Tuesday, 15 September 2026
Continued to Thursday, 17 September 2026
Sitting date: 15 September 2026
Tuesday, 15 September 2026
The Speaker took the Chair at 2 p.m.
Start of Sitting Day
Karakia/Prayers
TEANAU TUIONO (Assistant Speaker) (14:00): E te Atua kaha rawa, ka tuku whakamoemiti atu mātou, mō ngā karakia kua waihotia mai ki runga i a mātou. Ka waiho i ō mātou pānga whaiaro katoa ki te taha. Ka mihi mātou ki te Kīngi, me te inoi atu mō te ārahitanga i roto i ō mātou whakaaroarohanga, kia mōhio ai, kia whakaiti ai tā mātou whakahaere i ngā take o te Whare nei, mō te oranga, te maungārongo, me te aroha o Aotearoa. Āmene.
[Almighty God, we give thanks for the blessings which have been bestowed on us. Laying aside all personal interests, we acknowledge the King and pray for guidance in our deliberations that we may conduct the affairs of this House with wisdom and humility, for the welfare, peace, and compassion of New Zealand. Amen.]
Obituaries
James Leonard Peters MNZM
SPEAKER: Members, I regret to inform the House of the death, today, of James Leonard Peters MNZM, who was an MP from 2002 to 2005 for the New Zealand First Party. I desire on behalf of this House to express our sense of loss and sympathy with the relatives of the late former member, including his brother, our fellow member, the Rt Hon Winston Peters. I now ask that members stand to observe with me a period of silence to mark, in respect, his memory.
Members stood as a mark of respect.
Presentation
Petitions
SPEAKER: Eight petitions have been delivered to the Clerk for presentation.
CLERK (14:02):
Petition of Alexander Ilin requesting that the House urge the Government to evaluate the replacement of proprietary software with free, open-source alternatives across all Government agencies
petition of Callum Entwistle requesting that the House ban the use of AI facial recognition in public areas
petition of Hair & Barber New Zealand requesting that the House urge the Government to provide a residence pathway for skilled hairdressers and barbers
petition of Jenny Bell-Johnson requesting that the House urge the Government to commission an independent, on-site audit of every public hospital emergency department
petition of John Clarkson requesting that the House urge the Government to develop and implement a secure, simplified digital pathway for low-risk property ownership transfers
petition of Neil Scott requesting that the House urge the Government to sever all relations with the state of Israel until Israel has observed the rights of Palestinians to return and to vote
petition of Ngāti Kahungunu Iwi Incorporated requesting that the House reject any proposals to remove, amend, or redefine references to Te Tiriti o Waitangi or its principles in legislation
petition of Simon Heath requesting that the House conduct an urgent inquiry into the operational practices of the Ombudsman and Auditor-General.
SPEAKER: Those petitions stand referred to the Petitions Committee.
Papers
SPEAKER: Ministers have delivered seven papers.
CLERK (14:03):
Financial Markets Authority, KiwiSaver Annual Report 2026
Minister of State-Owned Enterprise’s response to the petition of Joanne Klaui
Reserve Bank of New Zealand, Monetary Policy Statement, September 2026
Parliamentary Commissioner for the Environment, Managing the environmental risks of mining: a high-level overview of regulatory practice
public inquiry into the disappearance of the Phillips children
report of the Attorney-General on the amendments to the Summary Offences (Move-on Orders) Amendment Bill proposed by the Justice Committee and Amendment Paper No 804
report of the Attorney-General on amendments to the Corrections (Management of Prisoners and Prisoners’ Property) Amendment Bill proposed by the Justice Committee.
SPEAKER: Those papers are published under the authority of the House.
Select Committee Reports
SPEAKER: Twenty-one select committee reports have been delivered for presentation.
CLERK (14:04):
Report of the Environment Committee, second scrutiny activities report for the 54th Parliament
reports of the Foreign Affairs, Defence and Trade Committee on the:
second scrutiny activities report for the 54th Parliament
India Free Trade Agreement Legislation Amendment Bill
petition of Rasy Sao
reports of the Justice Committee on the:
briefing on Te Au Reka
report of the Controller and Auditor-General, Department of Corrections: Planning for stable housing outcomes
report of the Māori Affairs Committee on the second scrutiny activities report for the 54th Parliament
reports of the Petitions Committee on the petitions of:
Daniel Matthews
Danny Tahau Jobe
Pegasus Residents Group Incorporated
Southland Recreational Whitebaiters Association
Tanya Waikato
Tristyn Kristna
reports of the Primary Production Committee on the:
Hazardous Substances and New Organisms Amendment Bill and the Petition of GE Free NZ in Food and Environment
petition of Jade Steel
second scrutiny activities report for the 54th Parliament
reports of the Regulations Review Committee on the:
briefing on retrospectivity in secondary legislation
complaint about the Land Transport Rule: Setting of Speed Limits 2024
Secondary Legislation Confirmation Bill (No 4)
report of the Social Services and Community Committee on the second scrutiny activities report for the 54th Parliament
report of the Transport and Infrastructure Committee on the second scrutiny activities report for the 54th Parliament.
SPEAKER: The bills are set down for second reading. The activity report briefings and complaints and the report of the Controller and Auditor-General are set down for consideration.
Bills
Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill
References to Tiriti o Waitangi/Treaty of Waitangi (Standardisation) Amendment Bill
References to Tiriti o Waitangi/Treaty of Waitangi (Strength of Legislative Obligations) Amendment Bill
References to Tiriti o Waitangi/Treaty of Waitangi (Repeals) Amendment Bill
Introduction
SPEAKER: The Clerk has been informed of the introduction of four bills.
CLERK (14:06):
Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill, introduction
References to Tiriti o Waitangi/Treaty of Waitangi (Standardisation) Amendment Bill, introduction
References to Tiriti o Waitangi/Treaty of Waitangi (Strength of Legislative Obligations) Amendment Bill, introduction
References to Tiriti o Waitangi/Treaty of Waitangi (Repeals) Amendment Bill, introduction.
SPEAKER: Those bills are set down for first reading.
Oral Questions to Ministers
Prime Minister
Question No. 1
Hon CARMEL SEPULONI (Deputy Leader—Labour) (14:06) to the Prime Minister: Does he stand by all his Government’s statements and actions?
Rt Hon CHRISTOPHER LUXON (Prime Minister) (14:06): Yes, particularly our desire never to introduce a capital gains tax that taxes inflation.
Hon Carmel Sepuloni: Does he stand by the fact that after two years of his Government there are only 54 additional nurses across the country and does he accept that his cuts mean fewer nurses and a health system under immense pressure?
Rt Hon CHRISTOPHER LUXON: What I acknowledge, as I said last week, is that under this Government we have hired 2,100 extra nurses. We’re actually also recruiting 2,300 full-time nurses at this point in time as well.
Hon Carmel Sepuloni: Why won’t he guarantee a job for every nurse who graduates in New Zealand so that New Zealanders can get the healthcare they need and qualified nurses don’t need to move overseas for work?
Rt Hon CHRISTOPHER LUXON: Well, look, I appreciate the member might want to tell her version of the facts, but here on this side, we understand that immunisation rates for under-two-year-olds are up, wait times in emergency departments are getting better, elective surgeries are getting better, and we’ve set some clear targets. Unlike the last Government, we are putting money into this, we’re putting workforce into this, and we are very clear on the outcomes and improved outcomes we want to see for patients.
Hon Carmel Sepuloni: Does he stand by his Government’s decision to cancel or halt infrastructure and construction projects, which has cost at least 20,000 construction jobs across New Zealand?
Rt Hon CHRISTOPHER LUXON: Well, I disagree and refute the characterisation of that question, because, I’ll just say to the member, what caused a slow-down in our construction sector was the last administration, which cranked up Government spending 70 percent—a lot of it wasteful—which drove up inflation and drove up interest rates. No wonder developers don’t have certainty. The good news is that we’ve had a 35 percent growth in construction jobs on SEEK and we’re getting this show on the road.
Hon David Seymour: Has the Government considered, or would it consider, borrowing $50 million to design a bike bridge it doesn’t ultimately build in order to stimulate activity in the engineering consulting industry?
Rt Hon CHRISTOPHER LUXON: No, we wouldn’t, and we also wouldn’t spend $300 million on an Auckland Light Rail project—money spent on consultants over six years without a single metre of track being laid and a route even being agreed.
Hon Carmel Sepuloni: Why won’t he restore and extend Apprenticeship Boost and invest in Māori Trade Training so that young New Zealanders have the skills and qualifications they will need when the industry gets moving again?
Rt Hon CHRISTOPHER LUXON: Well, that’s exactly why I’m very proud of our decision to double the amount of trades academy spaces from 10,000 to 20,000, and another 1,000 Youth Guarantee places for young students that actually have nil or very poor quality qualifications.
Hon Carmel Sepuloni: How many New Zealanders have been affected by his Government’s failure to administer winter energy payments, benefits, and hardship grants, and will he admit that those issues were a direct result of his decision to cut public services?
Rt Hon CHRISTOPHER LUXON: No. We have a law change that required beneficiaries to confirm their circumstances annually. It’s entirely appropriate, because we’re interested in getting people off welfare and into work. We don’t believe in having a 3.2 percent unemployment rate and putting 60,000 additional Kiwis on jobseeker support as that member did in Government.
Hon Carmel Sepuloni: Why won’t he support a public good test before he cuts jobs across Government agencies, given that his cuts to the Public Service are exactly what left pensioners without the winter energy payments and sitting in the cold?
Rt Hon CHRISTOPHER LUXON: Because this is a Government that actually does a lot and makes sure that for taxpayers’ dollars, we’re extracting maximum value from it. We believe we can build a classroom for $600,000, not $1.2 million, and, as a result, we can build twice the number of classrooms than that member and that Government did.
Prime Minister
Question No. 2
Hon MARAMA DAVIDSON (Co-Leader—Green) (14:11) 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) (14:11): Yes, and in particular our desire never, ever to introduce a wealth tax, an inheritance tax, a gift tax, a death tax, or to lift income tax rates or corporate tax rates either.
Hon Marama Davidson: Does the Natural Environment Bill include any changes sought by agriculture lobbyists in a private meeting that was held while the bill was still being drafted?
Rt Hon CHRISTOPHER LUXON: I’m unsure—you’d need to direct that to the relevant Minister—but what I’d say is that we engage with industry groups, and we also engage with the environmental NGOs.
Hon Marama Davidson: Can he confirm that the requirement for a development to be considered “within environmental limits” has been removed from the Natural Environment Bill following a specific request from agriculture lobbyists in a private meeting?
Rt Hon CHRISTOPHER LUXON: Well, I make no bones about the fact we are powering up farmers in this country, because they are the backbone of this country. They are doing exceptionally well, and we are very proud of what we’re doing to make it easier for farmers to get on and farm and growers to get on and grow and builders to get on and build.
Hon Marama Davidson: Did Federated Farmers ask for the Natural Environment Bill to prevent decision makers from considering the negative impacts of greenhouse gas emissions, and can he confirm that the bill was subsequently amended to require that persons “must not … consider any adverse effect on climate change of any greenhouse gas emissions”?
Rt Hon CHRISTOPHER LUXON: Well, I’d just say to the member, on this side of the House, we take advice, and we consult with broad ranges of people from our officials right out to industry groups and also environmental NGOs, and that’s exactly what happened in this case.
Hon Chris Bishop: Can the Prime Minister confirm that in addition to so-called private, closed-door meetings with Federated Farmers, the Government also held private, closed-door briefings with the Environmental Defence Society, Greenpeace, Forest & Bird, and indeed Lan Pham and the Hon Julie Anne Genter?
Rt Hon CHRISTOPHER LUXON: Yes, I can, and that’s the point I was trying to make in my earlier answers—that we are a Government that consults and takes advice from lots of different people, then we weigh it all up, and then we make our own decision.
Hon David Seymour: Does the Prime Minister stand by the Government consulting affected people “while the bill was still being drafted”, and, if not, what better time is there?
Rt Hon CHRISTOPHER LUXON: Well, that’s exactly the point. We want to get the perspectives from lots of New Zealanders who have views on lots of different things, then we weigh it all up, and we make a decision on this side of the House.
Hon Marama Davidson: Does he agree that Te Tiriti provisions in legislation provide an essential safeguard against the exploitation of te taiao and public resources?
Rt Hon CHRISTOPHER LUXON: Well, again, what we’re doing is making sure that our Treaty clauses are crystal clear for everybody so that everyone understands the obligations they have to each other, and we get some consistency in it.
Hon Chris Bishop: Does he think the Government would be accused and criticised for not talking to groups like Federated Farmers, the Environmental Defence Society, and other interested stakeholders in the resource management and planning system if the Government had indeed not talked to them during the development of the bill’s progress?
Rt Hon CHRISTOPHER LUXON: Well, I mean, I think this is the fundamental difference between this side of the House and that side of the House, right? I mean, we don’t just take our officials’ advice and just box-tick our way through it; we actually take our officials’ advice, we talk to lots of other people, and then we make a decision to get good policy in place. [Interruption]
SPEAKER: We’ll just wait for a moment. I’ll call the Hon Marama Davidson.
Hon Marama Davidson: Why is he prioritising, in the final weeks of this Parliament, repealing Treaty clauses from legislation while New Zealanders are struggling to afford kai, heat their homes, and get a decent job?
Rt Hon CHRISTOPHER LUXON: Well, I’d just say to the member that the thing that actually doesn’t help the cost of living crisis for many New Zealanders is, actually, implementing more taxes, and that’s what the other side want to do. But I’d just say, look, I’ve said it very clearly; we’ve got all sorts of Treaty clauses in our different legislation. They create uncertainty, they create legal risk, and we want everyone to be crystal clear on their obligations.
Hon Shane Jones: Do you consider it unusual in te Wiki o te Reo Māori, Māori Language Week, that the Greens have asked the same well-rehearsed primary question in Māori, but they don’t put the same effort into asking their supplementaries, and would he like me to give a Māori translation of the word “sock-puppet”?
SPEAKER: No, no. Thanks.
Finance
Question No. 3
RYAN HAMILTON (National—Hamilton East) (14:15) to the Minister of Finance: What recent reports has she seen on the economy?
Hon NICOLA WILLIS (Minister of Finance) (14:16): The BNZ-Business New Zealand Performance of Manufacturing Index for August came out on Friday, followed on Monday by the Performance of Services Index. These surveys show that both the manufacturing and service sectors are expanding in New Zealand. Manufacturing and services together make up about 78 percent of our economy, so these results are a positive signal about economic growth in the September quarter of this year, which is almost at an end.
Ryan Hamilton: What could harm growth in the manufacturing sector?
Hon NICOLA WILLIS: Well, ongoing conflict in the Middle East and its impact on fuel and freight costs is obviously a concern. Another blow to the sector would be the scrapping of the Government’s Investment Boost policy. If that were to happen, manufacturing businesses could no longer immediately deduct 20 percent of the cost of a new asset and would pay more tax when they invest in machinery, plant, tools, equipment, buildings, and other capital assets. Business tax in New Zealand would go up by $1.6 billion a year, and the country would miss out on much-needed investment in productive assets that would have raised wages for New Zealand workers.
Ryan Hamilton: What else could impede business growth in New Zealand?
Hon NICOLA WILLIS: Well, new taxes would hurt business and hurt the economy. Consider, for example, a capital gains tax on property that businesses own. Businesses, large and small, across New Zealand own and use factories, sheds, workshops, warehouses, garages, office buildings, laboratories, shops, and the land they sit on. These are an intrinsic part of productive businesses that employ people and pay wages. A capital gains tax would impose a new tax on them. Ultimately, that tax would fall on the owners of the business and the workers they employ.
Ryan Hamilton: What would be the impact of a major increase in Government revenue?
Hon NICOLA WILLIS: Well, a major increase in Government revenue would have an impact on all Kiwis, not just on businesses. Core Crown revenue is currently expected to be 31.2 percent of GDP in four years’ time. If, for example, that proportion was deliberately raised to 33 percent, it would require taxes to increase by $10.4 billion a year. Now, obviously, $10.4 billion is a big increase and would likely require some sort of combination of raising GST, increasing personal income tax rates, putting up the company tax rate, and introducing a comprehensive capital gains tax that included all assets. Those measures would be a huge blow, both to the economy and to everyday Kiwis.
Finance
Question No. 4
Hon BARBARA EDMONDS (Labour—Mana) (14:19) to the Minister of Finance: E te rangatira o te Whare, mihi nui ki a koe. Does she stand by all her statements and actions?
Hon NICOLA WILLIS (Minister of Finance) (14:19): In context, yes. I particularly stand by the statement of the National Party finance spokesperson that there should be no new taxes.
Hon Barbara Edmonds: Weird. Has the Government received Treasury’s review of State assets, first announced in November, and have any papers been taken to Cabinet?
Hon NICOLA WILLIS: I can confirm that no papers have been taken to Cabinet.
Hon Barbara Edmonds: Has the Government received Treasury’s review of State assets, first announced in November?
Hon NICOLA WILLIS: Treasury has been conducting performance ownership - purpose analyses of each company that the Crown owns, and Ministers have received Treasury’s draft advice.
Hon Barbara Edmonds: Will she rule out any asset sales as long as she is the Minister of Finance?
Hon NICOLA WILLIS: Yes.
Hon Barbara Edmonds: Does she stand by her previous statements regarding asset sales: “I think we’ve got to be really open with New Zealanders if we’re planning to change anything.”, and why won’t she front up to Kiwis on her plans to sell the assets they’ve built up over generations?
Hon NICOLA WILLIS: I stand by my statements, and despite the member’s wish for fireworks, the only fireworks are popping in her caucus, that is busily designing new taxes.
Revenue
Question No. 5
CARL BATES (National—Whanganui) (14:20) to the Minister of Revenue: Is the Government considering introducing a capital gains tax that would apply to gains caused by inflation?
Hon SIMON WATTS (Minister of Revenue) (14:20): No. This Government will not introduce a capital gains tax. We do not think New Zealanders should be hit with a new tax. [Interruption]
Carl Bates: Supplementary—
SPEAKER: Just a moment: we’ll just wait for everyone to calm themselves down.
Carl Bates: Why is it important to distinguish between an increase in the dollar value of an asset, and a real capital gain?
Hon SIMON WATTS: Because a higher price on paper does not necessarily mean someone is actually better off. If inflation pushes up the value of a property, taxing that increase can mean taxing someone on money they have not actually received. That is not fair and it is not something this Government supports.
Carl Bates: Supplementary—
Hon Dr Deborah Russell: 25 properties.
Carl Bates: What could it mean—
SPEAKER: Just a minute. Who was speaking then, while the question was being asked?
Hon Dr Deborah Russell: That was me.
SPEAKER: Well, then please apologise to the person asking the question.
Hon Dr Deborah Russell: I withdraw and apologise.
Carl Bates: Supplementary. What could it mean—
Hon Ginny Andersen: 25 properties.
Carl Bates: —for a small—
SPEAKER: No, hang on. One more time.
Hon Ginny Andersen: Sorry, I thought he was finished.
SPEAKER: I’m sorry?
Hon Ginny Andersen: I apologise.
SPEAKER: Well, stand up and do it. I’m sick of this.
Hon Ginny Andersen: Withdraw and apologise.
Carl Bates: What could it mean for a small-business owner if their property increases in value because of inflation but they are taxed on the full nominal gain? [Interruption]
SPEAKER: The balance of this question will be heard in silence with no interjections whatsoever.
Hon SIMON WATTS: Thank you, Mr Speaker. In some cases, they could actually be worse off in real terms after getting a whopping tax bill from the Government. That is not how we should be treating people who are hard-working and build something up.
Carl Bates: What is the Government’s approach to New Zealanders who work hard, save, and invest to get ahead? [Interruption]
Question 5 interrupted.
Withdrawal from Chamber
Hon Ginny Andersen
SPEAKER: OK, I just gave a fairly clear instruction to the House.
Hon Ginny Andersen: Ha, ha!
SPEAKER: There were—well, the member in the front row there might like to leave the House now. That wasn’t funny at all. I wasn’t making a joke; I was taking it very seriously. Please leave the House.
Hon Ginny Andersen withdrew from the Chamber.
Oral Questions to Ministers
Revenue
Question No. 5
Question 5 resumed.
CARL BATES (National—Whanganui) (14:23): What is the Government’s approach to New Zealanders who work hard, save, and invest to get ahead?
Hon SIMON WATTS (Minister of Revenue) (14:23): On this side of the House, we back Kiwis and we back New Zealand. New Zealanders should be encouraged to save, invest, build businesses, and provide for their families. On this side of the House, we do not see hard-working New Zealanders as a convenient source of more revenue to fund more spending. Our approach is to reward aspiration, investment, and hard work, not punish it with more taxes.
Health
Question No. 6
Hon Dr AYESHA VERRALL (Labour) (14:23) to the Minister of Health: Is it correct that Health New Zealand’s latest Budget material recently released showed a significant structural funding gap for the 2026-27 year and that it could not cover the costs of its existing activity?
Hon SIMEON BROWN (Minister of Health) (14:24): As the Hon Casey Costello said on my behalf in the House, the Government has agreed to increase Health New Zealand’s projected deficit for 2026-27 to $475 million, as set out in media reports and Health New Zealand’s publicly available statement of performance expectations. That is a deliberate decision to deliver more healthcare for New Zealanders. I reject the premise of the second part of the member’s question that Health New Zealand cannot cover the costs of its existing activities; that is not how Government accounting works. The agreed deficit is precisely what allows Health New Zealand to keep delivering those activities and more. It is also important to note that in 2022-23, Health New Zealand overspent its budget by more than $1 billion and, by the member’s own reasoning, precisely the same question could be asked of her.
Hon Dr Ayesha Verrall: Why did he claim “record investment in health” in May this year, when only two months earlier he’d been advised that even with that funding, the health system couldn’t cover the cost of its existing services?
Hon SIMEON BROWN: I would encourage the member to read page 11 of the statement of performance expectations, which states, “As such Health NZ will be considering a longer path to break-even that is more sustainable and ensures we can continue to deliver more services to New Zealanders without placing unnecessary pressure on the organisation.”
Hon Dr Ayesha Verrall: What steps did the Government take to increase pre-committed health funding when advised of that structural deficit in March?
Hon Shane Jones: More than you did!
Hon SIMEON BROWN: We went through a process to ensure that Health New Zealand could continue to deliver more services. As stated in the Statement of Performance Expectations, they will be having a “longer path to break-even that is more sustainable and ensures we can continue to deliver more services [for] New Zealanders”.
Hon Dr Ayesha Verrall: What other proof of health system underfunding would he expect, other than a Treasury note that references a structural funding gap eight times?
Hon SIMEON BROWN: If the member wants to—as I said in my answer to the primary question—pose that same logic on herself, when in 2022/23—
Hon Carmel Sepuloni: No, you’re the Minister!
Hon SIMEON BROWN: —Health New Zealand over spent its Budget by more than $1 billion and ran a large deficit that was to ensure that services could be delivered. We’re continuing to ensure we deliver more services for New Zealanders.
Dr Vanessa Weenink: Can the Minister confirm that an extra $475 million in health spending is arithmetically an increase, rather than decrease?
Hon SIMEON BROWN: That is correct: a $475 million deficit means Health New Zealand will be allowed to spend $475 million more to allow more money to be spent on health. It is a deliberate decision to deliver more care for New Zealanders.
Hon Dr Ayesha Verrall: Why did he choose to allow Health New Zealand to remain in deficit longer, and services at continued risk of cuts, rather than funding the health system more?
Hon SIMEON BROWN: Firstly, I would encourage the member to read the statement of performance expectations, which says, “As such Health NZ will be considering a longer path to break-even that is more sustainable and ensures we can continue to deliver more services to New Zealanders without placing unnecessary pressure on the organisation.” This is on top of the additional funding. The Government is continuing to put record funding into healthcare, and most importantly, we are seeing year-on-year improvement against our health targets, which are making progress after years of decline.
Prime Minister
Question No. 7
RAWIRI WAITITI (Co-Leader—Te Pāti Māori) (14:28): 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) (14:28): Yes, and particularly our position of no new taxes.
Rawiri Waititi: Does he agree with the Māori Language Commissioner that his Governments policies have put te reo Māori at risk?
Rt Hon CHRISTOPHER LUXON: No, not at all. I think we are very proud to be celebrating te Wiki o Te Reo Māori for 50 years, it’s been really important, and we’ve put a huge investment into it.
Rawiri Waititi: How can he deny that his Government has put te reo Māori at risk when they have cut $30 million from te reo Māori teacher training; removed Māori words from children’s books; replaced Māori Government department names with English ones; directed the Public Service to stop communicating in te reo Māori; removed bilingual road signs; and wasted millions of dollars to make English an official language of this country, when English was under absolutely no threat?
Rt Hon CHRISTOPHER LUXON: Because we’ve actually invested more than $100 million for Māori education. We’ve put $14 million in to support 51,000 teachers, we’ve put $10 million into a virtual learning network connecting students to Māori-medium science, technology, engineering, and mathematics teaching, we’ve put $48 million into Māori broadcasting, we’ve put $49 million into Te Matatini, and $10 million into Te Māori Tū to showcase Māori culture to the world.
Rawiri Waititi: Why has this Government decided to erase or weaken Te Tiriti o Waitangi obligations across 19 pieces of legislation under urgency during te Wiki o Te Reo Māori, and does he accept that he is undermining Māori rights while the country is celebrating Māori culture?
Rt Hon CHRISTOPHER LUXON: No, not at all. Actually, we’ve had all sorts of generic Treaty clauses; from “honour” to “have regard to”, to “give effect to”, to “take into account”—all we’re doing is making sure we don’t have open-ended clauses that could create uncertainty and legal risk. Most importantly, we’re making sure that everyone’s clear about their obligations, because we’re getting maximum clarity and consistency.
Hon Paul Goldsmith: Can the Prime Minister confirm that the single biggest area of new expenditure in the arts and culture space has been the extra resources put into Te Matatini because of the great support there is for Māori performing arts?
Rt Hon CHRISTOPHER LUXON: Yes, and I want to commend this Minister and also Minister Tama Potaka for advocating very strongly for it in the Budget.
Hon Shane Jones: Does the Prime Minister agree with the esteemed leaders Māui Pōmare, Sir Apirana Ngata, Te Rangi Hīroa, and Timi Kara that the Treaty has three articles, not fabrications and contrivances of the 1980s otherwise dressed up as principles, and that this Treaty between two peoples ultimately brought us together: one people, one country—he iwi tahi tātou?
Rt Hon CHRISTOPHER LUXON: I also believe very strongly that the best way to meet our obligations under the Treaty is to focus on delivering better outcomes for Māori, and that’s what this Government has been doing.
Hon Shane Jones: Can the Prime Minister confirm that the bills referred to in terms of regularising references to the principles of the Treaty of Waitangi are actually rationing something that had become akin to cultural spaghetti spread throughout our legislation?
Rt Hon CHRISTOPHER LUXON: Well, the point that I’ve been making is that we’ve had a complete variation of actual Treaty clauses. It’s important that they are consistent and they give maximum clarity so that everyone understands their obligations.
Rawiri Waititi: Does he agree that the three references to Te Tiriti o Waitangi bills that his Government intends to pass will result in less accountability to Te Tiriti, and the only way to stop them is to vote this Government out?
Rt Hon CHRISTOPHER LUXON: No. I think, actually, that when you look at the results that we’ve had, we’re improving regular attendance for Māori students from 51.3 percent to 54.6 percent; when you think about the lower level of Māori youth offending, down 28 percent; there are 4,000 fewer Māori victims of violent crime; when you think about the amount of work that we’ve done around housing—and what about the Ngāi Tahu aquaculture projects, which are going to create lots of jobs for young Māori? So in this House, we actually get on and we deliver for Māori. We don’t just come here and do performative stuff.
Hon Shane Jones: Does he accept that the ultimate accountability to te iwi Māori is via the voting system, and some Māoris in this House are looking healthier than others?
SPEAKER: Well, that’s a point, not a question. Question No. 8—
Rawiri Waititi: Says a list MP.
SPEAKER: —Laura McClure, and no one else, Mr Waititi.
Regulation
Question No. 8
LAURA McCLURE: Thank you, Mr Speaker. To the Minister for Regulation, what recent announcements has he made about—
Rawiri Waititi: Put your name on the ballot.
SPEAKER: Hey, hey, listen—sorry. No one speaks when a question is being asked. One member has left the House today for breaching that after two warnings, and there will be others to go if we continue.
LAURA McCLURE (ACT) (14:32) to the Minister for Regulation: What recent announcements has he made about regulatory relief for the hospitality sector?
Hon DAVID SEYMOUR (Minister for Regulation) (14:33): Last week, alongside our Minister for Tourism and Hospitality, the Hon Louise Upston, I released the latest sector review from the Ministry for Regulation. It shows the usefulness of the ministry because it was able to listen to 13 different sector groups, 27 district licensing committees, 12 territorial authorities, and a further 21 hospitality businesses, alongside receiving 247 written submissions. These people have told the ministry that they have been bedevilled by excessive regulation, often having to provide the same information multiple times even to the same regulator; decisions take too long and they have little certainty; alcohol licensing and renewal processes are inefficient and disproportionate to risk and are ineffective; fees for licensing and registration are too high and not always transparent; food safety requirements are not always effective, efficient, or proportionate to risk; and the building consent and planning requirements create unnecessary costs and delays specific to the hospitality industry. We know this, and we now have 24 recommendations that the Government has already accepted and will implement in the next year—
Hon Carmel Sepuloni: It’s a very long answer.
Hon DAVID SEYMOUR: —because the ministry was able to get this information from the sector.
SPEAKER: It was indeed a long answer, and so concise answers should—
Laura McClure: What are the review’s recommendations?
SPEAKER: Hang on. Answers should—
Hon DAVID SEYMOUR: Mr Speaker—
SPEAKER: No, hang on, we haven’t had the question yet. However, if we could short-cut it without the question and just go straight to the answers, that might be—
Laura McClure: Oh look, I took your advice well on board. What are the review’s recommendations?
Hon DAVID SEYMOUR: Mr Speaker, I’m sure the tape will show that she had asked that question, and I would respectfully submit that I am—
SPEAKER: Well, just a minute.
Hon DAVID SEYMOUR: —being concise: we’ve just done a lot of good.
SPEAKER: Sorry, sit down. I hadn’t heard it and so we’ll just call the question to an end, and, in that case, we’ll go to question No. 9, the Hon Willow-Jean Prime.
Hon DAVID SEYMOUR: Mr Speaker, point of order. There is a right of a member to ask a question, and she does not deserve to lose that right because you don’t believe that I’m answering it correctly.
SPEAKER: Well, you need to read your Standing Orders, because all supplementaries are at the discretion of the Speaker. And you argued with me, which wasn’t the smart thing to do. It’s not progressing.
Hon DAVID SEYMOUR: The question is: are you using that discretion responsibly for the House?
Withdrawal from Chamber
Hon David Seymour
SPEAKER: The member will leave the House.
Hon David Seymour withdrew from the Chamber.
Oral Questions to Ministers
Social Development and Employment
Question No. 9
Hon WILLOW-JEAN PRIME (Labour) (14:35) to the Minister for Social Development and Employment: Does she stand by her statement that “I accept responsibility” for a series of mistakes related to payments from the Ministry of Social Development; if so, why did it take her more than three weeks to publicly accept responsibility?
Hon LOUISE UPSTON (Minister for Social Development and Employment) (14:36): To the first part of the question: yes. To the second part of the question: I reject the member’s assertion. As Minister for Social Development and Employment, I accept full responsibility for my portfolio, including when people are let down. As I’ve said previously, what happened was unacceptable, and I would again like to apologise to everyone who was impacted. My focus as Minister is on ensuring this does not happen again. The review that was released last week identified where things went wrong and what needs to change, and my expectation is that Ministry of Social Development (MSD) will implement the recommendations as soon as possible.
Hon Willow-Jean Prime: How many disabled people who missed out on payments they were entitled to fell behind on rent as a result?
Hon LOUISE UPSTON: The report that was released last week by MSD states the number of people who were affected. Some of those were on the Supported Living Payment; that number is 2,349.
Hon Willow-Jean Prime: How many pensioners who missed out on payments they were entitled to couldn’t afford food as a result?
Hon LOUISE UPSTON: I don’t have an answer to that. As I said, I recognise that the mistakes meant that payments were suspended that shouldn’t have been. The focus was on ensuring that payments were made at pace—MSD did do that—but I acknowledge that there will be people who suffered hardship as a result.
Hon Willow-Jean Prime: Were there other benefits, such as Jobseeker, affected by processing delays at MSD?
Hon LOUISE UPSTON: The Confirming Your Circumstances review related to predominantly those on the Supported Living Payment. There were a very small number on emergency benefits that were affected.
Hon Willow-Jean Prime: When will she admit that people had to go without food, medical appointments, or fell behind on rent, because of her changes under urgency and her cuts to staff at the ministry?
Hon LOUISE UPSTON: I reject the assertion of that question. I have said in this House, previously, that people had payments suspended that shouldn’t have. As soon as that was identified the payments for the winter energy payment were made within 48 hours. There has been a review—which the Ministry of Social Development delivered last Thursday—with recommendations, and I expect them to deliver those at pace.
Social Development and Employment
Question No. 10
RICARDO MENÉNDEZ MARCH (Green) (14:39) to the Minister for Social Development and Employment: How many suspensions and cancellations of main benefits occurred as a result of processing delays triggered by Confirming your Circumstances reviews, and how many of them were Supported Living Payment recipients?
Hon LOUISE UPSTON (Minister for Social Development and Employment) (14:39): The Ministry for Social Development (MSD) have advised me that 2,460 clients on a main benefit were affected by the processing delays; 2,349 clients were receiving the Supported Living Payment. MSD did not break this affected group down by cancellations or suspensions. MSD has acted quickly to clear the backlog and make sure that these clients have had their payments reinstated and any arrears paid.
Ricardo Menéndez March: Has she bothered to ask the Ministry for Social Development whether any of the sick, injured, or disabled New Zealanders who lost their main source of income went hungry, into debt, or became homeless?
Hon LOUISE UPSTON: It is clear from the review that was undertaken that people went without payments that shouldn’t have, and I have acknowledged—as has the chief executive of MSD—that that has created harm and hardship, for which we have both apologised.
Ricardo Menéndez March: Has she asked her ministry whether any of the sick, injured, or disabled New Zealanders who lost their main source of income went hungry, into debt, or became homeless?
Hon LOUISE UPSTON: I’ve answered that question and acknowledged that those who had payments suspended that shouldn’t have, have experienced harm and hardship. That will be in a range of ways, with a range of different circumstances.
Ricardo Menéndez March: Has she sought any briefings or advice on the impact on sick, injured, or disabled New Zealanders who lost their main source of income, and whether this led to people going hungry, into debt, or into homelessness?
Hon LOUISE UPSTON: Yes, because that is why a review was undertaken, on which MSD reported last week. As I said, it is clear that people had payments suspended that they shouldn’t have, and that had an impact on them.
Ricardo Menéndez March: If her answer to my previous question over whether she sought advice or briefings about whether people went hungry, into debt, or into homelessness was “Yes”, what did MSD have to say about the number of people who went hungry, into debt, or experienced homelessness?
Hon LOUISE UPSTON: I’ve answered the question in terms of the number of people who had a main benefit suspended when they shouldn’t have, and the review that was provided by MSD last week clearly goes into what happened and why, and how many were affected. As I’ve said in this House on multiple occasions, as soon as I was aware of the issue, my focus, and my request of MSD, was to ensure that payments were put in people’s bank accounts at haste, and they have been. There are recommendations now in terms of what has happened and why, and I expect MSD to action them with pace.
Ricardo Menéndez March: On what date did she first receive correspondence from welfare recipients or members of Parliament alerting her that people were experiencing cancellations and suspensions to their main benefits or supplementary assistance due to MSD processing delays, and this excludes the briefing she received on 13 August by her own ministry?
Hon LOUISE UPSTON: In terms of the question, the first identification that went to an MSD staff member about a suspension was at the end of April. As I said last week, it took far too long for MSD to draw the threads together when issues had been raised by multiple people. That was unacceptable, and that is where I expect the recommendations of this review to be delivered at pace.
Ricardo Menéndez March: Point of order, Mr Speaker. My question was specifically on correspondence that she received from welfare recipients or other members of Parliament. At no point did she address either of those groups; she talked about correspondence from MSD but did not address whether she received correspondence from welfare recipients.
SPEAKER: I’m not sure that that’s right. I think the question was certainly addressed.
Hon LOUISE UPSTON: I’m happy to answer it. I don’t have that detail in front of me. If the member wants to put a question down in written form, I will answer that for you.
Tourism and Hospitality
Question No. 11
NANCY LU (National) (14:43) to the Minister for Tourism and Hospitality: What recent reports has she seen on tourism in New Zealand?
Hon LOUISE UPSTON (Minister for Tourism and Hospitality) (14:44): Data released by Stats NZ yesterday shows New Zealand’s international visitor numbers continue to rise, with arrivals for July exceeding 2019 levels. Our first target for visitor numbers was to return to 2019 levels, so this result is great news: 256,600 international visitors arrived in New Zealand in July 2026—an increase of 8.5 percent on July 2025. We’ve also welcomed 3.69 million arrivals in the year to July—an increase of 9 percent on the year prior, which puts us at 95 percent of the 2019 levels for the year. Growing tourism is a key part of our Government’s plan to fix the basics and build the future, and this progress shows that our plan is working.
Nancy Lu: What markets have seen the strongest growth?
Hon LOUISE UPSTON: We are seeing continued growth from our largest visitor market, Australia, with a record number of our Aussie mates crossing the ditch in July. Visitor arrivals from Australia increased by 6 percent on July last year, reaching 194,900 visitors. There was also strong growth from other key tourism markets, including a 12 percent increase in visitors from the United States and a 25 percent increase in visitors from China. These results are another positive step towards our goal of doubling the value of tourism exports by 2034. With one in nine New Zealanders working in tourism and hospitality, growing visitor numbers means growing job opportunities.
Nancy Lu: What commentary has she seen on these reports?
Hon LOUISE UPSTON: ASB senior economists said global demand for New Zealand tourism has held up more than anticipated given recent global shocks. Rotorua mayor Tania Tapsell said, “The efforts that have gone in, both locally and from the Government, to these key markets is really starting to pay off. July is usually a quiet time, so the big win is the 70 percent jump in business and conference events that keep Rotorua afloat.” Dave Beeche, the CE of Queenstown-based tour operator RealNZ, has said that the visa pilot for Chinese visitors has been enormously successful and has made it a lot cheaper and easier for them to visit. Tourism is critical to our economy, and our investments will help deliver lasting benefits for communities and businesses across New Zealand.
Nancy Lu: What steps is the Government taking to support an increase in tourism growth?
Hon LOUISE UPSTON: We know domestic visitors generate nearly twice as many guest nights as international visitors and account for around two-thirds of all guest nights across New Zealand. We do not believe that New Zealanders booking a weekend away or travelling for a family funeral or sports event should face an additional tax on top of the costs they already pay when travelling domestically. We are working hard to attract more visitors to New Zealand because the more visitors we have to our cities and towns, the more money is being spent in local shops and cafes. It’s a key part of our plan to grow the economy so we can keep investing in front-line public services that Kiwis rely on, without having to reach for new taxes.
Commerce and Consumer Affairs
Question No. 12
ARENA WILLIAMS (Labour—Manurewa) (14:47) to the Minister of Commerce and Consumer Affairs: Tēnā koe e te Māngai o te Whare. Ngā mihi o Te Wiki o Te Reo Māori. Does he stand by his statement that the Government’s policy is for “sustainable food price increases”; and, if so, how much does he think prices will rise for things Kiwis cannot go without?
Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (14:47): Yes, which is why annual food inflation is at 1.9 percent. In terms of prices and inflation more generally, I would note that Budget 2026 forecasts inflation for 2027 and 2028 within the Government’s target band of 1 to 3 percent. That is a significant improvement on the 7.3 percent inflation rate recorded in 2022.
Arena Williams: Does he stand by his statement “We acknowledge that, overall, Kiwis pay too much for their groceries.”; if so, what actions has he taken to reduce food prices for Kiwis?
Hon CAMERON BREWER: Yes, we do acknowledge that Kiwis pay too much for their groceries. That is why the Commerce Commission is continuing its compliance work against major supermarket operators, that is why we are supporting reforms to improve competition and lower barriers to entry in the grocery market, and that is why we are increasing penalties for fair-trading breaches.
