justice) (21:23): Thank you for noticing the two different commencement dates—and there is a reason for it. We can get this one, this particular one, under way the day after Royal assent because we’re making smaller changes and that can be implemented straight away.

Whereas, the next bill, that we’re about to debate, the reason why 1 July is the setting date is because that becomes the date that the Department of Internal Affairs (DIA) will then become the single supervisor. That is also the date where they can start giving out the information to the different agencies on how they can mitigate some of their risk—in other words, give the advice out to industry—and it will all happen from that date. I selected that date in order to have a time where the DIA is the single supervisor, comes through, and can start giving businesses relief.

CARL BATES (National—Whanganui) (21:24): I move, That debate on this question now close.

Motion agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported with amendment.

Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill

Committee of the whole House

Part 1 Amendments to principal Act

CHAIRPERSON (Teanau Tuiono): Members, we come now to the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill. We start with Part 1. Part 1 is the debate on clauses 4 to 35, “Amendments to the principal Act”. The question is that Part 1 stand part.

Hon NICOLE McKEE (Associate Minister of Justice) (21:25): Thank you, Mr Chair. Now, I started off the last debate by reading out my introduction to this bill— accidentally, of course—so I won’t go through and read it out again, because you’ve heard it. But there are three substantial changes that we are making within this bill: ensuring that we go from three supervisors down to one, so that we can get relief for industry; introducing a levy, so that we are able to pay for the changes that we’re making to the anti - money-laundering system—changes that will benefit not only the industry but New Zealanders as a whole; and then, finally, other matters, which is just bringing in all the other little bits and pieces that we need to make sure that we have a robust system that fights organised crime and keeps our communities safe.

Thank you to our members for engaging in the debate.

Dr LAWRENCE XU-NAN (Green) (21:25): Thank you, Mr Chair. I’m going to be asking the same questions I asked previously because, apparently, I also got the wrong bill. Just checking with the Associate Minister of Justice: the question I had before was to do with the regulatory impact statement. This is the one that is entitled, The Supervisory Structure of The Anti - Money-Laundering and Countering Financing of Terrorism System, and this is page 28 paragraphs 136 and 137.

I won’t repeat the whole thing but just want to check that the Reserve Bank of New Zealand (RBNZ) did not agree with the problem statement, but what I didn’t hear is whether the Minister believed that the depth of analysis is being conducted to a satisfactory level for RBNZ—if there have been any follow-up conversations.

I want to check with the Minister then, because I know that in this bill there is the levy structure, which we’ll talk about later on, but if the levy structure resolves the RBNZ—concerning paragraph 127 of “costly and disruptive structural changes”—would that adequately address that? That’s my first question.

Hon NICOLE McKEE (Associate Minister of Justice) (21:27): Thank you, Mr Chair. My understanding is, with the three supervisors that we had, both the Reserve Bank and the Financial Markets Authority—although, they’re kind of unhappy about losing their role in this—they were each unwilling or unable to be the single supervisor, but they didn’t want to hand over their role either. But the need for a single supervisor was actually really quite clear. The regulatory impact statement was well-founded in its recommendation that the Department of Internal Affairs (DIA) be the ones that are the single supervisor. I can trace the analysis back to our last Financial Action Task Force evaluation and statutory review because it goes that deep.

What I will assure the member of, though, is that both the membership of the Reserve Bank and the Financial Markets Authority has still been working with DIA on how to get and what type of information to get out. So while their anti - money-laundering (AML) teams, as such, will no longer operate as a supervisor, the key people within those agencies have still been working overall with the AML strategy to make sure that the outcomes are still there for everybody.

REUBEN DAVIDSON (Labour—Christchurch East) (21:28): Thank you, Mr Chair and good to be moving on to the second bill, and this being my first call on that. I think, as we’ve referenced a couple of times, there is the potential for confusion between these two bills and so I’m very keen to work quite methodically through the areas covered in this bill, the bigger of the two bills—as indicated by the Associate Minister of Justice in closing remarks on the previous bill—has quite a lot more in it and, therefore, needing a different commencement date to the prior bill, but also needing to work through it quite methodically because there is a lot in it.

The Minister also referenced exactly what this bill does and that that had been profiled at the beginning of her opening remarks on the previous bill. But I just think that one of the areas I really want to dig into is the role of the supervisor and the structure of that. But I think that that’s best considered in the broader context of exactly what this bill is doing in and of itself and in isolation from the other bill that we’ve looked at and examined. So I am just going to step through some of the commentary about what the bill as introduced aims to do, which is to improve the efficiency and effectiveness of New Zealand’s regulatory system for anti - money-laundering and countering the financing of terrorism.

Now, it’s also, though, about reducing those compliance costs and it’s about seeking to simplify how the system is supervised, and those are some of the questions that I will probably start with when I get to them around that new supervisor role and exactly how the system is supervised. What we are seeing is a number of changes both in the way we operate financial markets domestically and internationally, how we need to comply with some of those international treaties or obligations that we are committed to, but also the changing shape of financial transacting, and that’s why these protections are required but it’s also why we need to be certain that we have in place the appropriate supervisory structure to be futureproofed.

That simplification argument needs to be examined quite thoroughly in the context of this bill to ensure that there aren’t unintended consequences. It’s good to see here that it also talks about needing to be agile, which I think is very important, especially considering some of those broader risks that I have talked about, but also in terms of a risk-based approach to supervision through changes to anti - money-laundering and counter financing of terrorism (AML/CFT) secondary legislation. The secondary legislation is another thing that that we will need to look at and no doubt there will be a number of questions as we as we step through the bill.

I move to the principal changes made by the bill. One is obviously reducing the number of supervisors in the AML/CFT system from three down to one. That’s a significant change. Another is the strengthening the supervisory powers of the single supervisor to compel interviews, set time frames for the provision of documents and information, and conduct on-site inspections; and also there is the extending of the regulatory powers of the Secretary for Justice, the Commissioner of Police, and the chief executive of the proposed supervisor to make secondary legislation for the system; and there is also the introduction of an industry levy.

Now, this is another part of the bill that we really need to ask a number of questions about and get a really good robust understanding, shared understanding, of exactly where that levy model sits to ensure that we think it is fit for purpose and fit for the future.

To jump into the bill, I have a number of questions. Part of this too is to ensure that we actually meet the international obligations that we see both from the Financial Action Task Force, as well as the Foreign Account Tax Compliance Act. So it’s not just our own rules and our own standards that we need to meet. It is also those international obligations that we need to ensure we do meet.

So the first questions I have really relate to—and I’m conscious I am running a little short on time, but I’m hoping to get this first question out, which is around Part 1. In Part 1, in clause 5(2), where we’re talking about replacing the definition of “AML/CFT supervisor with—”

Tom Rutherford: Wrap it up. That’s five minutes.

REUBEN DAVIDSON: What the other members don’t realise is that if they continue to heckle like that I’ll have to start my sentence again. So clause 5(2) states, “In section 5(1), replace the definition of AML/CFT supervisor with: AML/CFTsupervisormeans the public service agency that, with the authority of the Prime Minister, is for the time being responsible for supervising reporting entities under this Act.”

There are a couple of things that I have questions about for the Minister. The first is: why is the agency not named there? I think we all understand who the agency is, but it isn’t explicitly named there, which seems like quite vague language. Then, adding further vague language into that, you also have “for the time being”. It’s quite an open-ended addition, and I’m keen to get some clarity from the Minister on exactly what that means.

Hon NICOLE McKEE (Associate Minister of Justice) (21:34): Thank you, Mr Chair. Thank you to the member for his introductory remarks and his questions. The member made mention of not wanting to have unintended consequences from the single supervisor, and I do appreciate that remark, but I think what we’ve found is that for the last 13 years we’ve had unintended consequences from the three supervisors—that being that they’ve not been able to get adequate resources out to industry to tell them what risk they can take. None of us saw that—we weren’t even around then, but it wasn’t seen and it’s become an unintended consequence. Hence why we are moving to a single supervisor.

As to why we don’t name the Department of Internal Affairs (DIA), if we have a look we’ve had the Reserve Bank, the Financial Markets Authority, the Department of Internal Affairs, and we’re now going to make DIA the single supervisor, but we just don’t know what’s in the future. We don’t know whether Government agencies may change their name or anything like that, so we’re just merely futureproofing so that if there is a name change or if we find there are unintended consequences with it being the DIA and we need to move somewhere else, that we can readily and easily do so. All it is is merely futureproofing for who could be a supervisor in the future.

ARENA WILLIAMS (Labour—Manurewa) (21:36): Thank you, Mr Chair. I appreciate the Associate Minister of Justice’s remarks about the feedback that was received from industry over the last 13 years about the under-resourcing of the anti - money-laundering (AML) regulators when they were the Reserve Bank, the Financial Markets Authority (FMA), and the Department of Internal Affairs (DIA). It became a series of commentary from industry—say, lawyers, accountants, firms that are affected by AML and have to know their customers and are required under our international obligations to observe, to the Government—that the regulators were under-resourced. This was the thing that gave rise to the ideas about a single regulator. One submitter said, “As a general observation based on our experience on advising clients on the application of this Act since its inception, the existing supervisors appear to be under-resourced. The benefit of a single super AML regulator could be better, more focused resourcing.”

My first question to the Minister around that definition at clause 5(2) is whether at section 5(1) replacing “AML/CFT supervisor” with an open-ended definition that is at the behest of the Prime Minister is in fact giving effect to what industry have been saying for those years. Will this not only improve longevity and an understanding of the industry that there is one supervisor and that it is DIA but also that this supervisor will be appropriately resourced to be able to do the work that is it is required to do across the industries that it is required to regulate?

I will come back to this because I think the guts of this bill really is the levy, but we don’t come to that until later in the bill. So we will approach that methodically, as my colleague has said. The question I want to ask the Minister underneath this definitional point is about the fact that DIA is mostly the preferred regulator of those submitters who submitted from a professional services bent—accountants and lawyers, say. That is the regulator they have dealt with. But for other participants in the system, say, fintechs and banks, their regulator has been the FMA. The FMA have a particular set of expertise in here, which never needed to defined in an anti - money-laundering bill because their remit was clear: for the health and oversight of a strong and enduring financial system that was not unnecessarily exposed to risk either from money-laundering or other financial risks that occur because of inadequate supervision. So when the FMA is granting its functions over DIA, which is a part of this bill, are we clear and do we have confidence, Minister, that that expertise is also being transferred over?

The example that I point to here is the FMA bringing a set of practice notes with a particular fintech that was warned and then fined $900,000 for not reporting suspicious transactions. That was done by the FMA’s director of supervision. That director of supervision has expertise in supervising all manner of trusts, not just publicly reporting entities that are covered by AML but also trust entities that have these kinds of reporting obligation under other Acts; say, those trusts that take retail investments and need to report to the people who invest in them. That supervision expertise is a set of expertise which is not just public expertise but also exists in the commercial sector. Supervision expertise is something you can buy and pay for and is well understood within the market. That is something that the FMA have a role in all of the time—in supervising the supervisors and then being the supervisor for funds and for trusts, but that is something that DIA is not in the usual business of doing.

I want to ask the Minister about how DIA can play that role for the types of organisations that it is not best set up to cater for, that the FMA was catering for. I agree with her comments that a series of overlapping decisions made it very clear that one regulator would benefit, but, as I’ve said, submitters made the connection there because of the resourcing constraints, not because three regulators who have slightly different remits for slightly different industries was inherently a bad thing. Is DIA well equipped to deal with real estate? I ask this question because from 2020 to 2022 the focus internationally and in New Zealand was on the risk of money-laundering through real estate transactions. That should still be our focus as it is large amounts of money that are laundered in this way. Is DIA well equipped to not only deal with real estate agents but their professional obligations when dealing with real assets and land assets? Is it the supervisor that is best placed to continue their focus that New Zealand owes the rest of the world?

Hon NICOLE McKEE (Associate Minister of Justice) (21:41): Yes, but I will explain a little bit more. As I mentioned earlier when we talked in the previous bill, the supervisors that were the Financial Markets Authority (FMA) and Reserve Bank, made up of some very skilled people—some of those people are actually moving over into the Department of Internal Affairs’ (DIA’s) anti - money-laundering (AML) team, so we’re not losing that expertise.

I mean, part of the problem with the three supervisors is that two of them were legal entities and one wasn’t. This is where part of the conflict came when it was time to actually give out advice because one may be able to give out advice, but it may contradict another’s legal references. In order to have DIA be the single supervisor in things that we capture with FMA and Reserve Bank skilled people sitting on there, and capture the things that they need to still capture, like the example that you gave, but they’re not going to conflict with each other’s Acts when it comes to giving out that information. They can basically nail it, go out there and penalise people who abuse it or who don’t comply with it, but they can also give out that advice that is needed across all of those markets, including the fintechs as well. They will be working together, and I’m really pleased that the team that has come together will have skills and expertise across all three of those previous supervisory roles.

Dr LAWRENCE XU-NAN (Green) (21:43): Thank you, Mr Chair. Thank you, Minister, for that response. That segues nicely into my question, which is on clause 7, “Section 39A amended”, around suspicious activity. Now, I understand that for this particular part, the insertions just in section 39A(b), inserted by clause 7, with the inclusion of additional articles, for example, describing section 67A, which is the prohibition of certain cash transactions, but I want to check with the Associate Minister of Justice that while we’re going from three supervisors to one—and I actually want to thank Dr David Wilson for his guidance around this and he may be able to speak more to this particular point—one of the missing links in all of this is the role of banks.

Arena Williams: Yep.

Dr LAWRENCE XU-NAN: Yeah, a lot of that because, again, if when we are looking at three to one, what is the Department of Internal Affairs’ (DIA’s) role in reinforcing or holding banks accountable for ensuring that their processes are up to speed and that they don’t have sort of, like, bank accounts on their books that have been used to facilitate some of the transactions? I noticed that a lot of the things to do with scams etc., do go through a bank account. So when we’re reporting suspicious activities, I just want to know from the Minister whether there’s any consideration of the role of banks in all of this and how they are being held accountable, or how their processes are being held accountable, for any of these activities.

The next question I have is also with suspicious activity, and I referenced this in the second reading of my speech, which is that recently, in France, we saw the landmark case with the Lafarge cement company, which has been charged with financing terrorism in Syria and adjacent areas. Lafarge cement is now a subsidiary of the Swiss cement company Holcim, which also operates here in Aotearoa New Zealand. I guess the question there is, when we’re looking at suspicious activities, how broad are we able to go when we’re looking at the broader potential parent company or subsidiary of the parent company that operates in another jurisdiction, where, potentially, we just simply don’t know how they can be linked to a reporting entity or for a person conducting a transaction here in New Zealand? Are there any thoughts that you might have, any sort of advice you’ve taken from DIA, or any other things that you’re working together on in this new area on how we can address that?

Hon NICOLE McKEE (Associate Minister of Justice) (21:45): Thank you, Mr Chair. I thank the member for his question. There’s a lot of operational detail in there that we would never cover in legislation, but I think if I can answer in this way—and hopefully it answers your question—part of the funding for the levy is to also fund the FIU, which is the Financial Investigation Unit of the New Zealand Police. When the member talks about if we see crime occurring or a bank sees crime occurring, and he’s asking about parent companies, etc.; that’s where I expect the FIU would be able to step in and take any potential criminal cases that occur from the money-laundering.

Now, when we went out for the discussions with the banks on the levy—well, not just the banks; we went out to everybody to talk to them about the levy and who would pay what and whether or not it was fair, and those discussions have been had and feedback given—we were looking at proportioning part of the levy based on who has the highest rate of, perhaps, potential laundered money going through their system. For example, banks will have more money going through and being laundered through their system then, say, your average real estate agent, so we’re looking at ensuring that the correct amount is being paid in the correct places. But then the question that remained was, “Well, we’re now paying this amount, so what are we getting for it?” This is why we’ve gone out for consultation, because we’ve basically said to the industry, “What do you need in order to operate well? What do you need to be able to mitigate the financial risks that are being undertaken, but also go after the organised crime?” The people that were consulted with came back and said, “Well, we really need the FIU to also be well funded because it’s one thing to stop these transactions, but if we don’t stop it from where it’s originating or even, you know, put some effort into that, it’s just going to keep reoccurring.”

The levy will help pay for the investigation of the criminal activity that comes from those suspicious activity reports that are given to the Police. I hope that answers the question of what happens with the flow-on effect once those suspicious activity reports—or SARS, as we call them—get reported. We do have the other avenues. It’s one thing for the supervisor to give advice, but we also have the FIU in there, which is going to take on the criminal activity that comes from that as well.

REUBEN DAVIDSON (Labour—Christchurch East) (21:48): Thank you, Mr Chair. Now, please don’t take this as suspicious activity, but I do want to take a step slightly backwards from where we were in the suspicious activity. I wanted to come to Part 1, clause 6, “Section 16 amended”, which is around the standard customer due diligence and verification of identity requirements. In clause 6(1A), “Subsection (1)(b) and (c) does not require a reporting entity to take steps to verify any information obtained under section 15(d).”

Now, we’ve talked a lot, in various speeches, around the futureproof intent of this bill. A lot of what we’re talking about there is new ways of transacting and new ways of moving money about, potentially and particularly in new industries and new sectors who choose to transact in different ways, be that domestically or internationally. I guess what they’re looking for, there, is fast and frictionless ways to transact, and that can be beneficial for a number of ways where you are moving money or currency around. But from a knowing-your-customer perspective and particularly looking at that clause 6(1), inserting new subsection 16(1A), the question here is then: does it have fingerprints?

If things become too fast and too frictionless, then the lack of fingerprints, or the lack of identification or the ability to be able to identify, becomes more challenging. But also, if, in this Act, we’ve made that ambiguous or vague or haven’t really made that a watertight provision, then the question really for the Minister is: are you confident that you will still be able to get done what you need to be done, but you will still be able to identify or verify the information that’s been obtained? But, similarly, do you believe that it will meet the international obligations that we’ve signed up to, so that what you’re putting into the bill here is actually robust enough to be able to capture that information that you would need?

Hon NICOLE McKEE (Associate Minister of Justice) (21:51): In answer to the question, yes, we do believe it’s robust enough. We think all the changes that we’ve made in here will please the Financial Action Task Force (FATF) and will demonstrate to them that we are committed to making the changes that they requested of us back in 2021. All of the changes that you see here contribute to that next FATF evaluation that is upcoming.

I understand why the member raises questions about this particular section being amended: section 16, amended by clause 6. This is in order to ensure that those people—perhaps if I give an example: you’ve been with a bank for 40 years, you’ve just gone in and you’ve not remortgaged but maybe reset the mortgage on your bank, and then you want to go back and get a loan or an overdraft, for example, and then the bank requires you to verify your identity all over again, even though you just did all of that with them when you reset your mortgage, because you hadn’t set it for 20 years. You just provided it to them. You’re the same person; you’ve got the same photo ID. It’s basically saying to the bank, you don’t have to go through all of that again because you’ve just done it—so allowing them to understand and mitigate those risks.

That’s going to be, I think, a lot easier for the banks dealing with customers who are getting very irate with them saying, “Why do I have to do this every single time I come in, when I just gave it to you the other week?” It’s really hard because the bank then don’t—they, basically, don’t say this is an anti - money laundering requirement. I hear the banks actually just say, “Look, I have to do this.” It’s taking pressure away from both of them and making sure that we’re not just wasting time having to do the same thing over and over, but also ensuring that where there is a change, the banks can ask for the information all over again, but where it’s not needed, allow them to not have to ask for it.

Suze Redmayne: Mr Chair.

Cameron Luxton: Mr Chair.

CHAIRPERSON (Teanau Tuiono): We are a bit early for closure motions, so I hope this is not—

Suze Redmayne: Oh, OK.

CHAIRPERSON (Teanau Tuiono): OK. Arena Williams—I appreciate the enthusiasm, though.

ARENA WILLIAMS (Labour—Manurewa) (21:53): Thank you, Mr Chair. Following up on the Associate Minister of Justice’s contribution there, it’s really useful to have their context that this isn’t intended to capture, say, a refixing of a mortgage scenario, but clause 6, amending section 16—at the top of page 6—does apply to all registered entities. When we think about the context of, say, a real estate situation which might hinge on section 15(d), which is the address requirements of the standard customer due diligence (CDD), you then look to the original section 16 of the Act, which gives the option for a registered entity to take reasonable steps to satisfy itself that the information under that section is correct, and, according to the level of risk involved, take reasonable steps to verify the beneficial owner’s identity. My question for the Minister is: does the effect of her new subsection 16(1A) mean that real estate agents won’t need to verify that someone’s address information is right? Are they entitled to rely upon address information provided by a buyer or seller as correct information? For lawyers as well—this is an important part of their CDD—is it the case that they no longer have to verify the information about address provided to them by a client? Is it the case that they can rely upon the information provided to them in the first instance as correct information?

This is also relevant in the financial services sector—not in those banks and entities with very mature systems for knowing their customers; these are long term, and they also hinge, for most of our banking institutions, on those requirements in Australia which are more stringent around CDD. But for those smaller institutions where they might be thinking that they are entitled to rely on the documents provided to them by a customer about their address information, but the law actually requires them to be sure of that presently, and now in the future seemingly won’t require them to do that—is that actually to change the law for those smaller entities?

I also want to use the final minutes that I have to flag a question I have for the Minister around clause 7, paragraph (a)(ii) of amended section 39A. Is it the intention of the Minister to limit the meaning of “suspicious activity” to things which are in fact criminal activity? You can imagine plenty of scenarios where, as she has said, this regime applies to say gold dealers or jewellery dealers. Does the section apply to people who notice a series of transactions by someone who they might not expect to be in possession of a large amount of money, through goods which are often associated with money-laundering—say, cars, boats, gold? And is it the case that, actually, what they’re looking for is the actual criminal activity rather than transactions which might otherwise ping their radar as things which might be associated with that kind of suspicious activity? I can understand the value judgments that would be associated with doing that, but my question is, really: does that meet our international obligations in requiring a further identification of these kinds of transactions? Because there’s a big difference between somebody who is visiting their local pawn shop and is pawning lots of items and regularly—that is not in any way prohibited under any of these Acts, but it might lead you to suspect that there might be an enforcement issue of the Criminal Proceeds (Recovery) Act 2009.