Arena Williams: Was it a good use of time and resources to spend three years trying to attract a third supermarket entrant from overseas when, during that time, the duopoly has maintained an 80 percent market share and grocery prices continue to rise?
SPEAKER: Sorry, no one speaks while a question’s being asked. The member will ask the question again, with no one else adding any commentary.
Arena Williams: Was it a good use of time and resources to spend three years attracting a third supermarket entrant from overseas when, during that time, the duopoly has maintained an 80 percent market share and grocery prices have continued to rise?
Hon CAMERON BREWER: Yes, it was a good use of resource and the fact that food price inflation is down to 1.9 percent is an indicator. When one does nothing, and one fuels the economy and pours petrol on the fire, that is when you get food price inflation of 12.5 percent under the last Labour Government in an annual context. We are a lot different from that lot.
Arena Williams: Are New Zealanders paying higher prices for groceries, petrol, airfares, and banking, and have they been told, repeatedly, by this Government, that more competition is coming and that will help those prices?
Hon CAMERON BREWER: This Government continues its focus on reducing inflationary pressures, while supporting reforms to lower competition and lower barriers. A 1.9 percent annualised food inflation is a lot better than the 12.5 percent in the year to June 2023. In the year to June 2023, under a Labour Government, fruit and vegetables went up 22 percent.
Hon Nicola Willis: Can the Minister—[Interruption]
SPEAKER: Just wait for your own crew to calm themselves down.
Hon Nicola Willis: Can the Minister confirm that in the 12 months to July the price of eggs, in terms of food price inflation, went down 15.5 percent, which compares to a 77.9 percent increase in a 12-month period under Labour; and can he also confirm that the price of tomatoes dropped 29.3 percent compared to a 148 percent increase during a during a 12-month period under Labour?
Hon CAMERON BREWER: I can confirm both things and I can confirm in the three years to 2026, food inflation—[Interruption]
SPEAKER: Just a minute, sorry. The member’s asked a question and clearly wants answers, so it would be a good idea, I think, to listen and to hear those answers. Start the answer again.
Hon CAMERON BREWER: Yes, I can confirm both those numbers. I can also confirm that in the three years to 2026, under this administration, food inflation has been 6.8 percent. But I can also confirm that in the three years to 2023, under the last Labour Government, food inflation was 21.9 percent.
Arena Williams: Does he stand by his Government’s approach to competition and believe it has been sufficient to protect New Zealand consumers from the market power of big companies?
Hon CAMERON BREWER: Yes, we do, and we also stand by our decision to remove the Grocery Commissioner and put more powers into the ComCom, and it was a decision that was made by Dame Paula Rebstock, who made the recommendation to remove the individual Grocery Commissioner role, and if you looked at the select committee report, the Labour Party unanimously agreed to the Rebstock report.
Hon Nicola Willis: Can the Minister confirm that in the last 12 months, tinned spaghetti has dropped 6 percent in price compared to a 35 percent increase in a 12-month period under Labour; that the price of chicken has fallen 4 percent compared to a 23 percent increase in a 12-month period under Labour—
Hon Willow-Jean Prime: What’s the price of mince?
SPEAKER: Sorry, we’re just going to back it up a bit. The rule is, and everyone knows it Ms Prime, Willow-Jean, the Hon, that we don’t—[Interruption] Yeah, I said we’re backing it up. We don’t speak at all when the question’s being asked. The Hon Nicola Willis, ask the question again.
Hon Nicola Willis: Can the member confirm, in terms of food prices, that in the past 12 months, tinned spaghetti has fallen 6 percent in price, which compares with a 35 percent increase in price in one 12-month period under Labour; and that in the same 12 months the price of chicken fell 4 percent compared with a 23 percent increase in a 12-month period under Labour?
Hon CAMERON BREWER: I am delighted to confirm those decreases, particularly around tinned spaghetti. I received a delighted email, a very pleased email, from the Hon Bill English, who makes spaghetti and pineapple pizzas—he too is delighted.
Arena Williams: Is that what he says to the people who are paying 88 percent more for butter, 96 percent more for tomatoes, and 72 percent more for bread under his watch?
Hon CAMERON BREWER: What I would say to those people is that fruit and vegetable prices are lower than a year ago, down 1 percent, and that is a stark contrast to food prices being up 12.5 percent in the year to June 2023, including fruit and vegetables up 22 percent in the year to June 2023 under the last Labour Government.
Hon Nicola Willis: In light of that member’s question, would the member be surprised to learn that, in fact, in the 12 months to July this year, butter price inflation fell 1.9 percent, which, again, compares with a 13.5 percent increase during one 12-month period under Labour?
Hon CAMERON BREWER: Yes, I can confirm that, and also reiterate that, while fruit and veges went up 22 percent in the last year of the previous administration, fruit and vegetables in the last year of this administration have gone down 1 percent.
Hon Carmel Sepuloni: Can he confirm that he flippantly said to the general manager of Fair Food, the food rescue organisation, when she was sharing with him about the cost of living crisis and struggle with people purchasing food, “Don’t you think a little bit of hunger is just inevitable?”
Hon CAMERON BREWER: Anyone who knows me knows that I would never have said such a thing, so I dispute that. Just because that claim was made doesn’t make it true.
SPEAKER: That concludes oral questions.
Debates
Winter Energy Payments—Findings of Government Report
Urgent Debate Declined
SPEAKER: Members, I have received letters from Ricardo Menéndez March and the Hon Willow-Jean Prime to seek a debate under Standing Order 399 on the findings of the Government report Winter Energy Payments and Confirming your Circumstances: A Review. This is a particular case of recent occurrence for which there is ministerial responsibility. The House has already debated the circumstances that gave rise to the report. I do not think that the matter warrants further attention to the House today. The application is declined.
We come to take a 30 second break before I call on the next Government order. Members, there’s too much talk. If you are leaving for other business, do so quickly and quietly. I don’t want to single out members, but those at the bottom of the Parliament need to be quiet or leave.
Bills
Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill
Legislative Statement
Hon SIMON WATTS (Minister of Revenue) (14:58): I seek leave to present a legislative statement on the Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill.
SPEAKER: Leave has been sought for that purpose. Is there any objection? There is none.
That legislative statement is published under the authority of the House and can be found on the Parliament website.
First Reading
Hon SIMON WATTS (Minister of Revenue) (14:59): I move, That the Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider this bill.
This omnibus bill contains a broad range of measures all aimed at growing the economy and encouraging investment.
A consistent theme throughout is reducing compliance costs, simplifying rules, and increasing certainty for businesses and taxpayers. The prime example is the proposals related to fringe benefit tax—or FBT. FBT was originally intended to ensure non-cash employment benefits, such as work vehicles, are taxed consistently with salary and wages. Over time, the rules have become increasingly complex, resulting in misunderstanding and poor compliance. The bill proposes a much simpler approach.
Rather than requiring detailed record-keeping and log books to determine private use of work vehicles, employers would select a category reflecting the level of private use and apply a corresponding valuation rate. These changes are expected to significantly reduce compliance costs for Kiwi taxpayers. Valuation settings will also be updated, with different rates applying to standard, hybrid, and electric vehicles, to reflect the lower running costs of electric vehicles.
The next major component of the bill relates to our Foreign Investment Fund—or FIF—rules. We started reforming this regime last year, focusing it first on settings that were deterring skilled migrants from staying in New Zealand. This year, we are focusing on removing the pain points for New Zealanders. The FIF de minimis threshold would increase from $50,000 to $100,000. This means that more people with smaller investments will not have to apply these rules, and instead will pay tax on the dividends received.
The bill would extend availability of the revenue account method for unlisted foreign shares to all New Zealand residents. This removes a requirement to pay tax on unrealised earnings from liquid assets. Related changes to the financial arrangements rules will reduce compliance costs and cash-flow uncertainty for taxpayers who hold foreign currency denominated financial arrangements.
And lastly, we have made a change to the transitional residence regime that will benefit both migrants and New Zealanders returning after 10 years or more from overseas. Previously, it was possible for the transitional residence period to be triggered while a migrant was still tax resident in another country. The bill provides that the transitional residence period would only start once a person is tax resident in New Zealand under a double tax agreement.
The bill also improves the research and development tax incentive, one of the Government’s largest business support programmes. Eligible businesses will be able to receive in-year payments based on expected entitlements. Inland Revenue will also be able to accept late applications, or correct minor administrative errors so that businesses can retain access to the incentives where appropriate.
We are also proposing to reduce the cap on eligible internal software development expenditure from $25 million to $3 million per business, per year. These changes are all intended to make the tax incentive more accessible and cost-effective, maximising its productivity benefits.
To remain fit for purpose, the tax system needs to adapt to new technologies. The bill also includes measures related to the taxation of crypto assets. A new rule modelling on existing share-lending arrangements will mean that gains or losses are recognised only when the asset is ultimately disposed of. More New Zealanders are now exporting excess electricity back into our grid. The bill will also zero-rate GST on excess electricity supplied from residential premises.
The bill also implements several Budget 2026 initiatives for charities and not-for-profits. The bill confirms that membership subscriptions and levies received by not-for-profits would remain non-taxable. The bill will also increase the statutory deduction for smaller taxable not-for-profits from $1,000 to $10,000 and make it clear that tax returns are not required so long as the net income is and remains below this limit.
To encourage more charitable giving, eligible donors would be able to receive donation tax credit refunds during the year, rather than waiting until the end of the year, and they will be able to transfer those donation tax credits directly to the charities they wish to transfer them to. The tax treatment of volunteer honoraria would also be simplified by allowing such payments to be treated as salary and wages.
Finally, the bill grants overseas donee status to six New Zealand charities with overseas charitable purposes. Our Government’s focus is clear: growing the economy, improving productivity, and creating the conditions for businesses to invest, grow, and employ—simply, to fix the basics and build the future. Tax is not the only lever in that agenda, but it is a very important one. I commend this bill to the House.
Hon Dr DEBORAH RUSSELL (Labour) (15:06): This is quite a large tax bill for a tax bill. There’s a lot in it, and they’re largely sensible measures that the Labour Party agrees with. They’re pretty standard tax measures: tidying up aspects of our tax law that need to be tidied up, and changing some stuff because the world has changed, so the laws need to change. The Labour Party supports this bill through to first reading, though there are several issues we will want to dig into in the select committee stage.
The changes around the calculation of fringe benefit tax (FBT) on vehicles are very sensible. It is a complicated area in terms of record-keeping. These new changes mean that an employer can specify whether a car is mainly for private use or mainly for business use, and then the fringe benefit tax is calculated accordingly. That’s a sensible change. But there are some wrinkles in it. One is that if a vehicle is going to be claimed to be mostly for business use, then it has to be a branded vehicle—it has to have the company’s branding on it. There’s an exception for farm and agricultural vehicles there.
Intriguingly, in the commentary on the bill, there is a description of what might happen. It says, “The purpose of the branding requirement for vehicles is to discourage employees from using company vehicles outside their permitted private use. This is because employees are generally less likely to use a branded vehicle for private use because doing so could bring the employer into disrepute or make non-compliance with FBT requirements more visible”, and then it says, “(for example, a company ute seen towing a jet ski at a boat ramp).” That’s a very specific example, and it makes me suspect that perhaps officials at Inland Revenue had seen exactly that going on. In fact, we know that there has been a fair amount of non-compliance around some of the FBT rules—perhaps because they’re unclear—and a fair amount of private use that wasn’t being accounted for in the FBT rules. So these are all pretty sensible changes sitting in there around fringe benefit tax.
However, I do think we’ll need to ask at select committee how Inland Revenue intends to monitor the way that businesses are classifying vehicles in terms of their private use or business use, and we’ll see what plans they have around that. There is something that we do need to know a little bit more about there.
In terms of the rules around financial arrangements—again, there are some very sensible changes. People say, “Well, what’s a financial arrangement?” It’s basically any long-term financial agreement—a mortgage, a swap, an investment bond—and, ordinarily, once it’s over a certain value, the income and expenditure and that has to be calculated spread over the life of the debt instrument or of the financial instrument. It’s complicated maths, and you really need to know how to do those finance calculations in order to do it. There are some sensible changes here around the financial arrangements rules to make sure that it’s just a little bit easier for ordinary taxpayers. Now, businesses likely still have to do the calculations, but they’ve got the resources to do it.
Something that people often didn’t realise is that debt denominated in a foreign currency falls into the financial arrangement rules.
Now, that’s a problem for a New Zealander who perhaps owns a house overseas and there’s a mortgage on that house overseas denominated in a foreign currency. That technically is supposed to be accounted for under the financial arrangement rules. Lots of people don’t even know that. Back when these rules were first put in place, the world was much less connected, people travelled less, but these days not only do we have many more migrants coming to live in New Zealand, but actually it’s entirely possible to get financing from a foreign bank quite easily, and so be subject to these rules.
There’s a pretty sensible exception that this bill is going to introduce to the financial arrangements: mortgages on private houses don’t need to be accounted for as a financial arrangement. Now, by and large, that looks like a good measure, but it does leave a wee bit of a potential loophole in the Income Tax Act. Where there’s a loophole, someone will walk through it if they possibly can. So, again, I want to check with officials during the select committee process as to exactly how they intend to monitor that and how they intend to ensure that people really are complying with the law.
However, as I said in my opening remarks, by and large, pretty much this bill looks like a very sensible tax bill—a standard tax bill that obviously advances the Government’s agenda, but also addresses several issues within the Income Tax Act. We will support this bill to select committee.
Hon JULIE ANNE GENTER (Green—Rongotai) (15:11): Thank you, Mr Speaker. Let me start by talking about one of the tiny, good things in the bill, and then I’ll speak to the Green Party’s concerns about the rest of it.
Fringe benefit tax. I had a member’s bill which was sadly voted down by members of Government parties earlier this term that would have fixed up some of the loopholes around a perception that company provided vehicles weren’t subject to fringe benefit tax if it was a double-cab ute, even if it wasn’t being used for work purposes and it was being used for personal purposes. This bill in front of us starts to incorporate some of that, which I’m relieved to see. I think, overall, the simplification looks like a reasonable thing.
There is a tiny incentive for hybrids and electric vehicles (EVs) to combat the fact that they actually were slightly penalised by the fringe benefit tax policy approach previously. Even going back to when I was Associate Minister of Transport, trying to talk to the then Minister of Revenue, Stuart Nash, I was trying to get the Inland Revenue Department to deal with this, and they were pretty obstinate. I think now we’re providing a tiny little incentive for companies to provide electric vehicles or hybrid vehicles as opposed to more high consuming fossil fuel vehicles as company cars.
That’s important because, actually, the majority of brand new cars that come into the country are purchased by businesses or fleet vehicles. So fringe benefit tax policy towards motor vehicles is a huge lever the Government can pull to ensure that we’re getting better outcomes from our vehicle fleet. That means better fuel consumption in a time of a fuel crisis—seems pretty basic. Getting those brand new EVs into the country also reduces the cost for ordinary New Zealanders who usually acquire their vehicles through the second-hand vehicle market. So that’s one tiny thing.
I mean, they could have gone much further. Australia exempted EVs from fringe benefit tax for five years or something like that and it worked quite well. That’s what my bill proposed, which the Government voted down. But here at least we’re seeing them do something sensible on the treatment of motor vehicles so we aren’t unintentionally subsidising fuel inefficiency and higher cost of fuel use through our fringe benefit tax approach to motor vehicles.
The Green Party won’t be supporting the bill. By and large, overall, our income tax policy penalises low-income earners and means that high-income earners like members of Parliament don’t pay enough tax. The Green Party have proposed quite a different approach in our tax policy that would see 96 percent of New Zealanders paying less tax, while still raising more revenue to invest in services and infrastructure that are for public good, which we all benefit from. We usually don’t support these bills because the current coalition Government, despite all their rhetoric around being about productivity, actually, what they’re mainly doing is upholding a status quo that allows those on the highest incomes and those with the most wealth to continue enriching themselves, whilst starving the Government and the public the revenue they need to invest in public good infrastructure and services. That is a political choice that does not help the country become more prosperous—quite the opposite. If you think that we’ve had a productivity problem in New Zealand for a few decades, maybe continuing the same approach, with the tax system, isn’t the right way to address it.
They also have significant concerns about some of the other aspects of this: introducing wider automated decision-making powers for Inland Revenue that can be used for decisions that impact taxpayers. This is an issue that we have had concerns about in relation to the Ministry of Social Development and benefits. We also have the same concerns when it comes to IRD. And it makes it easier for overseas-based student loan borrowers to be arrested. I just don’t think that’s the right approach at all. I mean, this Government has chased hundreds of New Zealanders overseas a day—hundreds a day; a huge number since they came into office—by cutting investment in public services and infrastructure, meaning there are no jobs, just making everything much worse for younger people who are already burdened with huge debt in order to access tertiary education or any type of vocational education. We really disagree with this punitive approach and the Green Party will not be supporting this bill.
TODD STEPHENSON (ACT) (15:16): ACT will be supporting the Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill. As the Minister of Revenue has already set out, this is a bill which does some very important things, including setting the annual rates for 2026-27 for taxation. As many people know, ACT is the OG “no new taxes” party, but we are also into tax simplification. The fringe benefit simplifications contained in this bill, we’re very interested to discuss and see it go through.
We often get a lot of questions about foreign investment fund rules—FIF rules—and again, there are some really sensible changes in here, which I think will help those having to navigate that very complicated system. I commend this bill to the House.
Dr DAVID WILSON (NZ First) (15:17): Thank you, Mr Speaker. New Zealand First rises in favour of this Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill. Beyond setting annual rates, the bill aims to continuously maintain and modernise the tax system by updating settings across foreign investment funds, fringe benefit tax, research and development tax, incentives, goods and services tax, not-for-profit organisations, and tax administration. It seeks to reduce tax barriers to capital and skills, eliminate unnecessary administrative compliance costs for small businesses, and provide legislative and certainty for modern digital administrative tools while protecting the tax base.
We certainly support the new rules for the foreign investment fund, raising the tax deductions from $50,000 to $100,000, and removing income tax return filing requirements for small non-profits—a very sensible arrangement for those small non-profits who are doing good charitable work in our communities. It delivers in-year advanced payments for R & D tax credits, putting vital cash flow into innovative Kiwi companies when they need it most.
This is pragmatic centre-ground legislation that cuts red tape and supports our productive sectors. I commend this bill to the House.
RYAN HAMILTON (National—Hamilton East) (15:18): Thank you, Mr Speaker. Look, this is a pragmatic bill. One of the great highlights I enjoy out of it is the phrase “close enough is good enough” from the Minister of Revenue, as we’re simplifying the fringe benefit tax piece of legislation into six simple categories: mainly private use, mainly business, mainly business use on farmland, private use limited to home to work commuting, business vehicles for home to work travel only, and pool cars. So it really does help to simplify it. Mr Speaker, I commend the bill to the House.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (15:19): Oh, thank you, Mr Speaker. A special treat to talk on a tax bill today. I was disappointed that the ACT member didn’t explain how tax on foreign investment funds works, because it is actually a pretty tricky area—I thought he was up to the job, but apparently not. In fact, this is something that constituents have approached me about: the difficulty where they—
Hon Matt Doocey: Ha, ha!
Hon Dr DUNCAN WEBB: Well, you might laugh, Mr Doocey, but I actually have constituents with wealth and they’re not all my uncle.
The fact of the matter is that if people come to New Zealand—particularly people who’ve been here for a while—they often have investments and pension funds in their home country. The foreign investment fund rules, as they currently sit, require a payment of 5 percent of the value per year—or that’s the deemed return on them, and so you’re taxed on that 5 percent whether the fund went up 5 percent or not.
Of course, the other problem with that is that you’ve got to actually find the cash, and if it’s a pension fund that’s over there, then you might not. In fact, the constituent I’m thinking of was on a modest salary in New Zealand—about $80,000—but did have a healthy retirement fund in the United States, and he had to find a sizeable chunk of cash to pay every year. He pointed out that there had been a carve-out for wealthy individuals coming to New Zealand whereby you could return the actual increase in the fund along with dividends and be taxed on that, which is essentially opting for an actual returns rule, as I understand it, rather than a kind of deemed return.
The whole idea of the 5 percent was to get around, essentially, the arduousness of valuing shares and dividends all the time. Here we have a situation where the indulgence that was extended to new immigrants essentially has been extended to everyone, and it makes really good sense that that’s the case. It is actually just enabling tax on real revenue, rather than on assumed revenue.
I must say, I giggled a little bit in terms of the fringe benefit tax and utes. I did mention to Deborah Russell, as she was speaking, that she needs to go to the Coronet ski field car park and see the number of branded utes up there. I do know that the IRD has been known to go to car parks at places like ski fields to see how many work vehicles are being used there. But this simplification of fringe benefit tax—I think there is always a balance between tax being accurate, being fair, and being workable. I think this fringe benefit reform kind of moves it towards the workability end; it’s not trying to get the tax perfect down to the last dollar.
The idea of lifting the categories of weight class is a good one because, obviously, you don’t want to be excluded from fringe benefit tax because you’ve got a double-cab ute that is over 3,000 kilograms. Moving that weight class up to 6,000 kilograms, so that we know that those vehicles clearly are light trucks and not everyday vehicles, is a really good thing.
Obviously, as we go through every year, we’ve got to update and confirm our tax rates. It’s a pretty fundamental part of the public finance framework. It’s a good bill, and obviously our members of the Finance and Expenditure Committee will be having a good old look at this bill at select committee, which is what should happen. In my experience, there are actually some useful tweaks around workability that happen in that forum. It’s one of those bills that because it’s a technical bill—and people do actually want the tax system to work effectively—there is some constructive feedback, and of course you get that independent advisor in who will also do much the same. So off to select committee it goes—not this Parliament, obviously, but the next one—and that’s all good stuff. Thank you.
DAN BIDOIS (National—Northcote) (15:24): This is a good bill. It’s particularly good for small businesses in its fringe benefit tax changes. I support it to the House.
Hon Dr MEGAN WOODS (Labour—Wigram) (15:24): Thank you, Mr Speaker. It is my pleasure to take a call on the Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill. This is a bill that Labour supports. It is a pretty standard tax bill—the kind of bill that comes to this House annually; it sets those annual rates, makes the changes that were included in the Budget, and various other tidy-up bits.
Now, there were some changes that were made at the Budget at the time that Labour said we were supportive of. For that reason, we are supporting this. One of those changes, actually, that I think is really important is the change to the foreign investment fund or FIF rules that were announced at the Budget. This is incredibly important in terms of how it is that we attract international investment to New Zealand. The way in which it did work was very much on an unrealised basis. Before we make these changes, the tax was charged on an unrealised amount. The investor was deemed to earn income equivalent to 5 percent of the opening value of their foreign shares each year, regardless of the actual income that they received.
Now, I think, across this House, we can see the benefit of attracting foreign investment to New Zealand—but not only foreign investment but attracting those individuals that want to come here and sometimes come home. I have met a number of New Zealanders who have gone overseas and done some remarkable things and want to come home, but they have got caught out by FIF rules. This is an important change. As New Zealand, increasingly we are punching above our weight in a number of industries. We have New Zealanders who do remarkably well, and they earn share options, often, in overseas companies, and when they come home, it can be incredibly complex. One of the changes that is made here, and one of the obvious changes that this bill is making, is that it moves that threshold from $50,000 to a new threshold of $100,000 for that.
There is also a new method for calculating FIF incomes on unlisted shares, which was introduced in the last tax bill, but it was only available to recent migrants. The new method, or the revenue account method, says that 70 percent of gains realised on the sale of shares during the year, plus any actual dividends received, are subject to the tax and the taxpayer’s marginal tax rate. This really shifts away from that idea of unrealised gain that happens in there.
The other change, and my colleague the Hon Dr Deborah Russell, who likes nothing more than the technicalities of a tax bill to go through in detail, and will be looking forward—well, this probably won’t be something that the current Finance and Expenditure Committee examines. But I know from other tax bills that she likes nothing more than going through in a very technical way, as both she and the Hon Barbara Edmonds are both technical tax specialists and like to pick the eyes out of such bills. My colleagues have talked about what’s happening in terms of the fringe benefit tax on motor vehicles, and that is a change that, I think, many see will need to be kind of kicked around a bit at select committee to have a look at whether it’s really doing what is intended and what we think is in the best interests around that.
The other change that is in this bill—and I’m interested to see what comes out of the select committee process about it—is the change around the research and development tax credit that is in here. The bill makes a good change to the Research and Development Tax Incentive. It enables businesses to claim credit quarterly, which improves their cash flow. This is especially useful for start-ups. It also expands the range of R & D expenditure that mining business can claim, and this is something I really want the select committee to have a very close look at in terms of what really is the research and development that’s happening within that industry, and what is it that is being given a tax break? We know that we have R & D tax incentives in New Zealand because we want to stimulate innovation—it’s the kind of economy we want to create—and we really need to have a look at whether that is fit for purpose.
Labour does support this bill. It is a bill we will happily pick up as a Government, because we know that this country cannot afford another three years of this National Government.
NANCY LU (National) (15:29): What this country can afford is a National Government that is focused on making sure that our tax settings are fair and just, and also a National Government that has already delivered tax relief to Kiwis for the first time in 14 years—and also another three years of a National Government that will continue to strengthen and ensure that our tax system is fair. Therefore, I commend this bill to the House.
KATIE NIMON (National—Napier) (15:29): Mr Speaker, thank you very much. Look, anything that reforms tax for small business is a wonderful thing, so with that, I commend the bill to the House.
A party vote was called for on the question, That the Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill be now read a first time.
Ayes 101
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.
Noes 21
Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
Bill read a first time.
Referral to Select Committee
SPEAKER (15:31): The question is, That the Taxation (Annual Rates for 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill be considered by the Finance and Expenditure Committee.
Motion agreed to.
Bill referred to the Finance and Expenditure Committee.
Sittings of the House
Urgency
Hon LOUISE UPSTON (Leader of the House) (15:31): I move, That urgency be accorded—
the remaining stages of:
the India Free Trade Agreement Legislation Amendment Bill,
the Local Government (System Improvements) Amendment Bill,
the Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill, and
the Summary Offences (Move-on Orders) Amendment Bill;
the first reading and referral to select committee of:
the References to Tiriti o Waitangi/Treaty of Waitangi (Repeals) Amendment Bill,
the References to Tiriti o Waitangi/Treaty of Waitangi (Standardisation) Amendment Bill, and
the References to Tiriti o Waitangi/Treaty of Waitangi (Strength of Legislative Obligations) Amendment Bill;
the second reading and committee stage of the Agricultural Compounds and Veterinary Medicines Amendment Bill;
the remaining stages of the Public Works Amendment Bill;
the committee stage of the Pae Ora (Healthy Futures) (3 Day Postnatal Stay) Amendment Bill; and
the remaining stages of:
the Building (Earthquake-prone Buildings) Amendment Bill,
the Policing Amendment Bill, the Corrections (Management of Prisoners, and Prisoners’ Property) Amendment Bill,
the Immigration (Enhanced Risk Management) Amendment Bill, the Land Transport (Revenue) Amendment Bill,
the Financial Markets Conduct Amendment Bill, and
the Commerce (Promoting Competition and Other Matters) Amendment Bill.
Today, we accord urgency, in the second to last week of the 54th Parliament. No bills are going through all stages this week or bypassing scrutiny. This is, once again, overtime. Our Government has had a significant legislative agenda, and it isn’t quite finished yet. Some of the bills are being sent to select committee today so that committees can open submissions before the Parliament dissolves. The rest, we aim to enact before the end of the term—all worthy bills which will have positive impacts on New Zealand and New Zealanders.
A party vote was called for on the question, That urgency be accorded.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
Bills
India Free Trade Agreement Legislation Amendment Bill
Legislative Statement
Hon TODD McCLAY (Minister for Trade and Investment) (15:34): I present a legislative statement on the India Free Trade Agreement Legislation Amendment Bill.
SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Second Reading
Hon TODD McCLAY (Minister for Trade and Investment) (15:35): I move, That the India Free Trade Agreement Legislation Amendment Bill be now read a second time.
The Foreign Affairs, Defence and Trade Committee has carefully considered the bill, and I want to thank the members of the committee and officials for their work. The committee also took the time to carefully consider all submissions, and I commend them for that approach. I recognise that they worked incredibly hard to scrutinise the legislation in tight time frame, including when Parliament was in session, to make the necessary recommendations and to have the bill ready for the House today. The committee has also recommended technical amendments to the bill.
The committee has recommended amendments to Part 1 and Part 4 of the bill, and I welcome those amendments. Part 1 of the bill establishes a new quota for the export of milk albumin to India. It amends the Dairy Industry Restructuring Act (DIRA) 2001 to incorporate the albumin quota that we secured under the free-trade agreement (FTA) into New Zealand’s existing diary quota export licensing regime. Part 1 adds India as a designated market for albumin exports and provides for a regulation-making power to enable up to 10 percent of export licences to be reserved for smaller and new exporters.
The addition of clause 7A, inserting new section 26C, will provide flexibility if the FTA enters into force on a date other than 1 January. In that circumstance, quota must be allocated on a pro rata basis, to reflect the proportion of the quota year remaining. This allows New Zealand albumin exporters to benefit from improved access to the Indian market and provides certainty for exporters during a partial quota year. This is consistent with arrangements for other FTAs that have been given effect to under DIRA.
Part 4 of the bill establishes the framework for quota management systems for apples, kiwifruit, and mānuka honey. It enables regulations to set up systems to allocate quota return or transfer quota, issue export certificates, and provide information to Indian authorities. The amendments recommended by the select committee are largely technical and operational in nature, reflecting issues identified by officials during the development of the regulations and matters raised by submitters and the committee. Collectively, these amendments improve the clarity, transparency, and workability of the quota management system established under the bill.
The amendments strengthen the administration of quota arrangements. They improve quota manager requirements, transparency of quota allocations, audit arrangements, compliance and quota allocation, and management mechanisms. These amendments and the other minor technical changes are about striking the right balance, protecting the integrity of New Zealand’s quota management systems while ensuring enforcement powers are clear, proportionate, and consistent with those available under comparable regulatory regimes. No amendments were recommended for Part 2 or Part 3 of the bill.
The India FTA is one of the most significant trade agreements that New Zealand has secured in decades. Before I go on, I just want to recognise that, in the committee stage, the bill will be split in half, which is normal practice, so that the quota management is a separate piece of legislation. I do want to recognise, from discussions with the Hon Damien O’Connor, that whilst the committee might have been informed later in the stage—if there is any understanding around that that is different, I want to offer an apology for it—it is exactly the same as what happened with the UK FTA. It’s standard practice in the House.
The FTA opens the door to the world’s fastest-growing major economy, a country of 1.4 billion people and a middle class expected to reach 700 million consumers by 2030, and a GDP expected to reach $12 trillion in that same year. At a time of rising global uncertainty, New Zealand needs more customers, more markets, and more opportunities. As a small exporting nation, with one in four New Zealand jobs linked to exports, we depend on rules, relationships, and agreements to ensure our economic security and prosperity. FTAs, particularly with growing economies, allow our world-class exporters access to markets otherwise blocked. Growing exports means growing incomes, investment, and opportunities.
Once implemented, this agreement will create new opportunities and a level playing-field for most New Zealand exporters, relative to their competitors currently trading under their own agreements. Australia, the United Kingdom, and the European Union have all concluded FTAs with India, and we cannot afford to be left behind. In the first two years of the Australian FTA, with India, entering into force, its forestry exports to India surged 119 percent whilst ours fell 19 percent during the same period. Our share of sheep meat also dropped dramatically once Australia’s FTA with India entered into force. We used to provide 85 percent of India’s sheep meat imports, and this fell to 9 percent since Australia signed their FTA, with Australia now representing 91 percent of India’s sheep meat imports.
The agreement restores New Zealand’s competitiveness and puts our exporters back on a level playing field. The numbers speak for themselves. From day one of entering into force, 57 percent of our current exports will enter India duty free. This rises to 82 percent over 10 years when fully implemented. Another 13 percent will benefit from sharp tariff cuts. This means that tariffs on 95 percent of our current exports will be eliminated or sharply reduced. Tariff elimination on day one for a range of key products—including forestry, sheep meat, and wool—will ensure immediate benefits for exporters in those sectors. For goods like seafood, most industrial products—including iron and steel, bulk infant formula, cherries, and avocados—will see tariff elimination over periods of seven to 10 years. Other key exports like apples and kiwifruit have secured sizable duty-free quotas that offer commercially meaningful access into the market and additionally 50 percent out-of-quota tariff reduction for kiwifruit. Mānuka honey will benefit from a sharp reduction in tariffs over five years. On dairy, tariffs on bulk infant formula, other dairy-based preparations, and peptones will be phased out over seven years, while tariffs on albumins will be halved within a quota covering recent trade.
Beyond new market access, the deal offers more certainty for our services exporters, for investors, and for Kiwi businesses looking to increase their footprint in India. India has made commitments on almost 100 additional sectors above its World Trade Organization (WTO) commitments, including, crucially, a most favoured nation commitment for services. This means that any better access India offers future FTA partners in key services sectors will automatically flow through to New Zealand and that our agreement gets better over time. This is the case with the FTA concluded with the European Union and India. New Zealand will benefit more by passing this legislation and putting the agreement in force before the EU’s FTA.
This agreement strengthens more than our economy, and the New Zealand - India FTA will also assist the development of stronger trade, economic, cultural, and people to people links between our two countries. The legislation before the House is straight forward. New Zealand has secured this deal with India in record time—vital for our exporters and the Government’s goal of doubling the value of exports over 10 years. It will create opportunities for farmers, growers, manufacturers, innovators, service exporters, and small businesses across New Zealand. The India FTA stands to serve our economy, our exporters, and our future, and I commend the bill to the House.
ASSISTANT SPEAKER (Greg O'Connor): The question is the motion be agreed to.
Hon DAMIEN O'CONNOR (Labour) (15:43): Thank you, Mr Speaker. Labour rises to support this bill and this trade agreement. The Minister has said this is one of our most significant trade agreements. We do have to make a mountain from a molehill to achieve that agreement, I think. It is indeed a big step forward, but it is at a relatively low volume across many of the sectors—sheep meat, for example. Not to belittle the potential for this agreement, but I think it’s the start of a very long journey with a very big country for a very small country.
I want to acknowledge the Minister and the officials for the work they did. There has been, through previous Governments—including Labour—a lot of work put in. I want to take this opportunity in the House to acknowledge Jane Cunliffe, who had worked in my office, who had worked with the Minister previously, who has just left, and who had been a trade commissioner in India and been part of a team of people who lived in that country over many decades, building a positive relationship that allowed this trade agreement to move forward so quickly.
We were told of this agreement at the end of last year. We knew that there had been work going on and that the Government and the Ministers had put in a lot of effort, but it was at the very late stages of 2025 that the Labour Opposition was aware that this agreement had been signed. But, actually, before the end of the year, of course, we also found out that it wasn’t a done deal, because the coalition partner New Zealand First indicated it wasn’t going to support the deal.
There had been, at that point—of course, over the Christmas period—a lot of questions focused our way—is Labour going to support this? Unfortunately, the Government had chosen not to include the Opposition at any stage through the negotiation of this agreement, so we had to then set about investigating what was in the detail of the agreement, and the devil is often in the detail. And we had a coalition partner, led by the Rt Hon Winston Peters, saying that this was a terrible agreement and that he wasn’t going to commit to it and that was it. Then we had the ACT Party and the National Party—and I know the Minister and a lot of his colleagues have done a lot of work, including the Prime Minister, visiting India—saying this was the greatest thing since sliced bread. We only got a copy of the agreement at the end of January, and we committed to the Government, in confidence, to go through that agreement as best we could. We asked for background information. It was a little like getting blood from a stone to get some of that information, which made us a little wary of whether the deal was a good one or not. The headline issues were, raised by the Rt Hon Winston Peters, that we were going to be flooded by migrants and that we were going to have to commit $33 billion in investment from New Zealand, and the Government had guaranteed it. Well, those were the claims.
Look, we went through that agreement very, very carefully, as I say, in good faith with the Government, checking that in what had been a political commitment to this from Christopher Luxon to get this deal over the line—very ambitious, I’ll say that—we hadn’t cut corners or in fact, given too much away in what is always a very, very challenging situation. Negotiating trade agreements is not easy. We’re talking about the sovereign rights of one country, the sovereign rights of another, and reaching compromise, ultimately, to get a good deal for both, not the best or a perfect deal for either side but a compromise that satisfies the interests or the vast majority of interests in both countries, to move forward and ultimately to be in a better position after one or two or five or ultimately 20 years. We came back to the Government in April, and we said, “On balance, in spite of not having all the information, we believe that it is a good step forward.”, and we agreed to support that. Indeed, a few days later, of course, that agreement was signed, and I was in India with the Minister, and he invited me over, and I appreciate and acknowledge that because it does have to be bipartisan arrangement. It has to be New Zealand, not just political parties, committing to agreements like this, because they do affect both our opportunities and some of our obligations into the future.
The select committee then went through, and I’d like to acknowledge the members of the committee for looking at the treaty, for the treaty assessment process that we did, for looking at the deal, and for listening to people coming in and making submissions. I think that was a very thorough process. Now, we have in the House, of course, a piece of legislation that the committee has looked through. It’s come back to the House, and as the Minister said, we just had a last-minute amendment that actually splits the bill. Now, we can understand the technical side of it and the justification for it. However, the committee didn’t have an opportunity to just check whether splitting the bill would make any difference to the outcomes or the opportunities from this. None the less, we’ll take the Minister’s word there, and I’m sure there will be some scrutiny in the committee stages in the House here to ensure that splitting the bill does not move from what we heard in select committee and what the select committee understands will be the final outcome of the bill.
Indeed, the outcomes are opportunities. They are not huge steps forward in benefits for New Zealand. The tariffs are lowered, and the quotas are put in place and, over time, may be reduced, but it is ultimately up to the exporters to take up the opportunities offered by this agreement. They are reasonable, and they are significant, but it will take some time to run through that.
If I can just point to a couple of things, as I say, Labour has always supported moving forward with trade agreements for our country. We are a trading nation. We are totally dependent upon that, and the things that we have to trade off are few and far between. We’ve always been open. We have very few tariffs. In the areas of investment, which is one of the areas where we’ve always got to put on the table, we have normally moved up to $100 million of investment into our country with very little scrutiny. The threshold has been moved to $200 million where people can almost, as of right, with some exceptions, be able to invest in our economy. It’s normally positive, but not always, so we’ve got to keep an eye on that.
This agreement allows investment from India into our economy of up to $200 million, and with not much scrutiny. What is concerning, of course, and the Government has yet to answer this, is the commitment to promote investment from New Zealand into India of $33 billion within 15 years. That is an ambitious target. That is an ambitious target and the Minister for wool over there would probably rather turn his back on, actually, the most significant market for wool in India, and insult the Indians by saying, “Well, we shouldn’t try.”
The scrutiny that we passed over this piece of the bill and its detail was that it is to promote the investment into India, not the final figure itself. Now, Prime Minister Modi came here and he said it was certainly high on his agenda. He certainly wants to see investment in India, and we have to be mindful of that expectation. Governments over the next 15 years will have to keep an eye on the level of investment. I’ve spoken to some of the sectors; not a great deal of enthusiasm at the moment, but this is a market of 1.4 billion people and, indeed, we will have to have a commitment from exporters to invest in that market if they want to maintain the benefits negotiated in this agreement. It is nonetheless a risk, and we in Opposition have tabled that risk, which is why I go back to one of the most significant trade agreements. I’m not quite sure that I agree with the Minister for Trade and Investment on that, but it is certainly, potentially, significant.
On the issues of immigration—another thing raised by New Zealand First—the Labour Party has scrutinised this very, very carefully. It does offer opportunities for Indians to come into our country, but they are limited in number and limited in the associated benefits with that Temporary Employment Entry particular assigned—I don’t know what you call it. Anyway, it is a particular pathway for migrants that is unique to this agreement, and, indeed, the terms have been written into this agreement. We feel assured that, actually, that does protect us from rampant migration, and no doubt we’ll hear some counter views from New Zealand First.
The third area is innovation, and it will be through partnerships and innovation that we build our strongest partnerships with India. That was indeed the topic of many conversations that I had as trade Minister, and that my colleagues in Government had as Ministers when they visited India. This does offer huge opportunities into the future. The Labour Party supports this legislation through, but there are some risks that we have to acknowledge, and those risks go with the opportunities. Ultimately, it’s up to the exporters as to whether they take those up.
Dr LAWRENCE XU-NAN (Green) (15:53): Thank you, Mr Speaker. I rise on behalf of the Green Party of Aotearoa New Zealand to speak on the India Free Trade Agreement Legislation Amendment Bill. Now, the Green Party has opposed the agreement in the past, so it makes sense the Green Party will not be supporting the India Free Trade Agreement Legislation Amendment Bill.
Now, there are a couple of things, and I think both the Minister for Trade and Investment and also the Hon Damien O’Connor have mentioned the agreement that kind of underpins this particular bill, so it’s important for us to sort of address some of these areas as well. I think one of the fundamental challenges, and particularly for the Greens, when we’re looking at any sort of trade agreement is, firstly, we do have a level of scepticism when it comes to bilateral trade agreements in general. We have seen that bilateral trade agreements have been used more and more often now because of the challenges that the World Trade Organization is facing, despite the fact that, yes, it can still be said that most of the trade agreements internationally are still multilateral, or even plurilateral in some instances. Using the New Zealand - India free-trade agreement as an example, we do see India, that is traditionally hesitant when it comes to bilateral trade agreements, increasingly signing bilateral trade agreements, or at the same time, trying to uphold this international rules-based trade system as well, making deals with Aotearoa New Zealand, making deals with Australia, with the EU, and the like.
We’re seeing that even countries that are shying away, traditionally, from bilateral trade agreements are making some of these agreements. But fundamentally, one of the things that is still a continuous concern for the Greens is that the over-use of bilateral trade agreements, although works to a certain extent, does undermine the way that we look at that international rules-based trade system in general, because bear in mind that there are countries, India being a good example, that may not have the ability to negotiate strongly; or other countries that we see who are blatantly violating some of that international rules-based system, whether it is the increase in tariffs in the US or protectionism in other countries when it comes to resources.
When we’re looking at Part 1 to 4 of this bill, there are also other areas that are of concern as to how they have manifested through the agreement itself. Now, we have heard that we still haven’t received clarity around what that US$20 billion of intention to promote really means for our people and for our businesses here in Aotearoa New Zealand. That’s $33 billion over 15 years. Yes, we can say that it’s the intention to invest and all of those, but the problem is that the country that does make that kind of decision falls with India as opposed to their being part of a joint discussion. I think that continuously is a concern, like the Hon Damien O’Connor has said, that this is going to take future Governments, regardless of who is in power, nuance and a level of balance and also diplomacy to be able to get some of that right and to be able to work through what that potentially means. Also, fundamentally, it seems wild that we’re also expecting that the Government in some ways is having this level of commitment and requiring our businesses to be able to do that.
Now, of course, there are other levels of commitment in here, whether it is the impact this will have on our tariffs being a key thing. Because bear in mind, even though you look at Part 1, which talks about dairy tariffs and also, particularly, around things like albumin, which is a big part of this particular agreement—and my colleague Steve Abel will be speaking more around agriculture and dairy in general—but that is also a concern because, again, a lot of the tariffs of imports coming from India will be removed from day one, but a lot of the tariffs that we see for our export sector going into India will only decrease over time. If India, in this case, does find that we are violating some of the terms and conditions, particularly around the intention to invest, they’re able to remove some of the tariff reductions that we are supposed to be enjoying even as a part of this bill. That is something that is also a concern for us to think about. Of course, even when it comes to bilateral agreements, from a Green perspective, environmental protection and climate action and labour rights absolutely underpin what we consider to be a good bilateral agreement, which is why, out of a lot of the bilateral agreements we’re currently seeing, the New Zealand - EU free-trade agreement is the only one that we have supported thus far.
But there have been a lot of conversations. I’m noting that the bill that we do have, and we have lots of questions for the Minister during the committee stage as well, is a manifestation of that particular agreement, so the ability for us to even look at some of these things that we could change is quite limited, even though some of the changes we have seen during the select committee stage deviate from what we have seen in other comparable free-trade agreement bills or Acts in the past, or even comparable acts that are related to this, and I’ll mention a couple of examples. But through the committee of the whole House stage, I think one of the first things—you know, whether we’re looking at tariffs or we’re looking at other forms, the quota and how we look at quota managers, and the management of those quota continues to be a big focus in this piece of legislation.
One of the things I think is really interesting that we’ll kind of explore more fully during the consideration of this bill, as opposed to the consideration of the agreement, is what’s the genus, when we’re looking at—because, you know, as part of the agreement we’ve had the Apple Action Plan, the Kiwifruit Action Plan, the mānuka action plan. I would be keen to know, particularly when we’re looking at Part 4 of this bill—and we did have a little discussion during the select committee stage around what is captured by “kiwifruit” in the Kiwifruit Action Plan; noting some of the ongoing concerns we have with the loss of some of the cheaper varieties in China, as a result of some of those particular stocks being leaked is probably the best word that comes to mind immediately, but I’m sure there are other more appropriate words for that. For us, it’s really important to be able to prevent—
Hon Member: Stolen.
Dr LAWRENCE XU-NAN: “Stolen” is possibly a strong word. I guess it depends whether it was passed on, whether it was stolen by someone else. I think, you know, if we were looking at it from the context of criminal law—maybe we need to have a bigger discussion in the committee stage around mens rea and actus reus. I’m happy to have that conversation.
But it is interesting to see, in this agreement in particular, that mānuka honey—specifically mānuka—is locked in. I’ll be keen to know what that, potentially, means for other bilateral trade agreements, particularly when it comes to the Australia - India free-trade agreements.
Just finally, a couple of other things that we had considered during the select committee stage—it’s around search and surveillance, but particularly around investigation. I think this is something that we still do need to tease out. I know that this is something that my colleague Vanushi Walters and I did have a fair bit of conversation and discussion about as a part of the consideration of this bill—and also in terms of some of the aspects when it comes to secondary legislation about fee setting. I think it’s also important for us to consider this further during the committee of the whole House stage with the Minister for Trade and Investment.
One of the things I would like to point out, finally, and this is more of a broader concern that we do have—one of the things that the Green Party is is disappointed. This is, from a process perspective—like the Minister said, like the Hon Damien O’Connor said—an important treaty examination. But at the same time, the Government could not even adhere to its own Cabinet Manual, of refraining from taking any binding treaty action, in respect of a treaty that has been presented to the House, for 15 sitting days, but expected a select committee to move up the schedule for deliberation within that 15 sitting days. I believe we only had about nine sitting days to consider the agreement itself before the first reading of this bill was introduced. That simply is not good enough because when we saw the Trans-Pacific Partnership agreement, the Foreign Affairs, Defence and Trade Committee and the Government actually extended the time for consideration because it was important.
But again, it just highlights that this bill—we’re yet to see if this will genuinely be beneficial for the people of Aotearoa New Zealand, or if it is something that’s simply for political gain. So the Greens will not support it at this stage.
LAURA McCLURE (ACT) (16:03): Thank you, Mr Speaker. I rise on the second reading in support of the Indian Free Trade Agreement (FTA). Firstly, I just want to thank my other committee members for the work that we have done in scrutinising this legislation. This is the enabling legislation, but, as many members before me have started to speak quite a bit about the agreement itself, I will note that ACT did have some concerns, but we felt that they were well-traversed throughout the committee of the whole House stage, and we’ve landed in a relatively good position here.
The bill that is coming in to help with the legislation and getting it in place is really about setting out the framework, the quota management system, how it will work, and also around amending the Overseas Investment Act, for example. So that is really small technical stuff.
There has been heaps of commentary on the Indian FTA and I will agree that I think it is a really small step in the right direction. There was certainly not enough credit given to the likes of dairy, for example. Some of the quota amounts are quite small in some areas, and I think that we could have been far more ambitious. But you have to start somewhere. I think the Minister outlined, very succinctly, that India has the fastest growing middle class globally. New Zealand is not in a benign position; we are a tiny island nation at the bottom of the planet. We need to make sure that we are diversifying our trade options. For that reason, I’m going to commend this bill to the House.
Dr DAVID WILSON (NZ First) (16:05): I rise on behalf of New Zealand First to oppose this bill, the Indian free-trade agreement (FTA) bill, especially in the form that it is in.
Hon Damien O'Connor: What about the wool!
Dr DAVID WILSON: The wool is a product we’re selling. If you listen long enough, you’ll learn the difference.
New Zealand First has, in its manifesto—
ASSISTANT SPEAKER (Greg O'Connor): I’ve lived long enough, thank you, Mr Wilson.
Dr DAVID WILSON: —the aspiration to sign a FTA agreement with India, just not this version.
An FTA should deliver mutual benefits; this one advantages India over New Zealand. We need to get it right. Foreign affairs Minister, the Rt Hon Winston Peters, has visited India on many occasions to further New Zealand’s interests and facilitate a mutually beneficial agreement.
New Zealand First supports expanding New Zealand’s access to major global markets. As an export-driven nation, our prosperity depends on selling goods and services to the world and India, home to around 1.4 million people, represents a significant market. However, FTAs take time and should not be done in record time, as we heard earlier. With due care when negotiating an agreement and drafting legislation, we enter a legal arrangement that commits both parties under the World Trade Organization General Agreement on Trade in Services and General Agreement on Tariffs and Trades, and, on the other hand, our own domestic legislation.
The current Indian FTA bill has been too rushed and falls short in several areas and therefore should not proceed in its current form. The national interest test highlighted some concerning loose ends which, combined with various hooks in the agreement itself, does not put New Zealand on the same level as India in this agreement. New Zealand First would like to see some of these issues resolved. The trade imbalance: New Zealand is opening its market more fully and immediately than India, particularly in dairy and horticulture, while India retains significant protections, concessions, and exclusions. New Zealand has fully liberalised all tariffs on Indian imports from day one under this agreement, from a very low 2.2 percent tariff base, whereas India has 30 percent of its tariff lines remaining at high rates up to 33 percent with very gradual reductions.
The Indian economy sits around $4.1 trillion with a rising middle class compared to approximately US$240 billion for New Zealand. Our export impact on India’s economy is tiny, limited, and exclusionary. India’s potential impact on New Zealand’s economy, on the other hand, is vast and open. Why on earth—why on earth, then, are we investing New Zealand dollars—$32 billion—in their economy with no reciprocal agreement?
Immigration: this agreement goes beyond trade by embedding migration commitments that could limit future New Zealand Governments—aka us—control over immigration settings. It’s going to be in the agreement. There are uncapped and open-ended migration pathways that will impact New Zealand and New Zealanders. For example, uncapped student visas with 25 hours per week paid work allowable with a two-year post-study extension work visa, and after that, even, you can have a further extension if you wish.
The words that you were looking for, the Hon Damien O’Connor, were the uncapped intra-corporate transfer work programme—nice words—for work specialists, like yoga teachers—we need more yoga teachers, apparently! This allows for up to three years’ employment and access for partners and children who can also seek student or work visas whilst here, three-year work visas—take one of those—with an accredited employer. Oh, and a further work visa for another five years—post-study and post-work visas that can lead to residency applications with familial skilled migrant business and investment specialist work access. It goes on, and it goes on. New Zealand First has concerns about these things and argues that it will increase pressure on housing, infrastructure, services, job security, and social cohesion at a time when our youth and unemployed need jobs.
Investment: New Zealand First objects to the proposed commitment to facilitate US $20 billion of outward investment into India over 15 years, especially because India may be able to rebalance some of these concessions, the Hon Damien O’Connor, on tariffs, intellectual property, and quotas if it considered that New Zealand had not met its cooperation agreements. The commitments under these cooperation agreements are not benign.
Agricultural cooperation and quotas: New Zealand First is concerned that cooperation mechanisms and agreed action plans could compel New Zealand to share valuable agricultural expertise, cultivars, tacit knowledge, and intellectual property while exposing New Zealand to penalties if these commitments are not met.
Intellectual property (IP): a major risk in this agreement is that New Zealand plant varieties, seeds, technology, trade secrets, and industry know-how could be transferred or weakened under India’s IP framework, especially given India’s non-membership of the International Union for the protection of New Varieties of Plants. Come on, guys. We’re giving our stuff away; we’re selling our knowledge. Have we not learnt? Intellectual property within industry sectors is more than a legal definition of one innovation, strain, strand, or cultivar. IP, trade secrets, technology transfer, and sharing of expertise are evident in this FTA under those agreed action plans. Figure it out. New Zealand needs to be sure that there is no such repeat of, for example, SunGold Gold3 kiwifruit, mānuka honey in Australia, Envy apples in China, and the list goes on. We have not protected our stuff, and here we are doing it again. This is kind of crazy.
Domestic Indian legislation—have we really looked at this?—provides scant evidence for the protection of New Zealand’s IP and shared expertise—scant evidence. Why are we selling our trade secrets when we could be taking advantage of years and years of science, producer practices, and tacit knowledge and when we could be protecting our strongest competitive export advantages instead of giving them away?
Rules of origin and manufacturing: we haven’t come across that yet. Let me say what New Zealand First warns about—the specialist high-value dairy ingredients. We will be vulnerable to the rules of origin abuses by providing the opportunity for intermediary countries to exploit preferential trade agreements. The few concessions in the India free-trade agreement include tariff concessions on specialist dairy ingredients, such as albumins and peptones to be re-exported from India—in other words, New Zealand’s only dairy access—to support India’s manufacturing and value-added products. Why are we giving that expertise away?
Hon Mark Patterson: This is a terrible deal.
Dr DAVID WILSON: We’re getting there. How about the financial systems you’ve signed up to? Did you know about those? Come on. Those on the Finance and Expenditure Committee might know a little bit about this. There is concern in this agreement about the cooperation on digital payments, unified payments interface integration, fintechs, central bank digital currencies—CBDCs, right?—data governance, scams, privacy, and financial sovereignty. New Zealand First does not see how these clauses are fundamental to this agreement, given New Zealand itself is still concerned about, and still considering, all of these things. We’re not there yet with CBDCs. Come on. We’re signing a free-trade agreement, thinking that that’s going to solve it for us. Are you crazy?
The United Nations Declaration on the Rights of Indigenous Peoples and the Paris Agreement: these commitments should not be included in the trade agreement, because they could turn domestic policy choices into FTA obligations. We’re signing up to it with them; we have to live up to it. New Zealand First believes this free-trade agreement is not a good deal for New Zealand and New Zealanders. It is not too late to turn this into a free-trade agreement that benefits New Zealand and is in agreement on trade. Thank you, Mr Speaker.
ASSISTANT SPEAKER (Greg O'Connor): Steve Abel—five minutes.
STEVE ABEL (Green) (16:15): Thank you very much, Mr Speaker. We believe that trade, globally, should be focused on fairness, not simply on the removal of barriers to corporate exploitation of people. This bill has some real problems with it—this free-trade deal—and I want to outline some of the ones that the Green Party is concerned about. One common thing that we try and get better trade on, with other nations, is our dairy products. I think it was inappropriate for us to seek to flood or impact the local Indian dairy industry and market with New Zealand dairy products, because why would we as a nation that is, as is commonly expounded in this House, so dedicated to the dairy industry want to undermine the most ancient subsistence dairy culture in the world?
Cows have been farmed in India for 8,000 years. Do you know how many dairy farmers there are in India? About 80 million dairy farmers. Most of those dairy farmers own between two and three cows. Some only own one cow. Many of them are landless. They are subsistence farmers. They provide nutrition to their households and some small income from the dairy that they produce. I don’t believe it was ethical or appropriate for us to ever seek to undermine dairy farmers in India with our dairy product, here, from New Zealand.
Hon Andrew Hoggard: So if we all have one cow, then you’ll stop attacking the dairy industry in New Zealand?
STEVE ABEL: What did he say? I missed it. You’ll have to tell me that later, Mr Hoggard.
There’s another very glaring problem with this bill that has been outlined by our colleagues from New Zealand First. No, we’re not going to make a xenophobic attack on it, because we don’t believe in a race-baiting nationalism, which is the last refuge of the scoundrel; we believe in criticising it on economic grounds. It is the obligation that we shall promote foreign direct investment from New Zealand with the aim to increase foreign direct investment inflows to the value of United States $20 billion. That has been said before by my colleague Lawrence Xu-Nan—that’s $33 to $34 billion New Zealand dollars at current exchange rates. That has to be achieved within 15 years. Now, for context, there is nigh on zero possibility that we can achieve that, because New Zealand’s total foreign direct investment (FDI) outflow—abroad to all countries in the entire world—in 2025 was $1.46 billion. Just think about that figure. Less than $1.5 billion dollars is how much FDI New Zealand invested in every other country in the world, and we are signing up to an agreement whereby, in the next 15 years, we’re going to achieve a $34 billion investment in just one country. Where in the Lord’s name is that going to come from?
Foreign direct investment requires us to find the monies to invest in another country—i.e., not invest in our own country—and exporting such massive volumes of capital would be flying in the face of our current balance of payment position. We run a chronic current account deficit, and it’s largely driven by the outflow of profits to foreign investment in New Zealand—i.e., to Australian banks and to Australian companies that now own our meat industry in part. Additional financial outflows of direct investment to India would require either additional exports, fewer imports, or higher overseas debt to compensate. The New Zealand dollar would fall in value, making imports more expensive and overseas debt more expensive to service. This, in the name of doing good for our economy, is actually a total nightmare for our economy over the next 15 years, and that particular part of this agreement will come back to bite future Governments very hard.
TIM VAN DE MOLEN (National—Waikato) (16:20): Thank you, Mr Speaker. Look, we’ve traversed well the fine benefits of this free-trade agreement (FTA), and so I’ll focus my comments on the changes made through the select committee process. I do want to start by thanking submitters for their contributions through that process, and also fellow members of the Foreign Affairs, Defence and Trade Committee and the advisers. We did consider this in a very efficient time frame, and the aim of that was to make sure that we could get ahead of the EU FTA with India in order to enjoy that most favoured nation status with regard to wine, in particular.
Our focus was really around the nuts and bolts. We ensured that the Ministry for Primary Industries were considered accountable at the same level as other non-Crown quota managers. We put in a deadline to have a reasonable time frame for appeal processes around quota allocation. We got rid of the need to gazette those so that there’s less red tape, and we had some broader consultation on fee-setting, as well. Then, with regard to the search powers piece, we didn’t think it was appropriate to give warrantless search powers in this instance.
Those were a quick summary of the key changes we’ve made. This is a good piece of legislation, and I look forward to it progressing. Thank you.
VANUSHI WALTERS (Labour) (16:21): Thank you, Mr Speaker. Like my colleague the Hon Damien O’Connor, I rise to speak in favour of the India Free Trade Agreement Legislation Amendment Bill at this second reading and to commend the Minister for Trade and Investment for seeing the agreement through, but, as my colleague has said, really, the foundations of building the relationship happened before this term. I will speak in more detail to that at the third reading of the bill, but I did want to mention that in 2020, there was a five-year plan that the Labour Government put into place in terms of developing that relationship. Both the Hon Damien O’Connor and the Hon Nanaia Mahuta were very much responsible for driving forward that platform, on which this agreement proceeded.
As the Hon Damien O’Connor has said, this isn’t necessarily the agreement that we would have negotiated, but it is a start and it does present an opportunity for New Zealand, both for our larger exporters and also for our small and medium sized enterprises, as well. We heard from a number of submitters, including Business New Zealand, ExportNZ, Zespri, Seafood New Zealand, Beef + Lamb New Zealand, and others, about just how much they expect it to benefit their business in the coming decade-plus. As has been mentioned, export is directly connected to one out of four jobs in New Zealand, and so it certainly is a benefit, despite what others in the House have said.
Now, of course, this is an interesting piece of legislation because we first had the treaty examination process and received submissions on that. Can I commend the chair of the Foreign Affairs, Defence and Trade Committee, Tim van de Molen, for his work both on that part of the hearing as well as on this part, which was much more specific about a much thinner range of issues, but the submitters who made submissions in relation to this bill, regardless, submitted on the agreement itself in quite a broad way, and so I did want to speak to some of the issues that others have traversed, as well.
The first one is the investment commitment. As has been said, this isn’t a commitment in regard to the amount itself—so the $33 billion—but it is a commitment to promote. It is an effort clause in terms of how I like to see it, and it is one that we are obliged to work towards over the course of 15 years. But others in the House have used the word “clawback”, almost suggesting that once we get to 15 years, if India is not satisfied that that effort clause has been met, they can somehow retrospectively claw back some of the benefits to our exporters that they have already accrued, and that’s simply not the case. So, just to be clear on that, that is a clause that kicks in in 15 years’ time and, in the meantime, all those benefits are available to our exporters, and certainly I would expect the relationship to develop as such.
The second issue is the treatment of workers, which is always very central to our thinking as a Labour caucus. During the course of discussions and of reviewing the documents, that was a very significant part of what we took forward as a condition of our support. This conditionality is in two parts: one is to ensure that the labour inspectorate has sufficient capacity to be able to manage issues as they might come up, and the second was in relation to ensuring that the people impacted have access to legal advice at the very earliest of stages, and our proposal was that that could be done through Community Law. So we will absolutely be continuing to look at this to ensure that the Government is putting in place those measures.
Now, my Green Party colleague Steve Abel spoke about fairness and the issue of flooding the Indian market. In my view, that isn’t an issue in this scenario. He spoke about dairy, and that’s of course not going to be an issue in relation to the agreement as it is, but in terms of the other exported goods at play, there are clauses in the agreement which allow either party, due to a flooding-of-the-market issue, to suspend a quota amount because it’s having a direct impact on their local market, and so that isn’t an issue at all.
Then we had colleagues from New Zealand First speak about the immigration issues here. The immigration commitments are narrow. They’re not novel; they’re not something very new that we’re placing in our agreement with our Indian colleagues.
The commitments are largely consistent with or below the existing standards that we offer more generally. With the student visa work rights, for example, Indian student visa holders would get at least 20 hours of work rights per week, but the current settings are 25 hours, and so, in practice, the new commitment doesn’t expand on the status quo at all.
In terms of the uncapped flood of student visas that we’ve heard about from some members in this House, the no-cap commitment simply locks in a New Zealand approach more generally. It doesn’t create a new approach at all. The post-study work extension is narrowly targeted to PhD graduates. It’s not the general student population, and so it really does limit that cohort of entry, and, of course, the Government still retains policy levers to be able to control and manage the flow of immigration.
I just did want to say that I think it’s extremely irresponsible, some of the rhetoric that we’ve heard around immigration not only today but earlier in the House. I do think that members who continue down that path ought to take into account that it’s having broader ramifications in the public—what’s just being said in the House here.
The chair of the select committee has spoken to some of the changes that we made as a select committee in the House, and I just did want to acknowledge that some submitters—including, I believe, it was ExportNZ—urged us not to make any changes to the legislation so that it could proceed at pace. While I completely do understand that perspective, my view is that the changes that have been made are very technical but also extremely practical in terms of where we’ve landed. For example, the quota system that was created, essentially, at the initial drafting of the bill envisaged that the legislation would be passed at the start of a quota year, which isn’t necessarily the case. There are tweaks that we made to that which would help it make sense and would allow those quotas to be seen as a proportion, rather than applying from the get-go.
The other change that we made—which is a fascinating one—was in relation to search and seizure powers. As members have referenced, we removed one of two of the search power options. One was a warranted search, and the second was an unwarranted search to, essentially, allow inspection where there weren’t any grounds to secure a warrant in the first place. The committee’s decision was to completely exclude warrantless searches.
Now, interestingly, this is a point at which the committee disagreed with the legal advice that was provided by Crown Law. Crown Law’s view, on examining the initial search powers, was that both the warranted search powers and the non-warranted search powers were compliant with the New Zealand Bill of Rights Act and were lawful in that respect, and they counted as a reasonable search or seizure, but it was certainly the committee’s view that those unwarranted powers, with no suspicion whatsoever, were not. I do think that that’s a fair place for the committee to land.
My one concern in terms of where the committee has landed in regards to this free-trade agreement (FTA) is a question of whether the powers of search are consistent in relation to other powers that apply in the other FTAs—specifically in regards to the powers of inspection relating to dairy. The powers that relate to dairy reference Part 4 of the Search and Surveillance Act, which, in my view, were framed up as a power that is responsive to criminal offending. I do hope that in the long term, this House can look at whether we need a new search powers regime that is more fit for purpose for civil regimes and to allow the current search powers to only apply to criminal regimes. Having said that, I do think the committee did a fantastic job of scrutiny, and I commend the bill to the House.
TIM COSTLEY (National—Ōtaki) (16:31): It’s nice to see Lawrence Xu-Nan and Winston Peters agreeing on something, but I fear they’re on the wrong side of this one. In New Zealand, if we want more options for Kiwis, if we want more teachers or nurses or doctors—whatever we want, it takes money. New Zealand has always made its money by selling stuff to the world. India opens up 1.4 billion customers to New Zealanders. It is a great thing. I commend it to the House.
ASSISTANT SPEAKER (Greg O'Connor): This is a five-minute split call.
Hon PHIL TWYFORD (Labour—Te Atatū) (16:32): Thank you, Mr Speaker. It’s a pleasure to be able to contribute to this second reading of one of two bills that are implementing the India free-trade agreement (FTA).
Why does Labour support this FTA? For a number of reasons, and I’ll run through them. As the previous speaker, Tim Costley, was saying, this trade agreement really is a bridge to one of the fastest growing and largest economies in the world. There’s no doubt that in the years to come, India’s economic growth will make it one of probably three of the major great powers in the world, and over time it will probably surpass China in terms of the size of its economy. For New Zealand, I think the case is that—and for me this is what it all comes down to—in this increasingly uncertain world, it’s very important that New Zealand has the opportunity to deepen and build its bilateral relationship with India, given India’s geopolitical and economic significance.
The agreement itself is far from perfect, and I’m sure Damien O’Connor would have negotiated a much better one. No—didn’t get a rise of the Minister for Trade and Investment on that one. It’s not the agreement that Labour would have negotiated, but we have, after long and careful deliberation, taken the view that this agreement is in New Zealand’s national interest. There are very significant tariff reduction benefits to some of our most important primary sectors—kiwifruit, wine, honey, sheep meat, and forestry, among others. The opportunity to open up significant export relationships in services, tourism, and labour mobility is clearly, in our view, in our national interest.
I want to say something about the immigration aspects of the agreement. This agreement does not open the floodgates. In fact, it’s quite moderate. Labour mobility is extremely important to the Indian Government. Labour mobility provisions already exist in a number of the big trade agreements that have been negotiated internationally in recent years, including in several of ours. It’s not something to be afraid of, and the provisions in this agreement—specifically the 1,600 a year temporary work visas over three years; 5,000 at any one time; no pathway to residence; no right to bring family here—are commitments that will fit quite snugly within New Zealand’s existing immigration policy settings. Labour mobility was extremely important to the Indian Government, and I doubt we would have had this agreement if we hadn’t been willing to negotiate on those aspects.
I want to say something to colleagues in the Green Party about their approach to this in relation to ours. As I said, we acknowledge the bill’s not perfect, but Labour has always understood that New Zealand’s destiny and prosperity are very tightly tied to the ability of our firms to export and sell their goods and services on international markets. Without that, we wouldn’t survive. Agreements like this, and the China trade agreement before it, I think, are a pretty powerful illustration. Nevertheless, we also recognise that trade relations produce winners and losers, and it’s very important that at the national level, the distribution of benefits and costs are taken into account by Governments—our Governments—and we use the levers available to ensure that we recognise and address those.
We’re also committed to the Trade for All agenda, developed when David Parker was Minister for Trade and Export Growth, and a determined effort to take the community along with us. These processes should be transparent; we should engage the community and different interest groups and stakeholders—and particularly the very often sensitive labour and environmental standards that really go to the heart of the winners and losers in these agreements need to be considered and, wherever possible, negotiated in substance into these agreements.
CATHERINE WEDD (National—Tukituki) (16:37): I am really excited to support the India free-trade agreement. Coming from Hawke’s Bay, the fruit bowl of New Zealand, this opens up huge potential for our apples, cherries, kiwifruit, red meat, wool, wine, forestry—the list goes on. It’s going to be huge for our economy, huge for jobs and opportunities, so I commend this bill to the House.
Hon PRIYANCA RADHAKRISHNAN (Labour) (16:37): It is a pleasure for me as a New Zealand member of Parliament of Indian origin to stand and take a call supporting the India Free Trade Agreement Legislation Amendment Bill. I think for the entirety of my almost nine years in this House, this is something that Kiwi-Indian communities have been talking about and have been wanting to see Governments progress.
I, too, want to acknowledge the work of the previous Labour Government—particularly Nanaia Mahuta, David Parker, and Damien O’Connor—who had, as my colleague Vanushi Walters pointed out, a five-year plan to ensure that we stepped up the relationship between the two countries. There was a fair bit of effort that was put into that and a number of visits both ways that were symbolic, I guess, but also bore testament to the fact that that relationship was being strengthened and deepened. I do want to point to that and the fact that this is many, many years in the making.
It was a really good opportunity for me to be the only Opposition member as part of the PM’s delegation to India when the announcement was made around the negotiations restarting on this free-trade agreement (FTA). It allowed me to see the difference in narratives between how the FTA negotiations were being portrayed in India through the media and various industry organisations in India versus the narrative that was being shared by the current Government rampantly within Kiwi-Indian communities here. They were very different. What we heard here was that the Prime Minister had made a commitment on the campaign trail that if National was elected, there would be an NZ-India FTA negotiated and concluded in the first term, and all of that. And then the story that was sold was the power of this Government’s negotiation powers, I guess, or the strength of this Government’s negotiation powers, and how, in one year, they had done what no Government before them had managed to do, and they had deepened that relationship and got to a point of negotiating, or reopening negotiations, on this free-trade agreement. And yet, everything that we heard over in India—the way the story was being told back in India—was that things had changed. Geopolitical shifts were happening and India needed to secure supply chains; India needed to diversify their trade. It was very clear that India’s exports had been negatively impacted by the 25 percent tariff that the US had slapped on them, and so they needed to open up.
And so, in the last two years, India has been actively negotiating 10 free-trade agreements. Things have changed quite dramatically on the Indian Government side. And there’s no doubt that that was to our benefit, but it wasn’t due to the strength of this Government’s negotiation powers alone. I want to put that on the record, because that is the story that is being sold.
However, as colleagues on this side of the House have made very clear, this is not the gold star of free-trade agreements (FTAs) either. It’s not perfect, but we support it on this side because it goes some way towards improving things for us and for New Zealand exporters. We know that it gives New Zealand exporters more options in an uncertain international environment; that it positions New Zealand to benefit from India’s long-term economic transformation. We know that about 95 percent of New Zealand’s current exports will gain when it comes to tariff eliminations or substantial tariff reductions, particularly in sheep meat, in forestry, in kiwifruit, in apples, and wine. We also know, from significant commentary, that the gains may not be immediately realised, but the greatest value is likely to emerge over time. It gives New Zealand businesses a platform to develop new products, strengthens commercial relationships with India, and helps to build a sustained presence in a market of 1.4 billion people. All of that goes a significant way to benefiting New Zealand.
I understand that the Government has commissioned modelling that estimates that the FTA could lift New Zealand’s annual GDP by about $380 million, and exports to India by about $836 million by 2036. And so, for all these reasons, Labour supports this agreement and the legislation that will go towards enabling that. However, as we have pointed out, there are risks and there are two that I want to touch upon. One that is a significant risk, that Labour has pointed out, has highlighted, is the investment clause that others have spoken to, as well. It is a large sum of money that is meant to be invested in India. And as Vanushi Walters has pointed out—it’s US$20 billion, about NZ$33 billion in investment—it’s an investment promotion commitment. We need to show that we have done the work, put in the effort, over a 15-year period, for that investment to happen. But compare that with the 15-year period after the China - New Zealand FTA was signed, where outward investment to China was to the tune of about $1.5 to $1.8 billion over 15 years. So this US$20 billion commitment is significant, and the Government does need to reconcile Minister McClay’s aspirational, sort of, characterisation of this investment clause with what we’ve heard from the Indian Minister’s description of potential clawback measures, as well. The Government needs to be quite careful about that.
The other risk that the Government needs to provide some certainty around, or to correct the public record on, is whether future Governments can still manage international student numbers. We saw what happened under the John Key National-led Government, where there was a monetary target put on export education, which then led to a proliferation of private training establishments (PTEs). Of course, some PTEs have a legitimate role to play in our education sector, but the proliferation of PTEs that were providing substandard education—where many from India had sold land and houses to get the money to send their children to New Zealand, to get the substandard qualification, that then didn’t get them a job in New Zealand, and led to an increase in migrant worker exploitation. We saw that happen under the last National Government, and we want to make sure that there are protections—that we don’t stray into that territory. It’s bad for us and New Zealand’s reputation, but it’s also bad for the migrants and the students who come to New Zealand to study and to work here.
On the note of migrant worker exploitation, I do want to point out some of the wins that Labour has secured. We said we would—the process that the Government undertook to embark upon these negotiations was flawed. You don’t chuck out your foreign Minister—well, the foreign Minister exited the chat—negotiating it. Where the Government themselves didn’t have the numbers to pass ratification legislation in this House—knew that, embarked upon, and waded into it anyway—then came to Labour in the eleventh hour to get our support. We have provided conditional support as long as the Government expands the labour inspectorate to fund at least 14 additional staff focused on migrant worker exploitation, faster visa changes, and progressing the modern slavery legislation that we did a huge amount of work on in the last Government. All of those are things that the Government has agreed to as part of our conditional support for this legislation, but it will need to deliver on it and not just provide lip service and agree in principle to all of that.
I want to end with the narrative around immigration. We know this is not open-slather immigration. My colleagues on this side of the House have been very clear as to why, but I want to point to how dangerous it is when parties like New Zealand First use this to talk about and, I guess, scaremonger and spread misinformation around the nature of immigration as a result of this bill. It is false. It is dangerous. It has harmed Kiwi-Indian communities and made all of us feel much less safe. That is not the society that we want to be in. And so when David Wilson stands up and talks about social cohesion in this House, it is laughable, because it is their party that has led to a huge amount of hate towards our communities as a result of their irresponsible narrative on this bill.
Hon Dr SHANE RETI (National—Whangārei) (16:48): Thank you, Mr Speaker. I stand to support this bill. There are many important components, and I especially note the sectors on apples, kiwifruit, and honey. Ngāpuhi rangatira Sam Napia has affirmed to me that these are very important to the Māori economy. With that, I’m very pleased to commend this bill to the House.
A party vote was called for on the question, That the India Free Trade Agreement Legislation Amendment Bill be now read a second time.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 29
Green Party of Aotearoa New Zealand 15; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
Bill read a second time.
ASSISTANT SPEAKER (Greg O'Connor): The India Free Trade Agreement Legislation Amendment Bill is set down for committee stage immediately.
I declare the House in committee for consideration of the India Free Trade Agreement Legislation Amendment Bill.
Committee of the whole House
Part 1 Amendments to Dairy Industry Restructuring Act 2001, and Schedules 1AA and 1
CHAIRPERSON (Maureen Pugh): Members, the House is in committee on the India Free Trade Agreement Legislation Amendment Bill. We start with Part 1. This is the debate on clauses 3 to 13, “Amendments to Dairy Industry Restructuring Act 2001”, and Schedules 1AA and 1. The question is that Part 1 stand part.
Dr LAWRENCE XU-NAN (Green) (16:50): Thank you, Madam Chair, and thank you, Minister, for being available for the consideration of this bill. When we’re looking at Part 1, “Amendments to Dairy Industry Restructuring Act 2001”, I first have a series of questions specifically around the quota for albumin. I want to start with clause 4, “Section 5 amended (Interpretation)”.
I guess my first question, which might be an obvious question for the Minister for Trade and Investment, is about the reduction in tariffs. First of all, when it comes to “quota”, I’m assuming that part of the quota is to do with the reduction in tariffs, when we’re looking at albumin. We know there is an immediate 50 percent reduction, starting at 1,000 tonnes per annum and growing to 3,000 tonnes by year five. Can I check with the Minister: is that growth progressive, year on year? I’m seeing a nod. Good; that’s my first question.
Would that, then, potentially require any updates or changes in legislation, in terms of the way that that particular quota would be looked at? No? It does not.
Finally, when it comes to this particular one, would the Minister be able to, I guess, elucidate for the committee on how the quota would be allocated with existing dairy farmers, in the context of this particular bill? I’m looking at things like “albumin designated market”—or anything that’s related to clause 4(5) of this bill.
Hon DAMIEN O'CONNOR (Labour) (16:52): Thank you very much, Madam Chair. Indeed, going to Part 1, “Amendments to Dairy Industry Restructuring Act 2001”, this is arguably the most important and most contentious part, I guess, of the trade agreement. The Minister for Trade and Investment might have quite a bit of information to provide to us.
We export many, many products—and produce many, many products—from milk in this country, from a dairy industry that is arguably one of the most innovative in the world. The question to the Minister: why did we get only albumin? Why did we get only one product as of right into a market that is incredibly knowledgeable and appreciative of dairy products?
Maybe the Minister can answer or explain to us the process that left us with just one product, and then maybe he can explain the process of elimination that saw all of those other potential products knocked out of the agreement.
Hon TODD McCLAY (Minister for Trade and Investment) (16:54): Just if I might—because I want this to be as interactive as possible—to the Green member Dr Lawrence Xu-Nan, it is not farmers who will benefit from this part of the agreement and the issuing of quota; it is, of course, processors and exporters that do. Farmers supply them, and they go from there. Actually, the Dairy Industry Restructuring Act (DIRA) legislation that is already in force dictates how quotas are shared out. There is no change to that; the legislation merely adds India and this quota to the DIRA legislation. As with the EU agreement or the UK agreement, and many others, and so on, where we have quotas for dairy products, there is no change other than it being added.
To the Hon Damien O’Connor, the legislation that we have before us is very, very specific as to this quota only. I think probably the questions that he is raising are out of scope. I’m happy to talk to him afterwards. Of course, this is the legislation to meet obligations—in this case, to make sure tariff rates come down, and then, secondly, that New Zealanders can benefit from the quotas we have received. When we did the full treaty examination, previously, before this legislation was put in place, I think many of the issues he has just raised now, and that many others may wish to cover, were discussed in great detail by the House.
CHAIRPERSON (Maureen Pugh): Before I take another call, I’ll just remind members that we are not debating the free-trade agreement per se, just the legislation that sits alongside it. It is quite tight. I did give the Hon Damien O’Connor some latitude, hoping he would get to it, but it is out of scope.
VANUSHI WALTERS (Labour) (16:55): Thank you, Madam Chair. Like my colleague the Hon Damien O’Connor, I am on Part 1, clause 4(5). This is the definitions—two questions from me. The first one: obviously, we have the agreement, and then we have legislation that brings into force those parts of the agreement that require legislation to bring them into force. No doubt the same is true of India. Do the definitions sync, in terms of India’s legislation, and is that a conversation the Minister for Trade and Investment had with his counterparts to ensure that definitions like “albumin designated market” are consistent across both jurisdictions?
The second question: within that definition—“albumin designated market”—it says, at the end of that particular paragraph, “including any amendment or any successor to that annex”. That’s a reference to an annex of the free-trade agreement itself. I have a question about whether it is ordinary practice to allow for that flexibility, for part of a trade agreement to be renegotiated and then a piece of legislation to automatically apply to that new standard, or whether this is new. I would expect that, ordinarily, if there were changes, new annexes, changes to existing provisions, those changes would need to come back to the House in terms of changes made to legislation. I’m just wondering whether it’s ordinary practice, and also, whether the Minister is anticipating that there will be changes to what constitutes an albumin designated market?
Dr LAWRENCE XU-NAN (Green) (16:57): Thank you, Madam Chair. I know that we’re focusing, currently, primarily on clause 4(5), around some of the definitions. I think, while we’re discussing albumin in particular—albumin is in Part 1 of the bill because it is part of what we see in the New Zealand - India free-trade agreement as part of the tariff reduction. That is why we’re seeing it here. My question to the Minister is: if albumin being a big aspect of the tariff reduction is why we’re seeing it in Part 1 of this bill, I’m curious to know why there are, then, no clauses in Part 1, particularly under clause 4, around the fact that we also received a tariff reduction for bulk infant formula, and also dairy peptones.
One would at least assume that, in this clause, alongside “albumin”, dairy peptones would also have specific paragraphs. I mean, I’m looking at the fact that we’re getting an elimination of the 20 percent tariffs on peptones over seven years. Is it because it is not currently in effect? When it is in effect, are we expecting an amendment to this Act that will add additional definitions for dairy peptones—if the Minister for Trade and Investment wouldn’t mind clarifying that.