Those are two separate questions, but I think we can cover off that clause 6 and move on to the various meanings in clause 7.

Hon NICOLE McKEE (Associate Minister of Justice) (21:58): Thank you, Mr Chair. If I address that last question by the member *Arena Williams first. The inclusion of jewellery; watches; gold, silver, or other precious metals; diamonds, sapphires, or other precious stones; motor vehicles, ships—the new definition doesn’t expand on obligations of those current reporting entities. In fact, we’ve put this in here because industry have asked us to. Effectively, the suspicious activity reports couldn’t be filed on these things that they are finding money being laundered in purchasing. They said, “Could you please put it in so that way we can do suspicious activity reporting on those particular things.” That’s why that is there.

The member asked, as an example, about lawyers, real estate agents, accountants, etc.—who’s going to be doing reporting? That advice is going to come from the supervisors. The supervisor’s going to have a look at where the risk is, when they talk with industry as part of their discussion on who’s going to do what. They’ve been communicating with industry over who has what information, where it is best needed and regarded, and then they will give out their advice—I’m hoping—on 1 July, or not far after, as to who has to do what. I’m just giving them the highway to be able to make those changes.

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

Debate interrupted.

Sitting suspended from 10 p.m. to 9 a.m. (Wednesday)

Extended Sitting

Wednesday, 29 April 2026

Bills

Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill

Committee of the whole House

Debate resumed.

Part 1 Amendments to principal Act (continued)

CHAIRPERSON (Maureen Pugh): Good morning, members. The committee is resumed. When we suspended last night, we were debating Part 1 of the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill. This is the debate on clauses 4 to 35, “Amendments to principal Act”. The question again is that Part 1 stand part.

ARENA WILLIAMS (Labour—Manurewa) (09:00): Thank you, Madam Chair. Last night, we had a really helpful back and forth with the Minister around what kind of transactions would be covered by reporting entities and by people who may report suspicious activity. It was very helpful to hear from the Minister that the provision at new section 40A, I think she referred to, and at 39A(b)(i), amended by clause 7, came from feedback from the industry. I’m interested in this power for people who may report suspicious activity and whether that should be a requirement on them.

Section 67A in the original Act is the powers that relate to things like gold, silver, jewellery. You might envision a situation with shops that are trading in physical goods, where a person is transacting large amounts of money but over a longer period of time than one transaction that might give rise to suspicion. My question was, for the Minister—that’s not what I’d anticipated, because the old Act does provide for provisions that relate to trade in gold and silver. But this “may report suspicious activity” wasn’t, I thought, a higher requirement or something that a requirement would be put on the sellers of these to provide information to the supervisor around suspicious activity. Can she just clarify whether her new section 40A steps back the requirement on sellers of these goods to report suspicious transactions or whether that is a new power that provides a way into the scheme, which is I think what she said last night.

My other question is around her clause 7. We were on (ii) last night when we were—the questions are around at what point we are capturing the suspicious activity in a transaction that relates to one of these things which is mentioned in the actual legal Act. Any transaction which is covered by those Acts is illegal. The anti - money-laundering provisions step further into those transactions where you might need to report something that is suspicious or you might need to report something which would lead to illegal activity but is not in itself illegal.

But the wording of (ii) seems to be now a higher standard than what it was. “Reasonable grounds to suspect”, and just these offences, is a broader definition than simply “a suspicious activity”. The natural meaning of “suspicious activity” is being limited here. The things which you have reasonable grounds to suspect are leading to those illegal activities. “What is the extra power here?”, is the question. Any sort of transaction which you reasonably suspected was to aid transactions which were prohibited transactions under the Misuse of Drugs Act, like dealing, would be illegal in and of themselves, so what is it extra here that is being asked of people who are either reporting entities or these extra people who are dealing in the things which are set out at 67A of the original Act?

I think where we got to last night was a little bit of a better understanding about those Acts being the things that will give rise to the grounds for suspicion, but not necessarily what is extra from stepping back into a transaction or stepping after a transaction has occurred for the proceeds of a crime. Both of those parts of the transaction are meant to be captured by international obligations under anti - money-laundering arrangements that we make with the rest of the world. Are our obligations that are owed to the international community being met here by what I think is a tightening up of the definition of “suspicious activity”?

CHAIRPERSON (Maureen Pugh): I’m sorry, Minister. I’d just point out to members that we’re not very tolerant of repetition. I note that that member asked a very similar question last night. But if the Minister is happy to take a call—the Hon Nicole McKee.

Hon NICOLE McKEE (Associate Minister of Justice) (09:04): Thanks, Madam Chair. I was about to say that I think I did cover this all last night, but I’ll just give a little bit more if it helps the member. There is now the requirement that if somebody presents with over $10,000 to purchase something, a suspicious activity report now needs to be filled out. Now, before that $10,000 limit was put in, a lot of these agencies were already giving suspicious activity reports, but once we had the $10,000 limit, they weren’t required to do so. Effectively, we are putting in the ability for these agencies to be able to continue to deliver a suspicious activity report. It won’t expand on obligations for the current reporting entities.

As I’ve mentioned, it was requested by industry. To give examples of some of the businesses that might be caught up in this, it includes auction houses—like Turners, for example—or any dealership for either new or used motor vehicles. But mainly we have changed this purely because industry had asked for it. These people used to be able to give SARs—the suspicious activity reports. We’re basically saying if they want to continue to do that, we’re allowing them to do it. We’re not mandatorily making it that they have to, but they’ve requested that ability.

Of course, what comes with that is the anonymity, the ability for them to be able to report but still keep confidential their own reporting system, I guess is what we’re saying. With a suspicious activity report, they can report to the police, to the Financial Intelligence Unit (FIU), to say, “We’ve had somebody come in with $12,000 cash. We think that it might be drug money, but we’re going to report it, and then we will just step back.”, because it will ensure, through SAR, that their details are kept confidential, therefore keeping them safe. This will allow more people, as I mentioned last night, to be able to give those SARs to the FIU.

REUBEN DAVIDSON (Labour—Christchurch East) (09:07): Thank you, Madam Chair. It’s good to have the further opportunity today to continue to work our way through this bill, particularly in the context of it being one of two bills and there being the potential for items covered in either to be conflated or confused through the process. It is good, and I thank the Minister for both her time last evening in the limited time we had to get started on working through this, the second of the two bills, but also to continue stepping through that this morning. Appreciating your guidance, Madam Chair, on needing to maintain the forward momentum and moving through the bill rather than duplicating questions.

On that note, I’m really keen to move forward down into clause 11, which deals with the amendments to the annual anti - money-laundering and countering the financing of terrorism (AML/CFT) report, specifically looking at clause 11(3), inserting 60(2)(d), where it speaks to providing “any sector-specific information required by the AML/CFT supervisor under rules made under section 156B”.

The question here, really, is around the sector-specific terminology and whether there’s a risk or a potential risk here in allowing reporting entities to not, in effect, write their own reports but potentially to create the reporting structure by which they’ll be held accountable. Obviously, if you were dealing only with good operators, then that wouldn’t be a risk at all, or the risks would be far more minimal. But the nature of this bill, which is to comply with those international obligations we have but also to ensure that we are creating a framework that catches and prevents money-laundering and illegal transactions and transacting—then the concern would be that if you’ve got a less than fully honest or a dishonest operator, the ability for them to provide that sector-specific information could potentially unfairly weight the scenario to their benefit.

Therefore, it could make it very difficult for the bill to capture their activity with any degree of illegality, because they know their area of operation better than anybody else, and they have, effectively, structured the rules and guidelines around how they’re going to operate, but also, more importantly, how that’s going to be monitored or measured for breaches enforced.

Really, the question to the Minister on that is: what thought has gone into preventing that happening around that provision of sector-specific information by the sectors affected by this clause in the bill? Is there a monitoring or review provision there to keep a watch on that specific element of this bill? Was there any specific advice received around whether that was adequate framework to not just detect, because that would be a retrospective step, but to actually stop people being able to evade this component, this function of the bill by creating, in effect, their own report card that they can comply with but that allows them to continue activity that would be legal or less than desirable?

Hon NICOLE McKEE (Associate Minister of Justice) (09:11): Thank you, Madam Chair. The reporting structure is going to be set by the Department of Internal Affairs (DIA), and the annual reporting requirements are currently prescribed within regulations. This amendment is going to allow greater flexibility for the supervisor to issue rules in areas where it’s different or better information might be required. The DIA may add in sector-specific rules depending on what that sector is. For example, if we think about the virtual currency area, that’s always evolving, so it’s allowing the DIA to be able to set rules as things change.

The reporting entities themselves cannot pick and choose what they will be reporting on; it will be set by the DIA, and they may alter those requirements by sector. They might say the banks, for example, might have one rule that they have to abide by, and a lawyer might have something else because their dealing with it is a little bit different. It’s allowing the DIA to be able to move these rules as things around us, the modernisation of organised crime, and how quickly they manoeuvre also changes.

CARL BATES (National—Whanganui) (09:12): I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): That’s very optimistic of you, Mr Bates. We’re not quite there yet.

REUBEN DAVIDSON (Labour—Christchurch East) (09:12): Thank you, Madam Chair. I’ll confess to being an optimist too, and an optimist who wants to continue the forward momentum through the bill, but, at this stage, as far as Part 1, clause 13, replacing section 64, which is where we get into the subject matter around the “chief executive of AML/CFT supervisor may make codes of practice”.

Specifically, I wanted to look at subsection (3)(a) and (b) of the replaced section 64, in clause 13. What we’ve got here is, for context, “The purpose of a code of practice is to provide a statement of practice that assists reporting entities to comply with their obligations under this Act, regulations, notices, and rules.” Then we step into (3), where it says, “Before making a code of practice, the chief executive must consult”, and then struck out is “any persons, or representatives of the persons, that the chief executive thinks will be substantially affected by the code of practice.” That has now been replaced with 3(a), which reads “the persons or bodies that the chief executive considers may be affected by the proposed code of practice;”. The shift from “thinks” to “considers” in and of itself, is arguably immaterial, but it is a change. I’m curious to know what the thinking is behind the change of shifting that from “thinks” to “considers”. Is that something that came through in official guidance? Is that, in the Minister’s opinion, a weakening or a strengthening of the regulation or the new clause?

Also here, there’s the addition of 3(b), which lists “The Minister.” It adds the Minister—the chief executive must consult the Minister. For me, that’s an interesting change because, it could be argued, that that puts the Minister in a position—depending on the number of codes of practice—of needing to, I wouldn’t use the words “micro-manage”, but potentially needing to be consulted a lot more than they would have under the previous terminology.

It also puts the Minister in a position of needing to be across all of the detail all of the time, because it’s spelt out in black and white in the legislation that they have to be across that. That also runs the risk of slowing that process down, and the issue there would be, as the Minister has explained in previous answers this morning, the need for this legislation to be nimble and efficient and effective to keep pace with the speed of change that we’re seeing both in trading and in technology. Adding this extra step and this additional ministerial responsibility does, in my mind, pose the risk that the legislation is therefore less nimble and less able to pivot to meet the rapid pace of change that we’re seeing and likely to see an increase in.

The question to the Minister there is: does the Minister think that will slow down the ability for legislation to be match fit in a rapidly changing environment? More broadly, I guess, where did the notion of adding the Minister into the list of entities that needed to be consulted come from? Was that a thought of the Minister’s, or was that something that came through in official advice? A detailed question but a drafting question here is why (3)(a) and (b) needed to sit separately, and whether or not the Minister could simply have been added as an addition to the list of (3)(a). By singling out the Minister and making it separate and standalone, it certainly caught my eye when I worked my way through questions in the legislation. I’m curious to know why that needs to sit out and separate from (3)(a) where it could simply have just been an additional word at the end. So those are my questions on that clause.

Hon NICOLE McKEE (Associate Minister of Justice) (09:17): Thank you, Madam Chair. I think I’ll just take this opportunity, first of all, to speak to Amendment Paper 573, which is on the Table. It’s the only Amendment Paper that I’ve put in place here. I just want to explain that this Amendment Paper is taking some clauses in the bill that we discussed last evening out of that bill and placing them into this bill. It was a transfer of clauses from one bill into another, and, effectively, it’s removing some aspects that are in regulations, because we are putting them into the Act. I thought I’d just explain Amendment Paper 573 that’s been put up from the Government.

Speaking to the member’s question on clause 13: having a Minister involved with oversight is not an unusual thing. I think, most importantly, this is about the codes and the guidance. The guidance is not going to be binding on people; it is just guidance. These are the codes of practice, and they’ll remain in secondary legislation; they won’t come forward into the Act, because they need to be moveable.

Where did this come from? I’m advised that the Economic Development, Science and Innovation Committee amended consultation requirements in order to make it consistent and simpler, as the codes are not binding instruments, then they are closer to the guidance. Amendments that you will have seen within this paper actually came out of the select committee and I thank them for their consideration and for making the bill simpler as a result.

ARENA WILLIAMS (Labour—Manurewa) (09:19): Thank you, Madam Chair. I appreciate the Minister bringing the committee’s attention to her Amendment Paper slotting in new clause 17A. The censures—she’s right. I’ve had a look at where they were in the creature of regulation—where they might have been if you were a body like the Financial Markets Authority. Obviously, one new supervisor needs a legislatively empowered single exercise of its soft power to give instructions. What that’s like, though, is really different across lots of different public entities, and I’m keen to understand that from the Minister. What were these modelled on? Are these like Inland Revenue’s powers? Are they more like the Privacy Commissioner’s powers? Because they’re not censures that have an associated enforcement infringement fee or a fine. They don’t seem to have a public record element, either. Often, a feature of censure notices or advice-finding guidance is that it is public and so there is a precedent-setting element of it that makes it fair and it builds public trust in them. Is that what’s intended here? That could be something that’s intended here, but that would be provided for in the regulation.

A second species of question about these censures is: what were they before? Is this tidying up a problem in the regulation in that we did have either the Reserve Bank of New Zealand or the Department of Internal Affairs, but I suspect it was the Financial Markets Authority, providing guidance to businesses that wasn’t necessarily empowered by a piece of primary legislation about anti - money-laundering compliance. In the case which I’ve raised with her, where a fintech was notified multiple times—what were those notifications if they weren’t censures? What was the legal status of those? And are we tidying up a problem in the law here which is real—that if you have an agency giving guidance, somebody on the receiving end of the guidance should be able to clearly see whether that is binding, whether it’s enforceable, whether it constitutes an infringement?

We get ourselves into the same sort of issue here, because I can’t see that her new powers create a, sort of, stick element, with the carrot of being offered some helpful guidance. I want her to help me to understand: is that coming in the regulation or are these meant to be a softly, softly, soft power? In which case, which other agency has a similar power that she’s based these on?

Hon NICOLE McKEE (Associate Minister of Justice) (09:22): Thank you, Madam Chair. Clauses 17A and 17B set out on Amendment Paper 573 are creating a new supervisory power to censure. This is because we were effectively seeing that we will create guidance and expect the agencies to operate within those guidelines, but if they don’t, then—as the member had pointed out—where was the stick? The stick is the ability to censure, in writing, with those agencies that are not complying. The supervisor would be able to issue a notice of intention to issue a censure, and the person who receives it will have 10 working days within which to respond to that. What formal warnings that we’ve had do not have much of that deterrent impact, but the next layers of the court-ordered enforcement options significantly do.

I don’t know so much if it’s more “softly, softly”. I would see it more along the lines of, the Department of Internal Affairs will be coming out, they’ll be issuing guidance; we need to allow the agencies the ability to figure out how to work within that guidance, and if they’re not, issue a censure; and if they continue to not fulfil their obligations, then there can be court-ordered structure after that. It’s more about just helping them get through what it is that they need to do in order to comply.

ARENA WILLIAMS (Labour—Manurewa) (09:23): Thank you. Just a quick question on that: is this intended to relate to licensing requirements, then? Is it the case that someone who has been censured might lose their licence to operate, say, the Financial Markets Authority might have already given the fintech in question two different kinds of operating licences? Is it professional conduct rather than infringements that you’re relying on, and so you might assume that the regulations would then tie that to licensing? Or is it the case that someone could have been censured five times in the same year and would still be able to operate under a licensee?

Hon NICOLE McKEE (Associate Minister of Justice) (09:24): It’s a very good point that the member raises, and the Economic Development, Science and Innovation Committee raised something similar. They basically said that they had concerns that censures are typically penalties that follow evidential findings on conduct. They wanted the provision amended to instead introduce censure as a separate sanction with a robust process for issuance, and that takes into account the natural justice requirements, but the formal warnings will also still stay in place. We have made these amendments—based, again, on excellent select committee suggestions.

REUBEN DAVIDSON (Labour—Christchurch East) (09:25): Thank you, Madam Chair, and thank you to the Associate Minister of Justice for those answers on those previous questions. Continuing to move through and coming to Part 1, clause 20, “Section 131 replaced”, where we go through the functions. Just to step through these, because there are a number of functions that the anti - money-laundering/countering financing of terrorism supervisor needs to take, and I just wanted to step through each of these and have some questions specifically about those.

The first, being new section 131(a), is “monitor and assess the level of risk of money-laundering and the financing of terrorism, including through providing risk assessments and intelligence to the Commissioner and reporting entities”. That seems to make sense, but we’re looking at all of this, sort of, shopping list of responsibilities that previously were held by three entities and are now going to be the responsibility of a single entity.

There’s kind of, as we step through these responsibilities, two questions—the first being: how do these differ, or do they differ, from the previous responsibilities of the three entities? And secondly, when you merge and reword a number of responsibilities, there is always a risk that some may have failed to be included, or that the rewording or restructuring of those responsibilities and the way in which they are accounted for changes the interpretation or the reality of what is included in the—for want of a better term—shopping list of responsibilities.

To move to new section 131(b): “monitor reporting entities for compliance with this Act and regulations, and for this purpose to develop and implement a supervisory programme: (c) provide timely and up-to-date guidance to reporting entities to assist compliance with this Act, regulations, and rules: (d) investigate reporting entities and enforce compliance”—

CHAIRPERSON (Maureen Pugh): The member can assume that we can read this.

REUBEN DAVIDSON: OK, excellent. That is great. So, then, the questions really are around the inclusions in clauses (a), (b), (c), (d), (e), (f), (g), (h), (i), and (j). The question, to come back to it, which I framed at the top of this contribution, was: how do these differ from what was previously accounted for, given that what was previously three separate functions is now rolled into one? How does that differ? What assurance does the Minister have that nothing has fallen out in that consolidation process? And, also, what wording changes are there that could potentially cause confusion or provide opportunity for someone to claim confusion in their interpretation of what is included in this bill?

Hon NICOLE McKEE (Associate Minister of Justice) (09:28): Well, when we’re trying to cut red tape and make things easier, we certainly don’t want any confusion. I feel confident that we have mitigated that within this bill. The status quo still stands within this clause, but there have been three additions that have been made for the single supervisor. The additions include direction that the guidance for reporting entities should be timely and up to date, and assist with their ability to comply with the law; a requirement to engage with industry to identify and mitigate unintended consequences—which the member spoke to before—of the entire anti - money-laundering and coutnering the financing of terrorism (AML/CFT) system; and mandating to assist New Zealand to meet its international requirements under the AML/CFT regime, as well. So just those three additions; everything else is still the status quo, just moved into the single supervisor.

REUBEN DAVIDSON (Labour—Christchurch East) (09:29): Thank you to the Associate Minister of Justice for that excellent answer. Moving into clause 21(5): here, it talks about—(5)(ba): “require any person whom the AML/CFT supervisor reasonably suspects has knowledge of a possible contravention of this Act or regulations to attend a meeting”. What we’re talking about here are actions that can be taken for non-compliance. What I’m wanting to, I guess, get a sense of here is what the degree of power that this bill provides is.

The first part of clause 21(5)(ba) says this Act compels a person to “attend a meeting (including via an audio or audiovisual link)”. That could be as simple as a telephone call—or a Teams or Zoom or whatever is the video format of the day—with the supervisor to answer any of their questions that they have around the records and documents, or to provide the additional information that the investigator would need in this instance to see whether where there’s smoke, there’s fire, or whether this is a “nothing to see here” scenario. One of the questions from me around this point is: what happens and what powers does the bill give the supervisor in an instance where a person is requested to meet and declines that request? What would be the next step, and what power does this bill give the supervisor for non-compliance?

Another scenario would be that a meeting is agreed to and attended, but the questions are insufficiently or incompletely answered, and the provision of proper records and documents isn’t met in the opinion of the supervisor. What would the next steps be at that point? In clause 21(5)(ba)(ii), it goes on to say that the request would be to “provide any other information that the … supervisor considers necessary or desirable for the purposes of performing or exercising its functions, powers, or duties”. Again, what would happen if the person being asked to provide that information disagreed and said, “Yes, I have that information, but I’m not prepared to share it.”? If they didn’t attend a meeting at all, or if they didn’t respond to requests for a meeting, what power does the supervisor have? Can they summons that person to a meeting? Is it equivalent to a summons power? Do they need to take proceedings elsewhere to compel that person to come to a meeting?

The question, really, is around what tools and powers does this give the supervisor to make requests for meetings? What steps can they take if those requests are ignored or if those meetings are not attended? And then, what happens within that environment if the person or organisation persons refuses or is unable to provide the information requested? What would a scenario be in that example, where someone says, “Yes, I have that, but I’m not going to provide it.”? Or, if someone is sort of more of a shoebox receipt keeper—and I would hope that not many people are these days, but if this was the example—what would happen if the person had good will and intent but was unable to provide sufficient evidence as requested by the supervisor through a lack of attention to their own accounting records? In each of those scenarios, what powers does this bill give the supervisor to address the questions that I’ve raised around that new section?

Hon NICOLE McKEE (Associate Minister of Justice) (09:33): Thank you, Madam Chair. I think, if you look at clause 21, “Section 132 amended”, it’s amending the powers. Of course, there is consequence if you give powers that are not able to be fulfilled, but the scenarios that the member has put to me are operational scenarios that I certainly cannot answer sitting here, because you don’t know what the scenario might be.

I think what would be, perhaps, important for the member is the improvements, again, that came from the Economic Development, Science and Innovation Committee in result of this. They were a little bit worried, as well, about people being compelled to have to answer in a situation where a supervisor might just turn up. The select committee requested, and we have added into here, the ability for that individual to have a lawyer present at the meeting and be able to end the meeting at any point. That sort of speaks to what the member was asking about what if a person just says, “No, I don’t want to give you that information.” Well, we’re allowing them to end a meeting; we’re allowing them to have a lawyer so that they can be represented, but I can’t speak to exactly what the scenario will be, because I don’t know what the situation is.

It won’t be a one size fits all, but the powers allowing the supervisor to be able to request the meeting—this needs to happen very fast. We are all aware that dirty money moves very quickly through our systems and can leave the country very quickly, as well. Allowing these powers allows the supervisor to be able to, hopefully, stop money leaving the country, especially if it’s been taken out of people’s bank accounts. How they work within that will depend on the actual scenario that they’re facing and what information has or has not been garnered.

ARENA WILLIAMS (Labour—Manurewa) (09:35): Thank you, Madam Chair. Useful contributions about the search powers that start here, from clause 21 through, and there are a few questions about this. The Minister is right to point to the work of the select committee on this. Getting this right will be really important to the longevity of the scheme.

One of the difficulties in this is that the codes do the bulk of the work, so you’ve got search powers that are associated with codes. Any contravention of the code—anything that, later, unelected people can decide is in contravention of the Act—then gives rise to requirements powers. They’re not summons powers, but they’re requiring someone to come to a meeting and then to be searched. That is something that we should legislate for. Every party in the House agrees that we need a very robust regime, but we should do it in full cognisance of what we are creating here, which is a regime where codes give rise to search and to seizure. That is why we are particularly interested in this and why a good going-over with the Minister is called for.

On clause 21(8), the new (3A) inserted after section 132(3), I want to understand what the extent of the access to records and documents mentioned there is. Firstly, any person can be required to hand over documents, but does that mean any person who is reasonably connected to those documents? To whom does this apply in, say, a banking situation where you have some staff who are professionally engaged in compliance with anti - money-laundering? They are one category—obviously they are included. Then you have one category of staff who are engaged in client-facing work where they collect records. They are probably included. Then there are staff who are not engaged in either compliance or client-facing work. They are probably not included. What is the scope of who can be requested to requisition documents?

My next question is around the regulation-making powers. I just want the Minister simply to answer: can the regulations also prescribe a punishment? The regulations can set out very, very broad categories of things—we’ve gone over that with the Minister; it’s her section 64. There is no punishment for not coming to a meeting and there is no punishment for not making available these documents in a timely fashion in the primary legislation, but the codes do allow for the setting of rules in relation to the rest of the Act.

That’s important, because they’re not specifically set out in the primary legislation as something we anticipate the codes to do, but the general, catch-all nature of the codes means that you can anticipate what might happen if this did become a problem in future. You can imagine, if it became market practice not to come when required to come to a meeting, or if it’s just something that slipped, as in the situation the Minister has outlined where money is moving fast and time is off the essence, the requirement sort of lagging in market for two or three days when we’re actually talking about minutes and hours. Would it be the case that the regulator, the Department of Internal Affairs, could establish in the code either hard punishments, related to not coming along to these meetings or answering the phone, or soft punishments that were more associated with a higher administrative burden for other, positive access to the scheme that is required for licensees?

Hon NICOLE McKEE (Associate Minister of Justice) (09:39): Thank you, Madam Chair. In answer to the member’s first question, require any person reasonably suspected—that is any person. That is any person at all that the supervisor feels may have some knowledge of transactions or what’s occurring. The reason why it’s any person is that you might have a business, and you might have an outside business—such as a law firm or an accountant or someone else who may hold information—and not even realise that there is crime occurring. We need to be able to access any person.

The ability to compel a meeting is common and it has similar regulators—for example, the Financial Markets Authority in section 25 of the Financial Markets Authority Act 2011; also, the Commerce Commission at section 98(1)(c) of the Commerce Act 1986 has it that the supervisor must inform any person questioned under the new power of their right not to answer as well. Of course, we put in those other pieces around it, allowing a lawyer and a person to be able to end a meeting.

The member asked whether or not punishment could be put in the regulations. The answer to that is no. Punishment will not be put into guidance either. It’s an expectation; it’s guidance. It’s guidance telling industry how they can operate within the law, how they can cut some red tape, mitigate risk, and what risk it is it they’re able to mitigate. It’s not coming in over the top and saying, “And if you don’t do this, you shall be punished.” That will be set out somewhere else and, of course, the punishment can be anywhere. The punishment could also be under the Crimes Act, and New Zealand Police may enforce that. That’s why it’s difficult for me to answer absolute specifics, because we have a wide variety of avenues for the supervisor to go down, including the newly acquired censure that they will be able to issue. Instead of going straight to police, they’ll be able to work their way through and give knowledge to the industry as well.

REUBEN DAVIDSON (Labour—Christchurch East) (09:41): Thank you, Madam Chair. Moving through into clause 23, inserting new section 133A, there’s a heading here: “Power to enter dwellinghouses”. This one really is interesting to me because it says that “supervisor must not enter a dwellinghouse to conduct an on-site inspection except”—and it goes on to explain the circumstances in which that would be possible: with the consent of the occupier or with the granting of a warrant. That’s not the part that I’m really questioning; the part that I’m questioning is around the use of this term “dwellinghouse”, and that’s for a number of reasons. I’m not a lawyer, but, to me, “dwellinghouse” would suggest you’re talking about a place of residence. If we look at conventional and established business practice, then we could rightly argue that people work in offices and live in houses. I’ve lived in all sorts of different houses; I’ve never called any of them a “dwellinghouse”. I’ve also at times worked from home. So I’ve often been based at home doing any number of different roles or jobs, at which point you could have argued that there was as much resource material and information in my possession in my “dwellinghouse”, if that’s what we decided to call it, as there would have been in my office. At times, there’s, in fact, been more information available about what I’m doing and what I’m working on in my home than there has been in what would conventionally have been called my office or my workspace.

Now, the other thing that this doesn’t account for is that in a world—and in a country—where we have a huge number and massively high proportion of small and medium enterprises, businesses, and start-ups, there will be a number of people who live and work in the same space, either because they’re working from home or because, in some cases, they may buy or rent a facility that provides a space to work downstairs and a space to live upstairs, or vice versa—it doesn’t matter which floor they live and work on, but that can be a cohabitated space. So is that a dwellinghouse or is that an office or is that a factory or is that a plant?

The other thing is that in a world where we increasingly can carry around in our pocket access to and as much information as you could potentially need to mount an investigation, you could also argue that, at times, someone’s car or someone’s backpack has as much information and as much access to the kind of information you would want to be investigating or prosecuting as a potential breach of this Act.

The Minister has spoken about the speed at which this happens, and I don’t think any of us are in any doubt about the need for speed—to use that terrible slogan—but in instances like this, the need to be able to move quickly. Now, dwellinghouse to me doesn’t say futureproofed legislation; it feels to me like a very clunky old-fashioned term, which risks excluding a number of locations, sites, and opportunities to be able to access and find the information that could be key to being that the handbrake—to use another word often used in this House—on that speedy process of transacting.

The concern for me would be that the term “dwellinghouse” doesn’t sufficiently capture the number of places and spaces that information may be readily available and could be the missing piece in the puzzle. So, really, the question is: why the choice of the term “dwellinghouse”; whether the Minister gave any consideration or whether there were any other recommendations for better terminology or language; and whether you could argue that a car could be a dwellinghouse if you are potentially living in your car or working out of your car. As one of my colleagues has pointed out, there are a number of working people living in cars in New Zealand at this point in history, so would that be counted as a dwellinghouse? Would their car and the contents of their car be excluded under this legislation? By what I’m reading, you could argue that it is. So, really, the definition and whether there’s any consideration to how many environments this definition excludes from the reach of the supervisor.

Hon NICOLE McKEE (Associate Minister of Justice) (09:46): Thank you, Madam Chair. Dwellinghouses are known throughout several pieces of legislation, so we use “dwellinghouse” because it’s already used and it’s therefore consistency. But it would only be used after other approaches have been tried—for example, if a request to produce documents is then denied, there would be the ability to go into the dwellinghouse. It would not be reasonable if the same information was available at a non-residential location. There has to be reasonableness about entering into a dwellinghouse.

All other locations except marae are already included. The dwellinghouse previously had been excluded and it shouldn’t have been. So this makes it clear that the only exception now is actually a marae. That’s the only exceptional place. I do note, once again, that the Economic Development, Science and Innovation Committee actually looked into this, queried about whether or not they needed to make it more robust, and decided that they were happy with where it landed and there was no need to change it.

Dr LAWRENCE XU-NAN (Green) (09:47): Thank you, Madam Chair. I want to move on to the next section, which is clause 26. I think this particular part is quite a meaty chunk of the legislation and this is to do with the national strategy and work programme. I want to check with the Minister first that with the new system, the Minister in the chair is the Minister in charge of anti – money-laundering and countering the financing of terrorism (AML/CFT), but the ministry in charge is the Department of Internal Affairs (DIA).

What I couldn’t see in the definition of Minister and ministry of AML/CFT is what happens when the Minister, for example, is not the Minister of the DIA. How would that work in terms of—are you the Minister that’s referred to in clause 26, new section 149A, “(1) The Minister must adopt a national strategy AML/CFT”, and how would you then interact with DIA if the Minister relevant to the AML/CFT is not the Minister of the DIA? So that’s my first question.

The second question is in—I’ll stick to this one because I have questions later on around the levies, which is also a big part of this bill, but for the time being, my second question is in new section 149C, inserted by clause 26. It talks about “Duty to review national strategy after Financial Action Task Force evaluation”. We’ve spoken about this briefly and then, in the regulatory impact statement, there is the idea that the next mutual evaluation is in 2028. Would I then assume that the review is after that particular period—so after 2028?

Hon NICOLE McKEE (Associate Minister of Justice) (09:49): Thank you, Madam Chair. Thanks to the member for his first question for the morning. Yes, the Minister in charge will be the Minister in charge of AML/CFT and that currently sits under the Ministry of Justice. Those that are doing the operational work will sit under DIA. They are the group. It’s just the same as when there were three supervisors—the Financial Markets Authority, Reserve Bank, and the Department of Internal Affairs—it still sat under a Minister who was involved in justice, because we are talking about dirty money here; we are just utilising a different agency to enforce the law.

With the mutual evaluation, yes, and the reason why we’re going to review it is because, once we’ve had that mutual evaluation, there may be considerations that we have to make changes, so we want to have a look at what the evaluation will tell us—that we’re on the right pathway or that we could improve it by doing something else. That’s why we will have an evaluation of the strategy and how it’s working, based upon the mutual evaluation that the Financial Action Task Force gives us. That begins—2027-28 is when we will have that evaluation. Once we’ve received it, that’s when we will start to look at the strategy and say, “Have we nailed it?”, “Have we met our international obligations?”, “Is there anything we need to change?”

Dr LAWRENCE XU-NAN (Green) (09:50): Thank you, Madam Chair. Thank you, Minister, for that response. Can I just check, because one of the things the Minister mentioned yesterday is the fourth piece of legislation that’s coming—before the mutual evaluation 2028, but it’s coming, possibly, next year. Will there be sufficient time for the strategy to be implemented and embedded and then the mutual evaluation?

Hon NICOLE McKEE (Associate Minister of Justice) (09:51): I’m advised that, yes, there will be, as long as we don’t muck around and actually get these passed—any time really soon would help the country with their mutual evaluation.

TOM RUTHERFORD (National—Bay of Plenty) (09:51): I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): I think there are still some areas of this bill that can be explored.

Dan Rosewarne: Madam Chair.

CHAIRPERSON (Maureen Pugh): Sorry—brain fade.

Hon Members: Dan Rosewarne.

CHAIRPERSON (Maureen Pugh): Dan Rosewarne—sorry. My apologies to the member.

DAN ROSEWARNE (Labour) (09:51): Thank you, Madam Chair. It’s my first question in the Chamber since being sworn in again, and it’s definitely interesting not being worried about closure motions but actually going through this bill. I want to thank the Minister for her detailed questions and rounding out the understanding of the bill.

Now, clause 26 prompted my interest, especially with the Green contribution over there, so I have a similar line of questioning. Introducing sections 149A to 149D, essentially, creates a new strategic backbone for the anti - money-laundering and countering the financing of terrorism (AML/CFT) regime. It’s a national strategy adopted by the Minister, followed by a regulatory work programme issued by the ministry. This is significant overdue reform. For too long, AML/CFT settings have evolved in a piecemeal fashion, often driven by external evaluations or operational pressures rather than a coherent domestic strategy.

A published national strategy provides clarity of direction and prioritisation of risks, which is good for holding agencies to account. The requirement to consult affected persons before adopting the strategy and issuing the work programme is particularly important, in my view. It acknowledges that the AML/CFT obligations have real economic and social impacts and that effective compliance depends on early engagement. However, the success of this framework will depend on substance, not form, and a strategy that is aspirational but vague will not provide any meaningful guidance. Likewise, a work programme that lists activities without timelines, ownership, or cost implications will not deliver that transparency.

There’s also an important constitutional dimension. While the national strategy may direct agencies, it must not undermine the statutory independence, particularly of the Commissioner of Police, as explicitly recognised in section 149A(4). In my mind, the committee should therefore view these provisions as accountability mechanisms. If done well, that will anchor the supervisors’ expanded powers in a publicly visible plan that Parliament, reporting entities, and the public can actually scrutinise.

My questions are around what level of detail the Government expects the national strategy to contain, regarding priorities and sequencing, and how progress against the regulatory work programme will be reported to Parliament beyond the summary publication requirement. Thank you, Madam Chair.

Hon NICOLE McKEE (Associate Minister of Justice) (09:54): Welcome back to the member, and thank you for your first question back in the Chamber. The national strategy is done in such a way that, because we are levying industry, we want them to be a part of the solution. We’re basically saying, “We’re going to levy you, but what do you need to make it work well for you?” These new sections—149A, D, E, F—are all setting out the fact that we need to have a national strategy that is agreed to by industry in order to move forward.

Section 49D requires the Ministry of Justice to issue a regulatory work programme in order to implement the strategy. New section 49E requires the Ministry of Justice to report annually on their work programme and the levy and to set key elements of each annual report. I will again go back to the select committee and thank them for the work they did here. They actually wanted to have a clause within the bill that details where the money is being spent and how it’s being spent, so that there is accountability.

New section 49F requires the ministry to review the levy funding three years after the levy regulations are made or significantly amended so we can see whether or not we’ve landed in the right spot, that the contributions from different industries are the right amounts, and, more importantly, that we’re able to, together, combat organised crime.

REUBEN DAVIDSON (Labour—Christchurch East) (09:56): Thank you, Madam Chair. Continuing to move through the bill, and thanking the Minister for that last answer, which was great—it got us to where we are now, which is clause 26, inserting new section 149B. This is around the publication of a national strategy.

Now, really, I’m looking at this in the context of the Minister’s earlier answer around the need to cut red tape, and that’s a term we hear a lot from certain parts of the House. The concern I have with that statement, in the context of section 149B, is that it talks about adopting a national strategy under section 149A, and then it talks about amendments or replacements to the strategy and what the Minister is compelled to do.

Paragraph (a) talks about presenting a copy of the strategy of the House—that’s pretty straightforward; notifying the adoption, amendments, or replacement in the Gazette—once again, that makes the information available; and publishing the strategy on the internet site maintained by or on behalf of the ministry. All of these talk to making that information available for people to find. That’s good. People do need to be able to find what the national strategy is. But what it doesn’t speak to and what it seemingly omits—and so my question to the Minister is whether this is the case—is that there doesn’t appear to be a consultative process there.

If your objective is to cut red tape, surely those who would understand the frustrations, or the supposed frustrations, with the red tape best are those affected parties who the red tape gets in the way of. Without spelling out in law that those communities need to be consulted with, the risk is that, with the best of intentions, the red tape may remain; may, in fact, get worse; might get better. There’s really no formal consultative process with community or stakeholders that I can see spelt out in this bill that ensures that, whilst the strategy is able to be published, is able to be shared, is able to be widely discoverable, it necessarily reflects—or, certainly, no one is compelled to ensure that it reflects—the needs, the wants, the requests of the sectors that the strategy is actually for.

The question to the Minister is: if that is not part of the process in section 149B, is it hidden somewhere else in the bill that I’ve missed? There’s a very good chance that it is. If it’s not hidden somewhere else in the bill, is she concerned that there isn’t a facility within this bill for industry and operators to inform a strategy that is the national strategy for them? If that’s the case, is there a risk that, actually, the best of intentions to facilitate and make easier the administrative and compliance process for organisations and entities could, in fact, be more difficult by way of a national strategy that doesn’t reflect the hopes, desires, dreams, requests, demands of the sector?

What facility is there for community and stakeholder engagement in the shaping of the strategy; and, I guess, also, out of interest, what requests, and via what mechanisms, have asks for change come to the Minister so far? I imagine it would be interesting to know if it’s feedback from industry that is compelled this change, then, what is the ongoing mechanism to capture the feedback from industry about: (1) whether the change is working, and (2) whether the change needs to change more in the future to be more reflective of creating a safe but de - red-taped environment for those organisations and entities to operate.

Hon NICOLE McKEE (Associate Minister of Justice) (10:00): Thank you, Madam Chair. I can assure the member that the consultation groups involved in the national strategy have been very wide, very broad. This has been ongoing for a while. We don’t usually put in legislation who exactly it is that you’re going to be consulting with. I’ve never seen that in legislation—where it’s actually detailed. And if it was, I would not want it detailed on there because we have, like I have mentioned many times, emerging technologies, emerging groups. So you want to be able to capture everybody who could be involved and need to have a say.

I’m really proud of the way that the Ministry of Justice have conducted their engagement on the national strategy plan. They have finished their consultation with industry; they, now, are preparing what they think a national strategy will look like. Of course, this has been worked with industry in order to remove that red tape and, by goodness, we’re certainly going to do it. And it’s going to relieve a whole lot of red tape for so many New Zealanders out there who don’t even realise that they’ve been caught up in the anti - money-laundering system. And, at the same time, strengthening those agencies to be able to conduct business and open it up a bit better for them. So they are involved—well and truly involved. I would like to just give my appreciation to those industries, the banks, the real estate agents, the lawyers, the accountants—all those that have been involved in what will, ultimately, be New Zealand’s best anti - money-laundering strategy that we’ve had since we’ve been in this regime.

TODD STEPHENSON (Whip—ACT) (10:02): I move, That debate on this question now close.

CHAIRPERSON (Maureen Pugh): I think we are getting towards the end of this debate, but I will take some further questions, as we move forward, from Lawrence Xu-Nan.

Dr LAWRENCE XU-NAN (Green) (10:02): Thank you, Madam Chair. I did indicate to you, Madam Chair, before, that I want to move on to the levy sections. I’m looking at clause 30, “New sections 155A to 155D inserted”.

Now, I just want to check with you, Minister—this is the first time I’m actually seeing a new acronym: CRIS; I have not seen a “cost recovery impact statement” before. I want to check a couple of things with you. Noting in 155A(3)(a), (b), and (c), it talks about “a portion of the costs incurred by the Ministry” and “a portion of any additional costs” and “the full costs of collecting the levy money.”, which I understand. Can I just check if that is consistent with what we’re seeing on page 5 of the CRIS, which is the recommendations for a partial cost recovery for the regulatory system rather than full cost recovery, citing that a lot of this is part of public good, which should be factored into a budget line for an agency. I want to check with the Minister if there’s any work that’s being done on—I know that will fluctuate—but has there been any work done on what would be considered recoverable where that portion would be considered recoverable from a private sector levy and will be considered as a baseline for the agencies itself?

Now, Minister, you mentioned before that there’s also going to be a different, sort of, tiered system. I think, yesterday, you mentioned that banks that have the highest risks, will, potentially, incur the greatest levy. Can I just check if that is to be interpreted under new section 155A(6)(a), which, for example, is “the regulations may specify class or classes of reporting entities that are required to pay a levy.” I wanted to check if that is also consistent with what we’re seeing on page 10 of the CRIS, on high-level cost recovery models, which talks about individual levy amounts will be set by revenue risk band. Is that something that is, although not stated explicitly—those words—in the legislation, is it still the intention of the regulation that, potentially, is proposed on those individual levy amounts based on revenue risk band rather than fixed percentage?

Last one. This is just purely, purely, out of interest. It’s new section 155D, which says the Minister must consult the persons in 155D(1), but in 155D(2) it says, “A failure to comply with this section does not affect the validity of the regulations.” I’ve seen that particular phrase come up a couple of times in other legislation around the making of regulations, but I want to check, Minister, from a drafting perspective: what would be the difference of having (1) say “Minister must consult” and if it failed to consult it doesn’t invalidate the regulations; then, if (1) just says the “Minister may consult”, and leave it up to the Minister’s discretion on whether consultation will happen or not? I don’t know if it’s simply semantics or drafting preference, but I thought that was an interesting observation. Thank you.

Hon NICOLE McKEE (Associate Minister of Justice) (10:06): Thank you, Mr Chair. In speaking to clause 30, new sections 155A to D—the setting of the levy and what’s recoverable. Yes, in answer to the member’s question 155A(6)(a), “the regulations may specify the class or classes of reporting entities that are required to pay a levy:”, that is where you’re quite right. It’s to set out exactly what industry will be paying; what percentage of the levy. What is well-known, I think across the Chamber, was, in the past, the three supervisors were unable, they didn’t have the resource to be able to really capture or interrogate where dirty money was flowing—the anti - money-laundering system. What’s become very clear, in consultation, is that industry have told us, effectively, that they are very keen to pay a levy if it reduces red tape on people; it stops them having to do the same things. But they also said to us: “Could you, please, ensure that you fund the Financial Investigation Unit, because having them and the ability for them to prosecute, will also make life easier for industry.