Hon DAMIEN O'CONNOR (Labour) (16:59): Thank you very much, Madam Chair, and taking your guidance, of course, of sticking to the more technical side of it, I will indeed attempt to do that.
The allocation of quota, and the definitions here under clause 4(5), “albumin designated market means the tariff quota for albumins of New Zealand origin”— one of the questions I have for the Minister—because we do have a number of core components, including albumin, coming into New Zealand from Europe for infant formula manufacture. I’m just asking the Minister about the “country of origin” definition—I know it’s included here—just to ensure that that doesn’t allow any crossover from some of the imported product.
Then, in terms of the allocation process for export quota, on the basis of the existing quota or the existing total volume, that’s reasonably small to my knowledge, so maybe the Minister can explain whether they considered the growth in this market and whether there had to be a new system of quota allocation from what we’ve traditionally done into markets like the UK, EU, or the US. So there are a couple of questions in there.
The other one is about the “eligible reserve albumin participant”, of course. If someone can apply for some of that reserve—which is 10 percent of the total volume, as I understand—why is it limited to 50 tonnes or less? It would be good if the Minister can answer those questions at the moment.
Dr DAVID WILSON (NZ First) (17:01): This is just a question for the Minister around the economic cooperation and technical assistance chapters or sector. Quota management remains quite tightly connected to these action plans under this agreement. We would really like to know how our action plans—which include cooperation for cultivar transfer, seeds, albumin, peptones, and so on—are going to be affected if there is any kind of situation where New Zealand has actually not performed its agreements or commitments under the cooperation that we have agreed to through the action plans.
Dr LAWRENCE XU-NAN (Green) (17:02): Thank you, Madam Chair. While I see that the Minister is seeking advice, I do acknowledge that because this is quite a technical bill, there might be chances where the Minister needs some very specific advice and guidance from the officials. Just following on from what my previous question is, now, the reason I asked the previous question is that, currently, the tariff reduction we get for albumin is 1,000 tonnes in the first year, which becomes 3,000 tonnes, as the Minister said, in five years’ time. According to the national interest analysis, the 3,000 tonnes is just slightly above the average of what we’re exporting right now, which means that although 1,000 tonnes in the first year will get that enjoyment of a tariff reduction, presumably the other 2,000 tonnes won’t. I want to check with the Minister—and maybe there’s a simple explanation for this—when we look at the definition of “albumin reserve portion”, how would a reserve work, and then what then would an eligible reserve albumin participant, in this case, need to do to be able to be a part of that reserve?
There are a few questions I want to ask the Minister regarding the definitions of “albumin reserve portion” and “eligible reserve albumin participant”, but I want to start with: it seems like only one-third of our current export amount will enjoy the tariff reduction, so which one-third will we, again, expect the reduction to be—unless I got it completely wrong?
Hon TODD McCLAY (Minister for Trade and Investment) (17:03): I’m very happy to answer some of those questions. The first one was around albumins and the definition in the legislation. Anything that countries trade across borders has a name, but it also has a tariff clarification, and it is a tariff code. That code starts small. It can go out, depending upon the greater amount of detail. In effect, “albumins” is the name that we use, but in as far as the agreement is concerned, if one goes to the back—and I recommend members do that; there are 500 pages of all these lines and so on, so I won’t tell you where in the 500 pages albumin is, but we’ll have a test later on to see if you got to it. I can tell you it’s either just before or just after page 250, possibly. But the point that I’m making here is that that is very clearly defined and, therefore, there is no misunderstanding. On the questions around whether India is lining up their understanding the same as ours, it comes to that tariff clarification. So that is the case.
Secondly, it is for each country to inform the other that they’re able to meet their obligations. When India says they’re able to do that, as we do, it is accepted on either side; it’s not for the lawyers to go and cross the i’s and dot the t’s or, in this case, dot the i’s and cross the t’s.
To Damien O’Connor—can product be imported for re-export as part of this quota, and will the rules of origin in the agreement cover that? They are very, very clear. Generally, the answer would be, no, it’s not the case. This is purely from New Zealand, but the rules of origin dictate what we’re able to export if there has been any transposition of value added. But, in this case, to answer your question, it would be no. The reason that it only talked about albumins and not infant formula and other things is that there is no quota required for infant formula exports; there is no quantitative restriction; there is only a reduction in tariff rate. The reduction in tariff rate for infant formula goes to zero, but it’s over a period of time of—seven years or 10 years?—seven or 10 years. We’ve got at least seven years to get an answer. But the point of that is: it doesn’t need to be in here, because there is no quota over it.
There is a reserve of 10 percent of the quota—whatever the quota may be in the first year. It’s 1,000 tonnes, it goes up to 3,000 tonnes over that period of time. There is a reserve of 10 percent of that so that any manufacturer or exporter who is not exporting at the moment and may want to in the future or who is not manufacturing now but may want to the future wants access to that market is able to do so. But it is the Dairy Industry Restructuring Act (DIRA) legislation that controls how that takes place, not this this piece of legislation.
Then, finally to the question of the quota with tariff reduction and how that applies, well, ultimately, DIRA decides that. Companies will make an application enabled through DIRA, set out through regulation, and they then will have the opportunity to receive some of that quota and export as part of that. This is no different to what happens in any other quota that we have going in many other parts of the world.
Damien O’Connor asked why, of the 10 percent, there was a 50-tonne maximum. That lines up with what we do with beef exports to other countries around the world. Ten percent is reserved. In the case of the first year, 1,000 tonnes would be 100 tonnes. Those who are bidding into the 10 percent reserve can get a maximum of 50 tonnes so that many others could have access to it. In the case that one company bid and got the 100 tonnes, as an example, then no one else would be able to get in there. In this case, for the 100 tonnes, at least there would be two. My expectation, though, is that those who want to bid in would be at the lower level to start with.
Hon PHIL TWYFORD (Labour—Te Atatū) (17:07): Thank you, Madam Chair. Further on the question of reserve albumin export licences, I wonder if the Minister can share with the committee what annual export value he expects that the access provided, or allowed for, under these provisions will generate. It would be interesting to have even a—
Hon Todd McClay: It depends upon the value of the protein by tonne that’s exported.
Hon PHIL TWYFORD: Would the Minister put a ballpark dollar figure per year that we’re talking about?
Hon Todd McClay: I have to stand up and answer, so I’ll wait till you’re finished.
Hon PHIL TWYFORD: OK, that would be interesting to know. Under new section 26AB, which allows for reserving 10 percent of the licences for small and emerging exporters, that option is discretionary, and I wonder if the Minister expects to activate that reserve in the first quota year. If not, what would smaller or emerging exporters have to demonstrate before he would activate it?
My colleague Damian O’Connor asked about the 10 percent reserve. I wonder whether or not the Minister or his officials have got an estimate of the number of New Zealand businesses currently expected to qualify as Eligible Reserve Albumen Participants.
New section 26AB also requires evidence that reserve participants will be able to use the licences. How will the Minister assess that without setting such a high evidential standard that genuine new entrants might be excluded? It also requires him to consult existing albumin licence holders about creating the reserve. I wonder how he expects that his department will ensure that the views of incumbents don’t outweigh the interests of potential entrants.
Hon DAMIEN O'CONNOR (Labour) (17:10): Thank you, Madam Chair. The question does go—given that we are talking about quota for albumins, and it’s a component of infant formula, and elsewhere in the agreement, the Minister and the officials have negotiated access for dairy products for re-export from India, I’m thinking that albumins would be part of that process. So the question is: why, indeed, do we have a quota and weren’t we given unlimited access for albumin, given that it could go into infant formula, huge volumes of which could be exported from India? So the question is: was it negotiated in that way so the quotas that we are talking about here and the reserves, of course, which will be 10 percent of that total quota, is that volume—why was it limited when, in fact, our understanding of the agreement is that anything for re-export was unlimited?
Hon TODD McCLAY (Minister for Trade and Investment) (17:11): Just going through this. As far as the reserve, it is my expectation that the reserve will be used in the first full year. Consultation on reserve has already taken place, and we’ve received feedback, and that was part of the reason to establish it. The way it will be governed is the same as with the EU and other agreements, and it’s governed by the Dairy Industry Restructuring Act, not by this bill. As far as value is concerned, it depends upon the value of the protein by tonne, but an early estimate as of today—plus or minus when fully enforced—is maybe up to a $6 million tariff saving on what is the full amount.
To Damien O’Connor, again, different issues, but ultimately there is albumin exports to India already. They are paying tariffs at the moment—this will be a reduction. I would assume that those who are exporting this product or in India importing it—wanting to buy it—would only pay the 11 percent tariff if they were going to keep it in India, as opposed to re-exporting it, because the member is correct that any dairy product imported to India for re-export is a zero tariff rate. So it wouldn’t make sense to use this for re-export when you can have a zero tariff rate available to you straight away without any quantitative restriction. As I understand it, this will be used for product that will remain in India, as opposed to being re-exported. This is a very high-value concentrate protein. It is sought after because of the high quality of what we have in New Zealand. So it is my expectation that the quota will be filled each year, as well as a significant amount of other product going to India for additional value being added for then re-export.
Hon DAMIEN O'CONNOR (Labour) (17:13): Thank you, Madam Chair. In regard to that process, can I ask the Minister who will be responsible for ensuring that albumin, if it goes in for re-export at zero tariff, won’t end up in the domestic market, and therefore put us at risk? So is that our obligation here? Or is it, indeed, that of the Indian Government to ensure that there’s no crossover? Indeed, it won’t be the Government’s intention, I know, but like everything in law or regulation, there does have to be some kind of policing arrangement to know that we don’t get caught out through such a deal.
Dr LAWRENCE XU-NAN (Green) (17:14): Thank you, Madam Chair. Thank you, Minister McClay, for your response before. I actually did just have a look at the agreement. Can I just check, because one of the questions I had before was around a progression from the 50 percent reduction in tariffs and the progression of the quota, which we’re covering for under this particular bid. I asked if the progression from 1,000 tonnes to 3,000 tonnes is progressive or 1,000 for year 1 and 5,000 in year 5. But it does look like there is a progression of a 500-tonne increase per year, based on the free-trade agreement. Which means that if we’re looking at a 10 percent reserve, potentially, each year, for the first year there will be a 100-tonne reserve up to a 300-tonne reserve in year 5 progressively. Would that be a correct interpretation of that?
Hon Todd McClay: 10 percent of whatever the quota is.
Dr LAWRENCE XU-NAN: Yep. Then, in that case, when we were looking at the eligible reserve albumin participant, this clause 4, amended section 5(1)(b)(ii), when we are looking at someone with equal to a volume of less than 50 tonnes of albumin for the quota year, if that’s in year 1 that the reserve is 10 percent, could we potentially then be looking at two or maybe even three eligible reserve albumin participants? Would that be, in that case, a possibility? In that case, what is the process to determine what those two or three eligible reserve albumin participants are going to be?
Now, the next thing is I did ask the Minister is regarding the definition of albumin. Going through the agreement, as well, we’re looking at people having to hold an albumin export licence. Can I just confirm with the Minister that an albumin export licence and the definition of albumin in this case according to the agreement, then, would also include albuminoidal substances, albuminates, and albumin derivatives, because those three are three different terms that have been used within the agreement. I just want to make sure that this bill captures all three potential interpretations.
Now, I did ask the Minister questions around the reserves. I do want to move on to clause 7, new section 26AB, in terms of the reserve albumin export licence. I do want to check, because the 10 percent reserve is secondary legislation. It will be done on the basis that subsection (3) of new section 26AB is going to be met. I guess my first question for this section, and I’ll leave it at that for this contribution, would be: how likely, then, would that secondary legislation be made? Because while we can talk about the albumin reserve, etc., my assumption is that that wouldn’t be a thing if that isn’t being given affect by secondary legislation. Can I just check with the Minister for new section 26AB(2), how likely is it, and has the Minister considered any time line of when, that secondary legislation will be commencing?
Dr DAVID WILSON (NZ First) (17:18): Thank you, Madam Chair. To the Minister, Hon Todd McClay, I noticed you were otherwise engaged from my last question, so it would be very nice if that was addressed. But related to that, the Joint Agriculture Productivity Council to oversee industry cooperation under the Agriculture Productivity Partnership I think is directly related to quotas and tariffs. In so far as these action plans around kiwifruit, apples, and honey outlined, the delivery of New Zealand’s performance obligation in relation to these action plans is directly linked to these things. India has made it clear its expectation that cooperation activities under these plans start prior to entry in force of the free trade agreement. Second question: have they started? First question: what affect may the Joint Agriculture Productivity Council or the Committee on Economic Cooperation and Technical Assistance have due to underperformance on our part and the penalising actions that may be taken by India in that regard if that were to happen, which are outlined?
Hon TODD McCLAY (Minister for Trade and Investment) (17:19): Quick questions around the process for different products being imported to India. Some will be in quota, some won’t have a quota, some will have a reduced tariff rate, others won’t. The case for export for a zero tariff rate, it is in the interest of both Governments to have a better understanding of this. This legislation deals with, in the case of albumins, the quota, and setting up the process linking it to other legislation so it can be issued, and therefore those exports under the quota, the certificates issued, will benefit from a tariff reduction.
It doesn’t deal with things that will go in where there isn’t a need for a quota. However—and I’m happy to help the member—in the case of import for re-export and whether there is a zero tariff rate, India has agreed to set up a single desk, or a special desk, and only New Zealand has this. It’s in the agreement through the free-trade agreement to manage the product that comes in so that we can ensure that it can reach those who want to import it for re-export. We also, of course, have received a commitment from India that goods that are perishable are to clear their customs within 24 hours. That is a significant benefit to our exporters. However, the bits I was speaking of don’t feature as part of this legislation. This legislation that we’re speaking about now is merely to set up the quota system for wherever there is a quota and the reduction of the tariff rate amongst that.
As far as the 10 percent quota is concerned, ultimately, what we’ve said is a maximum of 50 tonnes per exporter that wants access to the reserve quota. As to how many there will be, that will depend upon those that want to export. If 100 exporters in the first year, as the quota will be 100 tonnes, want to export one tonne each, I guess it could be 100 exporters; but there could not be only one with the full amount in that case because of the reserve. How that is governed is the same as other quotas we have when there’s a reserve. The European Union and UK legislation, remember, in beef, we’ve set that up as well so that anybody that is not currently exporting to that market but would like to has the ability to get some quota to get an establishment in that market at a lower cost. This isn’t new. It’s happened a lot of times before. It’s very fair and transparent, and the sector is aware of this.
As far as performance, this legislation doesn’t deal with the issues that the member raised. This is merely about how we govern the quota and share it fairly for export, but in the case of the question around, has the cooperation started already—the industries themselves are responsible for that and many of them have been up there—the answer is yes, it has.
CHAIRPERSON (Maureen Pugh): Before I take the next call, can I just please ask members to refer to the clause that’s being spoken to please?
STEVE ABEL (Green) (17:22): Thank you, Madam Chair. I’m referring to those clauses about albumin in Part 1, and we’ve been canvassing them quite extensively. I just want to get a direct answer, if the Minister for Trade and Investment is able to give it, on my colleague Phil Twyford’s question on the value of this albumin tariff reduction, because it’s clear from the national interest analysis that we’re currently exporting around 3,000 tonnes already to the country, and it’s envisaged that, by year five, all 3,000 of those tonnes will be without the tariff.
Hon Todd McClay: No, that’s—
STEVE ABEL: Yeah? If you can correct me on that, that’s great. But I wonder if you can give us clarity on what the value of that will be. The importance of this is in us understanding what the overall purported value of the free-trade agreement will be to us as against what the potential costs and risks will be.
CHAIRPERSON (Maureen Pugh): I explained before, this debate is not about the free-trade agreement; this is about the legislation that enables it.
Steve Abel: Sure. Madam Chair, can I just ask for clarification on that? So we can’t ask about—
Tim van de Molen: Is this a point of order or not?
STEVE ABEL (Green) (17:23): Yeah. Point of order. Can we not ask about the value that this bill brings into being through it making the free-trade agreement come into effect?
CHAIRPERSON (Maureen Pugh): No.
Dr LAWRENCE XU-NAN (Green) (17:24): Point of order. Thank you, Madam Chair. Can I just get a piece of clarification because, usually, when we do discuss other bills as well, there will be things like an accompanying regulatory impact statement that we can actually ask about when it comes to policy-related questions as well. Now, when it comes to international treaty examinations, or even free-trade agreements, we actually don’t have regulatory impact statements, but, in the same way, what we do have instead are things like national interest analyses, etc., so it probably is important, when we’re looking at how the overall package of this bill in relation to the agreement—
CHAIRPERSON (Maureen Pugh): So your point of order is?
Dr LAWRENCE XU-NAN: My point of order is that the agreement itself is actually integral to the analysis we’re able to do in some of the questions.
CHAIRPERSON (Maureen Pugh): I think I understand what you’re saying. The value was debated in the first reading, and so now we are debating the parts in the legislation that relate to the implementation. I don’t want this debate to drift into the value of the free-trade agreement because we are not debating that. We are debating this legislation.
Dr LAWRENCE XU-NAN: Speaking to that point of order. I completely understand where you are coming from. We’re not debating the value of the free-trade agreement; it’s the value of the tariff reduction that was the question because we didn’t get a chance in the first reading to actually ask Ministers questions around the values or specific aspects of what this bill would entail. But we will make sure to keep it quite concise and related to a particular clause.
Hon TODD McCLAY (Minister for Trade and Investment) (17:25): Madam Chair, in as far as the 10 percent quota is concerned, or the reserve or the full amount, it is not possible to answer the question directly. The reason for that is that it would depend upon the value of the commodity at the time. All I can say—
Steve Abel: You must know that.
Hon TODD McCLAY: Well, that’s because if it’s $10 compared to $1,000, the 11 percent would be different. But the point that I guess I’m making is that I did answer that fulsomely earlier. I mean, I don’t want to take any time of the Committee, but if the Greens are indicating that their support for the legislation depends upon this answer and they may finally support a free-trade agreement, then I’d be happy to go and have a coffee and talk about it later.
Hon SIMON WATTS (Minister for Building and Construction) (17:26): I move, That debate on this question now close.
CHAIRPERSON (Maureen Pugh): That’s very well read, Minister. I think there is probably a little bit of room if we are prepared to move on, but we have thrashed clause 4. I’m happy to take some new material but this is quite a restricted—OK, you got it?
Hon DAMIEN O'CONNOR (Labour) (17:27): Absolutely, Madam Chair, as always. As always. New section 26AB, inserted by clause 7, and it is on the allocation of reserve albumin export licences, and new subsection (2) says, “The Governor-General may, by Order in Council made on the recommendation of the Minister, make regulations that reserve 10% of albumin export licences…”—quite a critical area—and then we go down to new subsection (3)(a) where it says, “Before making a recommendation…the Minister must be satisfied that—(a) there is demand for reserve albumin export licences from eligible reserve albumin participants;”.
Look, there are some cynical people around this place that say we have the “Ministry for Fonterra and Trade”. It’s not. It’s the Ministry of Foreign Affairs and Trade. Can I get an assurance from the Minister for Trade and Investment that he won’t be subject to what will be—it may be a legitimate argument from Fonterra that we have to consolidate, not disaggregate the albumin allocations. And so, the Minister has to reassure us, and he can in the chair, that, in making a recommendation to the Governor-General that there is demand for it, he’s not subject to some legitimate pressure from some of the big players that eliminate some of the smaller and innovative exporters who may have found or may want to develop a market opportunity for this. The question comes down to: what is the ability for us to check on that and ensure that the allocation of, not the quota but the reserve quota, which is 10 percent of the total quota, that that is going to be allocated on a fair and innovative system?
VANUSHI WALTERS (Labour) (17:29): Thank you, Madam Chair. I’m on the same clause as my colleague. This is clause 7, inserting new section 26AB, and it’s a question about the Minister for Trade and Investment’s decision not to allow the transferring of export licences. New subsection (4) says that an eligible reserve albumin participant who is allocated reserve albumin export licences effectively cannot transfer them. Now, section 28A of the Dairy Industry Restructuring Act allows the Governor-General to essentially approve secondary legislation that allows the transfer of other licences, essentially for the purpose of ensuring or expediting exports.
The question is why that’s not allowed in this case and, if it’s intended not to be allowed more generally, why the Minister wouldn’t consider a more narrow allowance for the transfer of licences—for example, where someone had already held one of these reserve albumin export licences in the past, allowing just the transfer of an existing licence to those former licence holders, pursuant to section 28A of the Dairy Industry Restructuring Act. Thank you.
Hon TODD McCLAY (Minister for Trade and Investment) (17:30): I can help move us through this quite quickly. The approach is identical to that in the United Kingdom free-trade agreement we have, where I think a reserve quota was set up in a number of areas, including beef. It was a smaller one—it might have been about 3.5 percent. Therefore, it will be governed exactly the same.
Can I give an assurance that it will be done properly and fairly? Absolutely, we will. The reason a reserve quota is set up—we don’t have to; it’s not in the agreement—is to allow those who are not already exporting to that market to have the ability to establish themselves—to get a small foothold, should they want, with a reduced tariff rate to grow their business. Without that reserve, they could still export there, but they wouldn’t get a reduction of the tariff rate. In the case of some products—mānuka honey is an example: it is a significant reduction for high value mānuka honey—it would be hard for them to get into the market. This would allow some of them to have a foothold there.
In the case of albumins, look, it varies, but there is only one export of any significance from New Zealand. Do we want more to, should they choose to put effort into processing this product? The answer is yes; we do. They will have a small reserve that they can ask for if they meet the conditions, which are very similar fare to what we have for other quotas we share around the world. They would at least be able to start building a business export relationship in that market.
Hon DAMIEN O'CONNOR (Labour) (17:32): Thank you, Madam Chair. I thank the Minister for that explanation.
I just want to move to—still “clause 7” but—clause 7A. It was an insertion made in the Foreign Affairs, Defence and Trade Committee to deal with the issue of the commencement of the free-trade agreement. There’s some uncertainty, so my question to the Minister is: when does he foresee this being brought in? If this legislation is passed under urgency, then an Order in Council is required to bring the FTA into force. We’re wondering about that—that’s the first question for him.
Then: I guess the commitments here are to ensure that we have, basically, a pro rata system—depending on when the Minister decides, or the Government decides. If we, presumably, pass this legislation within the next week—or soon, I think, under urgency; it might be even today or tomorrow—then when does he see the Order in Council bringing this agreement into force, and what will that mean for new section 26C in clause 7A, the insertion here?
Has there been a calculation done—because I know he did this with the EU FTA—that bringing it in sooner will give tariff relief for some exporters? What’s the approximate value of us facilitating this, as we are—we’re trying to scrutinise but facilitate the passage of this legislation, and then there’s an Order in Council required. The question is: can that be done before Parliament lifts, and when might this FTA be brought into force?
Hon TODD McCLAY (Minister for Trade and Investment) (17:33): Parliament hasn’t voted on the legislation yet, so I don’t want to pre-empt the support of the House to see whether the bill enters into force. But I can assure the member that it is the Government’s intention for the FTA to enter into force. We will meet all of our obligations in both directions. The legislation allows us to pro rata, as was the case with the European Union free-trade agreement, and the amount of the pro rata—and, I suppose, value—will depend upon the amount of the quota which is left. It’s based upon a 12-month period. If there were two months left, it would be two-twelfths or one-sixth of the quota. But it is my expectation that before the free-trade agreement enters into force, the secondary legislation would be in force also.
Dr LAWRENCE XU-NAN (Green) (17:34): Thank you, Madam Chair. I note that my colleague is mixing up questions for clauses 7 and 7A, but I do want to move on to clause 13, which is Schedule 1.
Now, there are quite a few questions I have over here, but for the first one—this is an interesting schedule because it’s rules for allocation of export licences to multiple participants; I’m assuming this is still on the basis of the NZ-India Free Trade Agreement—I want to hone in specifically on clause 3 and when it comes to what we are defining in terms of eligible participant and submitting their export volume history.
I want to check with the Minister why it would then be relevant for an eligible participant in the New Zealand - India Free Trade Agreement, when it comes to dairy or, specifically in this case, albumin, to have to declare—this is clause 3—for the Japan prepared edible fat market and the European Union dairy processed agricultural products and high protein whey market. Would the Minister be able to just clarify why those two markets, and having the export market volume history declared, be relevant to be an eligible participant for the New Zealand - India Free Trade Agreement.
Hon PHIL TWYFORD (Labour—Te Atatū) (17:36): Thank you, Madam Chair. I want to speak to clauses 8 to 11, which extend the existing information, audit, and disclosure powers to albumin participants. I wondered if the Minister could say what guidance and compliance assistance MPI will give, particularly to the smaller exporters who will be covered by this.
Under section 29G, a participant or their employee or agent cannot refuse to answer a question merely because the answer may incriminate them, and I wonder what protections apply to information obtained through compelled answers in this context.
Also, how will commercially sensitive information supplied by applicants or obtained through such an audit be protected; and who may receive information disclosed under section 42, and are there any restrictions which apply to its subsequent use?
CHAIRPERSON (Maureen Pugh): I’m looking for new material. We’re starting to get down into the weeds.
Dr LAWRENCE XU-NAN (Green) (17:37): Thank you, Madam Chair. I’m still waiting for my questions around Schedule 1, but I do want to continue on with questions for the Minister on Schedule 1.
We did discuss a little bit when it comes to—I believe it’s called—the reserve portion, but I do want to check, because in clause 5 of replacement Schedule 5B in Schedule 1 it does talk about what happens in the event of an excess or shortfall in reserve export licence applications. I do want to check with the Minister—because the example that is given here is interesting—based on the existing exporters of albumin into the Indian market, how many licences would the Minister expect would be covered under the quota and in general? We did discuss a little bit about the reserve portion, but I think that is an important question again when it comes to excess or shortfall in reserve export licence application.
If the Minister has given the reserve export licences and then those licenced participants didn’t meet their expected quota within that, what then would happen? Would the reserve portion be then opened up again for tender? How would it be communicated with potential exporters that they can now bid any potential shortfall in that reserve export licence?
VANUSHI WALTERS (Labour) (17:39): Thank you, Madam Chair. I have a very brief question in regards to clause 9. This is the power to require information. I’m quite interested in the fact that it overrides section 60 of the Evidence Act, which is the portion of the Act that provides the non - self-incrimination provisions, both in terms of the criminal law but also in terms of the civil law. It’s an explicit decision to override that, which section 60 does allow.
My question is, really, how this compares to other comparable provisions in terms of the power to require information and whether like provisions also explicitly override section 60 or whether this is more of a novel provision that the Minister has decided on. Thank you.
CHAIRPERSON (Maureen Pugh): We’ve got five minutes.
Hon TODD McCLAY (Minister for Trade and Investment) (17:40): Madam Chair, thank you very much. I’ll try and move through these quite quickly.
The ability to compel to provide information is not unique. It is in other free-trade agreements, and indeed the last ones that the House passed have similar quota systems in them. The European Union, and, before that, under the previous Government, the UK agreement had similar abilities or powers in there. The reason for that is, as the House has decided on a number of occasions—the ability to export is easy; if you want to take advantage of a quota that you have been given as opposed to someone else having it, then you need to provide information, and should you not be meeting the requirements of that, we have the ability to get the information to ensure that we are meeting our obligation to the country we’re exporting to.
In as far as the 10 percent in the reserve is concerned and how it’s managed and all these other things, I think I’ve answered that on a number of occasions now in the House during this part of the discussion or debate, and that is that is the same as we have in other situations. The way it is governed and managed is to be fair and open and transparent. It is to allow new entrants to a market who might not be there already, but we will approach this in the same way we do with the EU free-trade agreement (FTA) and the UK FTA, and, in the case of acquisition, the access we have to a number of other countries, including Japan.
A party vote was called for on the question, That Part 1 be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11;
Noes 29
Green Party of Aotearoa New Zealand 15; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Part 1 agreed to.
Committee of the whole House
Part 2 Amendments to Overseas Investment Act 2005 and Overseas Investment Regulations 2005, and Schedule 2
CHAIRPERSON (Maureen Pugh): We come now to Part 2. This is the debate on clauses 14 to 24, “Amendments to Overseas Investment Act 2005 and Overseas Investment Regulations 2005”, and Schedule 2. The question is that Part 2 stand part.
Hon DAMIEN O'CONNOR (Labour) (17:43): Thank you very much. This is a critical part of this agreement, and perhaps one of the areas where, I guess, the New Zealand negotiators had something to put on the table. My questions go to the Minister for Trade and Investment, and there are a number of technical regulations in here. Clause 18, regulation 85 is the definitions, and it says, “India branch means a branch of an enterprise if the branch is (a) located in the India territory; and (b) is carrying out business activities in the India territory”.
My question to the Minister is, how do we know and is he sure that we have negotiated sufficient protection to ensure that companies from other parts of the world are not going to access this trade agreement—and it’s effectively their right to invest up to $200 million in our country—and that we’re not opening the door to some other non-Indian companies. I’m sure the Minister has gone through this, and he’s probably got a reasonably solid explanation, but I’d like for him to put it on the floor of the House here, because I know, from New Zealand First’s perspective, it seems to be an area of grave concern. I think the House and Parliament deserves at least a clear explanation that this and the provisions in here will not be rorted or sidestepped for whatever reasons for companies from other than India to come into our country.
CHAIRPERSON (Maureen Pugh): Thank you. Unfortunately, there’s not time for the Minister to respond. The committee is suspended for a valedictory statement.
House resumed.
Valedictory Statements
Celia Wade-Brown
SPEAKER: Members, I’ll indicate now that at the conclusion of the valedictory statement by Celia Wade-Brown, the House will suspend for the dinner break. For now, I call on Celia Wade-Brown to make her valedictory statement.
CELIA WADE-BROWN (Green) (17:45): Tēnā koe e te Māngai o te Whare. E ngā hoa, e rau rangatira mā, e ngā iwi o ngā hau e whā, tēnā koutou, tēnā koutou, tēnā koutou katoa. Ngā mihi o te Wiki o te Reo Māori ki a koutou katoa.
[Authorised translation to be inserted by the Hansard Office.]
I have only been in this House for five minutes compared to many of you—though I haven’t been told to go back to my own country. Thank you, Aotearoa, for letting this immigrant become a councillor, mayor, and now an MP. I have been allowed to belong, but belonging is being made harder.
Let’s start with voting—with who’s included. We are truly proud of being the first country to achieve women’s suffrage. We should be equally proud that in 1975, this Parliament extended the right to vote to everyone who can live here indefinitely. Many countries are less generous than New Zealand about dual citizenship, so people genuinely committed to living here may not wish to relinquish their first passport. These are many of our nurses, our surgeons, our early childhood teachers. Shame on anyone who wants to narrow our democracy further by restricting who can vote. I started with the right to vote because today is the International Day of Democracy.
There are two more threads I want to draw on for both politics and my personal life. The first is Predator Free. For 20 years, I have been kayaking out to Taputeranga Marine Reserve, on Wellington’s south coast, to kill rats and protect the lizards and seabirds that live there. In the 1990s, I led a Wellington City Council working group that examined the feasibility of the then Karori Sanctuary. We gave it a big tick. Reserves have been planted, tracks created, and the birds have flown out of Zealandia to recolonise the city. My final signature as mayor was on the Predator Free agreement between two councils and the NEXT Foundation.
Since then, I served six years on the board of Predator Free Wellington. The professional and community effort has been extraordinary. That mahi is underfunded across the country—especially as Jobs for Nature was canned. As the Greens’ Predator Free spokesperson, I’ve taken time to meet groups working around the motu. My popular Cat Management Bill still languishes in the ballot tin. Several MPs have vowed to bring cat management forward next term—and maybe the existence of that bill encouraged the Minister of Conservation to put feral cats into the Predator Free 2050 Strategy. I will keep trapping and keep advocating for te taiao after I leave this building. Healthy nature is the foundation for all of us.
The second thread—you can probably guess this—is cycling. In 2008, this capital city agreed to a cycling plan, but there was zero budget. In 2009, I amended the budget to half a million dollars, and in 2010, advocates held a meeting called “Fix the Gap” to try to connect Petone and Ngauranga. That same year, I became mayor, and I cycled out to the airport to meet Hillary Clinton with my bike shorts hidden underneath my suit, which caused a bit of a furore. In 2013, the Rt Hon John Key opened the Remutaka cycleway and said it should really start in Wellington City—and I got into trouble with his comms staff because I let him ride my e-bike without a helmet. We now have the bones of a genuinely good network, and this year, the marvellous Te Ara Tupua opened, with Julie Anne Genter, Minister Bishop, and me first across once the ribbon was cut. Walkers, runners, and cyclists are loving this part of the Great Harbour Way.
Affordable living isn’t just about rent and kai; it’s about whether your family can get to school or work or to the shops without always needing a car. The great rides are a wild success, with 50 percent walkers and 50 percent cyclists supporting regional tourism. But recently, the Prime Minister said he was nervous about crossing Molesworth Street. There are two lanes of motor traffic, two lanes of parked cars, a signalised crossing just up the road, and one very terrifying cycle lane. But given the lack of public sympathy for his plight, the tide may be turning in the cycling culture wars.
Talking of culture, it has been a huge honour to join official visits to Rātana, to Waitangi, and to Koroneihana. Those are occasions that showcase leadership for 500 years, not just for the next election. As a Green MP, I came into this House committed to Te Tiriti. I have watched settlements pass here with unanimous support, but I have also seen division. In my very first summer in Wellington—the 1983-84 summer—I visited Tapu-te-Ranga Marae. I wonder if more Pākehā took up the invitation to step onto a marae, they might understand this remarkable, unique mechanism for social cohesion. Empowering marae resilience is for all of us.
Leadership has never rested on a handful of individuals. Representative democracy should not be the only way we make decisions—I mean, the Westminster system doesn’t work that well in Westminster—and it must not be allowed to further privilege the wealthy and the powerful. There is a long tradition—certainly in the Māori world; also in the Celtic world—of deliberative decision-making: getting people to reason things through, not simply counting votes every three years.
Our economy has grown more than a hundredfold since 1960, yet the gap between our lowest decile and our wealthiest has grown wider. Waiting for economic growth to fix that is wilful blindness. Affordable living must be a deliberate choice a country makes, not a myth of trickle-down hopes.
Other things got worse since the 1960s: the state of our climate, our biodiversity, child poverty, addictions, homelessness. What has got better includes exactly what some parties long to wind back: we have reduced stigmatism towards rainbow, takatāpui, and disabled communities. That’s progress worth defending. I tremble a little for our mokopuna, and their mokopuna to come, as extreme rainfall, high winds, and warming oceans begin to trigger feedback loops. All of us bear some responsibility for those floods in Nepal, the heatwaves in Spain, and the wildfires in America. Individual action will never be enough, and neither will technology alone. We need systemic change in land use, transport, and science funding. This country has a far better future available for all of us if we cooperate, base decisions on evidence, and think seriously about consequences for future generations. Honest politics is just that: telling people the truth, unbiased by corporate donations, instead of promising them more while saying “no” to a fairer tax system.
I may have arrived here five minutes ago, but it wasn’t altogether an accidental journey. In 1996, I first put my name forward for Parliament—I don’t give up easily—on the Alliance list at a modest number 44, then I campaigned for the Greens in London in 1999—that was a Rod Donald idea. In 2002, I ran in a collegial contest in Rongotai with Glenda Hughes and Annette King—and we actually agreed on a remarkable amount. The 2020 and 2023 Wairarapa campaigns were also mutually respectful, with the Hons Butterick and McAnulty swapping places, but always focused on policy, not personal attacks. Thank you to campaign managers Chrissie and Annie for those years. I wish Lauren Craig and the Wairarapa Party Vote Green team all the best. And a shoutout to all the local body politicians who are living through some tough times.
I want to record my huge respect for Julie Anne Genter, having run in Rongotai myself—and I came third. She won in 2023 and I expect to win Wellington Bays again in November—and, of course, Tam in Wellington Central. But Julie Anne and I share an office that’s sort of a bicycle depot. You need some lycra, you need a pump, and I will really miss cycling off with Julie Anne, either at 10 p.m. or midnight.
Midnight urgency has been misused. Our communities, our iwi, our students—they’ve all got plenty of wisdom to draw on. If we let the select committees do that, I think we’d have better legislation. For example, the modest lifejackets bill improved immensely from the first reading to its passage because it wasn’t rushed. On the other hand, we’ve seen what happens when a contentious bill—or 30—is rushed through all stages. Winter energy payments, anyone?
My personal view is that a four-year term, with the Opposition chairing most select committees—not necessarily a majority; just chairing the select committees—would buy this House some breathing space. So would consulting—yes, consulting—on the Budget, the way local government already builds its long-term plans, and a higher threshold for urgency should be required. I look forward to a future Government that sees the four wellbeings as the point of central government and local government, and that honours Te Tiriti as a matter of course.
Now, to some thankyous. First, thank you to Alastair—who still refused to sit in the front row, but never mind—for standing by me through all these years, with coffee and hot water bottles as required. Thank you to our boys, who grew up in and around political campaigns and Green Party conferences. Ramsay and Jono can’t be here tonight, but I look forward to spending a lot more time with them, and with our grandson, Reid. Jono once asked me, “Mum, why do you always speak to people you don’t know?” That, my fellow MPs, is our superpower.
I thank Chlöe and Marama for their leadership, and my caucus colleagues for mutual support. Thank you to all our parliamentary staff: Kevin, Meg, Raewyn, Tom, Daniel, but all of you. Also, to our party staff and the volunteers around the country.
A huge thanks to Parliamentary Service, especially the outreach team and the library; our select committee clerks and advisers are awesome. Thank you to the House staff for keeping us always hydrated. Thanks to MPs and friends across the political spectrum, for the times we listened to each other. It’s really worthwhile.
Of course, there’s a lot of leadership outside this House, whether it’s Te Arikinui Kuini Nga wai hono i te po showing rangatahi what is possible; whether it’s Helmut Modlik reshaping democracy conversations; Max Rashbrooke, Catherine Knight, and Ganesh Ahirao helping us face inconvenient truths. But the important leadership comes from people who hold no title and no elected role. They’re the night shelter managers, the community leaders, the artists, the founders of new organisations working out how to reduce waste, to fix disease, and to make life better.
Why am I standing down, given my continuing passion for change? It isn’t my health—though I have to say an emergency appendectomy in May gave me a fright, but as the oldest woman in this House, I reckon I’m still reasonably fit. The reason is the calibre of our caucus, the calibre of our candidates: their energy, their commitment, and their willingness to be here at midnight. I am going to spend time with my friends and family in our regenerating forest, and on some exciting expeditions on foot, on bike, and in my kayak. I’m going to enjoy November’s Wairarapa Walking Festival—you’re all welcome to book a walk—and I’m going to be chasing some pūtea for completing the Wairarapa Five Towns Trail, so don’t expect me to retire quietly. To those who have gone before and those who will come after: tēnā koutou, tēnā koutou, tēnā koutou katoa.
Waiata—Purea Nei
Sitting suspended from 6.03 p.m. to 7.30 p.m.
Bills
India Free Trade Agreement Legislation Amendment Bill
Committee of the whole House
Debate resumed.
Part 2 Amendments to Overseas Investment Act 2005 and Overseas Investment Regulations 2005, and Schedule 2 (continued)
CHAIRPERSON (Teanau Tuiono): Members, the committee is resumed. Prior to the dinner leave, we were considering Part 2 of the India Free Trade Agreement Legislation Amendment Bill.
Hon DAMIEN O'CONNOR (Labour) (19:30): Thank you, Mr Chair. I know we put aside the committee for the valedictory; I think we all enjoyed that.
Just going back to this quite critical area of this piece of legislation that relates to amendments to the Overseas Investment Act and the investment regulations, I was asking the Minister in clause 18 around definitions of Indian companies and branches and individuals. The question was whether he is sure that the door is not left open for, I guess, individuals or companies or multinationals from other places around the world coming in through some kind of Indian re-export regime. I know that they have left a door open for us when it comes to dairy if we’re re-exporting. India has an interest in developing its own export capability; how do we know that the definitions in this piece of legislation, in clause 18, actually mean that we will have genuine investment from genuine Indian nationals? Maybe the Minister can take a call on that one.
Hon TODD McCLAY (Minister for Trade and Investment) (19:31): I’m very happy to. There are two differences here. The member maybe is confusing them—not purposely.