How this is going to look? I’m still waiting on that advice—who’s paying what? What amount? How is it going to work? What amounts are going to what cost recovery? What’s very important, though, is that the cost recovery is reasonable, that it’s not excessive, and it is on the part of the public good. I think what’s very important for the member to understand is that the agencies or the levy is not paying for the entire system. Government’s contribution is still there. Government will still be paying for the amounts that are for the public good as well. So it’s not that we’re taking everything from industry and expecting them to pay—Government will continue to pay their fair share.

ARENA WILLIAMS (Labour—Manurewa) (10:08): Thank you, Mr Chair. Great to be discussing the levy, which I said was the guts of this bill. Congratulations to the Minister for bringing in these new powers for levying the industry to pay for a service which is really valuable to them.

I want to ask her about new section 156E. I appreciate that she is in the process of consulting on who pays and who doesn’t, but this is a very broad power about when she has decided who pays and who doesn’t, then the chief executive being able to exempt people who would otherwise be caught by her net. I want to bring the Minister to that section, particularly because it is useful for the committee to understand how broad that power is. In this Act, there are no provisions in the primary legislation that govern the chief executive, in terms of either a purpose or value statement, about why the chief executive would make an exemption or a class of transactions as an exemption. So this is not only who pays but what kind of transactions are within the anti - money-laundering net is also being provided for as an exemption power here. That’s a really broad power because you would usually either have a class of persons who were operators within a system or you would have a class of types of activities, and those are usually, you know, the types of activities that you would prohibit in criminal sanctions, is the way that we draw the net there. But, in this case, you’ve got both kinds of powers for the chief executive to cut out of the system at a later date. That seems really broad. Is the intended design here that the chief executive—is this merely futureproofing? If it was just futureproofing, then that’s really useful for us to understand, because if the operating environment doesn’t change too much in five years, then you might say, well, we wouldn’t expect lots of uses of these exemption powers, particularly the class exemption powers. But if they’re not about futureproofing—if they are, say, because you would anticipate larger entities behaving in different ways to smaller entities or more kinds of political pressure being exerted on a given industry, say, like real estate and more political attention being provided for real estate—is that the intention of the class exemptions?

That would be different because, you know, it’s up to any given Government of any given day to look at a particular industry and say, “We think there is a real risk here and a systemic risk to our national reputation, and so we want to focus on this.”—but you wouldn’t usually do that via a class exemption. We’ve had some useful debate in this House about how you would set that national strategy to do some of that, sort of, values-based decision making, not via this mechanism, which is the exemptions powers. So if the Minister could give some attention to that, that would be very helpful.

I also want to ask her about new section 156G, inserted by clause 32. This also relates to the exemption powers, but it’s making notices around, then, parts of transactions. I want to ask again about what the status of those notices is. Are they secondary legislation? Are they part of the code? What are they and what is their enforceability? I have some more questions about the rule-making powers further for the levy, but will stop there for now.

Hon NICOLE McKEE (Associate Minister of Justice) (10:12): The ability to issue an exemption has always been there within the law. The reality is that without guidance on how these entities are to operate, a lot of exemptions haven’t actually been issued. However, since I’ve been in the chair as the Minister in charge of anti – money-laundering and countering financing of terrorism (AML/CFT), we have now started to issue some exemptions.

To give the member an example, just off the top of my head—a class exemption that was given recently was to the insurance industry, for example. It’s unlikely that you’re going to see dirty money laundered in trying to pay for the car insurance or the house insurance, so they had asked for an exemption for certain parts or certain activities that they have. This is just allowing the status quo, which is to allow an exemption, either as a class or, perhaps, for a single business, but that requirement must be met by ensuring that there are certain qualifications that are met within the application that would allow an exemption to take place. If they don’t meet those requirements, they will not be eligible for an exemption.

CARL BATES (National—Whanganui) (10:13): I move, That debate on this question now close.

CHAIRPERSON (Greg O'Connor): The member has suggested she’s got some more questions. I would suggest she put them all into this.

ARENA WILLIAMS (Labour—Manurewa) (10:13): One contribution? All right, Mr Chair. I’ll prioritise the question I had about the matters which relate to rules. Are the matters that relate to the rules, Minister, that you’ve set out at your new section 156H, inserted by clause 32, then intended to apply to the exemption notices? You have helpfully given us that it’s not just about futureproofing; it is about our values judgments and based on risk. Say, at any given time, the insurance industry is not in the gun. We accept that; that makes sense.

So are, then, the powers that set out the values judgments that you’d make—and I’ll bring your attention to new section 156H(e) at the top of page 23, which is unfair advantages for reporting entities and disadvantages to others; those are the sorts of value judgments that are made, which are in the primary legislation, for the setting of your codes and your national strategy. Do they relate to the exemption notices? Because the exemption notices look to me like they don’t have any sort of values-based propositions for how you would grant an exemption, and yet you have access here to a set of values judgments for the codes, which are helpful.

I also want to ask you about the transitional provisions. The movement from the three regulators to one regulator would always have encountered some administrative difficulty—not only in terms of staff but also of data. Can we just focus on the use of the data and processes for gathering information? Is it the case, in these transitional provisions, that all of the data held by the Financial Markets Authority and the Reserve Bank of New Zealand move over to the Department of Internal Affairs (DIA) and don’t trigger any oversight from—that would otherwise trigger provisions from in the Privacy Act or the Policing Act? Does information that the Police hold in the Financial Intelligence Unit also get shared in this way at transition, and is it necessary for the data held by DIA in its former capacity as regulator for a part of the anti – money-laundering system to also transition its data?

The reason I ask is because all of that probably gives rise to obligations under other Acts. Does this transitional provision for data exempt any other provisions arising, or is it the case that there is still potential liability arising at that point of transition?

Hon NICOLE McKEE (Associate Minister of Justice) (10:16): The member points out, I think, paragraph (e) and paragraph (h) in new section 156H, inserted by clause 32, which is processes for making rules and notices. While there’s some about exemptions, it’s actually all about making rules and notices within that particular section.

When it comes to data sharing, I mean, there is already data sharing that occurs. As I’ve mentioned earlier, members from the Financial Markets Authority and the Reserve Bank are on the Department of Internal Affairs team, so not only will there be information but there’s a lot of knowledge up in these heads that will still be contributing to a really robust anti – money-laundering and countering financing of terrorism system that’s going to cut red tape and make it easier for Kiwis to operate.

STUART SMITH (Senior Whip—National) (10:16): I move, That debate on this question now close.

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

Ayes 68

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

Noes 55

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

Motion agreed to.

CHAIRPERSON (Greg O'Connor): The question is that the Minister’s amendments to Part 1 set out on Amendment Paper 573 be agreed to.

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

Ayes 68

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

Noes 55

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

Amendments agreed to.

Part 1 as amended agreed to.

Committee of the whole House

Part 2 Consequential amendments to other enactments

CHAIRPERSON (Greg O'Connor): Members, we come now to Part 2, the debate on “Consequential amendments to other enactments”, clause 36. The question is that Part 2 stand part.

ARENA WILLIAMS (Labour—Manurewa) (10:19): Apologies, Mr Chair. Just a quick question on the Associate Minister of Justice’s new clause 10: are there any technical redundancies that would have arisen, but for this provision? The Minister has been very helpful at outlining the value of the information in people’s heads, but also the skills and expertise involved in this work. This is a niche field of practice globally, and it is hard to recruit to New Zealand for these globally important skills. Are there people who will have lost their roles given the move to the Department of Internal Affairs and a single regulator, or is it the case that all of the expertise has been soaked up into DIA and that new team will operate, just within a different part of the Public Service?

Hon NICOLE McKEE (Associate Minister of Justice) (10:20): Schedule 1, inserting new Part 3 into Schedule 1 of the Act, clause 9 transfers both employees and information as is specified. This particular Schedule 1, new Part 3, also extends provisions under the Public Service Act 2020 to affected employees at the Reserve Bank and the Financial Markets. The provisions are no less and no more generous than provisions that would apply to transfers between two public sector agencies.

ARENA WILLIAMS (Labour—Manurewa) (10:20): Thank you, I appreciate the Minister’s answer. At clauses 12 and 13, is the effect of those provisions to save all of the exemptions and class exemptions that exist? Is notices under the Financial Market Authority’s practice guidance-making powers—do they all carry over, given that they now no longer have a role in the administration of the anti – money-laundering countering financing of terrorism system?

Hon NICOLE McKEE (Associate Minister of Justice) (10:21): I hope this one answers that question. Revoked powers cannot be used to update and reissue regulations, only end them. These provisions will allow time for the development of new rules and notices to replace the regulations, while removing the ability to make new regulations with revoked powers. I’m hoping that I’ve answered the member’s question in that respect.

Hon Dr DEBORAH RUSSELL (Labour) (10:21): I just want to carry on with the concerns about employees. My colleague Arena Williams asked a question about clause 10, the technical redundancy, and the Minister answered with clause 9 but I nevertheless think that particular question is answered. I just wanted to direct the Minister’s attention to clause 11 of Schedule 1, where the employment of the transferred employee is to be treated as continuous employment under any Act. I’m just wondering about how that’s going to work with what we know have been significant concerns around holiday pay and the calculation of holiday pay. I just want to know if the Minister received any advice about whether the particular entities that have all been merged have got backlogs of issues with holiday pay—which we know exist in many entities—and to what extent that was taken into consideration as to how those backlogs of calculations around holiday pay were to be treated, given that they’re all in one entity now, which might have different sets of rules.

There’s a whole lot of sets of complications there. Did the Minister receive any advice on that? Are there any particular special arrangements having to be made to ensure that employees are not worse off because of back pay, holiday pay calculations that might have differed between the various agencies?

Hon NICOLE McKEE (Associate Minister of Justice) (10:23): I think I answered that specifically just in the last answer that I gave, which is the extension of provisions under the Public Service Act, and provisions are no less or no more generous.

ARENA WILLIAMS (Labour—Manurewa) (10:23): I understand that my colleague will come back to that question. I’ll just ask the Minister quickly, while I’m on my feet: her new section 13; I think I’ve understood her correctly in that all of the class exemptions remain in place under that provision. What is the situation when the national action plan comes into effect? Does the national action plan supersede exemptions or notices made by the Financial Markets Authority, given that they will no longer have a supervisory role under the anti – money-laundering and countering financing of terrorism net.

Hon NICOLE McKEE (Associate Minister of Justice) (10:24): This is a transitional section or schedule, so it’s effectively—what we have in place now for rules stay in place until they are amended. The national strategy plan is what we will move to as we go forward, and anything that comes out of that—the guidance—will supersede anything that was there before.

Hon Dr DEBORAH RUSSELL (Labour) (10:24): With respect, Minister, you haven’t answered my question. I agree around the no more, no less. But I asked if you’d received any advice on that, particularly with respect to holiday pay because it is a vexed issue.

Hon NICOLE McKEE (Associate Minister of Justice) (10:25): When you’re looking at these different organisations, I’m not responsible for them. In regard to how they do their pay, that would go to their Minister because it would probably, I expect, come out of their budget lines. I am looking, in this piece of legislation, to how we can remove the red tape for New Zealanders and make it work for them; how we can get agencies such as our banks, our real estate agents, and our lawyers to be able to operate.

The conditions around who’s being paid what if there’s a redundancy, if there’s not a redundancy: my understanding is that the majority of these people have moved into this particular area. I also understand—and I hope this helps to answer the member’s question—that those who have been taken off anti – money-laundering are now into other areas within their departments, so there’s no need for a redundancy. They’ve just been moved elsewhere. My understanding is that the transitional provisions are really just moving from the three into the single, but details around redundancy I’m not aware of because, as far as I know, no one has been made redundant as a result of this.

Hon Dr DEBORAH RUSSELL (Labour) (10:26): My question was about holiday pay entitlements and the vexed issues around holiday pay. The Minister has answered around redundancy. So I still want to know if the Minister received any advice relating to whether or not, in particular around holiday pay for the employees who were transferred.

TODD STEPHENSON (Whip—ACT) (10:26): I move, That debate on this question now close.

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

Ayes 68

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

Noes 55

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

Part 2 agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

Schedule 3 agreed to.

Committee of the whole House

Clauses 1 to 3

CHAIRPERSON (Greg O'Connor): Members, we come now to our final debate, clauses 1, 2, and 3, the debate on “Title”, “Commencement”, and “Principal Act”.

TODD STEPHENSON (Whip—ACT) (10:28): I move, That debate on this question now close.

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 agreed to.

Bill to be reported with amendment.

Regulatory Systems (Transport) Amendment Bill

Committee of the whole House

Part 1 Amendments to Government Roading Powers Act 1989

CHAIRPERSON (Greg O'Connor): Members, we come now to the Regulatory Systems (Transport) Amendment Bill. We start with Part 1, which is the debate on clauses 3 to 5, “Amendments to Government Roading Powers Act 1989.” The question is that Part 1 stand part.

TANGI UTIKERE (Labour—Palmerston North) (10:29): Kia orana. Good morning, Mr Chair. It’s a pleasure to ask the Minister in the chair some questions on this bill. It has seven parts, and the way in which the Labour Party will be approaching this is for each of the parts, which is actually quite discrete, because as a regulatory systems bill—an omnibus bill—this does come to the Parliament from time to time, and so it’s quite discretely managed in that particular sense.

This particular part is seeking to amend the Government Roading Powers Act 1989, and there are just a couple of changes. One of them is a new power that provides for the agency—in this respect, that is the New Zealand Transport Agency Waka Kotahi—to undertake the closure of some of the State highway networks. Now, while I say “State highway networks”, it’s very clear in this bill that it relates to a State highway. I guess there is a possibility there that if it was perhaps at a junction where two State highways meet—which is not uncommon in this country—there would still be the provision to close, but that would relate to the singular highway, so there would need to be two forms of approaches there. That’s the first question for the Minister—just some clarity around that. At an intersection where safety is deemed as an issue, the intersection relates to when it’s just one State highway and then, perhaps, a local road that comes in on that, the authority to close the State highway would obviously exist—the local controlling authority would have responsibility over the local roading network and could take what steps it wishes to around that. But just some clarity in that space, I think, would be really, really helpful.

I think it’s also worth hearing from the Minister around what specific circumstances he believes would justify the use of this power. What I think no one would argue with is that when there are real and pressing safety needs, the powers exist for the agencies, whoever they might be, to take steps to ensure that things are safe for everyone—for other road users, for those who are, perhaps, responding to an incident.

Where new section 61AA(3), inserted by clause 4, comes in, which is around the requirement for the agency to basically form a notification process, it says that that notification must go through to “the New Zealand Police, Fire and Emergency New Zealand, and relevant ambulance services as soon as practicable of any action taken …”—the action to close. Do we infer from that, Minister, that when it comes to safety, it relates to an issue that involves the police, Fire and Emergency New Zealand, or ambulance services? Is it perhaps not the case that, for example, if there was some environmental impact that caused the requirement for a road to be closed, there should be a requirement to notify beyond those three statutory components there, or not?

I guess the other question is whether it’s expected that the notification—I get that it says that it needs to happen as soon as practicable, of any action taken, but what drives that practicality? Obviously, people do—and agencies do—need to be given the tools to be able to make these decisions and these calls pretty promptly and pretty quickly. Certainly, you wouldn’t want to see circumstances where they’re trying to work through a phone tree before certain things need to happen. But does the Minister have some thoughts around what his expectations are as to when that notification period should kick in?

Hon JAMES MEAGER (Associate Minister of Transport) (10:34): Thank you, Mr Chair. I just think in terms of “as soon as practicable”—that will be context specific, depending on the emergency that is occurring or the safety steps that need to be taken. You’d have to judge it on a case by case basis—and there’s a long, I guess, statutory history of what “practicable” may or may not mean—but I would imagine it would be as soon as the New Zealand Transport Agency are able to contact the relevant emergency service. It might be all three emergency services. You might be contacting, in the normal course of events, others beyond that, but I think the situation is that you can’t give an answer now. It would be context specific and I would trust the agency to use its judgment on the case.

TANGI UTIKERE (Labour—Palmerston North) (10:35): Thank you, Mr Chair. I thank the Minister for his response around that. When we’re looking at that new subsection (1) around the actions that the agency may take, there are three particular actions that the agency may undertake. Firstly, they may “stop” traffic on a State highway—that’s fine. The second action is “divert”. The third is “otherwise control”. I’m just interested in—what is the “otherwise control”? You either stop, you divert, or you allow to go—maybe that is what the “otherwise control” component is about. I’d like some clarity around that.

The other question I have is around safeguards. Closing a stretch of New Zealand State highway, whether it’s State Highway 1, State Highway 2, or State Highway 3—let’s stick with State Highway 1, the main highway that runs from north to south in this country. Being able to ensure that there is a swift movement of people, freight, and other things along that—it is really important that it is able to be productive. Certainly, what we do hear is that when the agency is required to undertake some works or what have you, it’s not a big chunk of State Highway 1 that gets effectively shut down for an extended period of time, although there are occasions where there are things that happen—weather events, more often—where there is a requirement for parts of the State highway network to be shut down.

But what safeguards exist to ensure that the power to close—which is quite a significant power; this is not a circumstance where the police are looking to manage the movement of traffic through, perhaps, say, an emergency circumstance where there may have been a crash or something similar. This is for the State highway to be closed for a period of time, and that causes significant inconvenience to many people. If we all reflect on holiday periods when the State highway network is extremely busy, where there is some obstacle or barrier to swift movement along the network, that does cause some frustration, but these things need to be safe. In circumstances where alternative routes are required to be taken, that does add significant time. It adds significant costs at the moment, as this country is facing a fuel crisis, as well. These are the sorts of things that need to be considered.

So what safeguards are in place to ensure that the closure of parts of the State highway network is not done without having sufficient oversight? There is a requirement for the agency to notify those three statutory roles there, but there is nothing in here that identifies what that particular threshold is. Yes, it is to do with closing a State highway and for it to be for the protection and safety of the public—and that could create a whole range of different options, within that particular formula—but how can there be some confidence that this is not going to be a power that is utilised freely for reasons other than what is absolutely essential when it comes to safety considerations?

Hon JAMES MEAGER (Associate Minister of Transport) (10:38): Thank you, Mr Chair. I’ll run over—not run over; that’s not a good term. I’ll run through a few of the questions from Tangi Utikere. Just in terms of the question about some examples of when the power might be used, some of the examples I have been provided would include, I think, things the member has referred to: potential risk of landslide, avalanche, bushfires, or other severe weather events or disasters. The power here, essentially, for the New Zealand Transport Agency (NZTA) is analogous to that power which exists with road-controlling authorities that have their own networks. The NZTA doesn’t have the equivalent power at the moment, so we’re providing them with that.

In terms of the question around what happens at the intersection of two State highways—I think the question was around State highways and local roads. There will already be pre-existing agreements between local councils and NZTA on the agreed maintenance boundaries between those councils, so I would just encourage and assume they would be working together on that.

There was a question about what “otherwise control” traffic would mean. Of course, you’ve got—I’m heading back to first-year law here—“stop, divert, or otherwise control traffic”.

If you wanted to maybe reduce the speed with which traffic goes through a certain area, rather than stop traffic completely, or divert traffic to a completely different road, there’s an argument that if you didn’t provide the ability to otherwise control, in theory, some clever cookie could argue that you’re not allowed to reduce the speed of traffic going through that road at that time to be able to, maybe, manage a partial blockage of the road where you’re cleaning that up. That would be where “otherwise control” comes into that.

Finally, what guardrails or safeguards exist for, say, the closure of State Highway 1? Without giving away my address, I live on State Highway 1, so I’m very interested in the limited closure of State Highway 1, whether that’s where I live or around the country. I would just point to the existing safeguards that are provided both in this amendment and the Land Transport Act generally, which is that the New Zealand Transport Agency can only exercise the power if it considers it appropriate to do so for the protection and safety of the public. Once that consideration of whether or not the public needs to be protected and kept safe is made, that power would presumably no longer become available. I’ll get some advice, but possibly there is a longer-term ability to close or control State highways that isn’t immediately available in times of emergency.

CELIA WADE-BROWN (Green) (10:41): Thank you, Mr Chair. I’ve got a couple of questions in Part 1, and they’re about the notification of closure. I was just wondering whether it would be useful for the territorial local authority also to be included in that list?

The other one—and maybe I’m not clear on this—but whose responsibility, if any, is it to update the navigation system many people use, which is Google Maps? Will it just get updated because it finds that people are not going that way, or could one be more proactive, especially if it’s a planned closure, and actually update Google Maps? I know that they do accept information from the general public, but my understanding is that there are faster ways to update Google Maps by a trusted authority. If you change the entrance to a rural property to somewhere different, you can update that yourself, and they will eventually correct it, but I think there must be a more effective mechanism for local authorities. I just think that this hasn’t quite got into this portion of the 21^st century yet. I do have a further question on restrictions on use of motorways, but that’s separate.

Hon JAMES MEAGER (Associate Minister of Transport) (10:42): I think there’s an open question as to whether or not you would legislate the requirement to update particular mapping technologies—Google, Apple, whichever map you use. From memory and from experience, it happens quite quickly already. I’d have to probably dig quite deeply into what the processes are that both territorial authorities and the New Zealand Transport Agency (NZTA) follow in terms of updating and providing warnings online. I know NZTA provides rode closure warnings on its website. I’d have to check the technical details of how those flow through into mapping systems. It’s probably beyond the scope of primary legislation to direct, because, of course, you could then get into the situation of legislating that something happens when it is already happening and just putting yet another burden on NZTA at a time when they’re trying to deal with the issue there and then, which could be a landslide or something similar.

In terms of notifying territorial authorities—again, it’s a reasonable question to raise. This section essentially limits it to the emergency services in order to allow them knowledge of where they can and can’t get to. If they are having to respond to an emergency themselves, knowing that a road is closed and that they will have to take a different route is very important to them. Providing that requirement to notify as soon as practicable is important. Of course, under the normal operating procedures of NZTA and road-controlling authorities, they would be communicating around road closures anyway. So I don’t know if we need to put that in the statute, but it’s certainly a valid point to raise.