One is around export of products. The member is right—dairy products can be exported to India from New Zealand at a zero tariff rate and they can be re-exported with value added or something else, and therefore that’s why there’s a zero tariff rate. This is about investment into New Zealand, and I can give him the assurance that I am very sure that other nationalities will not be able to take advantage of this, because it is identical language to that in the New Zealand – European Union Free Trade Agreement and the New Zealand – United Kingdom Free Trade Agreement. All it actually is doing is applying a threshold of investment and different types of screening that will be required, lining up will all of our other free-trade agreements. All of our free-trade agreements, bar one, are at the same level as what this will be. The one that’s not is the Australia-New Zealand Closer Economic Relations Agreement, of course, a large amount of which is historically for very, very different reasons. So it doesn’t change anything around investment screening or anything else, other than saying that this is the investment threshold, and it lines it up with all other trade agreements.
Hon DAMIEN O'CONNOR (Labour) (19:33): I just want to carry on—I thank the Minister for that; I appreciate that India has a relationship with Russia, for example, and so I appreciate that it’s not the threshold, and that we’re moving from $100 million to $200 million. But the issue is: how do we know? Are we relying on the Indians to then ensure that the money has not come from Russia, through India, into New Zealand? I think most Kiwis would object to that backdoor way of inappropriate investment.
Hon TODD McCLAY (Minister for Trade and Investment) (19:33): In the very same way that this is dealt with under the New Zealand – European Union Free Trade Agreement and the New Zealand – United Kingdom Free Trade Agreement, both of which that member, at the time he was a Minister, was involved in negotiating. It doesn’t alter how New Zealand makes a decision around whether or not they get access under it; that is set out elsewhere. This is merely saying the threshold is moved to this level.
There is a concept called “denial of benefits”, though. In the case that somebody has tried to use it and they haven’t established themselves in such a way that they have a legal entitlement, New Zealand has the ability to deny those benefits. But it doesn’t alter the screening or ability or what needs to be done for a company or someone else from India. It is the same as all other previous agreements, and it really is merely only moving the threshold up to be equal to those.
And in every one of our free-trade agreements, it is the same threshold—it’s a $200 million threshold—except for the CER with Australia, which is higher. This is the same as China, the UK, the European Union, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership countries, the UAE—which this Parliament has signed off during this term of Parliament—and the EU one.
Dr LAWRENCE XU-NAN (Green) (19:34): Thank you, Mr Chair. Just on that, in terms of “India branch”, I understand that particularly for Part 2, we’re looking at the Overseas Investment Act and investment regulations, but this idea of what an India branch is as located in the India territory, and I feel like this is something that potentially will come up both in this part in terms of overseas investment into Aotearoa New Zealand but also later on, when we’re looking at Part 4.
I would be interested to know, for example, who then determines what is considered Indian territory. For example, there are a lot of contentions around where the boundary of India is, particularly in northern India, around the Kashmiri region. There are obviously a lot of—this is more, kind of, looking at international relations and international diplomacy. But, for example, if something that is within that particular region that is kind of very grey in terms of jurisdiction boundaries between India and Pakistan in Kashmir, what then determines what that would be? Who then determines what we consider Indian territory? I think that’s my question for this part, if the Minister wouldn’t mind giving a response to that.
Hon TODD McCLAY (Minister for Trade and Investment) (19:36): This is a trade agreement. It’s not foreign affairs. It’s not determining territories of countries. But I can give the member Dr Lawrence Xu-Nan an absolute assurance that this part of the bill is identical to that which was done in the European Union Free Trade Agreement Legislation Amendment Bill that that member’s party voted for. I accept you’re not supporting this, but it is the same. All it is doing is lining the threshold up, which is a commitment we’ve made, which in all of our free-trade agreements is the same amount. It doesn’t alter anything else other than that. Some of the things he’s talking about are dealt with in legislation or policy elsewhere, but they are not within the scope of this bill.
Dr LAWRENCE XU-NAN (Green) (19:36): Just following up on that. The difference is that there are, as far as I know—and please correct me if I’m wrong—no border disputes within the EU. For example, there is nothing between France and the UK that determines what is part of France and what is part of the UK—it doesn’t apply to things like Jersey, Guernsey, etc.—but when it comes to jurisdictions or regions like India, there is a very clear border dispute. My question, then, would be: are we going by what Aotearoa New Zealand would consider to be the boundary for this to be considered India territory? Are we going with the Indians’ interpretation of what is going to be the India territory? I just want to know which side we’re going with.
Hon TODD McCLAY (Minister for Trade and Investment) (19:37): Well, it’s an interesting debating point, but that’s a discussion that should have taken place during treaty examination. This legislation—any part of it, but to this part—doesn’t deal with that. What the member’s talking about is outside of scope. One is to do with the remit overall and how you might decide this. This is merely changing a threshold around investment.
Dr LAWRENCE XU-NAN (Green) (19:37): One final tiny question. All I’m asking for from the Minister is how the Minister would define paragraph (a) in clause 18(1) of this bill.
VANUSHI WALTERS (Labour) (19:38): Thank you, Mr Chair. I’m also on clause 18, but a slightly different question relating to the definition of “India individual”. I think the interesting thing about India is, of course, that it doesn’t allow dual citizenship but the Citizenship Act does have a term that is “overseas citizen of India”. It’s quite a unique category, because in many ways that individual has very similar rights as a citizen except they don’t get the right to vote and they aren’t entitled to hold particular positions of office either. But for all other effects and purposes—they can come into the country without needing a visa and there’s no notification that’s required in terms of advising police of one’s whereabouts or travel. And so it’s just a question as to whether those individuals would be covered within that definition.
Hon TODD McCLAY (Minister for Trade and Investment) (19:39): Well, the simple answer is that a definition of citizenship comes with a passport. If you think about, in New Zealand, you can have residents and permanent residents that have similar status to that of a citizen. They don’t have the passport; they’re not citizens. In this case, an Indian national citizen would have to have a passport. Anything else is an arrangement India has; it’s not to do with New Zealand.
Dr LAWRENCE XU-NAN (Green) (19:39): Thank you, Mr Chair. I’m going to move on to a new clause. I’m moving on to clause 20, “Regulation 88 amended”. Now, this specifically looks at the Overseas Investment Regulations 2005, and after regulation 88(2)(i), inserts paragraph (j), which is article 8.2.
Now, regulation 88(2) specifically refers to exclusions—I think the term is apply “subject to the exclusions contained in the following provisions”, and in this case, specifically reference article 8.2 of the India free-trade agreement (FTA). Now, looking at article 2 of the India FTA, some of these do, I guess, in some ways, make sense, when it says that the chapter, in terms of scope, should not apply to measures affecting Government procurement, etc. But what I don’t understand is, for example, how would paragraph 3(e) of article 8.2 in the agreement be excluded or is needing to be excluded in this particular regulation. So when it comes to air transport services affecting traffic rights, would the Minister just clarify on, in this case, it says just article 8.2, but rather than specifically certain parts of 8.2, is there any part in article 8.2 that, for example, should not be excluded as a part of the regulation?
Hon TODD McCLAY (Minister for Trade and Investment) (19:41): When agreements are negotiated, you can have a general clause around investment. If the member looks at some of the detail of what this does, it increases the threshold to $200 million, it provides transitional provisions for how this might work; but equally, at the same time, there’ll be areas that countries reserve. So increasing a threshold to allow $200 million to be invested, whereas some other countries that don’t have a trade agreement with New Zealand, it will be a much lower amount—for instance, World Trade Organization members that we don’t have a bilateral or collective agreement with have $10 million only. So this is a significant benefit to those that we have negotiated a free trade agreement with.
But there are always things that you will reserve and have different abilities too. An example in many trade agreements: the ability for us to create conditions around screening is the way that a previous Government has looked at how we might create some guardrails around who might invest in types of property in New Zealand. We reserve the right to do it and it’s for New Zealand to make those changes. The example the member’s just given around aviation: there are separate aviation agreements that give people rights to come and fly in and out of New Zealand—to have a right automatically to have access to New Zealand. I’m speaking hypothetically now. I know it would be a separate arrangement not covered by the free trade agreement.
So this clause merely lines up for an Indian group of New Zealand trading partners for which an increase of monetary threshold to $200 million applies to investments in New Zealand by non-Government investors in significant business assets for the purposes of providing services in New Zealand, but there are always a range of things that we have reserved or there is more conditionality around or other bits of legislation or policy will govern.
Hon DAMIEN O'CONNOR (Labour) (19:43): Look, thank you very much, Mr Chair. This is in clause 18 again, and it’s relating to “India territory means the territory of India as defined by Article 1.2(q)(i) of the India FTA”. Relating to the marine territorial areas of India, the Minister will be familiar with the World Trade Organization Agreement on Fisheries Subsidies, where India played quite a substantive, if not disruptive, part in blocking or assisting or disrupting the agreement.
So the question for the Minister is: if there are Indian fisheries companies working in India territory, and they may or may not be involved in illegal, unreported, and unregulated (IUU) fishing, then does the agreement allow us an ability to block or intervene or, indeed, take produce—as fish, it would be, or some kind of marine product—from the area, given the importance of this issue in trying to reduce fish subsidies around the world? The Minister himself—and I acknowledge that—has been involved in trying to progress this agreement.
The question for him is: would this agreement allow operators fishing in Indian territorial waters, who might or might not be conducting IUU fishing, to then be blocked from an investment into New Zealand? Because we have seen, as the Indian economy grows, the huge investments out of India into all sorts of industries, and into fishing would be a possible one that we might have down here. So I leave that question with the Minister as to whether there’s any ability to intervene.
Hon TODD McCLAY (Minister for Trade and Investment) (19:44): Thank you. Two separate issues again. One is the sale of product into New Zealand—in this case fish products, I suppose. That’s governed differently because this part is about investment in New Zealand, not where goods may come from; that’s governed elsewhere in the free trade agreement, including around the rules of origin. But in as far as the hypothetical example the member’s given—somebody’s ability to invest in New Zealand—there is a good conduct or good character test anyway that sits there, separate from this, not in this agreement, but we have reserved the right in all of our trade agreements for that to apply.
Dr LAWRENCE XU-NAN (Green) (19:45): Thank you, Mr Chair. I’m going to move ahead to the final clause of this part, which is clause 24, specifically looking at Schedule 2 of this bill. Now, this Schedule 2, New Part 15 inserted into Schedule 1AA of Overseas Investment Regulations 2005, regulation 33 makes sense in terms of duplication. Nothing in terms of acquisition of rights or interests in securities or of other properties will take effect until after commencement of this Act—that makes sense.
Regulation 34 in terms of no refund—I do remember seeing comparable clauses in other comparable bills, but I don’t remember asking it previously. I think, now, looking at things from a different lens, what has jumped out to me is that there’s been no refund of any fees on the grounds that the matter, for example, is no longer relevant—i.e. that the consent that has been applied for is no longer required. I want to check with the Minister: is that something that, for example, is retrospective, being my first question.
I think my second question is: if a consent is in the process of being granted or denied and this bill comes into effect and they no longer need the consent, it’s automatically granted, I get that. But what happens if, for example, a consent is still required and a person is in the process of doing that, but the bill changes the nature of the criteria of that consent? Would, then, a person be entitled to a refund of any fees during that period or will their consent application simply be judged under the new system?
Hon TODD McCLAY (Minister for Trade and Investment) (19:47): This is an easy one to deal with. If somebody has put in a fee before entry into force, they don’t get a refund; after entry into force, they don’t have to pay a fee.
Hon DAMIEN O'CONNOR (Labour) (19:47): Thank you, Mr Chair. Really it’s an opportunity for the Minister, Hon Todd McClay, to explain the difference between type 2, type 3, and type 5 investors, as explained in the bill here, because I think anyone reading this might be somewhat confused, as it makes reference to the UAE individual, an India individual or, indeed, as one here, to Hong Kong. While this is amending legislation, some who go through this bill here might be somewhat confused. I’d really be interested in having the Minister’s explanation of those different types of investors and the relationship with the UAE, as pointed out and referred to in this legislation.
Hon TODD McCLAY (Minister for Trade and Investment) (19:48): Well, again, this is really lining things up with elsewhere. The types are actually defined elsewhere in the Overseas Investment Act, and this is the same provision that is in those previous agreements. My understanding of advice is it’s the same as the UAE as well as the EU and the UK—the last three that we’ve done. The description of the definition sits outside of this somewhere else—it’s merely borrowing it. There are, from time to time, updates to line things up—not from the point of view of changing it, but if you think about that you’re going to extend something to India, rather than amendments that are hard to see, they will from time to time just reproduce with it put in there so that when someone else looks at it, they see it flows clearly, rather than an amendment to an Act somewhere else that you’ve got to find how it fits together. So it’s merely to be more functional.
ANDY FOSTER (NZ First) (19:49): Thank you. Look, my question is in respect of clause 15—so it’s the section 61A amended of the Overseas Investment Act. I look at section 61A, and it’s got a long list of various free trade agreements. What I wanted to know was just whether those free trade agreements are all lined up. This is about inward investment, as I understand it. We’re concerned about both outward and inward investment, but this is about inward investment, OK—I understand that. But if they’re all lined up in terms of the regimes which are there, because there’s a long, long list there of trade agreements: China, Hong Kong, etc., etc., all the way through to UAE and so on.
If the amounts of money which are allowed for in each of those free-trade agreements are more or less in line with each other, or if there are any which are distinctly—if this is outside of the parameters, they’re all the same, so we’re talking about $200 million, roughly speaking. If the Minister could just explain the regime which is there, in terms of what is allowed for in terms of inward investment, the nature of those kinds of investments, and if there are any restrictions on those at all. It would be most useful to understand that. Thank you.
Hon TODD McCLAY (Minister for Trade and Investment) (19:50): As far as this legislation is concerned, it merely lines it up to say that India also is at $200 million, as the others are. We’ve negotiated different amounts, so most of the investment agreements—free-trade agreements around investment—have a most favoured nation clause. As it’s gone up, it’s extended to others, we’ve put in the list, and it goes up to $200 million for all of them. As far as the list of what you can invest in, unless it is excluded, actually it is not dealt with in this legislation. It is separate, and it’s under the Overseas Investment Act. So it’s not directly in the scope of this.
Hon MARK PATTERSON (Minister for Rural Communities) (19:51): Just picking up on that point, the $200 million threshold, is there any obligation—I can’t see it in here, and I assume it’s here somewhere. Is there any obligation on the Indians to actually invest any money here? The most egregious part of what is a terrible deal is the US$20 billion, which as of today is nearly NZ$35 billion that we’re expected to send into the Indian economy. It’s unbelievable that we would sign up to that—I cannot believe it. I cannot see within these clauses the inward investment—any threshold or any obligation on the Indians to reciprocate what seems to be an unbelievably generous concession that we’ve made.
We in New Zealand First obviously want to see New Zealand businesses investing in New Zealand. I’m part of the wool industry, as you know, Minister, and we’ve got a 2.5, 2.75 percent reduction in our tariff. The amount of that goes up and down every week at the auction—I mean, it’s negligible; it’s nothing. We’re trading away, potentially, the ability to—our own manufacturing base. That’s what I’m really worried about here. I want to grow the New Zealand wool industry and the New Zealand manufacturing base, but here we’ve got an obligation in the deal itself to NZ$35 billion offshore, but I can’t see where it’s in here—and I hope the Minister can put me right on this—where there’s a corresponding obligation on the Indians to actually invest in productivity and growth in New Zealand.
Surely our negotiating team looked at those two equations and said something does not add up here. We’re expecting to send $35 billion offshore—that’s money we desperately need to double our exports here; the investment needed to add value to New Zealand. The concern here is that we’re actually going to incentivise more export of raw material into India so it can be processed over there, because that’s where our companies are investing, but, correspondingly, we’ve got no obligation, as I can see within this threshold of $200 million that’s referenced in Part 2, that they’re actually going to spend a red dime here.
There is nothing there, so can the Minister please explain what the reciprocal obligations on the Indian Government or the Indian economy to actually invest in New Zealand and to our productivity and our growth, because that’s exactly what this Parliament—and the Labour Party can hang their heads in shame here as well—is looking at, extraordinarily, sending off overseas. I would like to know what the reciprocal obligation is within Part 2 that we get our fair share in this deal.
Hon TODD McCLAY (Minister for Trade and Investment) (19:54): This bit of the legislation is merely about aligning a threshold for India, as that member’s party voted in favour of in the European Union free-trade agreement. They didn’t in the UK one, because they weren’t in Parliament then. They probably didn’t in the China agreement because, actually, they weren’t in favour of that. But it’s merely lining this up, so there’s no difference here to last time that member voted on a free-trade agreement in this Chamber. The clause is identical—exactly the same. The other things he’s raised are outside the scope of this.
We did canvass this very, very widely when we did the discussions around treaty examination, and that’s the time when we go into all parts of the legislation. This legislation, very, very narrowly, does a small number of things, including setting the quotas so New Zealanders can get product into India for the first time, in some cases where no one else in the world is able to, and then a few other minor changes not within scope.
I would just comment for a moment that it’s fair for members of the House to have views; they should not mislead, because that member knows good and well that any obligation the Government has taken on around investment is a commitment to promote, nothing more. I do note that when he went to India and put out a press release that he enjoyed the hospitality of Indians and he dined with them and he spoke positively about the relationship, he was very, very different than he is tonight in this Chamber. But I do like the woollen suit he’s wearing, that he bought when he was in India.
CHAIRPERSON (Teanau Tuiono): The Hon Mark Patterson—but just a reminder to the Minister to keep it within scope of the bill. There are issues, of course, within the agreement, but this is about the legislation, which is about amending the agreement.
Hon MARK PATTERSON (Minister for Rural Communities) (19:56): I am trying desperately to keep it within scope. The Minister referenced in his answer the European free-trade deal, which we absolutely did. I don’t recall a clause in that deal where there was an outward investment clause, so that would seem to be a disparity here that is unexplained. Could he explain that, since he’s raised this, not me.
Hon DAMIEN O'CONNOR (Labour) (19:56): Mr Chair, thank you very much, and I’ll go back to clause 18. It does define, as I say, Indian branch companies or individuals who might be able to invest in our country, so the question for the Minister: if there was to be an Indian company that might want to—given there seems to be some concern about the export of raw materials, if we were to have investment in New Zealand in, say, a wool processing plant or a wood processing plant, would the Minister think that that’s a positive move and that this clause 18 would enable, indeed, investment from India into New Zealand that might add value to our exports out around the world in wood or wool?
Hon TODD McCLAY (Minister for Trade and Investment) (19:57): This bit of the legislation doesn’t speak to whether things are good things or not; this merely sets the threshold when you come in. There’s a different Act of Parliament that makes those determinations and those decisions. That Act of Parliament is not being amended by this, other than there’s a $200 million threshold for investments in India, which does go back to being exactly the same. Although the name European Union versus India is different, the clause is virtually identical in this piece of legislation.
Dr VANESSA WEENINK (National—Banks Peninsula) (19:57): 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 59
New Zealand National 48; ACT New Zealand 11.
Noes 63
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion not agreed to.
Dr LAWRENCE XU-NAN (Green) (19:59): Thank you, Mr Chair. Considering we’re still on Part 2, I think what the Hon Mark Patterson has raised—and, actually, the Hon Damien O’Connor raised—are both really important points. What we are not seeing in previous trade agreements are a comparable examples.
Just seeking your guidance as well, Mr Chair: while it is true that the agreement itself has received a treaty examination process not unlike a select committee, we have actually never had the opportunity to debate, even if it’s not the agreement itself—when we’re looking at the content of the bill, a comparable regulatory impact statement, which we do often debate, is in the form of the national interest analysis. Therefore, like we would do with a normal committee stage on a bill—putting policy intent, etc., from a regulatory impact statement—we should be able to also draw on the national interest analysis as a part of the debate on this bill. I think it is important, while we’re still debating Part 2, that we are able to pull on the content of the national interest analysis as well as consider the fact that we have not had a chance to debate the agreement as part of a committee of the whole House in this Chamber—that we should be able to draw on certain elements of that.
Tim Costley: But we’re not.
Dr LAWRENCE XU-NAN: You can, by all means, take a closure motion. I think, with that, we do just want to elaborate on the point that—this is quite interesting, because this must be what it feels like for a members’ day when we can actually expand the scope quite broadly. I think, in this case, we do need to discuss the fact that, within the policy intent that sits behind this, we understand that we are comparatively speaking a much smaller economy—we’ve got to admit, in terms of economies of scale—compared to India and there is this idea that there is an intention to promote the investment of US$20 billion, but surely there is also, through the Overseas Investment Act, a comparable expectation. I guess my question to the Minister for Trade and Investment then is: when we’re looking at overseas investment from India here to Aotearoa New Zealand, what modelling has been done to ensure that there is some level of comparable investment also to here. Now, it might not be locked into the agreement itself, but I am assuming this is something that the Ministry of Foreign Affairs and Trade has previously looked into or that the Minister would have looked into. I think we could have a little more conversation around that modelling.
Hon DAMIEN O'CONNOR (Labour) (20:02): Thank you, Mr Chair. I’ll go back to clause 14, which is in Part 2: “This subpart amends the Overseas Investment Act 2005.”, and then Subpart 2, of course, amends the Overseas Investment Regulations 2005. Those people who are listening, or who might be reading through or following on their iPhones, possibly, will be saying that that is quite an old piece of legislation and indeed, “Has it caught up?” One of the changes that the Government announced yesterday or the day before was changes to the charging regime and the time frames for overseas investors. My question to the Minister for Trade and Investment is: do the new provisions that were announced yesterday—and I am not quite sure of the detail; many of the things announced by the Government, you take with a pinch of salt. While they have said it will be cheaper and faster, my question is: how does that relate back to the 2005 regulations which we are amending here, and will it make it easier or cheaper for Indian investors to come into New Zealand? Indeed, the question is: why?
Dr LAWRENCE XU-NAN (Green) (20:03): Thank you, Mr Chair. We’re still waiting on quite a few responses, I think, from the Minister for Trade and Investment regarding our questions. When we are looking at, let’s say, clause 19—in terms of “ownership and control test”—I understand that when we are looking at Part 2, a large part of this, particularly when it comes to Subpart 2, is to do with the regulations themselves. Usually, when we’re looking at regulations, we are looking at a piece of secondary legislation. I want to check with the Minister for Trade and Investment: with the Overseas Investment Regulations 2005, surely it will require some form of Order in Council when we’re looking at this? We have asked the Minister previously. When the agreement comes into effect, what then is the timeline for the Order in Council to enact certain secondary legislation as a part of the requirements of this bill, particularly when we’re looking at overseas investment regulations?
Also, when we’re looking at “ownership and control test” in the definitions, or any other parts of this particular part of the bill—I think the Hon Damien O’Connor was asking questions about the different types of investors that we still haven’t got a clear response on from the Minister. When we’re looking at “ownership and control test”, how would this particular bill and this particular part look at the ownership and control test differently that what we have seen previously, if it does at all?
Also, when it comes to this part, is there, I guess, a comparable ownership and control test when we’re looking at India, the other party to this particular agreement? While we are enacting a particular bill in response to an agreement that has been signed between two parties, surely the Indian Government would need to do something comparable, which would then mean—or are they a monist system, in which case any agreement they sign is automatically a part of their domestic legislation? When we are looking at their comparable version of the Overseas Investment Act and overseas investment regulations, has there been any work that has been done by the Ministry of Foreign Affairs and Trade or any part of the national interest analysis that looks at that comparability between the two jurisdictions and the way that we look at overseas investment in general? Again, we’re looking at this from our side, and India will look at things from their side, but if we have fundamentally different interpretations of that, there might be mistakes or mishaps with the interpretation of that. I just want to check with the Minister how the Minister or the ministry would deal with differences in the interpretation and definition.
Hon TODD McCLAY (Minister for Trade and Investment) (20:07): Well, maybe I can read something here that will help members with this. Part 2 amends the Overseas Investment Act 2005 to add the India free-trade agreement to the list of free-trade agreements in section 61A of the Overseas Investment Act 2005. It doesn’t alter anything other than adding that name—and, of course, that brings the threshold up to the same as all the others. In as far as how India meets its obligations, this bit of legislation doesn’t deal with this; this legislation doesn’t alter or amend another Act other than adding the name “India” to it. It doesn’t change the definitions of the classes of types of investors: that is dealt with elsewhere. Should the Overseas Investment Act ever be amended, and those amendments would cover some of these things, it would flow through to all of our free-trade agreements, one supposes.
To answer all of the member’s questions, this legislation doesn’t do any of the things other than adding India to the list of countries we have a free-trade agreement with, number one; and then, number two, of course, is aligning the thresholds. I’ve said previously in the debate that it lines up the threshold of $200 million investment, which is the same in every free-trade agreement we have except with Australia’s closer economic relations, CER, which is higher for historical reasons.
CHAIRPERSON (Teanau Tuiono): Just before I take the next calls, just to sort of give us a way that we will approach all the parts, including this part: we are debating part by part. The scope has to be within that part as well. What will also be useful for the committee is if you refer to the clauses—that will also assist the committee. I appreciate the comments that people have made about scope, but the clauses and the parts will help to guide the scope. Vanushi Walters.
VANUSHI WALTERS (Labour) (20:09): Thank you, Mr Chair. I’m on clause 22, which is in Part 2—let’s see if there’s a subpart—it might be Subpart 2, from what I can see—
CHAIRPERSON (Teanau Tuiono): Yeah.
VANUSHI WALTERS: This is a clause that amends Regulation 94 to add the India free-trade agreement (FTA) effectively to that regulation in the definition of a “type 3 investor”. As the Minister for Trade and Investment has said, that lifts the threshold from $100 million to $200 million—I understand that. My question is about the types of investment the type 3 investor includes in relation to the India FTA compared to a type 3 investor under a different FTA. As far as I can see, under the China FTA, it is an investor who is investing to establish a commercial presence in New Zealand through which they’ll supply a service, or who is investing in a commercial presence they’ve already established in New Zealand through which they’re supplying or they will supply their service, but those services have to fall within a specific area for China that are either environmental services, construction or engineering, agriculture or forestry, pure engineering, integrated engineering, computer-related services, or tourism- and travel-related services.
My question is whether the categories of service are the same for the India FTA under that type 3 investor, as compared to the China FTA and the categories that I’ve just listed, or whether those are different, and if they’re different, then what binds that category together across different FTAs? Thank you.
ANDY FOSTER (NZ First) (20:11): Thank you, Mr Chair. I want to return to clause 15, which I asked a question about before. I just wanted to make sure that I understood the requirements we’ve got here, and I’d certainly like the Minister for Trade and Investment’s response on this.
I am assuming that if we were not to pass this piece of legislation, then the free-trade agreement (FTA) itself would be unimplementable, although—and I notice that he’s taking advice at the moment—obviously, the FTA itself has been signed. The FTA has been signed—and I turn to you now, with you having taken that advice, Minister—but we need to pass this to make that FTA implementable. Presumably, that is an indivisible document, because if there was any part of this that were to fail, then the FTA would itself be compromised. That’s what I’m looking for your advice on, because I think the advice you’ve given us it that the only time that this House has actually debated the FTA itself to any degree whatsoever was in the first reading, if at all, and, therefore, we’ve never had the opportunity to debate the content of the FTA itself, other than what is here—yes?
Dr Lawrence Xu-Nan: It wasn’t even called a debate; it was just a first reading speech.
ANDY FOSTER: Well, yeah, that’s what I thought. I think it’s very important that people understand that that’s exactly what is going on, because the kinds of concerns which we have about this piece of legislation which we’ve articulated, which are the issues about the investment externally—the requirement to put that sort of $20 billion into India—and I’ve looked at that also.
Hon Mark Patterson: US dollars.
ANDY FOSTER: US dollars—yes, as I say, it’s in US dollars. If the Indians decide—and it’s them that decide—whether we have put sufficient effort into doing that, then they can appropriately chastise us and take us to task, and, in fact, it says that they can impose “proportionate remedial measures” and rebalance tariff concessions. There’s a lot of important detail in that which this House has not had the ability to have a look at, and we are told that it’s outside of the scope of this conversation we’ve got here.
All we’ve got in front of us—and I just want to be really, really clear; well, to make sure that I’m clear—is that we have a small set of items in this bill, but those things are also required to be passed for the FTA to be passed. If they were not to be passed, then the FTA would be compromised. Now, that’s the assumption, and the question I’m asking the Minister is that if these were not to be passed, then the FTA, I assume, would be compromised.
I’d also be really interested in the process which the FTA itself went through to be approved, because that would seem to have been done by the executive, but the executive, clearly, on this free-trade agreement, was divided, and so it would be appreciated if the Minister could respond to those questions. Thank you.
Dr LAWRENCE XU-NAN (Green) (20:14): Thank you, Mr Chair. I think that it is an important point that has been raised by Andy Foster, but if we are looking at this, although the Minister for Trade and Investment has said that this particular part—if you are looking at clause 15—the changes to the Overseas Investment Act are something that is standard. Yes, I do believe that when we are looking at comparable agreements, whether it’s the New Zealand - UAE Comprehensive Economic Partnership Agreement or the New Zealand - European Union free-trade agreement, the New Zealand - United Kingdom free-trade agreement, or anything else, we do see comparables, and the Minister is absolutely right in terms of the $200 million threshold. That’s not been changed and that has not been adjusted. That’s true, but in none of the other agreements we have seen have we seen from the other side an expectation of, essentially, overseas investment, and I think that this is where the crux of this particular part is really important for us to unpack.
For example, if we’re looking at page 106 of the national interest analysis, it says “New Zealand is required to promote foreign direct investment from investors”, but I guess in this case, for example, when we’re looking at the definition of “Overseas Investment Act”, would the promotion of overseas investment under our Overseas Investment Act be considered overseas investment? If the promotion of overseas investment in our Overseas Investment Act is not considered overseas investment, I guess, in some ways, how then do we expect the other party to this agreement—particularly from the Indian Government’s side. When they are looking at updating their overseas investment Act, how then would they put it in their legislation—if they have to—to ensure that the word “promotion” is captured in their domestic legislation?
Again, if the Minister wouldn’t mind clarifying that promotion is not in our Overseas Investment Act—I think that that is an important part for us to tease out here. Again, none of the other agreements that we’ve seen previously contains a similar comparable clause such as chapter 9 of the New Zealand - India free-trade agreement. I do want to check that with the Minister, and my specific question then is around this: is promotion itself considered an overseas investment in the Overseas Investment Act 2005? That is specifically for when we’re looking at clauses 14 and 15 in Part 2.
Hon TODD McCLAY (Minister for Trade and Investment) (20:17): Well, I can help very quickly with this. This piece of the legislation—Part 2—deals with the Overseas Investment Act, and it merely adds India to the list of free-trade agreements (FTAs), lining it up with a threshold of $200 million. It makes no other legislative commitment by this House other than putting India in around that threshold of $200 million and adding them to that list of all other free-trade agreements, as I’ve said, except for one, which is the CER Agreement, which is a different amount.
As far as the different categories are concerned—which the member from the Opposition raised earlier—in effect, what this does is it lines up India with the EU and the UK free-trade agreements. Some others have a slightly different treatment when it comes to each of the five categories, but that is based upon something that was negotiated at the time in a limited most favoured nations provision. That means that in some areas, as an example, when the threshold increases, that is extended out, but in some cases where we may agree something—as an example—with the EU FTA, it wouldn’t automatically extend out to other countries, and so this is being treated the same as those last two agreements.
Hon MARK PATTERSON (Minister for Rural Communities) (20:18): I want to go back to this $200 million threshold and the national interest test levers that we would still have. That’s quite a high amount of money, and if I look at some of the examples in the bill in terms of where the tariffs are getting reduced, mānuka honey is one where tariffs are being reduced. I reckon $200 million would just about buy the whole New Zealand supply chain.
If I look at the wool industry, which is another one captured in here, we have one scourer, one company—well, we have two scourers, but they’re owned by one company. It’s a monopoly. Now, with that $200 million threshold and without the protection of a national interest test, we could lose control of a key piece of infrastructure where, essentially, if it wasn’t in New Zealand ownership, all the wool could be just sent offshore and our manufacturing base could be starved of scoured wool. We’d have to buy it back from overseas.
Actually, within the context of the New Zealand economy and some of our smaller primary sectors, that $200 million is quite high, and so I want to understand what levers we have. What’s our national interest test? With scouring, it would be devastating for the industry if we lost that scouring to foreign ownership. How would we intervene in that situation? Are we powerless under this $200 million threshold, or is there at least some—at least some—protection there for our industries so that we’re not just being prepared to wave some of them away for the sake of making a commitment that the Prime Minister made in a debate speech before the last election to get this through expediently before this election? Have we really taken the time to consider the consequences? As Dr Lawrence Xu-Nan pointed out, there are substantive parts of this bill that we’re not actually, really, getting the chance to debate. This is the only chance we’ve got to ask some of these more fundamental questions. Thank you.
Hon TODD McCLAY (Minister for Trade and Investment) (20:20): Where there’s an opportunity to ask questions about what is different and what is within scope, it’s for the chair to determine that. All I can really say is that the part of the discussion around the $200 million and whether that is a significant amount, an important amount, or not might well have been debated by that member when the UAE free-trade agreement went through that he voted in favour of, because it is the same amount, or the EU free-trade agreement during this term, because it is the same amount and that member’s party voted in favour of it. Outside of the scope of this bill is around thresholds, and it’s around regimes to consider investment and so on. That’s a different Act of Parliament. It’s not here. Whilst there have been changes during this term of Parliament around that under the Overseas Investment Act, that member’s party, in coalition, has supported those as well. What is unclear to me is whether this is a concern about a $200 million amount and what it might do or about the country the money is coming from.
Hon MARK PATTERSON (Minister for Rural Communities) (20:21): Point of order, Mr Chair. I take offence at that last comment.
CHAIRPERSON (Teanau Tuiono): What’s your point of order?
Hon MARK PATTERSON: I take offence to that last comment, which, essentially, said that it was because of the country, not the actual contents of the bill, which is absolutely wrong. We think this is a terrible deal. It’s nothing against India as a country. So I do take offence to that comment.
CHAIRPERSON (Teanau Tuiono): Yeah, sorry, that’s not actually a point of order. I take your point, but it’s not actually a point of order.
ANDY FOSTER (NZ First) (20:22): Mr Chair, thank you. I just wanted to note that the Minister hasn’t actually answered the questions that I asked earlier. The first of those questions was around the issue around the process that we’ve got to. You’re quite clearly hearing from certainly the parties here who are opposed to this bill—not the bill, but the free-trade agreement (FTA) itself. There hasn’t really been an opportunity to discuss that in this Chamber. Now, that said, I know that we need to focus on what is in front of us in terms of the bill. I take that. The question that I asked was: if this bill were not to pass, what would happen to the FTA itself? Is this legislation integral to the FTA? I’m assuming that it would be.
Now, the Minister has also said that there is nothing different between what we’re doing with the $200 million inward investment to any other—the UAE one, the EU one, and so on—so it’s exactly the same. I take that point. The question I would ask you is whether there is a corollary to this FTA in any of those arrangements that says that New Zealand has to show best endeavours to send $20 billion USD, or $35-odd billion New Zealand dollars, of investment to another country, to the UAE, or to the EU. Do we have to do that in any of those arrangements? That is the concern. It’s not the country that it is coming from, as the Minister said. That is the issue that we are concerned about. It’s our ability to do that. It’s also the one-sided bit at the end of that process, which is if India decides that it doesn’t think that we’ve given enough effort to do that and to demonstrate that we collectively, New Zealand Inc, have invested that $35 billion in India—and the wording is quite clear here—it allows them to impose “proportionate remedial measures” to rebalance tariff concessions and to continue to do so until they are satisfied that we have invested sufficiently in India. Now, if that is also reflected in the EU and UAE arrangements, fine; tell us that. That will be really useful, but if it’s not, that is the concern that we’ve got, not the country of origin.
CHAIRPERSON (Teanau Tuiono): Just before the Minister takes a call, we are constrained by the legislation that’s in front of us. This is a debate about Part 2, which includes those particular clauses. I have noticed that some members want to be able to talk around some of the issues around the agreement. The Government enters into agreements, but the legislation that’s in front of us is about implementing that agreement. It is possible to be able to talk about the issues that you clearly have some interest in, but I ask members to do that within the context of the clauses that are in front of us.
Dr LAWRENCE XU-NAN (Green) (20:25): Point of order. Thank you, Chair. Thank you for that clarification. I agree, but also, at the same time, we understand—when it comes to the agreement or the policy intent itself and when are we going to change the agreement or change the policy intent in this case—however, that having the ministerial intent and having the Minister’s intent in the Hansard in terms of clarifying certain aspects of the agreement that pertain to a particular part of the bill is quite important, and it is a fundamental purpose of the committee stage. Yes, I do agree with you, Mr Chair, and I think the questions we have seen so far are specifically referencing a particular clause and the impact that this clause will have in the context of this bill, which is only in front of this committee because of the agreement. I think it is important for us to have some of the Minister’s intent on record.
CHAIRPERSON (Teanau Tuiono): Just to respond to the point of order, that is entirely possible within the context of the different clauses. I know members are very skilled across the Chamber here and will be able to ask those questions within those particular clauses and within Part 2, which is what this debate is about.
Hon DAMIEN O'CONNOR (Labour) (20:26): Thank you very much, Mr Chairman. I refer to clause 15, which is “Regulations regarding alternative … thresholds for overseas investments in significant business assets”. It’s in relation to the points raised by New Zealand First here, I guess. They had some concerns, and we are moving from $100 million to $200 million—that’s what this change is doing. The question to the Minister, though, is around the safeguards, if you like. Most of these applications will still be scrutinised, I guess, by the Overseas Investment Office, and unless there’s exceptional reasons why not, it will probably give approval to them. But there may be some instances where the Overseas Investment Office might say no, because most of the agreements—and I’m guessing this one; and if I’m wrong, Minister, please clarify—retain the ability for our sovereign judgment over these investments to say no, for good reason. It has to have a good reason. What we’re doing is shifting the threshold from $100 to $200 million. It’s generally easier under $200 million, but there’s still an ability to intervene.
What we have said—and I guess it’s a question relating to New Zealand First—is if the Overseas Investment Office says no and the Ministers intervene and say yes, will the Indian Government be able to challenge that? Or if the Overseas Investment Office says yes and the Ministers say no, will it be the same thing? I guess the question is for officials and the Minister, because I understand that Ministers have overridden advice from the Overseas Investment Office and these sales have gone through, endorsed by New Zealand First in Government. So I’m wanting to check whether that will continue or whether these changes to the legislation will open the door for any litigation from India or from a potential investor.
Hon TODD McCLAY (Minister for Trade and Investment) (20:28): Mr Chair, thank you. That’s a good question. It was constructive. It doesn’t alter the definitions at all. They remain the same across free-trade agreements (FTAs) except where, in an FTA, it’s been negotiated differently. I gave an example earlier where, in some cases, a qualified most favoured nation provision for some areas could be liberalised in one agreement but it may not apply to another one. Sometimes they’re older; sometimes they’re newer. Equally, the safeguards are not altered by this clause of this legislation. In as far as the definitions of a “significant business” or the safeguards around an investment, those don’t change. They remain outside of the scope of this bill. They’re in the scope of the Overseas Investment Act. Where the Government has the ability to change that, they could do so. Again, I would refer the member to the previous groups I’ve talked about, because it is the same as those from the EU to the UK and some other ones. It doesn’t alter it at all; it’s merely adding the name “India” to it, the threshold goes to $200 million, and those safeguards and definitions around business and so on remain the same. That’s a different Act.
Dr LAWRENCE XU-NAN (Green) (20:30): I do want to pick up on what the Minister for Trade and Investment has been consistently saying, which is about the $200 million threshold. My recollection was that the threshold was increased from $100 to $200 million for the United Arab Emirates Comprehensive Economic Partnership Agreement Legislation Amendment Bill (CEPA)—now Act. That was where $100 was increased to $200 million, but I thought it was for the context of that agreement only, because in this agreement, as clause 15 stands, it’s drawing on section 61 of the Overseas Investment Act. Now, section 61 of the Overseas Investment Act is referencing section 13 of the Overseas Investment Act, and section 13 of the Overseas Investment Act, subsection (1)(a)(ii), still has the amount at $100 million. Would the Minister be able to clarify where the $200 million amount came from? It’s not added in this bill, but it’s also not in Overseas Investment Act, but it’s in the CEPA.
Hon TODD McCLAY (Minister for Trade and Investment) (20:31): Within the Overseas Investment Act, the threshold is $100 million. Free-trade agreements have lifted it up. I would need to be sure, but from recollection, I think, the Trans-Pacific Partnership (TPP) and then Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreement took the threshold to $200 million. There was then a most favoured nation (MFN) clause in some other agreements, including China, which increased their threshold to $200 million as well. The most favoured nations clause in the UK agreement was set at $200, in the EU, $200. Actually, as a result of subsequent agreements negotiated after CPTPP—whichever one it first was—and that most favoured nation clause, which looks backwards to increase it, they remain the same.
The member is correct that the Comprehensive Economic Partnership Agreement (CEPA) went to $200 million because, under the Overseas Investment Act, they already had access to a $100 million threshold, even though we didn’t have an agreement. That’s what the Overseas Investment Act says. This has increased it for them. The reason we do it in this way is that a benefit of additional investment is with a partner we have a trade agreement with. Any country we don’t have a trade agreement with doesn’t get the benefit of the higher amount. They would sit at the $100 million threshold.
Finally, any country outside of that—if we take, for example, World Trade Organization (WTO) countries, a commitment that New Zealand and others have made to the WTO is for $10 million. Over time, New Zealand has put that at a $100 million threshold through legislation. Free-trade agreements have put it up in the case that, with any of those agreements, we had gone higher than $200 million. Any trade we had a most favoured nation clause would have increased to that as well, just as was the case for China, as an example.
ANDY FOSTER (NZ First) (20:33): Thank you, Mr Chair. Look, I rise again—I didn’t really want to have to do this, but, Minister McClay, you’ve been on your feet at least twice since I asked three questions and you haven’t answered any of them. If I might, do you want me to remind you what the questions were?
Hon Todd McClay: No, no.
ANDY FOSTER: OK, thank you.
Hon TODD McCLAY (Minister for Trade and Investment) (20:33): Sorry, the reason I didn’t is that they’re all out of scope.
CHAIRPERSON (Teanau Tuiono): Steve Abel.
Andy Foster: No, one of them certainly was not so I’ll have another go.
STEVE ABEL (Green) (20:33): You have, Minister McClay, been talking a lot about this threshold—$100,000, $200,000—
Hon Todd McClay: Million.
STEVE ABEL: $200 million. A fifth of a billion dollars.
Tim Costley: Cheaper than a KiwiMart.
STEVE ABEL: That’s right, but perhaps much worse for the country. The question I have, Minister, in regards to that, and notwithstanding the point that my colleague Mark Patterson made about the importance of retaining the scourger in New Zealand—the two scourgers—the risk to us, as an economy, if we lose it. Is there some component to having a higher threshold, notwithstanding that it hasn’t got precedent in free-trade agreements elsewhere, to try and clawback some of the exported capital that we are obliged to send to India as part of this agreement, which runs counter to our chronic current account deficit because we can’t afford to be exporting that capital. Is this an attempt or a rationale for trying to get some investment back so that we are not punished by the loss of those domestic funds into India in the form of, currently, $35 billion?
My question, Minister, is, surely, in the process of making a decision about these clauses, 14 and 15 in this part, there was some advice sought on your part as to the probability of there being investments that either meet that threshold—
CHAIRPERSON (Teanau Tuiono): Don’t use “your”, you’ll bring the Chair into the debate.
STEVE ABEL: —or exceed it—pardon me, Mr Chair. Surely, the Minister undertook some advice as to what the probability or the volumes of investments that might meet that threshold or fall below that threshold were. And I wonder, if that’s the case, whether the Minister can give us some of the information and advice that he received.
Hon TODD McCLAY (Minister for Trade and Investment) (20:35): Well, there’s a range of advice that we receive when getting ready to bring a bill before the House to implement a free-trade agreement. The advice that’s given in this one around clause 2 is very much identical to that under the United Arab Emirates Comprehensive Economic Partnership Agreement, the EU, and, one assumes, the UK, because they’re very narrow in what it does; it increases the threshold for India, as it did with all these other countries, to $200 million.
The advice would also show that it doesn’t alter anything else in the Overseas Investment Act, which deals with all the other things that have been raised by members, other than inserting the name “India” into that so it fits within other free-trade agreement partners.
Dr LAWRENCE XU-NAN (Green) (20:36): Thank you, Mr Chair. Just while we’re on that threshold amount, did I just hear correctly that the amount is $200? Is the amount $200 million for this bill?
Hon Todd McClay: No.
Dr LAWRENCE XU-NAN: No? It’s $100?
Hon Todd McClay: There’s no amount in the bill.
Dr LAWRENCE XU-NAN: No amount in the bill—sorry, I didn’t quite catch the Minister for Trade and Investment’s first part of that response, which is the Minister kept on referring to a $200 million threshold, which is the standard, which is not in this bill but in the Overseas Investment Act. Can I just clarify whether the Minister did say $200 or $100?
Hon TODD McCLAY (Minister for Trade and Investment) (20:37): Well, I can be very clear: all of our free-trade agreements have a $200 million threshold, except for one agreement and that’s the CER with Australia, which is a higher amount. There is no amount in this bill because it is inserting the name “India Free Trade Agreement” into another Act that lines up with all other free-trade agreements.
ANDY FOSTER (NZ First) (20:37): Look, Minister McClay, you just kind of flippantly said that those three questions I asked were out of scope, but one of those questions was that if this bill were to fail—that clearly cannot be out of scope because it is about this bill—if this bill were to fail, what would it do to the free-trade agreement (FTA), which has not itself been in front of this committee, because this is the one chance that we get to debate this, in terms of what’s actually in there, and we only get to debate a small part of what’s in there. So the first question there is: if this bill were to fail, what would happen to the FTA?
Secondly, the other thing, Minister, you’ve said quite consistently is that this clause 15 is bringing the India FTA into line with all the others—and you’ve mentioned the $200 million amount—but again, I asked you that question and you said that you’ve talked about our New Zealand First position on the EU bill and the UAE bill and said that we were in favour of those, and we were, but it is not the inward side that was inconsistent there, because the inward side is the same—that’s what you’re saying to us—but it’s the outgoing side. And the question you had said—you might say it’s just out of scope and we’ll just have to take that as being read that there’s nothing there, but there is nothing that we’ve heard from you that gives us any confidence that this is not a unique outward situation in terms of the amount of investment that is required to be made by New Zealand in another country, and that that is not replicated in any other agreement. That’s our big concern.
CHAIRPERSON (Teanau Tuiono): Yeah, I was just trying to figure a way for the member to get his answers. I mean, look, we are talking about Part 2, so the question on whether parts of this might fail and how that would impact the agreement actually isn’t in scope with Part 2. But as I was thinking that, it is really a process question. So I’m just trying to figure out whether the clerks could answer your question. You go and have a chat with them to see whether you could get a satisfactory answer that way. That might be the best way to deal with it. But we might have a contribution here.
Hon TODD McCLAY (Minister for Trade and Investment) (20:39): On that, the member might use his phone and Google, and I’m sure that would help him with the last bit, but it’s not within the scope of this part as to what happens around enactment.
I have some recommended reading for the member. It is the Overseas Investment Act 2005 and Overseas Investment Regulations 2005. It will be very clear that is New Zealand governing investment into New Zealand—very, very clear. All that this Part 2 does—the only thing that Part 2 does—is changes a law, the Overseas Investment Act, to insert the India Free Trade Agreement along with all the other free-trade agreements so they have a similar treatment. It doesn’t do anything more than that; it doesn’t do anything less than that. But I think—I’m not entirely sure, but there may be a hint in the name of the Act that it’s amending the Overseas Investment Act.
Dr LAWRENCE XU-NAN (Green) (20:40): Thank you, Mr Chair, and thank you for that clarification, Minister. I did go back and have a look at it again in terms of the different types, and I did go back and check that the $200 million threshold was added as part of that UAE Comprehensive Economic Partnership Agreement (CEPA), which is a type 5 investment type. That does clarify things, so I do appreciate that.
Can I just check: when we did have the other bill, one of the arguments that was there was that type 5 investor was added as a part of the United Arab Emirates Comprehensive Economic Partnership Agreement Legislation Amendment Bill, and that was something that was deemed necessary for that one. So we have a precedent where, as a part of a new trade agreement, a new investment type has been created as a part of that.
I guess my question then is, for the Minister: has there been any consideration whether, in the context of this particular agreement, that a new investor type be included as a part of this part? So, for example, in the UAE comprehensive economic partnership agreement, clause 11 added new regulations 96A and 96B, which was the type 5 investor which we’re seeing over here in clause 23, regulations 96B amended. So I wondered whether there have been any conversations or discussions between the Minister and the ministry on whether in the context of the NZ-India FTA that a type 6 investor be included or be introduced as a part of this.
For example, we could very easily include a new amendment 23A, for example, that is, let’s say, new regulations 97A and 96—
Tim Costley: Speak to the bill!
Dr LAWRENCE XU-NAN: Well, we are referring to the Overseas Investment Regulations 2005, and I’m checking with the Minister on whether a new investor type has been considered, considering we’re seeing changes to type 2, 3, and 5. I think my colleague the Hon Damien O’Connor or Vanushi Walters has also asked previously—and I wondered—what happened to type 4. Maybe type 4 is no longer in existence. But, yeah, has a type 6 investor been considered with potentially a $300 million threshold or even a $500 million threshold in response to that?
That’s my first question. I think the other one is, when we’re looking at the rationale for those regulations and the different types of investors in the first place—and please correct me if, you know; this is not something, in terms of the Overseas Investment Act, that is my area of expertise. But a lot of that is to do with the kind of, I guess, checks and compliance or even background check requirements of the investors in those kind of instances. And there are obviously different thresholds based on the types of investors.
One of the questions I remembered—I’m possibly checking previously with the UAE CEPA—was around how someone would do a background check in overseas jurisdiction of the potential fraud or mismanagement, etc., of a particular investor in those countries. I do want to check with the Minister, when we’re looking at the scrutiny or looking at approving a certain type of investor, the way that we’re able to communicate with the Indian Government to ensure that there is good screening and background checks.
CHAIRPERSON (Teanau Tuiono): Just before the Minister takes a call, just to note that there was a question over there from Andy Foster around what happens if parts are not supported. The relevant part to have that debate is on clause 1 and 2, title and commencement. So if Andy Foster wants to take it up at that point, that would be the time and place to do it.
Hon TODD McCLAY (Minister for Trade and Investment) (20:45): Yes, Mr Chair. In as far as screening thresholds are concerned, that doesn’t change between agreement to agreement. It’s not dealt with under this Act; it’s the Overseas Investment Act. It remains the same.
For the UAE agreement, there was a new category created, which is why it was part of that bill. There is no new category created in this bill, which is why the member can’t find one. It doesn’t alter thresholds that go up, but that’s not the way that would be done. If a future agreement negotiated a threshold to increase, where there’s a most favoured nations clause in other free-trade agreements, it would naturally flow through, but, in this case, that is not the case.
FRANCISCO HERNANDEZ (Green) (20:46): Thank you, Mr Chair. I have a question around Part 2, clause 18(1). I’ve been following the debate in my office, so I’m pretty sure that this question hasn’t been asked. My question is around the definition around “permanent residence” around the definition of “India individual”. Is that the same threshold that we apply for reciprocal investment to India, and is that also the same investment that we apply, for example, for Hong Kong individuals and other countries that we have free-trade agreements with? Is that just permanent residence threshold sufficient, or is the requirement for the other nations to be nationals of their country for our other FTAs and for the reciprocal part of our investment into India?
Just wanting to ask that really quick question to the Minister. I think he’s looking to his officials for advice on that. I think he’s sought it now, so I’ll sit down.
Hon TODD McCLAY (Minister for Trade and Investment) (20:47): No, I was just checking. We treat nationalities—in that case, we treat it the same in New Zealand domestic legislation, yes.
A party vote was called for on the question, That Part 2 be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 28
Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Part 2 agreed to.
The result corrected after originally being announced as Ayes 101, Noes 20.
Committee of the whole House
Part 3 Amendments to Tariff Act 1988, Tariff, Customs and Excise Act 2018, and Customs and Excise Regulations 1996
CHAIRPERSON (Barbara Kuriger): We come now to Part 3. This is the debate on clauses 25 to 36, “Amendments to Tariff Act 1988, Tariff, Customs and Excise Act 2018, and Customs and Excise Regulations 1996”. The question is that Part 3 stand part.
Hon DAMIEN O'CONNOR (Labour) (20:49): Thank you, Madam Chair. I guess, to many people, this is probably at the heart of the trade agreement—that is, it deals with tariffs, or the reduction of them or the management of them. These are the barriers that cost us more if we export into the Indian market. We go through here, and it’s kind of bland if you look at the wording of what we’re doing in Part 3. Starting at clause 25, it amends the Tariff Act 1988, which is a wee way back. It does a number of things in here, and maybe the Minister for Trade and Investment can answer a few questions.
One is that there’s a transitional safeguard measure in this piece of the bill: that is that if New Zealand and India too—and I guess the reciprocity of this is something the Minister can explain—if we believe that there’s a large volume of products coming in that might be really upsetting one of our sectors. There may be large volumes of wool coming into New Zealand—highly unlikely, but maybe large volumes going into India where they think it’s upsetting a fragile market. The question is: I jest a little bit, but there are legitimate concerns for both goods and, to a lesser extent, services where—and the Minister can perhaps explain—the transitional safeguard measures, where they are in the legislation and how they can be applied to ensure that New Zealand industries are not decimated. Because there will be small fledgling manufacturing areas that may be concerned about this, given the scope and the size and the scale of manufacturing in India. That’s the first question I have: how will these transitional safeguard measures be implemented, and what’s the reciprocity of those in both countries?
VANUSHI WALTERS (Labour) (20:51): Thank you. Perhaps just a supplementary to add on to that question. My question is really about whether those measures—so the import surges criteria—are contained in the free-trade agreement (FTA) or whether they are in legislation. Because my understanding is that the different FTAs we have have potentially different import surge thresholds—shall we say—and so whether the Minister for Trade and Investment considered just applying or negotiating the same thresholds that are in existing legislation, so those could just be repeated.
The second question is in relation to clause 32, which is about concessions. This reference is number 66, which is a list of other FTAs where, when goods are repaired and then re-entered into a country, they’re not subject to an additional tariff because they have effectively already come through. I’m really just wondering about the policy that either does already or will sit behind that. I can’t see detail of whether there’s a proof element required. I know that when goods initially come into a country, you would have something like a certificate of origin, for example—that is your proof point. But if it were returned and then comes back in, it looks like that’s exempt, but I can’t point to anything in the legislation that requires an equivalent certificate. Could the Minister tell me whether there is such a provision in the legislation; or, if there’s not, if there is existing policy that none the less requires some sort of proof point to say that the goods have been repaired and that there hasn’t been a substantially transformed element of the goods post repair to deem it subject to a requirement for a new certificate of origin? Thank you.
Hon TODD McCLAY (Minister for Trade and Investment) (20:53): I might deal with these few as they go along so we don’t get too much of a backlog. In as far as transitional safeguard measures are concerned, this is merely stating in law that we are able to do this—it was negotiated is part of the free-trade agreement. It gives us the ability to, and of course a provisional or transitional safeguard is put in place while an investigation into harm is being done. It’s a different act of determination as to the condition around that and the thresholds and so on. It doesn’t alter that; it just means that, under the free-trade agreement, we’re able to.
The second question was around how this is done. Well, it’s different legislation. The Tariffs Act or the safeguard Act permits this. After a Tariff Act reduces—or, in this case, goes to zero—there’s a period of time by which you are still able to do these—either the safeguard Act or other measures to be put in place. Again, this is merely allowing that to happen.
For export, for repairs for reimport, Customs do that. It’s often certified before it goes away. There are proof points, of course. This legislation doesn’t alter that. It is standard practice for Customs. Just as, in some cases, where New Zealanders are leaving and they may have something of value with them—they’re taking with them for business or work, a camera—they can get a certificate on the way out to show that when they come back in it is being reimported, as opposed to having been purchased offshore.
Hon DAMIEN O'CONNOR (Labour) (20:55): Thank you. Just following on from that, I know, for example, there is a business in Wellington here that imports a lot of diamonds to process and then re-export. It’s been an issue with Customs as to how we set up a regime that doesn’t mean that they are effectively stripped of cash in what is a normal business transaction. I guess the question of whether there is some sort of reciprocity there as well, for us—and I can’t think off the top of my head of something like that. But Customs, rightfully, is pretty staunch and rigid in ensuring that, like repairs where we have online purchase—which is actually a new phenomenon, probably over the last 10 years where people can just go on and buy from anywhere in the world. You receive a product that’s faulty, you send it back, you’ve paid the duty on it once, it’s repaired, and then it comes back in. These are new provisions and new legislation—new trade agreements.
I’m just seeking an assurance that—and we’re told that this is covered in this part of the bill here, the repairs. But can I just check on that one around some flexibility around Customs for what may be a growing—and take, for example, diamonds, where they might be sourced from India into here to be processed and exported back out. I think we will build up more partnerships with Indian business, and we’ll need to be flexible. I’m just checking with the Minister for Trade and Investment on that.
Hon TODD McCLAY (Minister for Trade and Investment) (20:56): Well, there will be men and women all around the country watching tonight—single men and women—who are excited by that member’s great knowledge of the importation of diamonds to a shop in Wellington. But it is a separate piece of legislation. I actually have great sympathy for what he is saying. In the case somebody brings something to send out again, there may well be duty and GST and so on, which can be a burden, but that doesn’t alter any other Act; it doesn’t change that at all. There is not a commitment we have taken on with India around any special arrangements in that area.
Dr LAWRENCE XU-NAN (Green) (20:57): Thank you, Madam Chair. I want to check, in terms of Part 3, starting with Subpart 2, when it comes to tariffs. Now, we’ve just in Part 1 been discussing kind of tariffs on the other end in the form of quotas. Can I just check: is there a quota system from our end for tariffs? No, I’m seeing head shaking. That’s good.
I want to check with the Minister for Trade and Investment on clause 32, “Part II Concessions amended”. I guess this is something that both the Hon Damien O’Connor and maybe Vanushi Walters touched on. But I think if we’re able to pull it back even a bit further, if the Minister wouldn’t mind clarifying exactly what Concession Reference Number 66 is. Because it’s been mentioned here and I don’t know if that is standard knowledge or understanding.
I also want to check with the Minister whether this is a typo or something that is supposed to be structured like that. I’m assuming in here, after subsection (8), “(9) Goods re-entered after repair or alteration—(a) in the territory of India; and (b) in accordance with”—that is “free” in terms of concessions; is that what the “free” on the corner of that particular page is referring to? If the Minister wouldn’t mind, I just wanted to clarify what that “free” is in reference to.
Hon TODD McCLAY (Minister for Trade and Investment) (20:59): The term “concession” is the tariff rate—a concessionary tariff rate that applies and that brings it to zero. The India - New Zealand free-trade agreement means that on entry into force, goods exports from India to New Zealand fall to a concessionary rate of zero. That word “concession” is not something different; it just is lining it up, just as it lines the language up with the European Union free-trade agreement, where the same thing happened. It is a zero-tariff rate.
In as far as exports for goods sent out for repair—sent to New Zealand for repair and so on—of course, if they came from India, they would have a zero-tariff rate against them when they came in. That would be somewhere to India to know whether there was a tariff treatment. But in the case that New Zealanders send something out to India to be repaired and then brought back in, that concession means that if it’s sent out, if it’s certified and the same good comes back in, then there isn’t a duty or tariff to pay on it.
Hon DAMIEN O'CONNOR (Labour) (21:00): Thank you, Madam Chair. Look, under Part 3, there’s also a provision for the Minister for Trade and Investment to designate an authorised certification body to certify that goods originate in New Zealand, for the purposes of the India free-trade agreement. Can I just ask: what body will that be? Will it be a Government agency or will that be sent out to a private sector or is it a body within the particular industry? I know we have, not necessarily—FernMark might be one of them. I guess there’s provision for that, so an indication of whether it will be privatised, which is what the Government seems to want to do with everything else, or will it be closer to Government to ensure that, actually, what is deemed a product of New Zealand has a Government endorsement. Maybe the Minister can explain.
Hon TODD McCLAY (Minister for Trade and Investment) (21:01): So this is the Minister of Customs that does this, not the trade Minister, and the Minister of Customs gets to designate organisations in New Zealand that can certify that something is of New Zealand origin. There are a range of these things, but in many cases chambers of commerce have that ability in other agreements, and so on. I won’t get ahead of what the customs Minister may do, but the member will be interested to know it will be no different than other trade agreements.
Dr LAWRENCE XU-NAN (Green) (21:01): Thank you, Madam Chair. Just on that particular part, which is clause 26, in terms of regulations regarding the provisions relating to originating food; 51ZPP, originating goods. I understand that the Minister for Trade and Investment, in the chair, is not the Minister of Customs, but this falls under his purview as, I guess, the person who oversees the entire trade agreement. What would the process be for the agency or a private company or any organisation to be able to determine rules for originating goods in line with Chapter 3, Annex 3A, 3B and 3C of the India Free Trade Agreement? That would be my first question.
My second question is—
CHAIRPERSON (Barbara Kuriger): I’m just going to check to see if the Minister got the gist of the first question, because there was some administrative stuff going on here.
Hon Todd McClay: Most of it.
CHAIRPERSON (Barbara Kuriger): Most of it. OK, keep going.
Dr LAWRENCE XU-NAN: I’ll just finish with the second question, which is: if someone was told, for example, that it’s been determined that it’s not their origin or the rules of the origin, is there a dispute process for, in this case, an Indian exporter importing into Aotearoa New Zealand—is there a dispute mechanism for them to go to a particular New Zealand agency to be able to dispute on the rules of origin?
Hon TODD McCLAY (Minister for Trade and Investment) (21:03): In the case that something’s important to New Zealand and was outside of the definition of rules of origin, that’s a customs issue. There is a customs dispute panel that could look into this, but duty would be levied upon that import to the importer at that point in time, so it’s not a matter of us having to check something before it comes into the country. If it does come, and we find the origin is not correct as defined under the free-trade agreement, then customs deal with that—and it happens from time to time for a range of reasons—but there is a dedicated process for that to happen under customs.
A party vote was called for on the question, That Part 3 be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 28
Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Part 3 agreed to.
Vote Correction
India Free Trade Agreement Legislation Amendment Bill
JAMIE ARBUCKLE (Whip—NZ First) (21:05): Thank you, Madam Chair. Can I seek leave to correct a vote?
CHAIRPERSON (Barbara Kuriger): Leave is sought for that purpose. Is there any objection? There appears to be none.
JAMIE ARBUCKLE: To Part 2 of the committee stage of the bill: New Zealand First’s vote to be recorded as eight opposed.
CHAIRPERSON (Barbara Kuriger): OK, thank you. We’ll change that and make sure it appears on the record.
Hon Todd McClay: They’re meant to be in favour for the final vote.
CHAIRPERSON (Barbara Kuriger): I think we’ll face that when we get to the final vote. You can debate that offline.
Bills
India Free Trade Agreement Legislation Amendment Bill
Committee of the whole House
Part 4 India export quotas (apples, kiwifruit, and mānuka honey), and Schedule 3
CHAIRPERSON (Barbara Kuriger): We now come to Part 4. This is the debate on clauses 37 to 73, ‘India export quotas (apples, kiwifruit, and mānuka honey)” and Schedule 3. The question is that Part 4 stand part.
Dr LAWRENCE XU-NAN (Green) (21:05): Thank you, Madam Chair. This is probably the most substantial part of this agreement, with a number of new clauses. I want to start with clause 38, with some of the interpretations. The first one, we didn’t actually get sufficient clarity within the committee stage.
CHAIRPERSON (Barbara Kuriger): Sorry, can you repeat which—
Dr LAWRENCE XU-NAN: Oh, sorry. Clause 38, “Interpretation”, specifically focused on the interpretation for mānuka honey. I want to check: my understanding—I think the Minister for Trade and Investment has mentioned this previously as well—is that there is a free-trade agreement that’s been signed between Australia and India. I know that the term mānuka honey is highly contested when it comes to who owns the intellectual property of mānuka between New Zealand and Australia. In here and also in the free-trade agreement, it does specifically state “mānuka honey”. I want to check: does that mean in the context of the Indian market that New Zealand has the branding of mānuka honey but Australia doesn’t? Can I get that clarification from the Minister, first?
Hon TODD McCLAY (Minister for Trade and Investment) (21:07): There is a difference. When New Zealand honey arrives in India, it will be called mānuka honey; when Australia—it’s manuka honey, because they’ll pronounce it very differently. Our one sounds better, so people will want it. No, it doesn’t mean that there is protection for the name mānuka honey in that market. However, quite significantly compared to Australia, we have a very large quota with a significant tariff reduction. We are the only country in the world to get preferential access to the Indian market for honey and all of our honey is better than Australia’s honey, but it’s also more competitive because it has a halving of the tariff rate whereas the Australian free-trade agreement does not include honey. As far as protections of the name are concerned, it is not an intellectual property component of this part of the agreement.
Hon DAMIEN O'CONNOR (Labour) (21:08): Thank you, Madam Chair. This is the part of the bill that we’re told will be separated out under a separate piece of legislation. I guess this is an area where there’s been a lot of excitement about the free-trade agreement—
CHAIRPERSON (Barbara Kuriger): Just for clarification, this bill will be split into two parts, but we’ll be debating those two parts together when we do the readings afterwards.
Hon DAMIEN O'CONNOR: Thank you. The purpose, of course, of Part 4 is to set up a quota management regime for apples, kiwifruit, and mānuka honey. The question to the Minister for Trade and Investment is: why not hops, pears, other honey, and avocados? It is a list of just three, which has been a huge disappointment to some other areas, so the question is a legitimate one. I’m not trying to relitigate the negotiations, but I think people need to know, given this is the opportunity in the House as to why we don’t have other areas, particularly around horticulture in this clause.
Hon TODD McCLAY (Minister for Trade and Investment) (21:09): Because there’s no quotas there, just as there is not a quota system being set up for lamb; because there is no quota required for lamb. There is no quantitative restriction under the free-trade agreement for those other products, but in as far as the three that we’re talking about in clause 4, there is a quota and that quota goes in. Kiwifruit, as an example, has a duty-free quota, a tariff-free quota for kiwifruit, an amount; the only country in the world to have received that. Outside of that quota, there is no quantitative restriction. Sell as many as we want and the tariff rate is halved; it’s not a zero-tariff rate.
Hon DAMIEN O'CONNOR (Labour) (21:10): Sorry—just a clarification. As I say, it’s a slightly wider explanation as to the pushback, and, indeed, I understand the Minister for Trade and Investment’s point about the quotas, but these are other valuable export crops that—is the Minister saying that there will be no tariffs on hops, pears, other honey, or avocados, or indeed, what was the point of contention in those areas?
Hon TODD McCLAY (Minister for Trade and Investment) (21:10): No, I’m saying that Part 4 deals with three things and sets up a quota regime for them, just as Part 1 dealt with some dairy products only, and so the scope of Part 4 is mānuka honey, it’s apples, and it is—
CHAIRPERSON (Barbara Kuriger): Kiwifruit.
Hon TODD McCLAY: Oh, how could I forget kiwifruit from Te Puke? I’ll say it three times—kiwifruit, kiwifruit, kiwifruit.
VANUSHI WALTERS (Labour) (21:11): Thank you, Madam Chair. A couple of quick questions from me. On clause 38, the interpretation section for this Part, I’m just curious about whether a quota holder could be someone to whom a quota is transferred— so not the original grantee but someone who it’s transferred to—and if that’s the case, whether they would be covered by that definition.
Then my second question is in relation to clause 43. This is the quota management system itself, and new subclause 2 has three powers: one is a directive power, so this is the power to specify the allocation methodology, and the other two—paragraphs (b) and (c)—are permissive. Paragraph (b) is “may require the quota manager to publicly notify [some] information:”, and it sets that information out; and then paragraph (c) is, “may specify any other technical and administrative requirements for operating the quota management system.”
I’m just curious why those two additional powers, paragraphs (b) and (c), aren’t also directive and whether there’s—I imagine, in relation to paragraph (b), there might perhaps be some privacy requirements that are in play, but I can’t work out why the directive power isn’t there in relation to paragraph (c). So if the Minister for Trade and Investment could …
Hon TODD McCLAY (Minister for Trade and Investment) (21:12): Madam Chair, thank you. The reason that we’re doing this, where the Ministry for Primary Industries (MPI) will set up and manage this quota management system, is because the debate earlier in the day around Part 1, under the Dairy Industry Restructuring Act (DIRA), is well established and has been functionally working for a period of time. In as far as these three products are concerned, we don’t have another piece of legislation as significant or as long running, and so MPI has already consulted with the sector about how we might do this and manage it, and this is now setting that up for them to manage.
My advice is that, on the questions the members have, it is lining up closely to the DIRA Act rather than recreating it, reinventing it, doing it anew, and moving it over so that we can ensure that those who want to export will get a quota cheap and fairly, are treated equally, and that the system can work well but very quickly. In as far as a transfer concerned, yes, it is possible to transfer it. If somebody receives a quota and they can’t use it for a reason, they can pass it to somebody else of course. They must notify the regulator—in this case MPI—but they don’t need permission to do that. That will be possible with apples, and it will be possible with mānuka honey, but, of course, it won’t be for kiwifruit because we have a single desk, and there is only one organisation that is able to export kiwifruit on behalf of kiwifruit growers.
Hon DAMIEN O'CONNOR (Labour) (21:14): Thank you, Madam Chair. Look, I’d just like to go to clause 38. It’s in the interpretation here, and it’s of “enforcement officer”. It was an area that the Foreign Affairs, Defence and Trade Committee spent quite a bit of time on, effectively changing from “inspection officer” to “enforcement officer”, and it relates to the Search and Surveillance Act 2012.
I guess I’m asking the Minister for Trade and Investment how we’ve got to this point of recommendations from the select committee to make the changes, but is the Minister happy with the changes as directed, and the fact that we have now an enforcement officer rather than an inspection officer and that they have the power to go in to find whatever information they need when it comes to enforcing the conditions of any quota? It is quite critical, and there were views that some of the proposals were overzealous and we’ve eased off on those. But the question to the Minister is: is he comfortable and can he explain how this will be rolled out?
Hon TODD McCLAY (Minister for Trade and Investment) (21:15): Madam Chair, yes, I am. “Enforcement officer” is an established term under the Search and Surveillance Act 2012, and, therefore, it is used and copied across from that. It’s already defined elsewhere rather than creating a new one, which would need a definition, and, therefore, it’s lining up legislative definitions.
Dr DAVID WILSON (NZ First) (21:15): Thank you, Madam Chair. Just referring to the “Interpretation” in clause 38, and we’ve got a list of these interpretations around “kiwifruit”, “kiwifruit vine”, “mānuka honey”, and so on. We’re just wondering here, from the Minister for Trade and Investment, whether or not, in terms of us being worried about incursions into the usage of our intellectual property, and I mean that in the wider sense in the sense, that we have a whole lot of tacit knowledge and knowledge built up within the industries about how we produce some of the best kiwifruit in the world, as one example. Another example is all the fantastic work that Plant and Food Research did in relation to Psa-V virus, which almost devastated our whole crop.
Now, this is all knowledge that we have that we now seem to be giving away. We now seem to be behind that whole idea, and we’ve got this narrow definition here around the genus, but we’re not taking account of everything else that has gone into decades of investment in this particular crop. I’d just like the Minister to assure us that New Zealand Inc. can preserve that knowledge, that tacit knowledge, and its understanding of what we’re doing here, because we are giving away cultivars, seeds, and the opportunity for a similar incursion such as SunGold (Gold3) in China.
Hon TODD McCLAY (Minister for Trade and Investment) (21:17): Well, Madam Chair, I think the member’s question is a genuine one, but it is very, very broad from the scope of this. I’ll try my best to stay within the scope to answer. This is a free-trade agreement; it’s not a give something away agreement, and so the definitions allow us, in this section, to set up the distribution of the quota for people to send kiwifruit to India at a zero-tariff rate, and thereafter, the tariff rate is higher. But I suppose, should the exporter want to buy the kiwifruit from a grower, put it through a pack-house, put it on a ship, pay to get it to India, and then give it away, then that would be their business. They’re not compelled to, but, generally, I find that our kiwifruit exporter does a very good job of record returns in New Zealand.
The member is absolutely wrong in one thing he said. He said that New Zealand kiwifruit is generally or often the best in the world. He’s wrong because it is the best in the world—it is called kiwifruit. It is not Chinese-fruit, and it’s not Chilean-fruit, and it’s not something else.
Steve Abel: I mean, I think it is Chinese-fruit. It used to be Chinese gooseberry.
CHAIRPERSON (Barbara Kuriger): It used to be, when I grew up.
Hon TODD McCLAY: That’s right. But interestingly, I went down to the supermarket in Rotorua the other day, and I spent a long time in a long queue waiting to buy Chinese gooseberries, and there weren’t any. I bought kiwifruit instead and paid well for it. The point that I’m making here is that New Zealand has exported kiwifruit all around the world, and they do it very, very well.
There have also been decisions on the part of the owners of the plant variety—it’s not the Government; it’s the owners of the plant variety—to export that to parts of the world where they grow themselves. That is a decision they have made; it’s not one the Government is in. Therefore, for that to happen, the owners, which are the kiwifruit growers themselves, need to vote and to vote in favour of doing that, and that is separate from the Government. But for that to happen, it is governed by legislation, which is the legislation that sets up the equivalent of the exporting body. Nothing is being given away. We’re not compelled to do those sorts of things, and so on.
But the intellectual property of New Zealand kiwifruit is guaranteed in New Zealand and in New Zealand legislation, as it is in other agreements around the world. In the case that somebody somehow gets hold of a New Zealand kiwifruit variety and cultivates it and they’re doing so outside of permission or a licence, then the owner of that variety has the ability and the right to go and enforce their rights in another country and to seek prosecution, and the New Zealand exporting body, Zespri, has done that to great effect. This does not give anybody the right to take something or send it away. It doesn’t alter that, and should kiwifruit growers in New Zealand want to cooperate in any country in the world, there is a dedicated function under legislation for them to be allowed to do so, but it is not automatic.
Dr LAWRENCE XU-NAN (Green) (21:20): Thank you, Madam Chair. I want to carry on with this particular line of questioning. I agree with the Minister for Trade and Investment that when we’re looking at the quota management system it’s different from the Kiwifruit Action Plan, the Apple Action Plan, and the honey action plan—is it the mānuka honey action plan? No, it’s not mānuka honey; it was the third action plan anyway. It doesn’t matter; it wasn’t what I was going to ask about anyway.
I do want to check—the question around the G3 variety is a really important one. I guess under this particular bill, if we introduce a quota management system, we’re going to be seeing more exports of kiwifruit, and, in the bill, kiwifruit is simply defined as the fruit of the kiwifruit vine. It doesn’t define “species” or even define “subgenus” in this case. So if anyone has a licence to it, they could potentially get to export it. Gold kiwifruit or red kiwifruit? No, they can’t export any of that; only green kiwifruit. So maybe this question first: is it just the green kiwifruit?
Hon TODD McCLAY (Minister for Trade and Investment) (21:21): To be allowed to grow kiwifruit in New Zealand, you must purchase a licence to do so. You don’t have the permission to export it. It goes back to, in this case, Zespri—they are the exporter. So if the member decides to grow G3 kiwifruit in his own home and he hasn’t got a licence, he is breaking the law—I know he wouldn’t do that. If he buys a licence and he wants to take himself overseas to sell it, he is not able to do so. The export body is Zespri in that case.
As far as a cultivar is concerned and the quota to export kiwifruit itself, it could well be G3, it could be green, or it could be something else. This doesn’t define it. It doesn’t say what kiwifruit should be exported for consumption. It is for the exporter to make that decision, as they do. As an example, they often export a lot more green kiwifruit to Japan because it is more desirable to Japanese consumers and they pay more for it than they may somewhere else.
CHAIRPERSON (Barbara Kuriger): Dr Lawrence Xu-Nan—is this a clarification?
Dr LAWRENCE XU-NAN (Green) (21:22): Yes. I think that is really helpful, but let’s say Zespri, the exporter, is able to export different varieties of kiwifruit—their choice; they go for a decision with their members. We know that the cheaper variety gets exported and gets cultivated. What mechanisms would there be for us to be able to challenge not just India but any country?
CHAIRPERSON (Barbara Kuriger): The Minister is actually just agreeing with what you’re saying, so maybe we could clarify that.
Hon TODD McCLAY (Minister for Trade and Investment) (21:23): I can clarify. If we move away from kiwifruit, for example—hypothetically; just an example—and think about grapes and wine, the wine is exported; the grape is not. In this case, it is the kiwifruit to eat that is exported; it is not the variety, it is not the right to grow it, it’s not the right to do anything else. It’s a little bit like if the member goes to a shop tomorrow morning and buys a can of Coca-Cola, he’s able to consume it but he does not own the Coca-Cola recipe or the ability to produce Coca-Cola. I would recommend he doesn’t drink Coca-Cola; I would recommend he eats kiwifruit because I come from Te Puke.
VANUSHI WALTERS (Labour) (21:24): Thank you, Madam Chair. I am on clause 44, “Review of quota allocation decisions”. This is a question about the scope of this clause and whether a broader scope was considered. Clause 44(1) allows for a review of a decision not to grant a quota allocation or to grant a specific amount. I’m wondering whether the Minister for Trade and Investment considered third-party challenges to grant a full amount or to grant a partial amount in terms of a quota allocated—so almost a challenge to that by a third party. Is that done, or is that done in relation to other free-trade agreements?
The second part of my question is in relation to clause 44(2), which restricts what an applicant may seek a review of in terms of a quota manager’s decision. So they can seek a review of the decision itself but they can’t seek a review of the allocation methodology, if you like. I just wondered if the Minister has considered a situation where the allocation methodology is substandard and why that individual would not be able to seek a review of the methodology itself, understanding that that individual could still bring a judicial review, potentially, but that’s at considerable cost and considerable time. So if there was something woven into this review mechanism, it would be much more accessible to an individual. And the way in which the Minister could have done that is through a high-bar threshold where it was about a significant flaw in the methodology itself as opposed to a small technical one allowing a complaint in that regard.
Hon TODD McCLAY (Minister for Trade and Investment) (21:26): An individual can seek a clarification and challenge an allocation they got—I think that’s right—but not the system overall. The member is right in that if somebody is worried about the system overall, there is an opportunity for a judicial review, and although that feels heavy-handed, it happens from time to time, but, as far as a review of the process for allocation is concerned, there is the ability for ministerial review.
However, before the regulation is put in place, there is consultation with the sector about what it should look like and how it would work and so on, and that feedback is taken on board when the quota allocation system is set up, and that system has to be followed fairly and properly. But this is not the first time this has happened. There are quotas across the board in a number of areas—and we’ve had the conversation about the Dairy Industry Restructuring Act, which is there to govern dairy production but also quota allocation. So, in essence, for kiwifruit and for apples and also for mānuka honey, the quota allocation system replicates or mirrors closely quota allocation systems used elsewhere in New Zealand, albeit that when we get industry feedback through consultation, there can be changes made.
Dr DAVID WILSON (NZ First) (21:27): The Minister for Trade and Investment will appreciate that I’m trying to establish that plant varieties that are bred and born in New Zealand will not be shared that easily through this legislation. However, it can be in their own intellectual property framework, which goes back to the Act in 2001, where a farmer shall be deemed to be entitled to save, sow, use, resow, exchange, share, or sell his farm produce, including seed varieties that are protected under that Act. Before that Act came into force, India had no plant variety protection. Also, we have the problem with the International Union for the Protection of New Varieties of Plants, which the Minister will be well accustomed to. You see where I’m going with this—article 14A3(5)(B) commits New Zealand to help India enhance India’s regulatory framework, particularly in areas of plant variety rights and intellectual property protection, to enable the introduction of high-value, globally developed intellectual property and protected plant varieties into India.
Can the Minister assure the committee that the operative purpose of that statement is not to share those protected plant varieties that we have developed here in New Zealand?