CELIA WADE-BROWN (Green) (10:44): Thank you, and thank you for your responses there. I do look forward to finding out a little bit more about whose responsibility it is. If you think about those ambulance services, I don’t know, but I would imagine they’re using the same mapping systems that everybody else is to see where there are blockages or slow-downs or things like that. I’m sure that would be worth having a look at.

The next clause, clause 5, which amends section 82, talks about pedestrians on “infrastructure that is designed for pedestrian use; and located on the motorway”. I just wanted a little bit more information to check that “pedestrian” includes somebody using a mobility scooter or a wheelchair. Often, pedestrians and cyclists are often lumped together in infrastructure. Does this mean infrastructure that is designed for pedestrian-only use, or does it include shared use? And when it says, “located on the motorway”, does that mean the roading corridor, does that mean an overbridge, or whatever? I would really like to know a little bit more about that, because pedestrians are not advocated for as often as they should be in the transport system.

Hon JAMES MEAGER (Associate Minister of Transport) (10:46): Just to go back to a question before from Tangi Utikere around long-term closures: under the Transport (Vehicular Traffic Road Closure) Regulations 1965, agencies can undertake road closures under that regulation, but they have to give 42 days’ notice to the public. These powers allow the road closure to take place before utilising those existing powers for, maybe, longer-term road closures to fix a substantial issue with a road. There is pre-existing ability to undertake road closure, just not at short notice.

Hon Dr DEBORAH RUSSELL (Labour) (10:46): Not having been on the Transport and Infrastructure Committee, I haven’t had an opportunity to examine this bill. Some thoughts have occurred to me on it now, in this committee of the Whole House stage. We’ve all become, alas, too familiar with road closures in recent years, particularly due to the impact of weather events and so on. It has made me think of a particular incident that occurred before children—BC—so it was a long time ago. I recall my husband and I getting stopped on State Highway 1, and it was actually to do with, I think, a firearms incident. It wasn’t a New Zealand Transport Agency (NZTA) closure; it was clearly a police matter or something like that. It was quite legitimate, being stopped; there was no problem with it. We could see the reason for it—the public safety reason.

What I wanted to ask the Minister, because I don’t know and don’t understand that, is to what extent the powers that are available here now, through this bill, to NZTA, are analogous to the powers that are available to the police to close a State highway and analogous to, I presume, the fire service, in some circumstances, and so on. To what extent do those agencies have the reciprocal duty here to notify NZTA and so on? I’m just looking to see that we’ve got sort of analogous powers sitting here, because, obviously, a little bit of consistency in the law is a good thing.

Hon JAMES MEAGER (Associate Minister of Transport) (10:48): I think one of the issues that we’re trying to solve here is that, as I understand it, the New Zealand Transport Agency (NZTA) has previously relied on powers under the Policing Act to stop or control roads. There are, I think, some clear issues with that; that it’s not necessarily a policing issue that may be needed to control a road. In times of emergency or to fix a slip, the appropriate power would lie with NZTA.

I’m not sure what the reciprocal responsibilities are on the police to notify other authorities. I can probably get some advice on whether or not there are reciprocal duties. The idea of all of this is to try to align it as much as possible.

Just to Celia Wade-Brown’s point on closure notices: I’m advised that closures are published through the New Zealand Transport Agency’s official systems, which are then consumed by third-party platforms via intermediaries. The member’s nodding and understands that, so she’s a step ahead of me. What I understand is that it basically happens all automatically. They suck the information out of one bucket and put it into another so we can all read it on our devices to make sure we get the quickest way home.

Dr TRACEY McLELLAN (Labour) (10:49): Thank you, Mr Chair, and thank you, Minister, for those answers. It’s one of those subject matters that you think, maybe, there’s not much in it or that it doesn’t necessarily have lots of nuance, but when you start asking questions and then hearing answers from the Minister, all sorts of other scenarios spring up.

I just had a couple of very quick questions, and that is, given what you’ve said so far and how that works both in the context of the analogous kind of powers that the New Zealand Transport Agency would now have in relation to other organisations and the types of scenarios or contexts in which that could be used—so if we think of regions where they’re absolutely reliant on that single transport corridor, how will impacts on freight and other emergency access be assessed properly before exercising this power, unless it was an absolute rigid, you know, emergency situation?

Then, Minister, if significant decisions are being made under urgency, which I should imagine they would be if it was to be an emergency situation, is there any requirement for any kind of post-decision review or any subsequent public reporting on the closures that were made? Is that part of the thinking? That would certainly help flesh out that picture a bit more fully. Thank you.

Hon JAMES MEAGER (Associate Minister of Transport) (10:51): I’ll just touch on the question from Celia Wade-Brown just around that offer around advocacy for pedestrians, particularly wheelchair users. I guess the purpose of this clause is to fix an issue where pedestrians currently aren’t allowed to use pedestrian infrastructure within roading corridors. So pedestrian could include an individual wheeling a bicycle, but generally if you are on a bicycle, you are entitled to use the roading infrastructure as it is so they wouldn’t be counted as a pedestrian.

TANGI UTIKERE (Labour—Palmerston North) (10:51): Thank you. I thank the Minister for his responses, and my colleague Dr McLellan’s right, those responses lead to more questions. Very interesting indeed.

Can I just ask the Minister about the agency’s requirement to notify the New Zealand Police, Fire and Emergency New Zealand, and the relevant ambulatory services. When we talk about notification, there are often requirements that need to be taken. Whilst I understand them—and I thank the Minister for explaining “as soon as practicable of any action taken under subsection (1)”; I understand that—what is the actual sort of notification process? Is it that there’s a formalised process where this needs to be in writing? Is it just that there is a conversation—you know, you happen to be talking to a New Zealand Police officer who might be heading down towards the closure of the road and letting them know that’s how it is? I mean, how is this information captured?

Because when it comes to agencies and notification, there is a whole sort of array of different opportunities that might exist there, but not only that, this also goes to the point that Dr McLellan has asked around the reporting mechanism, if there is one at all. For example, if it’s determined that Fire and Emergency New Zealand is the appropriate agency that needs to be notified under this particular clause, is there a requirement for the agency to explain why it is that the stretch of State highway network has been closed, and for what period of time?

There’s nothing in the bill that indicates the requirements around notification. Is it just that the agency simply has to let one of those three parties, or agencies, know and that’s it? Is there an expectation that they need to—for example, if the agency contacts New Zealand Police and tells them on the Tuesday morning that this stretch of State highway is closed, are they expected to indicate that it’s going to be closed for three days, 10 days, two weeks, whatever? Is there a requirement for them to notify the same agency, statutory agency, once the closure is no longer actually in place and the State highway network is fully operational again? Or is it just as it would appear that all the New Zealand Transport Agency need to do is just let one of those agencies know that “Yep, we’ve closed the State highway” but there’s nothing further?

So just a bit of clarity; there surely must be some expectation about the nature of communication, and I get that you don’t want to perhaps be as prescriptive in primary legislation around all the steps that need to be taken, but what can the community expect in circumstances where either New Zealand Police, Fire and Emergency New Zealand, or the relevant ambulance services have been informed or notified that there is a closure under this clause? What would that look like?

Hon JAMES MEAGER (Associate Minister of Transport) (10:54): I think the member’s last sentence probably captures it. I think it would be difficult to prescribe in too much detail the exact requirements for notification, particularly in a situation where you’re looking at an emergency to protect safety and people and there is need for flexibility. There are, you know, existing processes for the New Zealand Transport Agency (NZTA) to communicate and notify other agencies about things that are happening, and I would trust and encourage them to continue those processes.

I’ll just note for the member and for the public that the requirement under clause 4(3) is to notify the New Zealand Police, Fire and Emergency, and the relevant ambulance services. So you’d generate an expectation that all of those services would be notified upon a road closure. Just for the avoidance of doubt there.

I’ll try to keep the answers shorter and succinct because I’m wary of creating too much extra work for Mr Utikere at this time of the morning, but he did follow up on his colleague’s question around post-decision reviews. We were getting into a back and forth about judicial review. You know, if people are concerned about decisions made, there is the ultimate review of judicial review. But the Government and NZTA, through its own internal business processes, can choose to review internal decision making from time to time as part of their normal business practice. I would put it in their hands as an operational matter that they would be the best place to determine whether or not they need to undertake reviews of significant decisions based on the context and the impact of those decisions at the time.

MIKE DAVIDSON (Green) (10:56): Thank you. I’ve just got some questions in relation to the answers you had for clause 5 on the section 82 amendment. I guess it’s in relation—because the answers that the Minister was giving were in regards to cycles, which I think is covered, from memory, around section 84 of the Government Roading Powers Act, where basically they’re excluded from motorways unless it’s allowed, which has to be, obviously, stated. This is actually around pedestrians, and I guess the question’s more around wheelchair users, which, in my understanding, are defined as pedestrians. But then it goes further—I think we need to know about people on roller skates, skateboards, scooters, and e-scooters, which aren’t defined as pedestrians, they are defined as vehicles, and whether they would be excluded from those pedestrian infrastructures, which I think is quite important when we see the amount of people that are now on e-scooters, whether they are actually allowed to go on to pedestrian infrastructure when they’re defined as vehicles, not pedestrians.

So while there was an answer around cycles, there was no actual answer around wheelchair users, which my understanding is that they are pedestrians, but then also people on roller skates, skateboards, e-scooters, and scooters, and all those are actually defined as vehicles. So I’m just wondering: what is the ruling on that, and, actually, will they be restricted from infrastructure that is designed for pedestrians and therefore completely excluded from that motorway corridor?

Hon JAMES MEAGER (Associate Minister of Transport) (10:58): I think we could go down a rabbit hole of finding every kind of box that has wheels that you could get around on in public, but for the avoidance of doubt, a wheelchair user is a pedestrian and would be entitled to use pedestrian infrastructure. Good news for the member, there are changes coming for the usage of things like bicycles for young children and e-scooters—to be able to use them on footpaths. So my advice would be any infrastructure which is designed for pedestrian use, albeit a footpath, or an overbridge, or even a cycle way along a busy road that might be a dual use, you know, along the Ashburton Bridge, you’ve got a bit of a side part to the bridge on State Highway 1 where you can both walk and cycle across or walk your bicycle across if you choose to do so and take into account the beautiful vistas of Canterbury.

I’d just say, take a common-sense approach to what counts as a pedestrian and we’ll go from there.

TANGI UTIKERE (Labour—Palmerston North) (10:59): Thank you, Mr Chair. Following on from that point that the Minister has made, the pedestrian aspect, I get that, but what’s captured here in clause 5 (e)(i) is that the piece of infrastructure is “designed for pedestrian use;”. So there’s no requirement for the infrastructure to actually be utilised or used for pedestrian use, but rather just in the design phase. So is it possible that this will capture pieces of infrastructure that initially might be designed for a particular purpose and actually the operational aspect of the infrastructure is quite different from what it was designed to do?

Hon JAMES MEAGER (Associate Minister of Transport) (11:00): I think the member could just analyse the clause and determine that if a piece of infrastructure was designed for pedestrian use, it is able to be used by pedestrians when it is located on a motorway. I think the clause speaks for itself. I don’t know if there’s much more technicality needed for that. Just to close it off, there was a question earlier on about whether police have a reciprocal duty to also report or to make other agencies aware of road closure? The Policing Act enables police to temporarily close roads if they believe there will be public disorder, danger to the public, or serious offences committed. There is no legislative requirement for the police to inform other parties. However, they do regularly communicate with the New Zealand Transport Agency and other emergency services, obviously, to enable the safe and swift passage of those services.

TANGI UTIKERE (Labour—Palmerston North) (11:01): Madam Chair, my apologies. Thank you.

CHAIRPERSON (Barbara Kuriger): Keep it really short because we’re honing in now. Just quick questions.

TANGI UTIKERE: That’s fine. Actually, this is just my last question, unless the Minister gives an erudite answer that requires further analysis, but he’s indicated he’s not going to do that. When the decision is taken by the agency to close part of a State highway or part of the State highway network, there must surely be some sort of hierarchy or delegation within the agency where that decision is taken. Is it the Minister’s expectation or understanding that internal processes will dictate who within the agency can make those determinations and that there’s no issue around some mixed messages in that space?

Hon JAMES MEAGER (Associate Minister of Transport) (11:01): Yes.

Part 1 agreed to.

Committee of the whole House

Part 2 Amendments to Land Transport Act 1998

CHAIRPERSON (Barbara Kuriger): We now come to Part 2. Part 2 is the debate on clauses 6 to 60, “Amendments to Land Transport Act 1998”. The question is that Part 2 stand part.

Hon JAMES MEAGER (Associate Minister of Transport) (11:02): Thank you, Madam Chair. I’ll speak to the Amendment Paper (AP), which is before the committee now and which makes a number of changes. Some of them are quite technical and administrative. This is AP 574, which has, I think, been published online a number of days ago. It makes a number of technical changes, but it also makes some what I think are substantive changes when it comes to talking about the digital driver’s licence provisions in this bill. Essentially, what these changes will do is they will recognise existing operational practices to authorise third parties to access driver licence photographs for register maintenance and licence card production. Essentially, at the moment, in order for you to get a driver’s licence, you have to provide a photo. Normally it’s done on site. Then, in order for that photo to go physically on to a card, that photo has to be provided to the people who produce the card, obviously in order to put the photo on the card, print the card, and get the card. All is well; you’ve got your licence.

Now, in going through the digital version of this, the new amendments to the existing statute will enable that process for the digital version of this. An individual’s photograph will be able to be provided to the digital driver’s licence provider in order to be digitally stuck on to the digital card so that you then digitally have that in your digital wallet. We’re going to be saying “digital” a lot over the next hour or so. That, essentially, was made clear in the bill as introduced. Now, given that we are maintaining physical drivers’ licences, it should be made clear to the public that even if we create the framework for digital licences and we introduce digital licences, the physical licence stays in New Zealand, and every New Zealander has a right to use their physical licence. In the same way that we provide the authority for third parties to use the photograph to digitally put on the digital licence, we are also replicating that provision in the physical licence production part of the bill just to make sure that they are consistent. That’s the main change that comes through on the AP.

The second part of that is that there is a reference currently in the Act to requiring consent to provide your photograph when getting a licence. Now, the view is that that requirement for consent is not required, based on the fact that you cannot get a licence without providing the photograph. The choice is: provide a photograph to get your licence or don’t provide a photograph and choose not to have a licence. It’s, essentially, a—I can’t remember the word when it’s one choice or the other; a dichotomy, di-something, bi-something—

Tangi Utikere: Binary,

Hon JAMES MEAGER: You have a binary choice, right? Thank you, Mr Utikere. You either provide the photo and get the licence, or you don’t provide the photo and you don’t get the licence. The requirement to provide consent for a photograph in order to get your licence isn’t needed, because it’s part of the process itself, so we’re just removing that unnecessary reference to consent and ensure the scope of their authorisation is explicit and appropriate.

The other amendments in the AP that I’ll go through are changing the commencement date, when we get to the title and commencement; some savings provisions for maritime regulations to make sure they stay in force; consequential amendments to navigation by-laws; a clarification relating to seafarer employment—

Tangi Utikere: They’re in different parts.

Hon JAMES MEAGER: Yes, but I understand we’re going to be voting on the AP in this part, unless the Chair can correct me.

CHAIRPERSON (Barbara Kuriger): Yeah, we will be voting on the amendments as they relate to Part 2.

Hon JAMES MEAGER: OK. Well, I can come to those amendments as they come up in each part. Just to round it off, there is another element around seafarer employment agreements, and inserting a definition of “information system”. Apart from that, I look forward to the very concise, short debate on this part.

TANGI UTIKERE (Labour—Palmerston North) (11:06:38): Thank you, Madam Chair. Thanks to the Associate Minister of Transport for the explanation around the Amendment Paper, which I’ll come to in a moment. One of the, I think, most significant changes in this particular part does relate to the ability for an electronic driver’s licence to be on the cards. The Minister, I think, himself has identified that this is not going to mean that it happens overnight, but it provides the legal ability for an electronic driver’s licence to come into being. One of the real concerns that the Transport and Infrastructure Committee did hear about were privacy considerations and optionality. I think the Minister has sort of touched on this briefly, but I do think it’s none the less important to put the question to him, which is: what assurance can the public have that that optionality does actually exist? There are always circumstances where if you end up wanting to utilise an app for something, that choice comes with particular incentives that really do reward or benefit those that go at that particular avenue, as opposed to those that perhaps get in a line and line up and all of those sorts of things. What’s really important here is that we’re talking about a licence that permits anyone in this country to legally drive on New Zealand roads. What guarantee or assurance can he give the community at large that that optionality is going to remain but also that it’s going to be treated equally as well, I’m not talking about the privacy stuff—we’ll come to that because there are real concerns that have been expressed around that—but my first question is just around the optionality and what assurance the Minister can give that we’re not going to get 12 to 15 years down the track and suddenly the scrum is screwed in favour of digital as opposed to those that might want to continue with the physical optionality.

Hon JAMES MEAGER (Associate Minister of Transport) (11:08): Yeah, I think it’s worth raising and repeating again that there’s nothing in the bill which removes the ability or the right to have a physical driver’s licence. Those in the public who do rely on physical drivers’ licences, or other physical forms of ID actually, should be assured that they will maintain that right. I would need to think of some examples of where there would be significant impact of some sort of fast-track queue where you might use a digital licence or a digital ID compared to a physical one. I could imagine a lot of people use their drivers’ licences to prove their age or prove their identification. Actually, a driver’s licence is there to prove that you have the ability or the legal right to drive the vehicle, but it is used and widely and commonly used as an age verification tool or other identity verification tool. I don’t do much clubbing these days. I haven’t been to Palmerston North nightlife in quite a while—

Tangi Utikere: You’re missing out.

Hon JAMES MEAGER: I am missing out, but there’s plenty to do down in Timaru. Maybe we could go on exchange someday.

But if the queues were somehow quite long at the local bar or club in Palmerston North and there was a bouncer who was physically checking IDs and there was some sort of fast-track pathway where you scanned your digital ID on some sort of digital-checking machine and that released some sort of high-spec futuristic barrier to allow you into the VIP part of Tangi’s nightclub, then I think those are decisions that businesses would make, but I can’t envisage much happening in the world where there would be a significant disadvantage to those who have a physical driver’s licence or a physical form.

I think the main takeaway is that there is nothing in this legislation nor in the Government’s programme that jeopardises the ability for people to use their physical drivers’ licences. There is huge advantage to digital drivers’ licences. We spoke about this in the second reading quite a bit, for example, for those of us who are slightly more absent-minded or who do a lot of travelling and their driver’s licence either sits in their pocket or sits in their truck.

If you were to absent-mindedly leave your driver’s licence in the—I’m not going to say which part of my truck, but let’s say a secure area of my truck. If you were to need to produce it for some sort of other purpose—not for driving your truck, because obviously it’s in there—it would be helpful to have that driver’s licence digitally with you for a lot of purposes, including the ability to get a rental vehicle, including the ability to prove your ID in a Government agency or wherever it is. So there are huge amounts of benefits to having a digital driver’s licence that will come from this framework, but I think any fears around being displaced would be misfounded at this place.

CHAIRPERSON (Barbara Kuriger): Dr Tracey McLellan. I’m just going to make the comment that I’d be really grateful if members in the committee didn’t sort of take advantage of the scope that the first part of the answer to that question became, so let’s keep to—

Dr TRACEY McLELLAN (Labour) (11:11): Absolutely. My question is a genuine one in response to the Associate Minister of Transport’s very good response that he’s just delivered. It just raises the question to me, and it may be somewhere, but you talked about having a physical licence and therefore also having a digital licence. I’m assuming you can’t have both, but maybe that’s an incorrect assumption. What is there to prevent, therefore, someone using that as a form of identification or a form of ability to lease a car or whatever, and someone else fraudulently using the physical licence also?

If you’ve got any thoughts around that basic sort of area—and I can see that you’re getting some advice, but any further information on that? I think it’s part of just making sure that—because this is about public confidence, and no matter what happens, any kind of changes, particularly when we’re digitising something that, you know, well before the age of 15, people start thinking about having their driver’s licence. It’s quite a momentous and really important part of most adult lives, and so when anything changes what generations have come to expect as normal, it will raise some concerns. There will be members of the public, and rightly so, who will apply a level of scrutiny that might not necessarily apply elsewhere, so anything of that nature would be greatly appreciated to inform this process.

Hon JAMES MEAGER (Associate Minister of Transport) (11:13): There’s nothing in the bill that establishes a framework for recognising digital licences that stops you having both. All this bill does is sets up the framework to allow digital drivers’ licences, in particular, to be recognised. We have quite a unique situation—quite a weird situation, really—where we can recognise digital drivers’ licences from other jurisdictions under our existing framework but not our own. For example—and the officials can correct me if this one is wrong—I understand that we can recognise digital licences from New South Wales as being valid forms of identification or driving ability or legality, but we can’t do it for our own, so this bill establishes the framework to be able to legally do that. There will be further Government work to actually implement drivers’ licences themselves.

Then I think there would be good questions as to if you are to have a driver’s licence on a device, how many devices can you have that on? It might be that for security reasons that you’d want that only on one device that is accessible only to the person through biometrics or through some sort of security, but of course the ability for people to steal identification or to share identification with other people for nefarious reasons exists under the current situation whereby you might have a driver’s licence which is lost or stolen and you have to order a replacement licence, then all of a sudden you’ve got two versions of that same licence floating around there.

The ability to have both a physical one and a digital one doesn’t necessarily solve that, but, in theory, it should make it a heck of a lot more difficult to do, because you would need to have not only control of the physical device where the digital ID exists but also the ability to access that device. Then there could be a decision made that there is an ability to remotely wipe the identification from that device so that if it was ever stolen or hacked and made available, it could then not be used in that form.