Hon TODD McCLAY (Minister for Trade and Investment) (21:29): There is nothing in this agreement or in this legislation that compels you to share in that way, and I can be very clear that the cooperation programmes the member has been talking about do not involve the transfer of any protected varieties or protected commercial know-how. It doesn’t involve any transfer. In the case of kiwifruit, the only plant material supplied from New Zealand will be open-source roots, plants that are not protected by plant breeders’ rights and can be bought by anybody around the world. In terms of the definition the member read out around the ability for farmers to sow and so on, in the case of kiwifruit it is different. It has its own Act of Parliament and there are plant variety rules and protections around that.
Should a plant variety owner, in this case Zespri, decide it wants to do something in Japan, Singapore, the United Kingdom, or India, they make that decision for themselves, and they would consider what protection there could be in the market they’re putting their product into. But there’s nothing in this agreement that compels them to do that, nothing that encourages them to, nothing that forces them to. It is a commercial decision that the owner of the plant variety, in this case Zespri, would make. And as I mentioned earlier in the discussion, for them to do so, the legislation is very, very clear about needing to get the agreement of the growers, who are also the owners of the cooperative.
Hon DAMIEN O'CONNOR (Labour) (21:30): Thank you, Madam Chair. Part 4 here is quite extensive, and deals with, as we’ve said before, quota management provisions. There are a number of clauses here, I’m not going to go through them all, but they cover everything from conflicts of interest, setting it up, review provisions when the quota is allocated and people don’t agree—all of that—and that’s all great. I asked questions around why some species were left out, but anyway, that was part of the negotiations.
I just want to raise an issue and a question for the Minister. Under the biosecurity provisions in this piece of legislation, there are no dispute settlement provisions, from recollection. So in allocating quota and the right of access, if India, or indeed New Zealand—and the reverse—was to say, “Sorry, we’re going to block the entry of these goods,” even though they might have been under quota, for biosecurity reasons. I would just asked the Minister: what does he see as a pathway through a dispute like that, that would affect all the goods covered under quota management? That has been, not under anything here, but it has been under logs, of course—
CHAIRPERSON (Barbara Kuriger): It would be good if you actually would bring it back to here.
Hon DAMIEN O'CONNOR: I mean, I can go clause by clause if you wish, but I’m just, I’m talking—
CHAIRPERSON (Barbara Kuriger): I think what you’re talking about is actually broader than the—
Hon DAMIEN O'CONNOR: It’s in Part 4, and it’s around quota—
CHAIRPERSON (Barbara Kuriger): Yeah, but if you can point us to the specific clause with the question, because it’s seems to be—
Hon DAMIEN O'CONNOR: “Quota manager may gather information”—Subpart (4), clause 53. I guess if the quota manager is looking at issues around biosecurity—I think the Minister probably understands what I’m getting at—it’s an explanation for the wider public around something that could make all of this redundant, because we could have an intervention that puts all this good work to waste.
Hon TODD McCLAY (Minister for Trade and Investment) (21:33): I can speak broadly, because there is a broad explanation, but it doesn’t affect the quota. Biosecurity is important to all nations, extremely important to New Zealand. As we know, we don’t import eggs into New Zealand from anywhere, because of a biosecurity risk. That doesn’t mean that the tariff rate for eggs doesn’t go to zero, but there is a separate consideration as to whether or not things can be imported.
If we take an example of mangoes, under this agreement the tariff rate for mangoes will fall to zero. But India or any other nation wouldn’t automatically have a right to send mangoes to New Zealand, unless we were sure there would not be a biosecurity risk to New Zealand as a result. There’s a separate regime that considers that away from trade, and so on.
In the case that New Zealand, hypothetically, had a quota system for the importation of chicken from, say, Australia—and we had that set-up and they were managing it as this legislation is setting up for kiwifruit in the other direction—and bird flu arrived in Australia, as it did a short while ago, we would still have the ability to stop products from coming into New Zealand because of a risk, irrespective of the quota.
Of course, that would mean the quota would not be filled for the period of time, perhaps of a year, that there was a restriction. And then, ultimately, whether Australia thinks that is a purposeful or not—or the right thing to do—is separate from the trade agreement, because it comes to biosecurity. It’s extremely important that New Zealand has that in place, as other countries do, but, of course, a decision around biosecurity has to be proportionate. As the member will remember, from probably his first day in Parliament, when we could not export apples to Australia, because they said there was a biosecurity risk, we challenged in other ways and eventually we won that case. And, of course, the day afterwards, when we were able to export apples from New Zealand to Australia, not only did the Australian apple industry not collapse; Australians, for once, had good apples.
Dr LAWRENCE XU-NAN (Green) (21:35): Thank you, Madam Chair. I want to start by just asking the Minister for Trade and Investment about clauses 44 and 49 regarding regulations. Has the Minister considered at what point those regulations would be determined or be approved as part of that process?
I do want to focus on clause 50 in terms of what the quota manager is able to do regarding export certificates. It does list the criteria of why they would cancel the export certificate, but I want to check in terms of the process. The process is either to suspend or cancel, and then, in clause 51, the person may seek a review of that decision. But during that review period, I’m guessing that the certificate that is issued is either suspended or cancelled—that being the first question.
The next question is whether there has been consideration of, rather than suspending or cancelling—has there been a warning system in other areas: you give a warning and say, “You need to do this, but we’re not going to suspend it or cancel it.” It just seems like we’ve kind of gone immediately to suspension and cancellation, and then giving them the ability to review. So I just want to check if that warning system has been considered.
Hon TODD McCLAY (Minister for Trade and Investment) (21:36): Well, it says “may”; it doesn’t say “must”. So the quota manager may cancel, suspend, or refuse, should they wish. It provides avenues for enforcement where there’s non-compliance by an exporter. Generally, the quota manager—in this case, the Ministry for Primary Industries—works very closely with exporters. It’s in New Zealand’s best interests to make sure that our exports are able to travel overseas. We don’t have a quota manager there saying, “I want to cancel this one without any warning because I don’t want apples to be exported.”
Of course, we’re setting the system up so we can export within the 45,000-tonne quota that we’ve received. The member will know and be very proud that New Zealand is the first country in the world to get a quota for apples, with the reduced tariff rate. No one else in the world had got that previously. I think now the EU might have, but, of course, not in competition to New Zealand, because they have a different season to us, so they won’t compete with us. They will compete with Indian apple producers because the season is the same, more or less, in India.
The point of this is that it is within our interests for the exports to happen—we want them to—and that’s why we negotiated a free-trade agreement. But where an exporter is not meeting their export certificate circumstances or requirements, then it provides us with the avenue to enforce.
CHAIRPERSON (Barbara Kuriger): I’m just going to take a couple more quick questions, because we have had a select committee here, and I just want to say to Dr Xu-Nan that your questions around the timing of regulations probably fits better with the commencement clause.
Dr Lawrence Xu-Nan: OK. Sure.
CHAIRPERSON (Barbara Kuriger): Yeah. But I’ll just take a call from Vanushi Walters.
VANUSHI WALTERS (Labour) (21:38): My question is on clause 45, so this is on the return of a quota allocation. Essentially, it allows a quota manager, where an allocation has been returned in part, to reduce the quota allocation for year 2. But it doesn’t explicitly point to a right of the quota holder to provide the circumstances of why they’re having to return that portion of the quota allocation. So subclause (3)(b)(iii) does allow the quota manager to use discretion not to reduce a quota allocation in year 2 if they’re satisfied that there are exceptional circumstances. But, again, I would expect that there would be a pre-emptive right to be able to present those circumstances so that it’s not after the case that someone has to make a complaint. So I was just wanting clarification on that.
Hon TODD McCLAY (Minister for Trade and Investment) (21:39): Madam Chair, thank you. The detail gets set out in regulation, rather than primary legislation, because, mainly, if you change it, it’s easier, therefore, to change. It would be more flexible or specific in regulation; this merely sets up the ability to do so.
It is important that when one thinks that where somebody has a right to a quota because of export history and they may not use it and they choose not to, they will still have the ability every second year to have a right to the quota again, based on previous history. It gives the regulator, the administrator, or quota manager the ability to say, “You haven’t used it. Therefore, is it fair or reasonable that we give it to you again if there wasn’t a good reason not to?”, and also the ability to say, “Well, there are exceptional circumstances where we would allow you to still have a new quota.” There may have been a weather event, for example, that meant that that grower or exporter didn’t have a crop to export that year, but the following year they would, and so it wasn’t purposeful, or something like that.
What we’re seeing in other areas is that often exporters may look to get quota and not use it so that there is not the competition in the market against other New Zealand exporters, and whilst I can understand that from a business point of view, it is not something that would be viewed as acceptable in as far as having negotiated access for New Zealand, where we want the export of the product to take place. So it allows there to be an ability for the quota manager to consider these sorts of things. If it gets set out in regulation, of course there has to be a process where if somebody is affected by this, they have the ability to seek appeal or a change.
Hon DAMIEN O'CONNOR (Labour) (21:41): Thank you, Madam Chair. I refer to clause 55, “Quota manager must manage conflicts of interest”, which is quite a critical area here. A recommendation came from the Foreign Affairs, Defence and Trade Committee to eliminate the ministry—well, eliminate from what?
It says, “This section applies to the following parties … a quota manager, other than the Ministry:”. The proposal put to the select committee was to not have the ministry subject to scrutiny over possible conflicts of interest, and I guess the question to the Minister is this. I know that there is the Public Service Act and there are other kinds of obligations on public servants, but this is a small country and I think the select committee decided that we should take out the exclusion for the ministry. So the question to the Minister is this: is he comfortable now that his ministry will be subject to the scrutiny over possible conflicts of interest?
When it comes to quota management in areas such as we are speaking of here, there are not thousands and thousands of people with the knowledge and experience, and it is possible that there may be conflicts of interest. So the question to the Minister is whether he is happy now that within his department, these things will be managed appropriately to ensure that there’s a fair and balanced allocation of the quota and then ongoing management—because they are two separate things.
Hon TODD McCLAY (Minister for Trade and Investment) (21:42): Yes, I am. The ministry has scrutiny through other parts of legislation. They have—as across all ministries—through the Public Service Act the ability to manage conflicts of interest internally with those who may be employed in a ministry, but the ministry has scrutiny upon it also through this House and through Parliament. I would expect that at the Foreign Affairs, Defence and Trade Committee and maybe the Primary Production Committee, at a given point in time in the future, this member and others will have the ability to question in detail the application and processes around the running of the quota system and the sharing or distribution of the quota.
There are many areas where there is scrutiny of our ministries and their roles. The individuals themselves get dealt with internally, but the ministries also take this seriously. I am comfortable with where we have landed with this part.
CHAIRPERSON (Barbara Kuriger): Dr Lawrence Xu-Nan—but you look a bit like you’ve just got a follow-up question here? OK, yeah.
Dr LAWRENCE XU-NAN (Green) (21:43): The Hon Damien O’Connor may have a follow-up question.
CHAIRPERSON (Barbara Kuriger): He’s ceding to you, if you want, the follow-up. Otherwise, I’m going to go to Dr Xu-Nan.
Hon DAMIEN O'CONNOR (Labour) (21:44): Yeah, I’ve got a follow-up, and it’s just off to the Minister for Trade and Investment—and thank you for his assurance on that. The other one is that the Minister has the ability to conduct an audit, and, basically, at the other end of the scale, we opened up the Minister’s discretion to intervene where he thinks he or she would think that there’s something wrong. So I guess a comment from the Minister on how that will be managed is probably something of interest, as well.
Hon TODD McCLAY (Minister for Trade and Investment) (21:44): Well, the ability to audit is an important one. If it’s not set in the legislation, it can’t happen, and if a Minister, for a range of reasons, may decide he wants to make sure that the quota system has been running well and properly as a result of the legislation setting it up, then I think that’s important.
I mean, it’s not quite the same, but if you think about some of the levy bodies, there is a process that they go through to set their levy and it’s very, very clear in legislation for that body, but, often, a Minister will have the ability to look at that and make determinations as to whether they agree or not that it has actually met the requirement in the legislation. In this case, a Minister’s ability to have an audit is, I think, a very, very good idea. The circumstances in which that may happen may well vary, but it will be a tool that future Ministers can consider.
CHAIRPERSON (Barbara Kuriger): Lawrence Xu-Nan is just going to round us off nicely now.
Dr LAWRENCE XU-NAN (Green) (21:45): Thank you, Madam Chair. I do have a few questions regarding clause 62, “Powers of search and seizure to investigate offence”. Again, this was something where, although it was discussed, the Foreign Affairs, Defence and Trade Committee didn’t have full agreement on it.
Now, Minister, you mentioned before in terms of, for example, non-compliance when it comes to export certificates and all of those things. One of the issues here is that there is no way for an issuing officer or enforcement officer to investigate for areas of non-compliance without getting a warrant, which then also means that there are some inconsistencies between this legislation and other comparable legislation around this. We did have a conversation around whether the wording before of a warrantless search was too severe and we said that something needs to be kind of softened, but I guess the first question to the Minister is: how then would an enforcement officer or an issuing officer investigate for non-compliance if the only way for them to do that is to have a warrant which requires there to be some suspicion that the person is non-compliant?
Hon TODD McCLAY (Minister for Trade and Investment) (21:46): This is only one tool. There are many ways that they engage and have the ability to do that, but where a search warrant may be required to search under the law—and this is under Part 4 of the Search and Surveillance Act 2012—it aligns with that power. It has the ability to do so, and it merely dictates what can happen. It allows for a search warrant in the circumstances of a search of a place in order to copy documents and seize computer systems or data storage devices, but there is often ongoing engagement with exporters before this, and this is just one of the powers.
There’s another part to this. It says that the search must be exercised with regard to the culture of any place the enforcement officer enters. If we take again, hypothetically, where a search warrant is issued to go to a church that has products in it, and so on, one may assume that at a time of worship, it may not be enforced, but at another time it may well could be.
TIM COSTLEY (National—Ōtaki) (21:47): 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 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 54
New Zealand Labour 34; Green Party of Aotearoa New Zealand 14; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
A party vote was called for on the question, That Part 4 be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 28
Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Part 4 agreed to.
CHAIRPERSON (Barbara Kuriger): We come now to Schedule 1AA.
A party vote was called for on the question, That Schedule 1AA be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 28
Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Schedule 1AA agreed to.
A party vote was called for on the question, That Schedule 1 be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 28
Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Schedule 1 agreed to.
A party vote was called for on the question, That Schedule 2 be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 28
Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Schedule 2 agreed to.
A party vote was called for on the question, That Schedule 3 be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 28
Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Schedule 3 agreed to.
Committee of the whole House
Clauses 1 and 2
CHAIRPERSON (Barbara Kuriger): Members, we come now to clauses 1 and 2, the debate on “Title” and “Commencement”. Lawrence Xu-Nan had a question about commencement.
Dr LAWRENCE XU-NAN (Green) (21:52): Thank you. I will start with the commencement. I do want to check, not so much when this—I’m assuming that the Order in Council date is going to be when the other remaining aspects of the agreement has been sorted. I do want to check: when this whole bill comes into effect, by Order in Council, does that also mean that the regulations I mentioned in other parts of this bill, overall, will also be—[Minister in the chair shakes head] No? OK, that’s fine. Thank you, Minister. That’s an easy question.
Then I guess I’ll move on to the title. I think it’s important to note that while this bill specifically, as the India Free Trade Agreement Legislation Amendment Bill, it has been something we’ve seen not only in the context of this free-trade agreement legislation but also other free-trade agreement legislation, where there is no effective way for this committee to be able to debate on the agreement itself in any effective manner. Yes, while we are here talking about how this is the bill and here is the national interest analysis, but it is a concern, and it’s not just in terms of this agreement; it’s in terms of, in general, how we look at international treaty examination—that a lot of the things that should be in scope, because, fundamentally, these sort of things, that the executive branch of our Government signed ourselves up to, does actually affect all of us. But we are not given a chance to be able to do that because the only opportunity for us to be able to examine an international treaty, whether it is a trade agreement or whether it’s any other forms of treaty, is through a select committee stage after the treaty has been signed by the relevant Minister. There is, effectively, no way that a select committee—
CHAIRPERSON (Barbara Kuriger): So the member said you were going to ask something about the title.
Dr LAWRENCE XU-NAN: I think that this title is inappropriate for this legislation because, although we are referring to the “India Free Trade Agreement”, there is no part of this debate where we are able to effectively debate on the India Free Trade Agreement. So I think a better title, if the Minister wouldn’t mind entertaining the committee, is that this bill is actually just the “India Free Trade Legislation” because there is no agreement to speak of, because we have not been given the chance to debate on the agreement.
That is part of the issue when it comes to our international treaty examination process, because when we had the international treaty examination through the select committee, and the Minister has mentioned during this entire committee of the whole House stage, on multiple occasions—and I do appreciate the Minister’s engagement, and the Minister has been very engaging in responding to questions around this bill. Everything that is to do with the agreement—to a certain degree, the Minister has been saying that this is outside the scope, despite the fact that it is part of the national interest analysis. At the same time, as I mentioned in my second reading, there was supposed to be a 15-sitting-day time frame for the Foreign Affairs, Defence and Trade Committee to consider the agreement and were only given nine sitting days because the Minister wanted to push this through before the end of this Parliament.
So the recommendation that I’m making to the Minister is simply remove the “Agreement” because we have not been able to have a robust discussion or debate on the agreement itself.
TIM VAN DE MOLEN (National—Waikato) (21:57): I move, That debate on this question now close.
A party vote was called for on the question, That the debate on this question now close.
Ayes 59
New Zealand National 48; ACT New Zealand 11.
Noes 62
New Zealand Labour 34; Green Party of Aotearoa New Zealand 14; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion not agreed to.
CHAIRPERSON (Barbara Kuriger): The time has come for me to leave the Chair. We will resume this committee again at 9 a.m.
Sitting suspended from 9.58 p.m. to 9 a.m. (Wednesday)
Urgency
Wednesday, 16 September 2026
Bills
India Free Trade Agreement Legislation Amendment Bill
Committee of the whole House
Clauses 1 and 2 (continued)
CHAIRPERSON (Teanau Tuiono): Members, the House is resumed. When the House suspended last evening, we were considering the India Free Trade Agreement Legislation Amendment Bill and were debating clauses 1 and 2. Clauses 1 and 2—this is the debate on clauses 1 and 2, “Title” and “Commencement”. Is anyone taking a call?
Hon DAMIEN O'CONNOR (Labour) (09:00): Mr Chairman, look, thank you very much. I’ve had a couple last night—interesting numbers in the House here over this piece of legislation. We are supporting it, but the title—the point was made last night, and it might seem somewhat frivolous, but it actually does go to the truth of this piece of legislation, which is amending the customs Act and amending the Dairy Industry Restructuring Act. The question of whether the Minister had thought about a different title for the bill—and then, of course, we have later on the splitting of the bill.
Effectively, this first bill is amendments to existing legislation, and the second is setting up the quota management system for all the areas of apples, of kiwifruit, of honey that we have negotiated through this agreement. So it’s two separate bills; the one of the title that is in part covering both bills, and I’m not quite sure what the Minister will call the second bill. Maybe he could explain whether the bill could have been renamed and more appropriately be named “Amendment to Customs and Excise and Amendment to Dairy Industry Restructuring Bill”.
CHAIRPERSON (Teanau Tuiono): Steve Abel—wakey wakey, folks.
STEVE ABEL (Green) (09:01): I thought my colleagues from New Zealand First might take a call on this one. I think the most notable factor of this bill, which has been somewhat touched on but for which we’ve had no satisfactory response from the Minister, frankly, is that in weighing up the India Free Trade Agreement Legislation Amendment Bill, one has to determine whether what New Zealand gets from the bill is greater than what we potentially lose through the deal. The most glaring component of that is the $35 billion price tag over 15 years for whatever we’re supposed to get from this free-trade agreement.
I want to note that in the Ministry of Foreign Affairs and Trade estimates of what New Zealand will gain by 2037—after 10 years of this free-trade agreement being in force—is an expectation that the tariff cuts that will have come into force by then will be just 0.7 percent of our GDP, or $401 million relative to the non - free trade agreement baseline. In 15 years’ time, we will have had to invest in India $35 billion. Anyone who does maths on those numbers—$401 million versus $35 billion—has got to be asking, “What are we signing up to here?”.
My proposal for the India Free Trade Agreement Legislation Amendment Bill is a new title that I’m happy to make up on the spot. I’m going to call it the “India Free Ride Agreement Legislation Amendment Bill”, because when our negotiators sat down at the table to say, “We want access to your markets, we want you to lift your tariffs.”—India to lift its tariffs—India said back to New Zealand, no doubt, “Well, what do we get in terms of what you’re going to make way for?”. New Zealand has already got rid of nearly all of its tariffs. We forfeited them under an ideological view of neoliberalism. We long ago gave up tariff barriers to trade. Nigh on no products into our country have tariffs, and they’re mostly under 5 percent. So what did New Zealand have to offer?
India rightly, and sensibly, put the pressure on us and said, “Well, New Zealand can only offer a huge investment in India.”, not only in the form of the $35 billion, but also in the form of intellectual property (IP) and investment through our germplasm of kiwifruit and apples and our knowhow on how to produce those products. The very products that we are seeking to get tariff relief on are the products that we are making India more capable of competing with us on.
I think, on balance, the public should be alerted to the fact that this is not a good deal for New Zealand. This is a great deal for India but it is not a good deal for New Zealand, and that’s why I propose that new title for the bill. Thank you.
ANDY FOSTER (NZ First) (09:05): I think I wasn’t in the Chamber at the time when you got some advice after the question that I asked yesterday, which was, essentially, what is going to be the effect on the free trade agreement (FTA)? I’m told there’s no effect on the FTA itself—the FTA is the FTA, it’s been approved by the executive rather than being approved by this House. What will be the effect on the operation, the making operational of the FTA, if this bill were not to pass? That’s the question I wanted to ask.
My understanding of what’s happened is that we’ve got an FTA which has been approved by the executive—effectively, it’s had a first reading in this House where we could allude to the bill and whether we agreed with it or didn’t agree with it. Obviously, there’s been an agreement to disagree right from the FTA being able to be read by anybody. New Zealand First has certainly said we don’t agree with the FTA as it came out, so we’ve made that very, very clear.
It’s gone through the executive process—at least, that’s my understanding; it’s a question I asked yesterday. New Zealand First has said no, we don’t agree with that, and we’re told now that we can’t change things, but I am interested in what the impact of this bill—if this bill were to fail, the impact this bill would be on the FTA itself.
I also just wanted to just follow up on Steve Abel’s comments, because in all of these FTAs, essentially we have virtually no tariffs, so we’ve got very little to bargain with in terms of saying “We would like your tariffs to come down”—in this case it’s India, it could be any other country. We have, essentially, no tariffs to give up, so what is it that they will come and say, “Well, we’re giving you a reduction in tariffs; what are you giving us in return?”. What we’ve got is a mix of a migration and study arrangement. We’ve got investing up to $35 billion over the next—or best endeavours, $35 billion over the next 15 years in India, and then, also, we’ve got the transfer of intellectual property (IP).
If I was to look at potential names for this bill, we could have the “India FTA Agreed By Most of the Executive Rather than the Parliament Bill”; we could have the “India FTA Requirement for New Zealand Businesses to, Best Endeavours, Invest $35 Billion in India Over the Next 15 Years When New Zealand Needs that Investment at Least as Much Bill”; or we could have, possibly, the “India FTA Transfer of Valued New Zealand IP and Future Undermining of Our Own Agricultural Industries Bill”.
I just want to make clear, obviously, New Zealand First said right from the outset that we agree there is a need for FTAs. We think FTAs are important, but we don’t think that this is a good deal. The reasons for that not being a good deal I’ve already mentioned, which is the transfer of IP, the best endeavours need to transfer $35 billion of investment into another economy rather than investing it in our own economy, and then there are all the issues around migration, the jobs that go with migration and study, and the impact of that on, particularly, our young people. We’re obviously not commending this bill to the House, but I will be very appreciative of some answers to those questions. Thank you.
Hon TODD McCLAY (Minister for Trade and Investment) (09:09): Mr Chair, thank you very much. Damien O’Connor asked what would happen to the bill’s names when they’re split; of course, the splitting of the bill is signalled very early and I’ll move that motion at an appropriate time, but the division of the bill was outlined at the Ministry of Foreign Affairs and Trade’s (MFAT) initial briefing to the Foreign Affairs, Defence and Trade Committee. Any member who was there at the time of the briefing would have been aware of that. The division of the bill was also included in the general policy statement of the introduced bill and the legislative statements presented to the House at the bill’s first reading, so any member that was in the House at the time or had an opportunity to read those documents would be aware of it.
It was recommended by the Parliamentary Counsel Office (PCO), and PCO advised that, with a split bill, the India Free Trade Agreement Legislation Amendment Bill—currently Parts 1 to 3 of the bill—will do its work and effectively fall away. The Act—that is currently Part 4—will come into force without including all the amendments of the other legislation. This is done for clarity for the public and for others. Indeed, the second bill will become the India Export Quotas (Apples, Kiwifruit, and Mānuka Honey) Act, and so it will treat that separately than other components.
There have been a lot of questions about whether we consider changing the name of the bill, but the first thing I want to address is why we’re here having this debate today. It is not a result of the executive making a decision; it is a result of there being a very large majority at first reading in this Parliament—a majority of 92 votes to 20-odd—for it to go to a committee, and it was returned from the Foreign Affairs, Defence and Trade Committee with a majority in recommendations for a change. At its second reading, it was the House’s desire for it to go on to the next stage. Therefore, every time we have a debate, there is a vote, and if the majority of members are in favour, then it continues through. What happens if it doesn’t pass? Well, that’s hypothetical.
But, very clearly, if the India – New Zealand free-trade agreement was not to enter into force, then the promises that Mark Patterson made to sheep growers and wool farmers all around the country when he travelled on the taxpayer resource to India to promote wool under the free-trade agreement and said the wonderful thing that there will be carpets for everybody because of the sheep wool that’s grown in New Zealand—well, they wouldn’t get those benefits. To the kiwifruit growers who will have the world’s only tariff-free quota into India of kiwifruit, and outside of that very substantial quota worth $125 million to New Zealand over the next few years in reduction of duty, plus a halving of the tariff right outside of the quota—well, they wouldn’t get those benefits. I suppose our kiwifruit exports to India would not increase in the way they have to every other country where we have a free-trade agreement, including China where, last year, we sold 1 billion kiwifruit to China, a significant return for growers in New Zealand that, in turn, spend it in the provinces and in our communities so that they create jobs.
Hon Damien O'Connor: New Zealand First objected to that too.
Hon TODD McCLAY: That is the point that I was coming to. It is fair that, in this House, different parties will have challenges with trade agreements. Some have supported every single one, some have supported the odd one, and some have supported none. But the China free-trade agreement was not supported by a majority of Government parties at the time, and the Opposition—my party—had to provide support to pass it into law so it could take effect just before an election in that year, not so different to this.
This year, we will export $23 billion worth of goods to China under a free-trade agreement. China has more than a billion people, is larger than New Zealand, and that free-trade agreement has done nothing but create opportunities and jobs and higher incomes for men and women throughout the country over the last 20 years. The India free-trade agreement will do the same.
We haven’t looked at changing the name of it because it is a free-trade agreement. It will deliver for all New Zealanders. I could think up just as many smart comments about positions others take in the House and put them into the bill, but what I’d prefer to do is focus on the substance of the significant opportunity for New Zealand exporters into that market. All over the country, New Zealand businesses, and the people that are working for them, are getting ready to sell more to 1.4 billion people, and with that in mind, I will be commending the bill to the House. The National Party, along with ACT in Government, will be supporting it because trade is in the best interest of New Zealand. I’m yet to see a perfect trade deal, but this one is one of the best that’s ever been negotiated with India.
VANUSHI WALTERS (Labour) (09:14): Thank you, Mr. Chair, and thank you to the Minister for Trade and Investment for that very thorough explanation of the value of the agreement. I think, probably, the question on everyone’s minds as we head towards this last stage of debating the bill is when it will come into force, so the commencement date, which comes into force with Order of Council. Now, that’s not unusual. We’ve seen that occur in relation to other free-trade agreements, and rather beautifully in relation to some, they have come into force on the day in which the international agreement also comes into force. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is one example of that, and the Regional Comprehensive Economic Partnership is another. No doubt the Minister is currently having conversations behind the scenes with Chinese counterparts—
Hon Todd McClay: Indian.
VANUSHI WALTERS: —sorry, Indian counterparts; my mind was stuck on the other agreement—with Indian counterparts, and I’m just wondering when we can expect the legislation to come into force and whether he envisages that there will be synchronicity and that will come into force with the agreement.
The other question I had was in relation to the title, and if the Minister bears with me, there’s a slight segue, but I do think it’s important and I propose a name like the “Indian Free-Trade Agreement and the Bill of Unusual Search and Seizure Powers”. The reason I do that is because, when we were debating Part 4 yesterday, a very small amount of time was spent on what I thought was quite a significant issue, and that was the change that the Foreign Affairs, Defence and Trade Committee made removing the non-warranted search powers.
I understand that there are other comparable powers in relation to dairy and other free-trade agreements where you have both warranted and non-warranted search powers. I was just wanting the Minister’s view of the framework in this bill, whether it’s appropriate, and whether, in his view, there’s a need for us to think in the future about a search regime that allows for things like a duty of production and inspection powers that doesn’t lean on Part 4 of the Search and Seizure Act, which, in my view, is built for criminal proceedings. I know it’s a slight stretch, but I do think we were pressed for time yesterday and we didn’t manage to get to that important issue.
Hon TODD McCLAY (Minister for Trade and Investment) (09:16): Well, I don’t think we were pressed for time yesterday. We probably spent five or six hours debating this part, which is a very good use of the House’s time because it allows it to make sure that the bill that will allow New Zealand to deliver commitments, and for New Zealanders to receive the benefits of the free-trade agreement, will work as intended. In as far as the obligations we’re taking on, or what this bill does when it enters into force, the way it always works as a trade agreement is that if the Parliament should adopt this and vote it into law, at a given point of time, it goes to the Governor-General who will sign it off; but, actually, the commitments we make, such as, for example, tariff rates coming down to zero, only take effect when the free-trade agreement (FTA) enters into force.
If that was not to be the case, then Indian exporters could benefit with a lower tariff rate into New Zealand before the FTA comes into force because this is the legal way that we lower the tariff rate. It adds India to another Act where tariff rates will come to zero, but only on the day that the free-trade agreement enters into force. The agreement talks about that, but the exact date will need to be agreed with India when they are also able to show that they can meet their obligations to New Zealand and New Zealand exporters under the free-trade agreement. In respect of the member’s question, no, I haven’t considered changing the name of the bill to the one she suggested.
FRANCISCO HERNANDEZ (Green) (09:18): Thank you, Mr Chair. While we’re on the subject of the title and commencement, I would like to propose an amendment to the title of this Act to the “India Free-Trade Agreement (Offshoring) Legislation Amendment Act”. I propose that because of, as already discussed, the requirement incentives, depending on which side of the debate you’re listening to and whether you’re listening to the Indian Government or the New Zealand Government, on the requirement for private sector investment into India to the tune of US$20 billion. That’s very concerning from our point of view because, ideally, the investment should be going to New Zealand instead of India.
Now, I say this not because I’m not of an internationalist-minded streak, but because I do think that the people and the Government of India are very capable of investing in their own people and in their own industries rather than relying on offshore investment. I just looked at the latest defence spending statistics. I think, in the last year, India spent something like US$93 billion on defence spending.
I don’t think anyone can disagree that, instead of spending money on military weapons and on militarisation, perhaps that money could be better spent on investing in the needs of people in India, rather than relying on New Zealanders to be investing in that to the tune of US$20 billion. I do say the word “offshoring” because, if a New Zealand company chooses to make private investments—for example, if they have a company over here in New Zealand and they choose to invest over in India by starting a call centre or a hub for manufacturing, or something—that would be counted in that US$20 billion threshold. Clearly, we can see that this free-trade agreement (FTA), which this legislation amendment bill helps to enable, is something that will contribute, potentially in a very strong way, to the loss of jobs in New Zealand, at a time when we’re already losing a lot of critical jobs in the regions.
In the electorate of Dunedin, which I am based in, we’ve seen this loss, in terms of the Gregg’s factory near the university. We’re seeing losses like that right across the country, at a time when our own regions and our own industries in New Zealand need the active support of investment here in New Zealand. Why are we enabling, through this free-trade agreement, US$20 billion—which is, I believe, about NZ$35 billion—to be offshored into another country? This is a country which is more than capable. India is an emerging superpower with its own space programme, with its own substantial investments in the defence industries, and with its own foreign aid programme. It really doesn’t make sense that this legislation is encouraging investment into a country which is already relatively prosperous and is relatively capable of looking after itself.
My second point is around the commencement date. It comes into force on a single date by Order in Council. I think the Minister for Trade and Investment already said that, in a previous Parliament, the big New Zealand - China FTA came into force after the election. Well, obviously, we’re two months away from an election—
Hon Todd McClay: Before the election.
FRANCISCO HERNANDEZ: Before the election, sorry. I meant: before the election. Now, we’re two months away from the next general election, and three or four parties here in this Parliament, depending on whether you count the Te Tai Tokerau party, do oppose this legislation. So, if you count the number of parties, as opposed to the number of MPs they have in the House, you could argue that a majority of the parties in this Parliament actually oppose the New Zealand - India FTA. We should, arguably, delay it till after the election. Thank you.
Hon TODD McCLAY (Minister for Trade and Investment) (09:23): Just on that last point, I think it’s very, very important to underline that the House is based on individual members. Each member of this House can vote any way they want—unless their party tells them they’re not allowed to and they might throw them out or put them down on the list as a result—and so, ultimately, if we were to go in the direction the member Francisco Hernandez has just proposed for this House, you may end up with 122 parties here, as opposed to the very loose number he has given at the moment. Probably a more reliable definition of democracy is the one that this Parliament has inherited from Westminster, which is the number of votes, so I think what we will do is see what the final vote will be on the third reading of this bill. If a majority of members are in favour of the free-trade agreement called the Indian - New Zealand free-trade agreement—this bill, which is the India Free Trade Agreement Legislation Amendment Bill—that will be the name, and exporters all over the country will benefit.
I did want to make just one final point about forecasts of growth and delivery for the economy. The Ministry of Foreign Affairs and Trade (MFAT) analysis is, rightly, always extremely cautious about how free-trade agreements will perform. As an example, for the European Union free-trade agreement, whose rights and obligations are very similar to this—in fact, the bill we’re putting through this Parliament now is very similar to the one that enacted the European Union free-trade agreement—MFAT’s analysis was that, over five or six or seven years, we might see an increase of $2 billion worth of exports. In fact, that happened in the first two years—many, many years sooner than they modelled in their forecast. I actually prefer them to be cautious in their modelling rather than overstating, because it is about opportunity.
What free-trade agreements do, when you first negotiate their entry into force, is they talk about tariff savings based upon the amount of exports and trade you have at that time. As an example, when the Chinese free-trade agreement entered into force, with a very large majority of support in this Parliament—although I think New Zealand First probably at the time didn’t support it—ultimately our two-way trade was a couple of billion dollars. This year, we will export $23 billion to them, and we will sell China more than we import from them—a $43 billion two-way trade. If you had looked at the modelling at the time, I’m sure you would have found it was very, very small, but, actually, a quick working out of what our GDP was at the time, compared to the $23 billion we exported this year, it is 12 percent growth annually of GDP on that day. And that was over a 20-year-period.
Now, I’m not saying that we achieve that in the same way, but, with every free-trade agreement New Zealand signs, our exports go up. We sell them more, but we also import more. If we take the example of kiwifruit: with 5 million people in New Zealand, if everyone in New Zealand eats one kiwifruit this year, we sell 5 million kiwifruit. If they have 10, I guess that’s 50 million kiwifruit. Well, Zespri is responsible for $5 billion worth of sales around the world now annually, a new record, and we sold 1 billion kiwifruit to China as a result of the zero tariff rate in there. What trade agreements allow us to do is to produce more to sell to the world, which grows our economy. In effect, even if it was only a 1 percent increase in GDP as a result of this FTA—and I believe it will be much more over time—that’s about $4 billion extra for the economy.
To replace $4 billion, you could have a capital gains tax, you could have a wealth tax, you could have a land tax, or we could back New Zealand businesses to produce more and sell more. We have to remember, when companies in New Zealand export, they earn more for the country, on average they pay their workers more, and they employ more women. I know those opposing the bill are not doing it for that reason, but, actually, New Zealand workers should earn more through being productive. We have an opportunity to sell much more of what we produce to 1.4 billion people. That’s 5 million people working hard to feed 1.4 billion people. New Zealand is a winner under this agreement.
CHAIRPERSON (Teanau Tuiono): Well done, we’re all hungry for kiwifruit right now! Before I take the next call, I have noted that members are using this as an opportunity to summarise—that’s what many people use the title and commencement debate for—but, if you’re going to continue to summarise, you’re not summarising; that’s just a thesis. If you’ve got specific questions focused on the title and commencement, those are welcome, but I would encourage members not to disappear down a philosophical path.
Hon DAMIEN O'CONNOR (Labour) (09:28): Thank you very much for that guidance, Mr Chair. It is around the commencement date, and I’ve asked the Minister for Trade and Investment this before. I haven’t had a clear answer. The commencement date will be laid out through an Order in Council. It is important, and I think there were questions from my colleague Vanushi Walters about whether it should be aligned, as normally occurs with the introduction of a free-trade agreement (FTA), or for some other reason, should it be another date? I guess the question is: will it be before the election or not, ensuring that Parliament still has the mandate and the authority to bring this into play? Questions around that are really important.
This is a unique trade agreement, and the Minister talks it up. I support his ambition, but I’m also realistic around it as well—that is, the increasing risk that goes with this trade agreement every year that we move down the path towards a 15-year deadline. There is an obligation to promote the investment of US$20 billion. Actually, New Zealand First pointed out yesterday that it was NZ$33 billion; it’s now NZ$35 billion because the coalition Government has mismanaged this economy and driven down the value of the dollar. Thanks very much, New Zealand First. Yes, that bill is going up; the liability is going up.
The commencement date is quite important, because I’m guessing that the Indian Government will be monitoring this agreement from the day that it begins through to that 15-year period. So the question to the Minister is about when he intends to or if he has a date in mind.
The other point I’d like to make around the title of the bill—and my colleague pointed it out—is that maybe it should have been the “Liberation Day Unintended Consequences Bill”, because we have President Trump to thank, in part, for this trade agreement.
Hon Rachel Brooking: Liberation Day.
Hon DAMIEN O'CONNOR: Liberation Day—yes, that’s right. Liberation Day was his idea. I acknowledge the Minister—I think he seized upon the opportunity when President Trump turned the world of trade on its ear and imposed sanctions on India, like other countries, that were completely ridiculous, and I think we should state that on the record. I think we should be brave enough to say that what the US has done to international trade is just abhorrent. The stability and peace across the globe that has been improved through trade agreements has now been reversed by decisions made in Washington.
I come back to the opportunity that the Minister took up. I guess that India has sought value in driving forward with more trade agreements with more countries, and one of them with New Zealand, and that is great. I think that over time we can seize the opportunities from that whilst mindful—to come back to my first point—that the clock will be ticking on our promotion of trade into India and, I guess, the question of whether the Minister of Foreign Affairs will be committed to promoting that investment—because the Minister of Foreign Affairs and Trade, the Rt Hon Winston Peters—
Hon Todd McClay: Minister of Foreign Affairs.
Hon DAMIEN O'CONNOR: Sorry—Foreign Affairs; yes. He’s in charge of the overall budget for Ministry of Foreign Affairs, so I’m not convinced—and neither will the Indians be, given New Zealand First’s stance on this trade agreement—that he will commit the resources to promote investment into India, given what we’ve heard from New Zealand First.
So we are facing a bit dilemma, and exporters should be fully aware that in taking up the opportunities through greater access into this market—which are huge and are beneficial, as the Minister said, to our country—there’s also a little cloud on the horizon that they should be mindful of. I’ve certainly, as I’ve said before, had discussions with them at this point. There’s not a huge commitment to a huge amount of investment into India. I hope that will grow over time. It will be through partnerships that we actually consolidate the value of this trade agreement over time, but the commencement date, which is a question for the Minister, is quite critical to those calculations.
STEVE ABEL (Green) (09:33): Thank you, Mr Chair. I just, Mr Chair, would ask you to note, further to your point about final summaries, that the Minister for Trade and Investment has taken a couple of what I think are quite useful calls; his last two calls, where he’s—
Hon Todd McClay: They’ve all been useful.