There are a whole lot of safeguards that can be put in place in the future when actually rolling these out, but for now, the framework put in place simply recognises that we are going to move to a system where we can have digital licences, and regulations and decisions made about what that looks like and how that is done will be made at a later date.

TANGI UTIKERE (Labour—Palmerston North) (11:16): Thank you, Madam Chair, and thanks again to the Associate Minister of Transport for his answers. I think that’s actually a very good response around the ability for, potentially, a road user or a licensed driver to have both of those. It might allay some of the issues about leaving physical copies in the truck or wherever that might be.

I just want to indicate that Ponsonby Intermediate have arrived in the gallery, and a special shout-out to them. This is really important, because the folk who are observing this debate will probably be the beneficiaries of this particular piece of legislation. For their benefit, we’re talking about drivers’ licences in New Zealand and the ability for them to be electronic drivers’ licences—

Rachel Boyack: Once a teacher, always a teacher.

TANGI UTIKERE: —once a teacher, always a teacher—rather than having physical licences as the only way forward. Welcome to the Parliament.

The question that I have in relation to the Amendment Paper that the Minister has tabled or has previously circulated relates to clause 55. It’s about the ability for the agency to provide a third party with a copy of the imagery and the data that’s stored, but, actually, it’s only the image, as we understand it. Now, this is scoped out by allowing for the purpose to be the maintenance, the creation of the driver’s licence, etc., but when we start talking about a third party, we really do start to kind of open up the gates a little bit there.

My question for the Minister is: again, what safeguards are in place to allow for a third party to be considered as appropriate for managing that information? I know the Minister has previously talked about the storing of images and the like. Obviously, that is important for an electronic driver’s licence to be produced, but are we talking about just one third party or is it in the sense that there could be more than one third party utilised for that purpose?

Hon JAMES MEAGER (Associate Minister of Transport) (11:18): Well, at the risk of getting Mr Utikere into trouble for acknowledging those in the gallery, I would also like to welcome anyone who might be here who might benefit from these law changes in the future, particularly those from Ponsonby.

I’d like to say to Mr Utikere, in terms of the Amendment Paper, all this does is, essentially, codifies the existing practice. The agency already provides photographs to third parties in order to physically produce the cards. The New Zealand Transport Agency doesn’t itself have a large card-printing machine or manufacturing facility, as far as I’m aware. They outsource that to specialists who do that kind of stuff, in the same way we do with a lot of physical assets that the Government produces—you know, passports, drivers’ licences, and all these kinds of things. All the safeguards that are required for determining who should or should not be a third party are those safeguards that already exist within existing procurement policies, contracts, privacy legislation. All of the existing statutory frameworks that apply to the procurement and production of drivers’ licences will be there as well.

I should note, for any aspiring drivers who may or may not be listening today that they will notice that in the windscreen of some of the vehicles that maybe their parents drive there are little paper stickers that may be in the top corner or the bottom corner. These tell people that their vehicle has got a current registration or a current warrant of fitness—actually, no, the warrant is in that corner, and the rego or that it is up to speed with its road-user charges.

This bill also removes the requirement to physically have that little bit of paper in the corner of your window. That might sound a bit weird to have to have a little bit of paper that tells people that your car is registered and that you’ve got the right amount of road-user charges on your vehicle in a world where a lot of that stuff is available digitally. I’ll tell you what, I’ve been on the receiving end of an infringement notice for improperly displaying a bit of paper in the corner of my windscreen and being subject to a $200 fine for it—albeit, not of my own making. I will admit that some issues with the postal service to receive that physical bit of paper—

Tangi Utikere: Because you’re shutting all the postal services down.

Hon JAMES MEAGER: —potentially had cost me $200. It’s nothing to do with that, Mr Utikere. For some reason, the little bit of paper could not be delivered to my address, which sits in the middle of Timaru, but I’ll get into that with my local delivery services as to why they could or could not deliver me a tiny bit of paper to put in the corner of my truck.

In saying all of that, this is supposed to solve that problem. Agencies having access to all that information already; there shouldn’t be a need, and people shouldn’t be subject to a $200 fine for not having a teeny-tiny bit of people in the corner of their windscreen when they’ve done all the right things and got the right number of road-user charges. The agencies already have the information. In this day and age, to require an individual to put a tiny bit of paper in the corner of their vehicle and then be subject to upwards of a $200 fine and further infringements for not paying that fine, we think is outdated and not in keeping with modern practice. We’re going to remove that requirement. If you want to stick a little bit of paper in the corner of your window, feel free to do so, but after this bill passes, you’ll no longer have to do so.

TANGI UTIKERE (Labour—Palmerston North) (11:21): Thank you—yes, we support that. Optionality is important, and we’ve talked about this whole pile of stickers, potentially, on windscreens. We support that—no problem at all.

One of the issues I have signalled is around the access to private data. One of the changes—which I think is a good change, actually—relates to the ability for the holder of a driver’s licence to provide their mobile number as a way of contact and the like. I think that is a sensible way. In select committees across the board at the moment, we’re constantly talking about having to update notification processes, and it’s common practice for email addresses and mobile numbers to be utilised, so we have no problem with that.

What it does do, Minister, is it introduces into the mix an additional level of personal information that people are handing over and putting into the system. When it comes to personal mobile numbers, when it comes to email addresses, what certainty is there around ensuring that information is protected? We’ve talked about the imagery and who can access that. As we’re starting to see an increase, or will under this bill, in the number of mobile numbers and email addresses that will be utilised as an identifier or a point of contact—which I accept is a very good move—that does need to be balanced with the concerns that have been expressed to the Transport and Infrastructure Committee about privacy of information and the data that’s being captured. How is that going to be accessed, and how will it be protected from being misused or inappropriate or unauthorised access to it?

Running the risk of hearing from the Minister that the member has answered his own question: it may be that there are processes and systems in place within the agencies and that there are expectations around that. I do think it is reasonable, given that there are some concerns out there around the access to private information and the data being retained and held—new data and new information—to ask how the public can be assured that access to that information is going to be for the appropriate means and won’t be unfairly authorised or, indeed, unfairly accessed.

Hon JAMES MEAGER (Associate Minister of Transport) (11:24): Well, the member may have asked and answered his own question—but I will say that the Privacy Act provides some pretty strong protections generally for personal information. The member, I think, was in Parliament when they passed the Privacy Act 2020—I’m not too sure. Either way, the member would be aware of the strengthened provisions in the most recent version of the Privacy Act, including increased fines and, essentially, accountability for agencies that get it wrong when they misuse or mistreat personal information. There are a range of protections within the Privacy Act, and there are a range of provisions within statute that I will get some further information on.

I would add that digitising drivers’ licences will actually provide an enhanced level of privacy for people. Yep, you’re going to be providing information into a system, which is tightly controlled and tightly monitored as to who can use it, but, at the same time, you are going to be receiving a whole new range of privacy protections. For example, when you’re going to the Palmerston North nightclub, and you’re handing over your driver’s licence, your physical ID, to the bouncer, that contains a whole lot of information on that little card beyond just proving that your face matches the age on the licence. There is a whole lot of stuff on that card that you might not want the particular bouncer to know, including, I believe—I don’t know if my licence has that, but I’m pretty sure some licences have maybe the physical address for where the individual comes from. It might have their donor status; it might have the driver’s licence number itself.

If you move to a system where you’ve got a digital driver’s licence and there are trusted checking framework systems in place where you can, through trusted, verified apps—maybe Hospitality NZ might have an app or maybe there might be a general app where you can simply tag the two phones together in some sort of ID-checking process—at that point, the only information that you have transmitted to the bouncer on the door of the nightclub would be that you are of age. You are the person who is verified to have this identification, and you are of age. You’re not transmitting any other personal information (a) to that bouncer individually themselves or (b) to the institution that may hold that information.

I think that’s actually a huge improvement on protection of privacy. It means that when you’re now being asked to provide your identification for purpose A, you’re not disclosing a whole range of other information that you might not actually want people to be privy to—particularly strangers. You might not want the bouncer on the door to know. If you are someone who doesn’t want strangers to know where your address is, I think being able to provide the precise information that that establishment needs without going any further actually has some additional protections for privacy.

TANGI UTIKERE (Labour—Palmerston North) (11:27): Thank you, Minister. I won’t comment on the night life in Palmerston North. It’s been a long time since I’ve had to—

CHAIRPERSON (Barbara Kuriger): Yeah, we’ve learnt all about that, and we have guests in the gallery.

TANGI UTIKERE: That’s right. The Minister has touched on one aspect that hasn’t been referred to yet, and it is donor status. At the moment, the physical copy of the driver’s licence can indicate the fact that someone is a donor—well, it indicates the donor status by choice. We assume that that would be the same for a digital or an electronic licence. We are assuming that the timely access to that clinical information is not going to compromised by virtue of the fact that someone has an electronic or a digital driver’s licence as opposed to a physical one. The first question for the Minister will be just around that.

My other question is—and this is sort of picked up in clause 21, which introduces new section 30UA. This does relate to the immediate suspension of a licence for significant health and safety reasons. When you go to subclause 3 of that, it talks about the time upon which the suspension comes into effect. When someone has an electronic or a digital licence, the surrender of that licence is perhaps much easier to do as opposed to a physical copy, which relies on either the licence, I guess, being taken from someone at the roadside or in circumstances where they are near a law enforcement officer, or on the individual surrendering the physical copy, if that’s what’s needed, themselves.

Can the Minister just perhaps identify that there is still going to be some consistency around the suspension of a driver’s licence, and are there any loopholes if someone has an electronic or digital licence as opposed to a physical one when it comes to the ability to give effect to the suspension? It might be that—actually, no, I won’t share what my views are, because that might answer the question. I’ll let the Minister answer it.

Hon JAMES MEAGER (Associate Minister of Transport) (11:30): I mentioned before that I was going to give some examples around privacy; I will do that and I’ll address those other two questions as well. So the question before was around requiring mobile numbers for digital drivers’ licences and the certainty about information being protected. So there are requirements that the information is shared only with the appropriate security protocols in place. The previous Government passed a trusted digital framework law and there are regulations that are in place and can be made around setting conditions and requirements for providers of apps that may be information-checking apps, and different security classifications—that’s all existing at the moment. So the system is in place for a trusted digital framework and so the digital driver’s licence will work within that kind of framework to ensure that the appropriate security protocols are in place.

Data is subject to New Zealand Government Protective Security Requirements, Privacy Act safeguards, New Zealand Transport Agency (NZTA) privacy policies and guidelines, and third parties can only use data to the extent necessary to provide contracted services, and must not transfer, store, or make available NZTA data outside New Zealand without written consent. There are strict contractual obligations to secure accreditation; there are international standards around that, and also, they’re regularly audited. There are a wide range of policies, practices, and statutory provisions in place—guard rails to protect data.

Just on the donor question: it’s a really good question and we’ve struggled in our country for many, many years with our donor rates. One of the issues with donor registration is that for a long time, and it is still the case, that even if you have donor status on your driver’s licence, it is still up to your loved ones and your families whether or not they’d give permission for your organs to be shared with others who may need them. My colleague Mr MacLeod has a member’s bill to help address some of those issues around, you know, what you say you want to do with your organs on your driver’s licence should be what happens. But we know there are some ethical complications in there.

But putting all that aside, there is a wider issue of accessing that information. Where is that information stored? I don’t think the digitisation of drivers’ licences will change that too much, because whether or not you have to find the individual’s personal physical licence or whether or not you have to access their phone, often these decisions are being made at pace in short periods of time with high levels of stress and emotion around them. So, ideally, there would be a system which doesn’t rely on a physical licence or a digital licence to acknowledge that an individual is a donor and has expressed their wish to be a donor, and that the register of that information is accessible to the appropriate health professionals without them needing to, you know, rifle through someone’s handbag or find the keys to their truck or try and get into their phone to determine their donor status. So regardless of whether we digitise drivers’ licences, I think the question of access of information of donors is our wider one to be addressed through both this system but the wider reforms to organ donation.

Finally, to the question of: are there any potential loopholes in the system around surrendering licences? Well, if there were, I would probably not highlight them immediately, in public—I can’t think of any. If there were some loopholes that were brought to our attention that needed to be remedied before the end of the committee stage, we could do so. But, as far as I am aware, this sets the framework up to allow those licences to be surrendered, and the process of rolling out drivers’ licences would provide for their ability to surrender a digital licence in the same way that you could surrender a physical licence. Now, how that is practically rolled out would be up to, I guess, the agency that is actually providing the digital driver’s licence, but there are many jurisdictions overseas who have done that. I could think of some examples that you could do: it could be an automatic revocation of the licence from the system, removal of authorisation, temporary prevention of access to the particular app that holds that information—there are a whole wide range of things that are beyond this bill and would be for the implementation phase.

TANGI UTIKERE (Labour—Palmerston North) (11:34): Thank you. That final point that the Associate Minister of Transport’s touched on about revocation as an option: is it an opportunity, given that there is an increasing reliance, and this has been introduced through this bill, to have electronic email addresses, identification, or, indeed, mobile numbers for text messaging and the like, that the revocation process could be a little bit actually smoother and enhanced as a result; whereas the revocation can take place in the system and the notification to the person doesn’t necessarily rely on the mail system but, instead, could be easily sent by way of electronic means or via text message. I mean, there’s nothing in the bill around that, but would that provide some equality between having to rely on the fact that someone has to present to the police station or to the local New Zealand Automobile Association, or whatever, and physically surrender as opposed to a blanket opportunity to revoke if warranted, and then the notification is a little bit smoother rather than waiting on things to come more slowly?

Hon JAMES MEAGER (Associate Minister of Transport) (11:35): Yeah, I think that’s right. And there is an irony in having to physically surrender a driver’s licence by delivering it to someone without, necessarily, the ability to do that legally because you can no longer drive. If anything, it should make that process more straightforward and simple.

CHAIRPERSON (Barbara Kuriger): The question is that the Minister’s amendments to Part 2, set out on Amendment Paper 574, be agreed to.

Amendments agreed to.

Part 2 as amended is agreed to.

Committee of the whole House

Part 3 Amendments to Land Transport Management Act 2003

CHAIRPERSON (Barbara Kuriger): We come now to Part 3, the debate on clauses 61 to 64, “Amendments to Land Transport Management Act 2003”. The question is that Part 3 stand part.

TANGI UTIKERE (Labour—Palmerston North) (11:36): Thank you, Madam Chair. I’d like to have a look at clause 63. This is about an amendment that allows for people to be paying a toll. We will just sort of delve into this a little bit. This talks about the name, address, and the electronic address or the email address if someone does hold one, and anything that leads to the knowledge as to identification of the person in charge of the vehicle at the time. So this is basically about liability and recouping costs of a toll payment. Of course, we don’t have that in the Manawatū because of the toll-free Te Ahu a Turanga.

Rachel Boyack: Well done.

TANGI UTIKERE: Well, thank you. I’ll take that.

The issue around photo capture is important because we’ve talked about the images being captured and into the system—this is a question: are there any circumstances in which that information could be accessed for the purposes of a driver fulfilling other aspects of responsibility for being a driver? So, you know, there’s a driver’s licence that has an electronic image and it’s captured, could that be utilised in any other way, digitally, to assist with identification for other responsibilities around toll or infringements or anything like that?

Hon JAMES MEAGER (Associate Minister of Transport) (11:38): Just in terms of a general approach to privacy, you can only use personal information for the purpose of which it was collected. So assuming that the collection of the photograph in the first instance has—albeit, it could be a wide range of purposes, but a limited one—if the collection fell outside of those purposes, then it could not be used for those purposes without explicit authorisation to do so. So the answer depends on whether or not the existing collection of the information does or doesn’t allow it, but, essentially, it’s kind of similar to the back and forth we had a while back in that if the purpose of collecting the photograph is to use it for other means, then that would have to be made explicit at the time of collection; if it’s not, then it would be restricted.

TANGI UTIKERE (Labour—Palmerston North) (11:39): When I look at clause 64, this is a little bit unusual because it seeks to validate declarations that had already been made back in time. So this is seeking to, basically—it applies to a declaration that a road is a State highway, that was made on or after 1 August 2008 and before this bill sort of kicks in once Royal assent is given. So the question, really, is around the retrospective requirement for validation. Why is that necessary and what risk of legal challenges kind of prompted this this provision? The Minister has indicated that he is just seeking some advice—

CHAIRPERSON (Barbara Kuriger): That’s correct.

TANGI UTIKERE: —which I do appreciate. As part of that advice, I think what would be quite helpful is an estimate as to how many declarations the Minister believes might actually be made under this provision, because we are talking about actions that may have been taken that, by virtue of this bill being passed, it effectively validates either a declaration made at the time or retrospectively applies something to a part of the State highway network. We do see this from time to time in legislation, where there are often bespoke requirements, where things are fit for purpose and they need to be given effect to. But, in terms of passing a law that validates previous actions that have been taken—or maybe not even actions but just the mere fact that they have been established over time, and now this bill will validate them in some particular formal fashion—it is important to understand that.

If the Minister is in a position, once he has received that advice—it may be, I don’t know, that this was something that could have been prevented, or it may be that, because of the changes that have been advanced, this is a consequential change that needs to happen to give effect to the status of something after 1 August and before 2026.

Hon JAMES MEAGER (Associate Minister of Transport) (11:41): I am getting some advice. There is a bit of extra information requested in that question, so I will allow the officials to provide some information if we can. I’m aware that neither Mr Utikere nor I were around on 1 August 2008, so probably neither of us knows the background to that particular date, but we’ll try to get that information as we can. If there are no other questions in this part, with the Chair’s indulgence, I will address it if we do happen to move on to the next part.

TANGI UTIKERE (Labour—Palmerston North) (11:42): Point of order. I seek leave for us to move to Part 4, following which to return to Part 3.

CHAIRPERSON (Barbara Kuriger): Well, we can either return to Part 3 or I can allow you to discuss your particular questions around Part 3. Do you have other questions around Part 3?

TANGI UTIKERE: Actually, no, it’s just relating to the answer to that.

CHAIRPERSON (Barbara Kuriger): OK, I will allow the answer and the member a follow-up question during Part 4 if that is required.

TANGI UTIKERE (Labour—Palmerston North) (11:42): Point of order. That’s fine, but it’s just that it might relate to the vote being taken on Part 3, as to whether Labour supports or votes against.

CHAIRPERSON (Barbara Kuriger): OK—OK. The member has no more current questions on Part 3? I’ll just take a little bit of advice.

With the leave of the committee, I seek approval to move on to Part 4—just suspend Part 3 for the moment until we have the answers—and then go back to Part 3.

Hon James Meager: No, it’s too complicated.

CHAIRPERSON (Barbara Kuriger): OK. I don’t have approval for that, but I’ll go back to what I said originally: I will allow the member to traverse some of Part 3 in Part 4. I call the Hon James Meager. We may well have the answer!

Hon JAMES MEAGER (Associate Minister of Transport) (11:43): With the miraculous provision of time and a little bit of creative extension, I have received some information from my officials.

The provision in clause 64 is intended to be retrospective and to remedy a technical error to validate a matter understood and intended to be lawful, and I refer to the Legislation Design and Advisory Committee guidelines about the appropriate use of retrospectivity. It fixes an error with the definition of “road” in past amendments to the Land Transport Management Act and validates the State highways that have been declared since this error happened. The error dates to the repeal of section 60 of the Government Roading Powers Act in 2008.

TANGI UTIKERE (Labour—Palmerston North) (11:44): Thank you, Madam Chair. I thank the Associate Minister of Transport for his answer. On that basis, the Labour Party will be supporting Part 3.

CHAIRPERSON (Barbara Kuriger): The question is that the Minister’s amendments to Part 3 set out on Amendment Paper 574 be agreed to.

Amendments agreed to.

Part 3 as amended agreed to.

Committee of the whole House

Part 4 Amendments to Maritime Transport Act 1994, and New Schedule 1AA

CHAIRPERSON (Barbara Kuriger): We now come to Part 4, the debate on clauses 65 to 101, “Amendments to Maritime Transport Act 1994”, including proposed new clause 101A and new Schedule 1AA. The question is that Part 4 stand part.

TANGI UTIKERE (Labour—Palmerston North) (11:45): Kia orana, Madam Chair. It’s great to move into the maritime space now. We’re still waiting for ferries around here, but it’s still great to move into the maritime space!

The interesting thing with this particular part is that it, basically, seeks to, as I understand it, Minister, bring New Zealand into a space where we are consistent with our international obligations elsewhere around the world. I think that is a commendable place to be, and it’s a good thing we’re heading in that particular direction.

When we’re looking at the statutory duty around entering into seafarer employment agreements, can the Minister just identify what his perspective is on any issues in terms of rolling that out, to ensure that it delivers on the outcomes that the Government and others are expecting of it?

Hon JAMES MEAGER (Associate Minister of Transport) (11:46): No, I don’t see any issues with it. There is an amendment around this in Amendment Paper 574, and I just wanted to clarify the reason for that amendment.

When we look at clause 67, we’re going to be replacing “seafarer employed to work on the voyage” with the slightly more complicated definition—but it will all make sense in a second—“person on the voyage who is a seafarer within the meaning of paragraph (a)(i) of the definition of that term in section 2(1)”. Essentially, the intention of this is to capture individuals who are seafarers but who are not employed in the traditional sense and still provide them with an employment-related agreement. Those are individuals such as cadets.

I will just refer to my previous notes, just so I can get that absolutely crystal clear. The amendment clarifies that the requirement to enter into a seafarer employment agreement applies to seafarers who are engaged for hire or reward but who may not be employed under a typical contract of employment. That’s when those cadets come into play there. It just provides a little bit of extra protection for our many wonderful cadets, many of whom I had the pleasure of engaging with over the weekend at our Anzac Day services and who will also be the recipients of, I’m sure the member would agree, excellent use of taxpayer investment into seafarer training throughout our country.

TANGI UTIKERE (Labour—Palmerston North) (11:48): I thank the Associate Minister of Transport for that and certainly that clarity covering cadets and others who might actually fall in that particular category who are not covered by an employment agreement, or thereabouts. We’re certainly very happy to see that, and the protections, also, beyond that for seafarers is really important from the Labour Party’s perspective, as well.

How does the Minister anticipate that Maritime New Zealand will be able to continue to monitor and enforce the compliance around recruitment and placement in service and the provisions that will be introduced? It’s great that we’re bringing ourselves up to spec and up to international standards. New Zealand has always been seen as a leader in the maritime space, so this will continue to underscore the significance and important aspect that that brings and that it does provide.

How does he anticipate that Maritime New Zealand, who is charged in the regulatory space with delivering a lot of what this will be asking for, and that’s no easy feat, will not just monitor and oversee things but will ensure that the enforcement of these conditions, and also compliance, will follow—that they’re able to do exactly that?

Hon JAMES MEAGER (Associate Minister of Transport) (11:49): Maritime New Zealand have an incredibly strong reputation with the sector, in terms of being the regulator in this space, having recently taken on some of the WorkSafe responsibilities as well. That’s actually been really well received by the sector. I think they appreciate having an agency that deeply understands the ins and outs of seafaring and takes a proactive, education-first approach to regulation. We are a country that depends very strongly on its maritime sector and on the health and welfare of our seafarers, particularly those who base themselves in and around Timaru at PrimePort, one of the best ports in the country, albeit that we have excellent ports around New Zealand, including those on our east and west coasts. I’ve got very high confidence that Maritime New Zealand can deliver the statutory obligations that they are required to deliver.

TANGI UTIKERE (Labour—Palmerston North) (11:50): One of the changes that has been made through the select committee process is around the maximum penalties. What, obviously, is important in any legislation is that, where there are provisions that allow for deterrence or for some form of sanction, they are appropriate. The specific changes that have been outlined in this particular bill, for example, if we’re looking at clause 72A—this is around “Infringement offences relating to navigation bylaws”, which replaces “ ‘$1,000’ with ‘$3,000 for an individual or $12,000 in any other case’.” That is what we would consider an appropriate ratcheting-up of those infringement levels. New Zealand, as we know, can make its own sovereign laws in this country, but if we are looking to be a key player and to be pulling our weight as an international participant in the maritime space, my question is: how do those sorts of infringement levels compare with other parts of the world to ensure that we are consistent on the international stage?

Hon JAMES MEAGER (Associate Minister of Transport) (11:51): I think you run into difficulties sometimes where you are looking at infringement offences and penalties and drawing on comparisons to other parts of the world, because, of course, not everyone in the world operates in the same regulatory and trust environments. The penalties needed to deter poor behaviour in New Zealand might be different to the penalties needed to deter behaviour elsewhere. I think, in general, the changes that this bill makes in terms of increasing those infringement fees, both to keep up with general inflation over time and to actually send a strong message that we take our maritime by-laws seriously are good ones. I think it’s also worth noting that the committee has also recommended to clarify that body corporate infringement fees, which are actually higher to those applying to individuals, can apply to breaches of navigation by-laws. Of course, that provides the ability for those infringements and fees to be applied to companies, essentially, or organisations and not just individuals.

TANGI UTIKERE (Labour—Palmerston North) (11:52): Yeah, I thank the Associate Minister of Transport for that because I think the proportionality aspect between individuals and bodies corporate is an important distinction and an important consideration. In question to the Minister: there are a number of changes that relate to clause 81—I’m going to come back to clause 80, which is about the powers that are given over to the Director of Maritime New Zealand in a moment—but there are a range of infringements or unsavoury acts that might be taken, whether by the bodies corporate or individuals, and so the ratcheting-up of those levels as such are quite significant.

For example, let’s just pick clause 82. This is “Section 65 amended (Dangerous activity involving ships or maritime products)”. The sorts of thresholds that are going to be changed are replacing $10,000 with $50,000 and, in addition to that, replacing $100,000 with $1.5 million. These are significant changes. The Minister has talked about that difference between individuals and bodies corporate, but it would be interesting to hear from him whether he thinks that the differentials or the thresholds that have been identified there—I’m talking about clauses 81, 82, 83, 84, 85, and 86—are satisfactory. I won’t go through the actual offences unless the Minister would like me to go through that. No. He’s nodding his head, so I won’t. I don’t think the Chair wants me to either. You get the drift. It would be helpful to understand the level of comfort around there. Those are significant increases in thresholds that have been promoted there as well.

One of the interesting aspects is around trying to serve as a deterrent, and I agree with the Minister that there needs to be some caution around looking to other jurisdictions, and I accept that. I guess the issue that I’m trying to get to here is if we are serious about being an international player, because our track record certainly indicates that, in the maritime space, we have always been a world leader, and these changes that sort of align with the reforms of Maritime New Zealand certainly help with that as well. The protections that have been put in place for seafarers absolutely will help in terms of lifting how we’re seen, but how comfortable is the Minister that, despite the fact that we’re not going to delve into different jurisdictions and what they might have as their thresholds, actually these are an accurate and adequate reflection of us being taken seriously on the international stage when it comes to maritime responsibilities, considerations, and deterrents that may be utilised from time to time?

Hon JAMES MEAGER (Associate Minister of Transport) (11:55): Thank you. Very confident to highly—somewhere in that range. The penalties are set using the ministry’s effective transport financial penalties policy framework and tool. Now, that’s a framework which is intended to take a systematic approach to supporting the process for setting more consistent and fit for purpose financial penalties, which are the fees and fines imposed by a court for offences across the transport legislation. The ministry has a framework tool that’s looked at what the existing penalties were. It’s decided that they clearly weren’t significant enough to act as an adequate deterrent—and not only deterrent but a punishment for wrongdoing. We’ve got to be clear about this. The best way to avoid being culpable of paying these fines is to not undertake the dangerous behaviour in the first instance. That’s what we’re trying to address here. We don’t want to go into all the offences detail by detail, but they are generally safety related, right? They are offences against dangerous activity, unnecessary danger, and communicating false information, which affect safety. Those are all things that impact the health and wellbeing and welfare of our seafarers and also of our maritime space. I’m very confident that the ministry has looked at the existing penalties, has used its framework tool, which I’m sure would incorporate analysis of what equivalent jurisdictions use as well, and has come up with a right figure to put into the legislation to carry us forward into the future.

I would close off on that by just reiterating what, I think, the member said at the outset, which is that a lot of what we’re doing in the maritime space is to, I guess, meet some of our obligations to agreements that we’ve committed to in the past. Of course, under our system of law, the only way for us to really meet those obligations is to incorporate them in domestic statute, so that’s the process that we’re undertaking now.

TANGI UTIKERE (Labour—Palmerston North) (11:57): Thank you. I agree with the Associate Minister of Transport. We wholeheartedly support the efforts that have been taken to uphold and to signify to the rest of the world that we are serious about maritime matters, because they are important. Advancing that through domestic legislation is something that we do support.

Minister, I did sort of indicate that I was keen on looking at clause 80. This is around the powers of investigation of the Director of Maritime New Zealand. This, I think, is, on the face of it, a really sensible move to allow the director some suite of powers to investigate a few things when it comes again to safety. One of the, I guess, common themes throughout this bill is that it is about safety, whether it’s in terms of road and rail—well, we’ll get to rail; we haven’t got there yet—or in terms of maritime. One of the things that we have had a look at and that this bill does introduce is this amendment that allows for the director to go about investigating anyone that holds what’s defined as a “maritime document”. Again, it’s kind of like a driver’s licence. We sort of take from that that this is a document that permits a set of responsibilities for someone who’s qualified, and, of course, qualification is left over to the sector to determine that, but also through regulation. In a circumstance where the director has what are reasonable grounds—that is always a bit of a catch-all, although there is a fundamental baseline there—to suspect that the holder has failed to comply with any of those requirements in section 17, it basically hands over to the director a set of powers to go and do some investigation. Well, the fact that this section has been introduced does kind of give rise to the fact that this is what is needed. There is, obviously, a bit of a gap here at the moment. But is the Minister comfort—there’s no gap there?

Hon JAMES MEAGER: Some. It allows for electronic services.

TANGI UTIKERE: OK, there needs to be some clarity around that. But I guess, you know, is the Minister comfortable that the reasonable grounds threshold is the appropriate one? I know he has a legal background himself, so he’ll be very familiar with this, but in terms of putting this into primary legislation, does he have any concerns—I think it’s important to have this power—that the threshold is at the right level?

Hon JAMES MEAGER (Associate Minister of Transport) (12:00): Thank you, Mr Chair. I think the member started by referring to a clause 80. So just for the avoidance of doubt, the summons power which is in clause 80, in new 58(3), is pre-existing; this change requires service to be provided electronically. So that’s what clause 80 does. And then in reference to clause 79, which looks at amending 54A—and apologies, there were five or six different bits of legislation that I had to pull up, so I’m just looking through 54A. We’re replacing existing 54A(1)(b)(i), which has the threshold of evidence “there is belief”; so 54A(1)(b)(i) currently says: “believes that the maritime document holder has failed to comply with any conditions of a maritime document;”. The new (i) says: “has reasonable grounds to suspect that the maritime document holder has failed to comply with any of the requirements in section 17;”.

Now, my very limited legal experience and knowledge would lead me to conclude that the test for “reasonable grounds to suspect” is a lower threshold than “belief”. Belief has a slightly higher threshold because you’d have to demonstrate actual belief or the reasonable grounds to believe it exists—whatever the test behind it is; I can’t quite recall where I’m sitting in first- or second-year law at the moment. But by lowering that threshold to “has reasonable grounds to suspect” just allows the director that additional ground to more easily undertake investigations, particularly in an environment or an area where perhaps the documents being held by some mariners or maritime entities aren’t quite as readily available or consistent or up to date as what they might be in some other parts of our legal framework. So that’s what that change in 79 does.

TANGI UTIKERE (Labour—Palmerston North) (12:03): Kia orana, Mr Chair. Thanks to the Associate Minister of Transport for that. It’s an interesting analysis of the belief vis-à-vis the “reasonable grounds”. Does he think that there’s anything that’s needed in addition to that, or is it more around the ability for the director themselves to land at a particular space where they think that actually that “reasonable grounds” threshold has been met?

Hon James Meager: Sorry, repeat the last bit, I was just reading the—

TANGI UTIKERE: Sure. Is he comfortable that, I guess, as worded that’s all that’s needed? Or is there a requirement to have any additional guidance for the director in exercising their mind as to whether or not that threshold has been met?

Hon JAMES MEAGER (Associate Minister of Transport) (12:03): I think in statute that’s all that’s required. And I’m sure that Maritime New Zealand, when executing these powers, will take the appropriate internal advice or legal advice as to what the appropriate steps would be.

Dr TRACEY McLELLAN (Labour) (12:04): Thank you, Minister. Speaking of that—and clause 80, which as you said requires electronic summons—and then looking at the subsequent clauses and the changes made to them, how does that expansion of electronic service and that notification mechanism improve access to justice, I suppose, for seafarers or for operators in practice? What were the sort of considerations? I mean, I suppose it’s a twofold question. The electronic summons in and of itself raises a new set of considerations, but it wouldn’t have been done, I presume, without good reason—and that would be to make the system more efficient somehow. Can you just provide some more details about how the ability to use the electronic summons, how that would improve the system? And were there any fish-hooks, were there any considerations during this process—

Tim Costley: [Singing] Were there any fish-hooks?

Dr TRACEY McLELLAN: —that have kind of highlighted—I’m sorry, I’m distracted by what sounds to be some sort of singing. Were there any fish-hooks or any considerations? We know that the electronic notification and other justice contexts have proven not to be as simple and straightforward as they might seem on the surface. So a little bit more information would be great.

Hon JAMES MEAGER (Associate Minister of Transport) (12:05): Thank you, Mr Chair. It is, essentially, just a modernisation of the summons part of the statute in the sense that—you know, there is an argument that if you don’t explicitly allow for electronic summons, then any attempt to do so would be declared invalid and so would prevent the administration of justice, or in this case the investigation of the director. So it is, in essence, just a modernisation of the existing system, to bring it in line with other systems. The member’s right to bring up these issues; anytime we try to digitise or make something electronic, the same issues tend to pop up over and over again. But we have, I think now, quite a long history of how electronics summons, electronic service works, particularly in New Zealand; particularly in a—I was going to say a land-based context, but particularly I guess in a maritime context, perhaps the ability to do electronic summons or service would be even more important because you may need to provide that to a ship en route to, you know, between port A and port B, and physically providing that at the time may be quite difficult in order to access it. So it’s, essentially, just a modernisation process, and I haven’t had any issues drawn to my attention that would cause me any concern.

TANGI UTIKERE (Labour—Palmerston North) (12:07): Can I turn to clause 92(4). This is an interpretation amendment, and, often, interpretation clauses are very, very important; they can often be quite benign as well. But this one is seeking to ensure that what’s captured there is the various declarations made around international conventions, protocols, or agreements that New Zealand as a country may enter into. So I’m just curious to understand from the Associate Minister of Transport what—because that will already be contained. I mean, the ability for New Zealand to be recognised as a party to different things that it agrees to, through the appropriate mechanisms, will already be captured. So I’m just trying to understand: what is the Minister seeking to ensure that’s clarified as a result of that particular subclause?

Hon JAMES MEAGER (Associate Minister of Transport) (12:08): The intention of this one is to ensure that once a convention is declared by Order in Council under the Maritime Transport Act, subsequent amendments to the convention of which New Zealand is the party are automatically included without requiring further Orders in Council. So it’s basically saying that where we sign up to one of these conventions—which are quite specific, actually—the conventions must relate to protecting the marine environment from pollution and we must already be a party to the convention. If there are amendments to the convention in future, which presumably we must agree with, they will be automatically included rather than have to go back through the Cabinet process.

CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendment to Part 4 set out on Amendment Paper No. 574 be agreed to.

Amendment agreed to.

Part 4 as amended agreed to.

Committee of the whole House

Part 5 Amendments to Railways Act 2005

CHAIRPERSON (Teanau Tuiono): We now come to Part 5. Part 5 is the debate on clauses 102 to 112, “Amendments to Railways Act 2005”. The question is that Part 5 stand part.

TANGI UTIKERE (Labour—Palmerston North) (12:09): Thank you, Mr Chair. Well, the committee comes to rail. What’s been really interesting is members of the Transport and Infrastructure Committee have become acquainted with the Transport Accident Investigation Commission. What this part is seeking to do is to tidy up, and, I guess, clarify, some of those aspects around safety; a lot of the driving forces around safety and who takes care of what.

That naturally asks the question, well, how do we ensure that there’s no duplication of things being done when it comes to actions taken under this particular Act? The register of licences, all of those sorts of things—again, we’re talking about the electronic address. This is a consistent theme that the Minister has kind of indicated, and I assume that his responses will carry over into this part and into subsequent parts, as well.

When we’re talking about things like the preparation of a safety improvement plan that’s cited under clause 107, the new section (1A), those are things that the experts turn their mind to. A lot of people often think they’re experts, but, actually, this is a very discrete piece of work, and the work that those individuals do—they’re highly qualified and they have their particular focus, which is important.

My first question to the Minister is, what safeguards or protections are in place to ensure that there is no duplication of things? I mean, if we’re looking, in a parallel, at an NZTA context, all of that investigatory power generally happens under the New Zealand Police. Yes, there are subsets under that, but they’re still under the New Zealand Police.

In terms of railway incidents or accidents that might be investigated or thereabouts, there is the provision for appointment of inspectors under new section 72X. How is the Government ensuring that there is no duplication of services, particularly when there are multiple agencies who might be involved in a particular incident? If we think about a rail incident, that might involve coastal elements; that could, foreseeably, involve Maritime New Zealand. If we have parts of the State highway network that are involved because it’s near a bridge—I don’t know; these sorts of things—how is there an ability to avoid duplication?

Hon JAMES MEAGER (Associate Minister of Transport) (12:12): With the avoidance of giving some intrepid law professor inspiration to create some sort of nightmare-fact scenario where a train crosses a bridge and collides with a boat, causing an oil spill, which causes a heavy vehicle to slide across the road, and then you’ve all of a sudden got a confluence of agencies investigating a number of accidents—I think the core issue is probably well put.

We have a number of different agencies that investigate and inspect a number of different parts of our transport system. When it comes to the Transport Accident Investigation Commission, their role in this process is not a fault-finding role. It is a role to investigate what happened, to investigate what went wrong, and to investigate what could be improved in the system. The Transport Accident Investigation Commission—or TAIC, as I’ll refer to them—take an overall, kind of, stewardship role in putting aside the finding of fault and looking at exactly what happened and what could be improved to stop that happening again. Actually, I’d encourage any member who’s interested in this area to go and look at TAIC’s reports that they do on accidents; they’re incredibly well written, and they’re incredibly straightforward. They are—dare I say it—in plain English, and they do a really good job of highlighting exactly what went wrong.

There are also other agencies whose role it is to investigate accidents and to perhaps find fault, and to perhaps look at whether or not further enforcement action needs to take place. There is always going to be a sense of crossover in those spaces, because some of those agencies will be asking for the same kinds of information from the same kinds of people. In the case of TAIC, there is some incredibly good work being undertaken with the use of artificial intelligence to help streamline that process. Whether that is looking through decades of precious reports to find similar fact scenarios and to provide some insight into the outcomes for those, it’s helping to produce reports that are obviously always finalised by a human eye. Some of the work that TAIC’s doing in that space is to really rapidly reduce the amount of time it takes to undertake an investigation and to do a report, which gives them capacity and scope to do more investigations and more reports.

What that leads me to is the question the member raised: what guarantees can we give that there won’t be duplication in these processes? Well, the best we can do is try to define clearly what the roles of each of those agencies are and, when there is overlap in the information-gathering process, perhaps encourage them to work together as much as possible to reduce the impact on, sometimes, an individual who is the victim of an accident or involved in an accident having to be interviewed by three different agencies. Being able to use that information and share that information across agencies would be a good thing to do.

In this case, the member referred specifically to clause 107, the rail investigation powers. I’ll just clarify, for the avoidance of doubt, that in this particular clause, the change required is that you are already able to provide a safety improvement plan. This is just clarifying that issuing an improvement notice under clause 110, which is a new section, won’t prevent the ability to provide or to require a participant to prepare a safety improvement plan. The suite of changes here is to essentially give rail investigation the same kinds of powers that we have in land transport in order to issue non-disturbance orders, to preserve a scene, and to provide information. It’s just so that when we are undertaking investigations into rail incidents—which, sadly, there are far too many of in our country—we can do so with assurances that we’re going to have the best available fact situation to determine a result.

TANGI UTIKERE (Labour—Palmerston North) (12:16): Thank you, Mr Chair, and I thank the Minister. That scenario he painted of rail, car, ferry, bridge—well, there’s no possibility of that happening, because this is a Government that cancelled the rail-enabled ferries. That’s not a predicament. Nicola Willis wanted to send that by text!

Anyhow, I do agree with the Minister on one thing, and that is the Transport Accident Investigation Commission. They do some fantastic work, and one of the things that the Minister will be aware of is, in the Transport and Infrastructure Committee’s report back to the House on another matter—and this just touches on this—there is some concern about what happens with the recommendations that they actually do present. At the moment, they kind of get laid on the table and there’s no momentum behind it. So I’m pleased to hear the Minister indicate the value of that commission, and we certainly agree that there needs to be some weight around that so that when they’re doing things like this—investigations that they will undertake under this particular bill—the possibility of future repeats is lessened as a result of something actually happening with the reports.

I want to ask the Minister about these new powers—because they are new powers around entry and opportunity to inspect and all of those sorts of things. There are homes that are marae all around the country. How can there be some certainty or guarantee that homes and marae—you balance that with the rights and opportunities to get the information that’s needed. We come across this from time to time, where the search and surveillance requirements—and I note that this is a bill that does actually amend parts of the Search and Surveillance Act 2012, as well. How are those new powers balanced against the private property rights of homes or, indeed, communal rights of marae? Because, freakishly, if we have a look at the number of incidents that happen around the country, they are very close to those sorts of places and locales. How are these new powers, which are important, balanced against the rights of folk going about their daily business?

Hon JAMES MEAGER (Associate Minister of Transport) (12:18): Yeah, this is new section 72D of new Part 2A, inserted by clause 110. I know the Transport and Infrastructure Committee made some recommendations for changes to make it crystal clear that the powers to enter vehicles, buildings, or places only apply to those owned by rail personnel or used in rail activities, and to limit the scope of the power. For the avoidance of doubt, those powers are to be used only for the purpose of carrying out an investigation of a rail accident or incident.

Built into the statute are some guardrails and some limits as to the kinds of premises that can be searched under the statute. There are also the wider protections provided in the New Zealand Bill of Rights Act in terms of, when you interpret those provisions, you’re supposed to interpret them in a rights-consistent way. Regardless of what people think about how the New Zealand Bill of Rights Act should or shouldn’t be applied, the protection against unreasonable search and surveillance is contained within that piece of legislation, as well, which would also apply here.

In terms of specific application to places like marae or communally owned or inhabited properties, you’d have to, again, take it on a case by case basis and apply the powers that are available under the law to those places. The underlying fact remains that the powers are serious powers, and they are to be used to investigate very serious rail accidents with the idea of finding fault or culpability and preventing these things from happening in the first instance, or ever again, and, also, providing accountability for those who may have caused those accidents. So there is an important purpose and reason for doing this. Those powers won’t be used lightly and can’t be used lightly under the statute, with the wider protections of search and surveillance, and also, even further than that, you’ve got general common law protections around privacy and around unreasonable search, as well.

I think that those three things combined should give the member assurance that they’re only to be used in specific circumstances. A wider commentary on whether or not they generally protect places like marae and other communally inhabited places would have to be looked at, depending on the fact scenario.

Dr TRACEY McLELLAN (Labour) (12:20): Thank you, Mr Chair, and thank you, Minister Meager. I have a couple of quick questions that may at the offset sound like they’re not connected, but they’re certainly connected in my mind, so hear me out. When the Minister was providing that answer, it kind of struck me to ask whether this applies only to the network that’s owned by KiwiRail. I was thinking about the smaller operators when we were talking earlier about the increasing penalties. Normally when that happens, there’s an overview to make sure that the compliance burdens are proportionate to smaller operators, and in listening to the Minister just provide that answer, I suddenly thought that perhaps I’m barking up the wrong tree in terms of assuming that there are smaller operators. I know that there’s certainly Mainland Rail and a couple of things in the South Island, but that points me to the wider question: does this only apply to the network as owned by KiwiRail?

But, more importantly, my question before I was distracted by that thought was this. With the additional exercise of these enhanced powers, so to speak, what sort of training and oversight mechanisms does the Minister envision or has the Minister had discussions about that will apply to enable inspectors to be able to do that enhanced work more—well, to be able to do that enhanced work, full stop. But will they be able to do so with the degree of skills and the level of expertise that will make the difference between having a piece of legislation on paper and having the implementation of it actually work—so any information around that or the advice that the Minister has received in that direction.

In that vein also, whilst we talk about these changes as being sort of modernisation, technical changes, or a chance through an omnibus bill to improve a system, what sort of evidence shows that they will actually improve safety outcomes? That’s the gist of all of these changes in this part, more so than just simply adding an additional layer of process.

Thank you. That was one weird question at the beginning that may have just been in my mind, and a specific question about those extra skills and whatever kind of resourcing or training needs to go into making that possible.

Hon JAMES MEAGER (Associate Minister of Transport) (12:23): To address the weird question, no, it’s not just KiwiRail. It’s all rail participants and rail personnel, and so you may have those small spurs that do go into a bit of private land, which would be subject to these investigation powers.

I’ll just touch on the final point around private premises and marae that was raised before. I’ll point members to section 72H, I think it was, or is it actually—

CHAIRPERSON (Teanau Tuiono): The power of entry?

Hon JAMES MEAGER: Yeah, it’s the power of entry. I’ll find the clause as I am rifling through my notes, but, essentially, you will only be able to go into private premises or marae with the consent of the owner or a warrant. It’s new section 72E in clause 110. You actually will need the consent or a warrant to do so, and so it’s not just the application of these search and surveillance powers, but you’ll actually have to get a warrant if you don’t have consent to enter.

Then, in and around the question around training and oversight, the Transport Agency already undertake these investigations for land transport purposes, for roading network purposes. There are training systems in place for their investigators, and it would just be an extension of that to, I guess, some members of the same team or maybe a particular team to investigate for rail, as well. There may be some situations about rail that would make it—you know, you might have some specific different types of training, but the equivalent powers exist in other areas, and so it would just be an extension of that programme. In terms of analysis on whether or not this will improve safety, I understand there’s some analysis in the regulatory impact statement, if the member is interested.

TANGI UTIKERE (Labour—Palmerston North) (12:25): Thank you, Mr Chair, and thanks to the Associate Minister of Transport for that. Obviously, the warrant powers are important because that means that there is a rationalisation process that the issuing officer needs to turn their mind to before determining that there is justification to enter private property—homes, marae, and the like.

Just one more question from me on this at the moment, which is in relation to new section 72F in clause 110. This is notice of entry, and this is about a circumstance where the inspector seeks to enter the place, the vehicle, or the building, and does so; needs to make some effort to locate the person who’s in charge and is unable to do so; and, as a result of that, he or she is then required to leave some information behind. Now, there seems to be a very base level of information, which is the identity of the inspector, the electronic address or email for the inspector, the date and time of entry, and the reasons for entering. There’s an additional one there to the electronic address, which is “and any other contact information the inspector wishes to provide;”. I see that that is optional. It could be a telephone number, I guess, or it could be whatever, but is it that the email address is sufficient, and the additional context is there so that the inspector could think about what is warranted and what is not, given the circumstances of the entry?

DAVID MacLEOD (National—New Plymouth) (12:27): Point of order, Mr Chairperson. I seek leave for the committee to pause its consideration of this bill, move on to consider the Ngāti Hei Claims Settlement Bill, and then resume consideration of the Regulatory Systems (Transport) Amendment Bill once it has concluded its consideration of the Ngāti Hei Claims Settlement Bill.

CHAIRPERSON (Teanau Tuiono): Is there any objection to that motion? Leave is granted.

Debate interrupted.

Ngāti Hei Claims Settlement Bill

Committee of the whole House

Part 1 Preliminary matters, historical account, acknowledgements and apology, and settlement of historical claims

CHAIRPERSON (Teanau Tuiono) (12:28): Members, we now turn to the Ngāti Hei Claims Settlement Bill. We begin with the debate on Part 1. This is the debate on clauses 3 to 21, “Preliminary matters, historical account, acknowledgements and apology, and settlement of historical claims”. The question is that Part 1 stand part.

The question is that the Minister’s amendments to Part 1 set out on Amendment Paper 577 be agreed to.

Amendments agreed to.

Part 1 as amended agreed to.

Committee of the whole House

Part 2 Cultural redress, and Schedules 1 to 3

CHAIRPERSON (Teanau Tuiono) (12:29): Members, we now come to Part 2. This is the debate on clauses 22 to 136—“Cultural redress”—and Schedules 1 to 3. The question is that Part 2 stand part.

The question is that the Minister’s amendments to Part 2 set out on Amendment Paper 577 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

Committee of the whole House

Part 3 Commercial redress

CHAIRPERSON (Teanau Tuiono) (12:29): Members, we now come to Part 3. Part 3 is the debate on clauses 137 to 160, “Commercial redress”. The question is that Part 3 stand part.

The question is that the Minister’s amendments to Part 3 set out on Amendment Paper 577 be agreed to.

Amendments agreed to.

Part 3 as amended agreed to.

Committee of the whole House

Part 4 Amendments to other legislation, and Schedules

CHAIRPERSON (Teanau Tuiono) (12:30): Members, we now come to Part 4. This is the debate on clauses 161 to 163, the amendments to other legislation. The question is that Part 4 stand part.

The question is that the Minister’s amendment to Part 4, set out on Amendment Paper 577, be agreed to.

Amendment agreed to.

Part 4 as amended agreed to.

CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendment to Schedule 1, set out on Amendment Paper 577, be agreed to.

Amendment agreed to.

Schedule 1 as amended agreed to.

Schedule 2 agreed to.

Schedule 3 agreed to.

Committee of the whole House

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.

ARENA WILLIAMS (Labour—Manurewa) (12:31): Thank you, Mr Chair. A very brief call on the title of this bill, this being the only opportunity we have to give a general call and to ask the Minister more generally about the policy of this bill. The people who are watching may be confused about why we can move so fast on a bill like this, but it is a reason to celebrate and a reason to commemorate every passage of every Treaty bill. This one is significant. Ngāti Hei are part of the overlapping and collective settlements that exist within their rohe, but they are their own significant part of it, with interests extending around the Coromandel area and Hot Water Beach.

I’d just invite the Minister to reflect on the significance of this bill and the importance of what we have just been through, which is a committee of the whole House stage moving quickly because everyone in the House agrees with it. I will not get an opportunity to take a call at the third reading, and so can I also congratulate those people who have worked tirelessly to come to not only those collective settlements for the rohe in the Marutūāhu claims settlement, but also for this iwi in its own right to stand on its own two feet and to have a settlement which will be significant, not only to the generations now who get to witness the passage of this bill but for all of their uri in the future. It is an important part of the country, a beautiful part of the country, they are its kaitiaki, and may we wish them the best for the passage of the bill.

Hon PAUL GOLDSMITH (Minister for Treaty of Waitangi Negotiations) (12:33): Well, thank you, Mr Chair. Obviously, it is a very exciting prospect that this stage that we’re at is a sort of a technical phase. We’ve had the first reading some years ago, and we’re looking forward to the final, third reading of this settlement bill for Ngāti Hei coming soon. As is mentioned, Ngāti Hei are an iwi that trace their origins to Kupe and Te Arawa waka on the eastern seaboard of the Coromandel, between Onemana and Whangapoua and out into the islands. This is a settlement that is part of the broader Hauraki claims. There are about 12 different settlements across the Hauraki that we’re working our way through, so this is a very exciting prospect that we’ll be looking to conclude in the next few weeks.

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported with amendment.

Regulatory Systems (Transport) Amendment Bill

Committee of the whole House

Part 5 Amendments to Railways Act 2005

Debate resumed.

CHAIRPERSON (Teanau Tuiono) (12:35): The question is that the Minister’s amendment to Part 5, set out on Amendment Paper 574, be agreed to.

Amendment agreed to.

Part 5 as amended agreed to.

Committee of the whole House

Part 6 Amendments to Road User Charges Act 2012

CHAIRPERSON (Teanau Tuiono): Members, we now come to Part 6. This is the debate on clauses 113 to 115, “Amendments to Road User Charges Act 2012”. The question is that Part 6 stand part.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (12:35): Very excited to make a contribution on this important bill. Just in terms of Part 6, in clause 115, which amends Schedule 2, there’s obviously a transition going on between post and other methods of informing citizens of what’s going on in their relationship with Government. I guess there are two aspects to my question. One is this adoption of the term, in clause 1(4), “… notice is sent (a) by post is … treated as having been given at the time the notice would have been delivered in the ordinary course of the post:”. That suggests that there is an ordinary course of the post, but the fact of the matter is that letters put in our dear old New Zealand Post post-boxes now can sometimes arrive in three days, sometimes 10, and sometimes, sadly, not at all. I was just interested to know why the decision wasn’t made to give a clear date, because that is actually a sliding scale. The worse New Zealand Post gets, the longer “ordinary course” will be. We’ve seen New Zealand Post closures around the country recently. They have over time been rolling back deliveries to households and extending out what “ordinary course” is. It used to be pretty much next day in the same city, and now I think it’s something like five days. So I’m interested to know what “ordinary course of the post” actually means.

The other thing, again, in terms of providing information or giving notices—whatever you want to call it—to citizens; I see that electronic notification is there. But it seems to be—and I’m just going to invite the Minister to kind of explain exactly what this is, because it’s not just by an email, for example, saying, “Your road user charges have been updated or have expired.” or whatever the case might be, but it’s by access to some sort of portal, it appears. This is in clause 115, Schedule 2, new clause (1)(ca): “sending an electronic notification to the person that states where they can access the notice electronically”, which seems to be an odd leap. Why not just tell them that this is notifying you of the fact, rather than saying, “Click on this link to go to this portal to enter your details to get the information that I could have given you anyway.”? It does seem that you can’t actually just email them, like sending them a letter. You’ve now got to—well, at least if you’re using subclause (ca), by having this portal. Why have we got this system of clicking on a link through, and what exactly is meant by it? Is this something we’re moving to immediately, or is this just kind of a belts and braces in case we want to go down that road? Thank you.

Hon JAMES MEAGER (Associate Minister of Transport) (12:39): Thank you, Mr Chair. Just to address the member’s first point: the wording in clause 115, amended Schedule 2, subclause (4)(a), is a repeat of the wording in the existing subclause (4) of Schedule 2. All the amendments do is repeat that wording in and around “ordinary course of the post” and then add on the electronic service provisions. So the existing requirements for “ordinary course of the post” are already in the legislation. It will, of course, depend on where you live, rural addresses, etc., so it’s not appropriate to put a specific number of days in the Schedule.

In terms of the second point around whether is this belts and braces, I would think that, yeah, it is belts and braces. I can imagine a world where your electronic notice doesn’t come by way of email with a PDF attached, but it could come by way of a notification through a New Zealand Transport Agency app or some sort of application where you get a notification that “Here’s your receipt for your road-user charges bill that you’ve just paid online.”, and it can be accessed in your wallet, or here or there. I think that just provides a couple of options for electronic delivery to be undertaken.

I think at some course, whether that’s in the near future or distant future, all of these issues around electronic service—and I know there is guidance and there is legislation existing for electronic service—will have to be probably updated across the board to take account of new ways of delivering notifications and services and updates. For this one, the thrust behind it is just to make it easier for people to receive notifications that, say, their road-user charges haven’t been paid, combined with the ability to no longer have to put that little sticker—it’s not even a sticker; it doesn’t have any stick on it, but it’s just a bit of paper—in the front of your vehicle, and to move to a more modern system. I would agree with the idea that it’s a bit of belts and braces and a bit of futureproofing.

Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (12:41): Thank you, Mr Chair. Just one final question in terms of notifications, and I’m now looking at clause 115(4)(b). It’s always a tricky one when you’re using an electronic communication and you press send and the bundle of information passes through a series of systems, because once it gets out of, say, New Zealand Transport Agency’s (NZTA’s) system, it will then go into an internet service provider’s system, and whilst these systems are extremely reliable, they’re not perfect. There are instances where it gets into an internet service provider system and then it just disappears, or some error occurs and it never gets further.

Why in this legislation and in this clause has the Minister decided to have a rule which says that the thing is delivered when it leaves NZTA, rather than when it arrives at the recipient’s system? If you think of it in the New Zealand Post example, it’s deemed to be delivered as soon as it goes in the post box, even if the letter is lost and never arrives at the address, because, in fact, that person won’t be notified. But this seems to say, “You are notified. You’re deemed notified as soon as we push send on our computer.”, even though it never arrives in your in-box, or other app or whatever it might be.

I just would be interested in the Minister’s comments on that. I see that there’s some advice coming his way, and so that would be useful to understand.

Hon JAMES MEAGER (Associate Minister of Transport) (12:43): I think that the intention is to be analogous to physical mail in that the New Zealand Transport Agency doesn’t confirm that the letter is received by the individual, because it’s not practical to do so. It deems it as being received—as the member pointed out before—at the time at which it would have been delivered in the ordinary course of mail.

Having been on the receiving end of a registration notice which should have been received by my person and it wasn’t received by one way or the other, and then the implications of failing to put that little bit of paper on my front windscreen were felt first hand, I’ve got lived experience of what happens when you don’t receive the particular bit of paper in time. But I can say to all of those out there who are worried, enforcement agencies are very sympathetic in explaining the reasons behind failure to display tiny bits of paper in the front windscreen of your car. If you explained the reasons behind that about the difficulty in receiving said bit of paper, they are generally more than happy to waive the particular infringement notice, although I suspect if it became a repeated pattern, they may not be so sympathetic.

DAN BIDOIS (National—Northcote) (12:44): I move, That debate on this question now close.

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

Ayes 68

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

Noes 55

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

Motion agreed to.

CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendment to Part 6, set out on Amendment Paper 574, be agreed to.

Amendment agreed to.

Part 6 as amended agreed to.

Committee of the whole House

Part 7 Miscellaneous amendments and related amendments to other legislation, and Schedules 1 to 4

CHAIRPERSON (Teanau Tuiono): We now come to Part 7. This is the debate on clauses 116 to 227—“Miscellaneous amendments and related amendments to other legislation”—and Schedules 1 to 4. The question is that Part 7 stand part.

TANGI UTIKERE (Labour—Palmerston North) (12:46): Kia orana, Mr Chair. These are sort of the catch-all provisions in this particular part where there are quite a few of them. A number of them relate to airports, and so this is the first time that aviation—I’m sure the Minister will approve—has sort of made an entry into this Regulatory Systems (Transport) Amendment Bill, given his interest in the area.

When we’re looking at the provisions that relate to the various airports that are identified there, the first question for the Minister is just the rationale around the policy change. I know it’s meant to be to provide some consistency in terms of operation, and also actually tweaking some, as I understand it, some sort of oversights when the previous legislation was making its way through.

Now that naturally bodes the question to the Minister around how we can make sure that this can be futureproofed to ensure that these sorts of things don’t have to wait until a regulatory standards bill makes its way through the Parliament. I guess that when it comes to the various airports, they might be quite discrete in that particular sense, but in relation to clause 120, which leads to the new Schedule 1 for Auckland Airport, we are talking about a number of airports that are strategically of significant importance to the transportation system within this country.

My first question is on that policy rationale for aligning the airport companies’ provisions with what was at the time a sense of older frameworks. It is going to be retrospective in terms of the change there to section 4(7) of the Regulatory Systems (Transport) Amendment Act, which is being amended by Schedule 1, but what was the operational or legal risk if these changes were not going to be validated, because effectively that’s what it’s doing. It’s retrospectively validating what was an earlier course of action to allow the functionality of the airport—well, the two airports: Auckland, under Schedule 1, and Wellington under Schedule 2. I mean, we’re talking about the period from which it’s come into force, which will be 5 April of last year, and so it was well over 12 months ago. That’s the first question for the Minister.

Hon JAMES MEAGER (Associate Minister of Transport) (12:48): Thank you, Mr Chair. I think it’s worth just explaining some of the background to this fix. Clause 119—which is the one the member is referring to—corrects a numbering error which unintentionally disapplied sections of the Civil Aviation Act 2023 when it was brought into force in, I assume, 2023. Those sections contained a power that the airports require in order to set charges for aerodrome activities, along with other powers that were never intended to be excluded. I’m advised that that error won’t have any practical effect until such time as, for example, Auckland Airport wishes to deal with land or is registered as an airport operator, and so it hasn’t had any impact to date. However, the ability to tidy that, I’m sure, unintentional error—which happens from time to time when legislation is passed—can be remedied through this bill, and the reason for applying it retrospectively is just to make sure that that error is, effectively, corrected from the date on which it was introduced by the Civil Aviation Act 2023, which was 5 April 2025.

TANGI UTIKERE (Labour—Palmerston North) (12:49): I thank the Associate Minister of Transport for that clarity. A number of airports around the country have interests that are effectively owned by the local authority and councils around the country. That is quite a common approach for airport companies, certainly in New Zealand. Given the changes to both Schedule 1 and Schedule 2—well, actually, they are both changes to Schedule 1, but they appear as Schedule 1 and Schedule 2, which kind of does beg the question: why could you not just put both of them into one schedule? But that was not the initial question I was seeking to ask the Minister.

It’s actually around the level of consultation that was taken, particularly with local authorities, in leading to this point or getting to this particular change. Many of them, as we know, are shareholding or controlling authorities, and so it is important to understand what that is before I move on to Schedule 3.

Hon JAMES MEAGER (Associate Minister of Transport) (12:50): Thank you, Mr Chair. I think you’d have to direct that question to the drafting wizards who know more about legislative design in this case than I do, but I’m sure there was a very good rationale as to why we needed to have a new Schedule 1 as well as updating Schedule 2 to reflect the insertion of Schedule 1. I’m sure there will be some distinction about having to have separate subject matters in different schedules that smarter people than I can explain.

TANGI UTIKERE (Labour—Palmerston North) (12:51): Thank you. I’ll move on to Schedule 3. This is back in the maritime space, and this, again, relates to the provision of international conventions and obligations or treaties that New Zealand as a country does kind of sign up to. As I’ve said previously, Minister, we certainly support those.

It’s important that New Zealand is not just pulling its weight but is seen to be compliant and consistent in terms of our international obligations. When the Parliament seeks to insert a provision that basically says that moving forward, if there are any changes to conventions that New Zealand as a country is a party to, we’ll basically just insert them. This is the mechanism to insert that opportunity. There is, I guess, a practical question around the ability of the Parliament to scrutinise that opportunity. So my first question to the Minister is: how does the proposed new schedule as outlined in Schedule 3 in the bill aid or support the ability for parliamentary scrutiny when various conventions are being considered and adhered to?

Hon JAMES MEAGER (Associate Minister of Transport) (12:52): The intention behind this Schedule 3 is, as the member pointed out, to make it a more streamlined process for conventions that New Zealand is (a) party to or (b) has become a party to the amendment or revision before, on, or after the amendment Act came into force. Essentially, it’s to allow for a smoother transition of amendments to conventions that New Zealand is already a party to and has already agreed to implement in its statute book, and presumably has also agreed to amend, as a party, to that convention to be incorporated automatically.

Now, there will be processes by which the Parliament can scrutinise that. I’m sure the Foreign Affairs, Defence and Trade Committee could open a briefing on a particular amendment to a convention to have a look at what the amendment did. I will take some advice from maybe members of the Regulations Review Committee as to whether or not such incorporation, because it’s done under the original—my understanding would be the original convention. There was a previous debate we had in a previous part around this very provision where it was implemented by Order in Council and so rather than having to go back through the Order in Council process again, you could do it automatically. So I’d have to take some advice from the likes of the Regulations Review Committee as to whether or not that could be scrutinised through their process and whether or not that could be a disallowable instrument—I think that might be the term, but I’d have to get some more clarification on that.

Of course, Parliament is the master of its own destiny, and if it so decided that it didn’t like that particular convention being implemented as part of its domestic law, then it could itself choose to legislate against that particular provision from being implemented. I’m not sure whether that’s best international practice, but Parliament ultimately retains that sovereign power to do so.

Part 7 agreed to.

New schedule 1AA and Schedules 1 to 4 agreed to.

Hon JAMES MEAGER (Associate Minister of Transport) (12:55): Point of order. I seek leave for the questions around clauses 1 and 2 to be put immediately.

CHAIRPERSON (Teanau Tuiono): Apologies to the Minister. The time for reporting back is set by Standing Orders and not by the House. The time has come for me to report progress to the House.

Progress to be reported.

House resumed.

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

Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill

Regulatory Systems (Transport) Amendment Bill

Ngāti Hei Claims Settlement Bill

Building and Construction Sector (Self-certification by Plumbers and Drainlayers) Amendment Bill

Report of Committee of the whole House

CHAIRPERSON (Teanau Tuiono) (12:56): Madam Speaker, the committee has considered the Local Government (Auckland Council) (Transport Governance) Amendment Bill and reports it with amendment. The committee has also considered the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill and reports it with amendment. The committee has also considered the Anti-Money Laundering and Countering Financing of Terrorism (Supervisor, Levy, and Other Matters) Amendment Bill and reports it with amendment. The committee has also considered the Regulatory Systems (Transport) Amendment Bill and reports that it has made progress on the bill. The committee has also considered the Ngāti Hei Claims Settlement Bill and reports it with amendment. The committee has also considered the Building and Construction Sector (Self-certification by Plumbers and Drainlayers) Amendment Bill and reports that it has made no progress on the bill. I move, That the report be adopted.

Motion agreed to.

Report adopted.

DEPUTY SPEAKER: The House stands adjourned until 2.00 p.m. today.

The House adjourned at 12.58 p.m.