STEVE ABEL: Just to be very clear about this, the Minister has expanded on the case for the free-trade agreement, and, in a sense, what he’s done in his last two calls is what we would have liked to have done more substantively, which is probably argue it and hear the case for it.
To acknowledge the Minister, I note that he has worked very hard for this agreement, and it’s not an easy thing to achieve. He’s spent many hours, and he’s travelled across to the other side of the globe, and not spent time with his family, and he’s tried to get this thing across the line. And he should, as much as any of us, have a chance in the fullness of this debating chamber to hear the case for and to hear the case against. I’ve appreciated his recent comments on making the case for the free-trade agreement itself.
One of the specific things that he raised was the value of the China free-trade agreement, which is $23 billion, I believe he said, in terms of export value to New Zealand. I have a very specific question on that, as he has sought to use that as a comparator with this free-trade agreement before us. What is the foreign direct investment commitment in the China free-trade agreement, Minister? Given that you’re arguing that we’re going to get a great return from this India free-trade agreement, the major concern that has been expressed by the parties in this House that are not supporting the current formulation of this agreement is around that foreign direct investment commitment over 15 years of up to $35 billion or more, depending on what the foreign exchange rate is doing to the American dollar. Because, of course, it’s down as $20 billion in US dollars, which could be NZ$35 billion or more or less.
What is the foreign direct investment commitment that New Zealand signed up to in the China free-trade agreement? Because only then can we understand whether the $23 billion of value that we get from our exports to China is greater than the amount that we are expected to invest in China in terms of foreign direct investment. And that is a greater comparator of what we are getting or what we are risking in this India free-trade agreement.
Hon MARK PATTERSON (Minister for Rural Communities) (09:36): I rise to speak on the title and the commencement date. Just picking up on the points that Steve Abel made, the title of the bill does not reflect what we’re discussing here or what would like to have been discussing here—the India Free Trade Agreement Legislation Amendment Bill. It is far more than a free-trade deal. New Zealand First is all for a free-trade deal with India. It’s in our coalition agreement. We’ve supported other free-trade deals that have gone through in this Parliament. So we are absolutely on board with the free-trade deal.
Hon Damien O'Connor: Stop digging.
Hon MARK PATTERSON: Well, the Labour Party should have read this a bit more carefully too, because there are wide implications in this bill, far beyond anything that we’ve ever signed up to with another free-trade deal in the past. This is not the India Free Trade Agreement Legislation Amendment Bill; it is the “India Free Trade, IP Concession, Immigration Relaxing, Outward Investment Amendment Bill” and it should be known as such, and I would propose that it is because there are vast elements to this bill that do not in any way just relate to the tariff reductions, which, obviously, we are supportive of.
We are supportive of trade with India. It’s a big opportunity for us, but what is in this for New Zealand? What are we trading away? We have had very little opportunity to go through some of those immigration settings we’ve got particularly with that community. There has been migrant exploitation—we won’t shy away from that. That community has a track record of exploiting its own. What are the protections in here for student visas with an uncapped 25 hours, currently, in work rights? How are they going to be protected? What is the pastoral care that sits around that?
In terms of the intellectual property (IP), we know that in China Zespri took a court case over there and won on IP. In this deal, it appears that you could drive a bus through the Indian IP arrangements. We could be giving away our G3 kiwifruit variety. We could be giving away our Envy apples and mānuka honey. We really haven’t had the chance to explore that through this debate. Their domestic IP laws are much, much weaker than ours are in terms of plant varieties in the sense that you can, for your own use, use some of these varieties when they are over there. So long before we’ve got 100,000 hectares of G3 growing somewhere in India? Have we got control over those things? We did have control in the China free-trade agreement and in other jurisdictions where we’ve signed up for free trade, but it is not clear to New Zealand First that we are actually not giving away some of our most valuable plant variety IP rights. On the outward investment, there has been crickets on how the $35 billion—as of the exchange rate of yesterday, it was $34.75 billion—that we’re obligated or aspirational—well, it’s not aspirational to me; my aspiration is to have that money invested in New Zealand, and it’s New Zealand First’s aspiration. But we’re on such a preposterous number—it is a preposterous number—and we’ve almost admitted as such; that its aspirational, and “nod, nod, wink, wink”, we’re not actually going to do it.
But that’s not what Prime Minister Modi said on three occasions when he was in this very country. That’s their expectation. We’re signing a deal. We’re going to be asked to vote on a deal shortly that commits New Zealand to $35 billion in outward expenditure into the Indian economy. And there are parties in this Chamber that are prepared to wave that away and not even ask questions about it. That is outrageous. I can’t believe the Labour Party, who have, kind of, made some weak suggestions, saying “Oh, that looks a bit concerning”, have not held their feet to the floor. You had the chance, the Labour Party. New Zealand First has taken a principled stand here; you could have taken a principled stand, but no.
So I will suggest those amendments to the bill’s name because it is not a free-trade agreement.
Hon DAMIEN O'CONNOR (Labour) (09:41): Thank you, Mr Chairman. As an ex-contract fencer to an ex-farmer, I’ve got to take the shovel away from you to stop digging; you’re going further and further into the hole.
Regarding the commencement and the amendment that New Zealand First indicated it could table here, I just want to speak to that because the member who’s just previously spoken may have forgotten that his leader is the Minister of Foreign Affairs, sits at the Cabinet table with the Minister in the chair, the Hon Todd McClay, and was fully aware of the process of negotiating this agreement all the way through—the Labour Party was not. So all of the conditions that the Government agreed to, the Minister of Foreign Affairs had the ability, at the Cabinet table, to have input into.
Hon Mark Patterson: We read it.
Hon DAMIEN O'CONNOR: Absolutely.
Trade agreements are never perfect. I agree with the Minister. We know that they’re always a compromise. And on the balance, what is the greater good? Do you sign it or not? The Minister of Foreign Affairs and the New Zealand First Party had the ability to input into and change and adjust and negotiate this trade agreement. And having done so, they now want to step back. But now, in the committee, want to step forward and say, “Oh, no, but we’d like a trade agreement with India.” Well, make up your mind. It will never be perfect. This is not the trade agreement that Labour Party would have negotiated. We accept that it’s the one that the Government has negotiated. We’ve looked at it, we’ve gone through.
The member from New Zealand First makes reference to migrant exploitation—he’s been in a Government that has dumbed down and reduced resources to the Department of Labour that we negotiated to increase again as part of our support for this trade agreement. You can’t have it both ways. Agree to dumb down the oversight of migrant workers in this country through Ministry of Business, Innovation and Employment—because that’s what you did; you agreed to that, to take resources from it to pay for tax cuts—and then bleat about the potential for that to occur in our country. We have never for a moment believed—because we looked at the agreement—that we would be flooded by migrant workers, as New Zealand First said would be. Actually, we appreciate, in the commencement, which is really important—
CHAIRPERSON (Teanau Tuiono): Come back to the title and commencement.
Hon DAMIEN O'CONNOR: I appreciate that, but I’m kind of speaking to what was indicated might be an amendment tabled in the Chamber around the change of the title to the bill from New Zealand First. So I’m just trying to clarify some of the logic to that and get a response to it, because, in my view, it seems that it’s absolute hypocrisy—absolute hypocrisy. And now, New Zealand First has realised that this is a trade agreement, while not perfect, there has potential and, indeed, has opportunities for exporters across our country. And I acknowledge the Minister for that. That’s why Labour supporting it. It’s maybe not quite as good as he says, but, you know, it’s a good solid agreement that we have to—New Zealand First are stuck out on a limb, not supporting it. Stupid—stupid and hypocrisy to come into this Chamber and then go on about what they care about, when, in fact, they’ve been in the Government that has actually opened up the opportunity for exploitation, unfortunately.
We appreciate the wonderful Indian people who have come into this country, are working in healthcare, are working in services, and in small businesses across our country. They have given vitality, vibrancy, and opportunity for many thousands of Kiwis because of their presence here. That’s why we support the agreement. That’s why we say that this agreement is an opportunity to build stronger relationships and partnerships between India and New Zealand. And the commencement date, which is the part that we’re debating, of course, is still a question for the Minister as to when he thinks this might actually come into force.
CHAIRPERSON (Teanau Tuiono): OK, I’m going to put the question. I think we’re there, folks.
A party vote was called for on the question, That clause 1 be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 29
Green Party of Aotearoa New Zealand 15; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Clause 1 agreed to.
A party vote was called for on the question, That clause 2 be agreed to.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 29
Green Party of Aotearoa New Zealand 15; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Clause 2 agreed to.
Bill to be reported without amendment.
Hon TODD McCLAY (Minister for Trade and Investment) (09:47): I move Amendment Paper 791 dividing the bill.
A party vote was called for on the question, That the motion be agreed to.
Ayes 101
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11; New Zealand First 8.
Noes 21
Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
The committee divided the bill into the India Free Trade Agreement Legislation Amendment Bill and the India Export Quotas (Apples, Kiwifruit, and Mānuka Honey) Bill, as set out on Amendment Paper 791.
House resumed.
Report of Committee of the whole House
CHAIRPERSON (Teanau Tuiono): Madam Speaker, the committee has considered the India Free Trade Agreement Legislation Amendment Bill and reports it without amendment and divided into the following bills: India Free Trade Agreement Legislation Amendment Bill and the India Export Quotas (Apples, Kiwifruit, and Mānuka Honey) Bill. I move, That the report be adopted.
Motion agreed to.
Report adopted.
DEPUTY SPEAKER: Those bills are set down for third reading immediately.
India Free Trade Agreement Legislation Amendment Bill
India Export Quotas (Apples, Kiwifruit, and Mānuka Honey) Bill
Legislative Statement
Hon TODD McCLAY (Minister for Trade and Investment) (09:49): I present a legislative statement on the India Free Trade Agreement Legislation Amendment Bill and the India Export Quotas (Apples, Kiwifruit, and Mānuka Honey) Bill.
DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Third Reading
Hon TODD McCLAY (Minister for Trade and Investment) (09:50): I move, That the India Free Trade Agreement Legislation Amendment Bill and the India Export Quotas (Apples, Kiwifruit, and Mānuka Honey) Bill be now read a third time.
This is the culmination of a journey that began more than 16 years ago when first discussions were held with India around starting free-trade agreement (FTA) negotiations. The Government made it a priority, recommitted to negotiations, and worked at pace with India to secure an agreement that delivers for New Zealand exporters, workers, growers, farmers, businesses, consumers, and all New Zealanders.
India is the world’s fastest growing economy. It is home to 1.4 billion people and is on track to become one of the world’s largest consumer markets. For too long, New Zealand exporters have faced significant barriers in India while competitors benefited from preferential access. This agreement changes that. It will open up significant new opportunities for New Zealand businesses already trading in India and will also help level the playing field with our competitors. The FTA will reduce or eliminate tariffs on 95 percent of current exports to India, and with the FTA our exporters will get the boost they need to sell competitively in India. The benefits are substantial, and they are immediate.
New Zealand apple exporters will be able to export 32,500 tonnes next season, increasing to 35,000 tonnes if we can get the agreement ratified this year. The current 50 percent tariff will be cut in half to 25 percent, within the quota. Industry estimates tariff savings of up to $25 million per year—money directly into the pockets of New Zealand apple growers.
Kiwifruit will receive tariff-free access for a quota that grows to 15,000 tonnes over the next six years—four times more than we’ve ever sold India in a year—plus a 50 percent tariff reduction for any out-of-quota trade exports to India.
Our exporters of sheep meat, wool, coal, and almost all forest goods will see tariffs immediately drop to zero from entry into force.
Fish and seafood exporters will see the current 33 percent tariff eliminated on most goods over seven years. Mānuka honey tariffs will reduce from a whopping 66 percent to 16.5 percent over five years.
These are real commercial gains for New Zealanders. They mean more exports, more sales, more jobs, and more income flowing back into the New Zealand economy and into New Zealand communities. They mean greater returns at the farm gate, pack-houses, processing plants, ports, and businesses across the whole of New Zealand. This agreement positions New Zealand for the future. It will boost the businesses of those who are already selling in India and open up new opportunities for those interested in expanding into the Indian market and having access to 1.4 billion people.
The FTA references several international instruments, including the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), which was first included in the New Zealand - UK FTA and then the New Zealand - EU FTA. However, the inclusion of reference to UNDRIP in the India free-trade agreement does not impose and is not intended to impose any obligation on New Zealand law or Government policy, and we reaffirm the reservations that were made by the New Zealand Government to the United Nations in 2010.
The strong support we have seen for the bills from across Parliament demonstrates our shared understanding of the importance of expanding New Zealand’s international opportunities. It has enabled us to progress quickly through our ratification process. This means that we’re able to bring the agreements into force this year, bringing the benefits to our exporters as fast as possible. Of course, because it is entering into force this year, the second round of tariff reduction or quota increases will take place on 1 January, rather than our exporters having to wait an additional year. It’s a great result for New Zealand businesses and New Zealand consumers more generally. From here, we will continue to engage with the business community to make sure they are poised to take full advantage of the agreement and all the benefits that it brings.
The India FTA is a significant achievement that advances New Zealand’s interests; it strengthens our international connections, and it supports the people and businesses who drive our economy. New Zealand is a trading nation; one in four jobs depends on our exports. Our future prosperity depends on our ability to compete, grow, and succeed in international markets. This agreement achieves exactly that. I will deliver real opportunities for our exporters to compete on a more level playing field, create new opportunities for growth, and lift incomes and living standards for New Zealand.
Today, we demonstrate our ambition and determination to pursue opportunities that will benefit New Zealanders for decades to come. This landmark agreement is good for our economy, good for our exporters, and good for New Zealand. I thank all those who have contributed to bringing us to this point, I thank the Labour Party for their support, and I commend the bill to the House.
ASSISTANT SPEAKER (Teanau Tuiono): The question is that the motion be agreed to.
Hon DAMIEN O'CONNOR (Labour) (09:56): Thank you very much, Mr Speaker. This is not the agreement that Labour would have negotiated, but it is an agreement and a big step forward for our country in terms of our connection with the world’s most populous country.
We unfortunately have to acknowledge “Liberation Day” and President Trump for tipping the world of trade on its ear and making countries like New Zealand and India appreciate the value of trade agreements and formal connections. Can I acknowledge the Government that picked up the opportunity—a relationship that had been built, as the Minister for Trade and Investment said, over 16 or many more long years with the Indian people and with that country.
We had certainly visited, while in Government, on a number of occasions—as had the Minister of Foreign Affairs, the Hon Winston Peters—to build the partnerships that India indicated were the way forward. Not a free-trade agreement (FTA); at that time, they saw that as a risk to their economy—an economy that they were trying to build as an export nation, not one that wanted to import. We in New Zealand, as a dairy-exporting nation, were seen as a threat to India.
It is unfortunate that we don’t have many opportunities for the dairy industry in this trade agreement; albumins, which are water-soluble proteins that go into infant formula and other high-value products, have got through the door, but it’s a very, very small part of our total dairy export portfolio. While there may be potential to build that over time, if I was in the dairy industry, I wouldn’t be holding my breath for massive opportunities. Nonetheless, what has been negotiation—quotas for kiwifruit, for mānuka honey, and for apples—is certainly valuable. Along with the services through tourism and through education, there is potential to a strong trading relationship with India.
There are, of course, some risks. It has been pointed out in the House by New Zealand First, and I’m right to say that the commitment to promote US$20 billion of investment into India is indeed ambitious—very, very ambitious. I’m not sure that we will come anywhere close to achieving that target, but if the Indian Government is convinced that we are promoting that, then maybe we will meet their expectations. Prime Minister Modi certainly indicated, on a number of occasions, that that’s what they’re looking for from this trade agreement, and we accept that. Exporters moving into this market, building greater export volumes and opportunities, must be mindful of that risk, which is the point we make as the Labour Party about this being a unique trade agreement. There’s not one that I can recall that actually has a growing risk over time rather than declining risks or removal of barriers.
Nonetheless, on balance, Labour—when we finally got access to the information; we weren’t included in the negotiation process, and even being updated was not part of it. We were told that an agreement had been reached and that we would get access to the information at some point. That was at the end of January; we got access to the documents; we looked over them in confidence; we went through them and asked for more information to try to clarify points, because we had the Minister of Foreign Affairs saying that this was a terrible agreement, and because it wasn’t going to be supported by a coalition partner. So we had to ask on behalf of those people who were confused. One coalition partner was saying this is the best thing since sliced bread, and the other coalition partner—New Zealand First—was saying that this is a terrible agreement for New Zealand.”
Labour took the responsible approach. We looked at the agreement. We went over it very, very carefully and weighed up the downsides. I’ll point to another one, around biosecurity: there being no disputes settlement process. If a call is made on a biosecurity risk, by either country, unfortunately we don’t have a process by which to settle that. We’ve faced one of those barriers in the past, with our log exports to India, and we had to work through the issue of methyl bromide—the alternative treatment processes—to assure the Indians that there was no biosecurity threat. Fair enough, but the absence of a disputes settlement process is one of the downsides to this agreement, which Labour would not have negotiated. None the less, it is what we have on the table.
In moving forward, we said, “Yes, on balance, we will support this agreement”, but we wanted to do a couple of things to ensure that the claims made by New Zealand First about mass migration and migrant exploitation could be addressed. The coalition Government had dumbed down and reduced resources to the labour inspectorate. That’s the organisation that runs around the country and tries to expose and prevent any migrant exploitation. Indeed, in spite of assurances by the Government that this doesn’t happen—that we don’t have abuse—it is occurring on a regular basis, and we need to ensure that the labour inspectorate is up to scratch. We negotiated with the Government and said we would support the agreement on the basis of an increased number of labour inspectors, and the Government has indicated that it is moving in that direction.
We also said that we wanted to progress the modern slavery legislation. It’s a requirement, in most OECD countries, that we have a piece of legislation in place that prevents, and indeed makes illegal, any migrant worker exploitation that might be deemed to be called “modern slavery”. Indeed, we have exposed that in our country on a semi-regular basis, so it’s no good pretending that it doesn’t occur. We said that we wanted legislation in place.
Hon Mark Patterson: It does. We’re trying to stop it.
Hon DAMIEN O'CONNOR: I look forward to New Zealand First supporting that legislation through the House. Indeed, the Government has again been a bit slow in moving that forward. I say, in the Chamber of this House, that the Government committed to the passage of modern slavery legislation for our support for this trade agreement. We want to see that progress, as we did with the labour inspectorate.
The other thing that we asked for was an assurance, because the Indian Government and diaspora in this country have been somewhat confused by a coalition Government that, on the one hand, says this a good trade agreement and, on the other hand, says it’s terrible. They don’t know where things might go into the future. We said to the Government: to ensure bipartisan support for this, Labour would like to be at the events that promote the opportunities from this free-trade agreement. The Government has been OK, but I have to say they have dropped the ball on occasions. I’d like to say in this House that we want to be part of those events, not just for political purposes but actually to ensure that there is support for this across the House. As the other major party, being eliminated from those is, in fact, somewhat insulting and may be not reassuring to the Indian people of this country.
On balance, Labour will support this piece of legislation that enables the free-trade agreement to be brought into place. It makes some adjustments to legislation across the dairy industry, which is quite critical—across customs and excise, to ensure that we can monitor the inward and outward flow of goods to and from India—and it brings in a quota management system for the goods that we’ve negotiated to get into India: apples, mānuka honey, and kiwifruit. Where there is potential, the volumes are still small—let’s not overplay that—but they do have the potential to grow if you’re selling into a market of 1.4 billion people. Labour has always supported trade negotiations and agreements—good quality agreements. We have negotiated many of them, going back to the India free-trade agreement that Phil Goff in Government did, and the value from that has flowed from that. There’s the EU agreement, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. These are agreements that the major parties have supported and that New Zealand has benefited from.
Can I acknowledge—and I know the Minister for Trade and Investment has—the good work of the officials. This is tough work, and the officials, I know—given, I guess, the speed of this process—did have to commit to many trips to India. It’s not always easy for them over there, but they did a great job—the best they could. Labour supports the India - New Zealand free-trade agreement, and we will work with exporters and importers to build the relationship between our two countries.
STEVE ABEL (Green) (10:06): Thank you very much, Mr Speaker. The Green Party will not be supporting this free-trade agreement. I want to make it clear that the Minister for Trade and Investment likes to say we never support free-trade agreements, but, in fact, we did support the European Union free-trade agreement. There were some key components in that agreement that made it an appropriate one to support, one of the obvious ones being there being climate and environmental obligations placed on both parties to that agreement. There are no such equivalent obligations in this agreement, at but one point.
One of the most radical things this Government has done, as the most radically anti-environmental and anti-climate Government in a generation, is actually threaten the integrity of that very agreement, because it has backed down on the calibre of the stance we are taking in regard to the climate and the environment and is actually undermining the integrity of that EU trade agreement. Our ability to fulfil the agreement that is before us is going to be threatened by this absolutely preposterous—in the words of my colleague Mark Patterson: “preposterous”—commitment that we shall endeavour to invest $35 billion over 15 years in foreign direct investment (FDI).
I asked the Minister for Trade and Investment, when he was elucidating or expounding the value of the China free-trade agreement—$23 billion currently—to let us know what the foreign direct investment commitment was that New Zealand made to China in that China free-trade agreement. He refused to answer, because the answer is that there is no FDI agreement. There is no foreign direct investment component in the China free-trade agreement. This is an exceptional and novel precedent set here with India that I believe will come back to bite us, in a way that future Governments will be standing in this Parliament and lamenting, including the purple coalition that we’ve got today between Labour and National.
A wise man once observed that New Zealand First and the Greens have something in common, which is that we are both economic nationalists. We are not racial nationalists in the Green Party, however, and we’re not militarists. Economic nationalism has a very important lineage, and I believe, as my colleague Damien O’Connor alluded to, in this new Trumpian world—where the rule of law has been abandoned, where we’re back to “might is right”—we will quickly find out that our willingness to protect our economic sovereignty, our ability to produce for ourselves and process for ourselves and manufacture for ourselves, is all the more vital. Our globalised world becomes less stable once it is back to “might is right”, once we lose the rule of law, which has been rapidly abandoned by that very dangerous man occupying the White House right now.
That’s why we should be much more cautious about these sorts of agreements. One of the consequences of us being expected to invest $35 billion in India is that we thereby weaken our own chronic current account deficit because we’re exporting such massive amounts of capital that we should be better investing right here in New Zealand. Part of the problem with our current account deficit is we’re already outflowing profits from foreign companies owned in New Zealand and we have loss of sovereignty over our own economy.
In regard to the question of food production, this is very acutely brought into stark relief by what has occurred in this term of Government. We are seeing deindustrialisation of New Zealand, in part by an energy crisis, in part driven by a unilateral attack on Iran by the United States—again, Trump—but also by the fact that the likes of Heinz-Watties and Gregg’s and McCain are owned by overseas companies that are not as committed to upholding the ability of New Zealanders to produce and process our own food as a New Zealand - owned entity would be, as a locally owned cooperative or company would be.
If we are to try and recompense for some of the supposed investment we’re going to make to India, it might be by trying to get India to invest in New Zealand, but that actually exacerbates that problem. You actually then create another situation where you get more New Zealand companies and more of the New Zealand economy owned by an overseas economy. When are we going to have that honest conversation about the fact we haven’t thought very deeply about that part of the consequence of the last 40 years of neoliberalism?
When people on the other side of the House say if you like farmers, then you’ll support this free-trade agreement, that sort of glib, shallow thinking doesn’t take account of the fact that the growers down in the Hawke’s Bay right now have no one to sell their peas to because they don’t have processing capability. It takes no account of the effect of the impact on actual growers and producers because we’ve been outcompeted by cheaper overseas products and we don’t have our local commitment to buying New Zealand - made and New Zealand - produced and we’re losing the capability to even retain that.
It is not a zero-sum game. The question of loss of ownership and economic sovereignty and our means of production and processing and manufacturing is intimately tied up with the nature of this sort of agreement.
Katie Nimon: Are you finished?
STEVE ABEL: I haven’t. I’m just having a little think about what I want to say next.
Tim van de Molen: Get on with it.
STEVE ABEL: I could do that if you like. There’s another component to this that the Greens are not happy with—the lack of a decent Treaty commitment. This Government, we know, has gone to great lengths to undermine the Māori-Crown relationship, to both pick a fight with Māori directly but also to undermine Treaty obligations. What we see in this agreement undermines the indigenous rights of both New Zealand Māori but also the indigenous people of India, because their rights are not recognised in India either by this fair-trade agreement—free-trade agreement. I wish it was a fair-trade agreement. That is another thing that we’re not happy with.
I want to finish by pointing out that the nature of that commitment of $35 billion or $20 billion American dollars is so far from what we are currently investing in foreign direct investment (FDI) overseas. I pointed out in the first reading that our current foreign direct investment, if you add it up over the last 10 years, is well short of what this $35 billion is. I’m just trying to find the figure now. The idea that we’re somehow going to rapidly increase our FDI is not consistent with the track record we currently have. In fact, over 10 years, we’ve had an average of minus $28 million. It was a net disinvestment. Our total FDI in 2025 was $1.46 billion and we’re going to ramp that up by thirtyfold. It’s not credible—it is not credible. It is the duty of this House to sign our country up and our future generations up to deals that are actually going to be fulfilled. More than anything, I would be concerned that if we know we can’t do that, we should not have made that commitment to India. That is not a reasonable commitment for us to make.
The final component I’ll speak to is it seems extraordinary that we’re getting tariff deals on export apples and kiwifruit in return for us agreeing to develop an action plan designed to enhance India’s production and quality of those very products and hence enable them to compete with us on the products we’re trying to export to them at a tariff discount. It makes no sense, and that is why the Green Party will be voting against this particular free-trade agreement with India.
Hon ANDREW HOGGARD (Associate Minister of Agriculture) (10:16): I rise in support of the India Free Trade Agreement Legislation Amendment Bill on behalf of the ACT Party. Trade has generally had a very bipartisan approach across New Zealand over many years and it has led to a hell of a lot of the success that this country has in that we approach it looking to make it fairer and better for our exporters around the world. Now, we’re getting to a point where we have done a lot of deals and we are a very open economy. We don’t put many barriers on anyone coming to it, and you’ve got to ask the question: what is in it for some of these other countries? This does mean that we do get some of the concerns we have raised here but have been answered by the Minister for Trade and Investment and by the Opposition spokesperson as well around these concerns have been raised. We are not signing ourselves up to “we must do this”; it is an ambition.
But I do want to point to the fact that, as the Minister mentioned, there are a number of benefits here in this agreement, particularly for our lamb meat exports. I believe we have faced a 33 percent tariff into India. The Australians used to be on something similar. We had good trade into there. They got a reduction. They basically cut our lunch. This enables our sheep meat exporters to get back on a level playing field with the Australians. We’re the first country ever to secure a preferential access for apples, and, as has been mentioned, kiwifruit and mānuka honey. These are important sectors in New Zealand and we will get better access from that.
As a proud dairy farmer, I do want to touch on the fact that we’re not getting a lot of dairy access, but that’s probably no surprise to anyone in the dairy industry. I recall being at the 2019 World Dairy Summit, where the chairperson of Amul Dairy, Dr Sodhi, was speaking on a topic around South Asian trade or something like that. Completely out of the blue he decided to tell all 1,000 audience members that there will never be a free-trade deal with New Zealand for dairy access. It was pretty clear. We had just beaten India in the World Test Championship; that may have played into his reason to put the boot into New Zealand at that point in time, but we’re always going to be up against it.
But I guess the point I want to make is dairy is our largest—
Hon Rachel Brooking: Thank you, Donald Trump.
Hon ANDREW HOGGARD: Blame Donald—yep. Dairy is our largest industry here in New Zealand, and yes, it’s been particularly tough. We haven’t had great access through the India free-trade agreement (FTA), and previous to that the EU FTA. Excellent access through the UK FTA—the one praise that I’ll offer to the former trade Minister. That’s sort of a benchmark that we should aspire to in the future, quite frankly. But going forward, we do need to ensure that where we can we break down barriers for our dairy industry and open up access. We’ve got to be stronger on that because it is our biggest industry. We do need to make sure we are creating more access to more markets for it. It’s very important. But I do want to say we do support this bill and I commend it to the House.
Dr DAVID WILSON (NZ First) (10:19): I rise on behalf of New Zealand First to oppose this free-trade agreement. Just at this particular time, I would just like to take some grace from the House to remember the Hon Jim Peters MNZM, a true gentleman and a scholar, and his beautiful wife Robyn, who have tributed so much to New Zealand First. He was very acute and very astute.
A key question, what I reflected on overnight: is this agreement in our national interest? I think this Parliament owes it to New Zealanders to actually answer that question.
The national interest test is interesting. The Hon Priyanca Radhakrishnan yesterday was eager to point out that some people here are racist and xenophobic. It’s very interesting, because the Hon Phil Twyford was part of the process that led to the national interest test because he dared to question Chinese nationals buying houses and raising the prices in Auckland, and that kicked off the agreement between our leader and David Parker to come up with a national interest test. Well, I’ve got to say it’s just as well we’ve got one, because as a new member, and there are plenty of members here who have been here a lot longer than me and have a lot of experience in this House—it seems a shame to me that the Minister has left the room, but it’s very important for New Zealand to actually consider this. The process is one that troubles me.
We had a first reading, whereby the agreement had already been decided. It then went to a select committee, whereby the agreement had already been decided. We had a second reading where, in both of those occasions, we had an opportunity to say and voice our reasons around why we disagree with this FTA. Now we’re at third reading. Where was the debate on the agreement itself? Don’t we owe it to New Zealanders to have that debate? Where and when were we, as New Zealand First, given the opportunity to contribute to shaping this FTA?
We are a nationalist economic party, as the member from the Green Party said, and we hold the line on national interest, which is why we were so keen to get it in the place for us. My reflection on this is that at this point in our journey as New Zealand, we’ve got an awfully big job ahead of us to rebuild our economy and to add value here so that we’re not stuck in a constant primary produce export nation; that we will move towards more value-added exports and employ people on higher wages, which are all things that we as New Zealand First really, really want for our country.
Let me say this about free trade. This one doesn’t seem “free” to me—this one seems more expensive to me—but, yes, absolutely: opening up the opportunity to trade with the rest of the world is fundamental to this country’s success. However, we need the ability to trade, and we don’t want to trade away our competitive advantages. What we are playing with here are three crucial competitive advantages that New Zealand has in the world through horticulture, agriculture, and, of course, honey. These things are really important to us, so there is reason for us to take some care around what we do with this free-trade agreement.
Now, the one that has come up in debate and drawn a lot of heat is this outward investment of $35 billion to India. What has not come up is the fact that that investment is made on behalf of New Zealand by this Parliament for the private sector to invest. I’d like to know where they are—I’d like to know where they are. Have we lined that up? Have we questioned them? Have we talked to them about how we’re going to achieve this? Or have we just made this agreement up as we’re going along? There are a number of things here that we are still not happy with, and we feel, as others do, that we needed the chance to actually participate in the development of this FTA.
Immigration is being traversed quite a lot here. The investment that we just talked about, the $35 billion—what about the trade imbalance? We’re dealing with a country that is 280 times our size. Do you think those two previous things add up in light of that, and the rising middle class in India? It is huge. They will swamp us if we are not sure about how we deal with this agreement. And, yes, I agree with the Minister and he has worked extremely hard and I agree with him on the Chinese FTA. That is a true reflection of us taking on one of the biggest nations in the world and coming out with a good deal, right? It’s worked for us, and we agree with that. However, this trade imbalance is really concerning for us. We know what we’re dealing with here, and there are a number of things around it.
Let me just take the albumins, for example, reflecting what I’ve just said. Albumins go into value-added products, so we’re exporting them. So, come on, why would we do that? Why would we not keep those important ingredients, along with all the others—the bioactives around mānuka honey and the bioactives, actually, and biofunctional foods around kiwifruit, for example; our apples; the list goes on. Why aren’t we investing that money in our own industry so that we can export those value-added products and take the benefit here for higher-cost, higher-wage jobs? It’s so, so important to us. The rules of origin—we didn’t cover much about that, but, essentially, those ingredients go into other products and other nations will be interested in them. How are we going to keep track of the rules of origin of our exports in that process? Good luck with that.
The agricultural cooperation quotas done through the agreements and the action plans that we have in place—now, do you think that that’s not important? Actually, I do think that’s important that we’re going to be training India how to grow apples and grow kiwifruit. I do actually think that’s a bit of an issue for us. We may have missed that article 9.10 allows India to impose proportionate remedial measures to rebalance the concessions given to New Zealand under its tariff schedule if India determines that New Zealand has not fulfilled its commitment to investing $35 billion in their economy.
There’s so much more here. I’ll jump down to financial systems. We’re jumping into bed with one of the most advanced countries in the world in terms of technology, and we are looking at sharing our cooperation on digital payments, on unified payments interface integration, fintechs, digital currencies, central bank digital currencies, data governance and sovereign data, scams, privacy, and financial sovereignty. We haven’t resolved those things ourselves, and yet here we are. It’s in the free-trade agreement. We’re just going to go right ahead and join up to what’s happening with India and see if we can manage ourselves through that process. Those are huge things. Blockchain is coming at us like there’s no tomorrow. Do you think that we need to be concerned and involved in those processes with our new partner? Why is it even here? Why is it even in this agreement?
We understand that our coalition partners want to usher this through, and we can see the opportunity, as well—but as this is already agreed and we have had little chance to influence the outcome, were it not for the Labour Party agreeing to this FTA, it could not be called a Government bill. We’ve got a problem here right from the start, and this debate opened up yesterday, as well.
Suffice to say, we believe that New Zealanders deserve to know that our national interests are uppermost in our considerations. New Zealand First, our party and our party’s members and its constituents, are not convinced, and we believe that many of the citizens and voters that support the parties in Parliament here are also in that place supporting them, similarly concerned. So we’re going ask New Zealanders: do you believe this is a good deal?
ASSISTANT SPEAKER (Maureen Pugh): The member’s time has expired. I’ll just use the opportunity to point out to members that this is a debate not on the free-trade agreement but on the enabling legislation, and, also, to the member Dr David Wilson, it is inappropriate to mention the names of people who may or may not be in the House.
RICARDO MENÉNDEZ MARCH (Green) (10:30): Thank you so much, Madam Speaker. Seeing as this is the third reading, I just want to reflect a little bit on the debate and processes that we followed.
I think there is something to be said about the reality that, throughout history, trade has been a backbone of development of all peoples, in exchanges of cultures, goods, and ideas that have led to innovation. But as we evolve, and our societies become more connected, in my view trade deals should first and foremost benefit the working people of both nations involved in it. The legislation enabling it should work towards that as well.
When I look at the legislation enabling this free-trade agreement, and the rhetoric, I think, that has been thrown in this debate more broadly, a reflection that I wanted to make—particularly in the contributions from other speakers, including from the Government side—has been a lack of commentary on, for example, whether this legislation which enables a trade agreement, furthers or protects labour rights. In the legislation, I don’t see anything that, for example, enables binding language in relationship to labour rights. It’s not covered in the dispute settlement chapter either. I think this is something that is really amiss, because we should be concerned about the fact that our trade agreements are not enhancing labour rights amongst both nations. Or, in the legislation that we’ve seen here, and submitters touched on this in the select committee process—so reflecting on some of our supporters’ concerns on this, I do think that the non-binding language on labour rights is particularly concerning due to the fact that India does have, unfortunately, a poor track record when it comes to labour rights. There are many workers in India who unfortunately still experience very little to no labour rights.
I think our contribution, both in the process in this legislation and more broadly whenever we design trade deals, should be seeking to enhance the wellbeing of working-class people across the globe. So I think this is particularly concerning. I know that, through this debate, while not explicitly in the legislation enabling the trade agreement, immigration has nonetheless still been a component of the debate, including within this legislation because of the rhetoric that ties to it. I would encourage any members that would have raised concerns throughout this debate on the immigration components of the deal to reflect on whether their concerns are actually coming from a place of wanting to enhance labour rights across the board or whether they come from just more broadly scapegoating.
We do share, though, our concerns with New Zealand First on the ability to genuinely enact some of the obligations on foreign investment, and actually being able to meet them; and echo the risks that exist of the unilateral ability for India to call back some of the tariff cuts if these are not met. I think this is something that particularly concerns us, because we have not seen the evidence that we’ll be able to meet those commitments. Therefore, the sort of merit off this legislation which enables a trade deal should then be questioned, as a result. I particularly questioned the timing of this legislation to enable the trade agreement due to the reality that I think New Zealanders deserve a robust public debate on the merits of this trade deal. It should not be dangled as a sort of “election win” or sort of “election cycle win” by the Government members. I want to make sure that New Zealanders remain confident that the trade agreements that Governments are signing us up to genuinely are to the benefit of everyday working people. I regret that this debate, and this process, has not enabled this to be the case.
I also welcome and want to reflect on the committee of the whole House process that we underwent in this House. It was definitely unusual to see New Zealand First members blocking closure motions, and I welcome them onto scrutinising Government bills a bit more. Like, I think this actually is a good thing, where there are differences in Government parties, that we actually do enable Government parties to voice their differences and actually adequately try to scrutinise this. This is something the Green Party in the previous two terms we were in Government actually took really seriously. I would welcome this as actually a healthy part of our democratic processes. I think it’s good practice for members who may have not had the opportunity to perhaps scrutinise Government bills to partake in these.
I think the more we’re able to have legislation that follows due processes, that engages with the broader public, the committee of the whole House, they just actually will be a lot richer and will be able to reflect those contributions. I do not think this legislation or the trade deal process has actually brought the public on board with enough information and engagement.
TIM VAN DE MOLEN (National—Waikato) (10:35): Thank you, Madam Speaker. I’m happy to take a call here on the final reading of this bill. It’s a good piece of legislation that gives effect to an agreement that will be very valuable and meaningful for New Zealand. It’s a shame the last couple of speakers have demonstrated a lack of understanding about the agreement and what is included; and, indeed, have not spent anytime focusing on the legislation itself.
We made some pretty straight forward changes around the quota management process, to ensure that it was efficient, and reduced red tape where possible. We also put in stronger oversight for the Minister around the audit process; ensured that the Ministry for Primary Industries was accountable, like other quota managers; and shortened up the appeal process time frame. So all succinct things that I am confident will deliver a better outcome for us. So I commend it to the House.
VANUSHI WALTERS (Labour) (10:36): Thank you, Madam Speaker. Like my colleague, the Hon Damien O’Connor, I rise to speak in favour of the India fair-trade agreement bills—what are now two bills before us—at this third reading. As my colleague has pointed out, it isn’t the agreement that Labour would have negotiated, it’s not the legislation that precisely we would be bringing to the House, but it is a step in the right direction. One that allows us the opportunity to grow and develop the relationship between the two countries over the 15-year horizon.
I know, Madam Speaker, as you’ve pointed out, we’re not speaking about the agreement but rather the legislation specifically. There is, of course, the important tether between the two, which is the commencement date. As the Minister spoke to in the chair earlier, the finalisation of the agreement itself is very much waiting for this legislation to pass, and then the agreement will come into force as well. So with the Speaker’s permission, I did just want to acknowledge not only the Minister who’s concluded the agreement but also my colleague the Hon Damien O’Connor, and the Hon Nanaia Mahuta—last term—for her work, which I’ll speak to briefly in a moment. But also to thank Vangelis Vitalis, our chief negotiator; Richard Griffin, who was the lead on the legal team; and the broader Ministry of Foreign Affairs and Trade staff, who played both a role in the agreement but also the drafting of the legislation, and who were in front of us at select committee answering many, many questions.
The agreement itself runs into 20 chapters that cover a range of issues that I won’t speak about, because I feel like, for me, the important thing in terms of what it’s doing is opening lanes. Both lanes in terms of relationships across academia and trade and people-to-people contact, and really ensuring that New Zealanders into the future are fluent in both worlds. So from an internationalist’s perspective, my view is that this is not only appropriate, but so important in changing times. Others have referenced Liberation Day in the context of a changing world. That is important for the legislation that we’re bringing to the House; it is important for timing and making sure that we’re making the most of opportunities not only for us but for the young people coming out of university who are looking for those job opportunities. The Minister mentioned that one in every four jobs are connected directly to trade. Those are direct connections. There is so much opportunity ahead that the legislation—that, hopefully, we will be passing today—will present for young people, as well.
If I could also recognise the role of the Indian community, who have rallied around the agreement, and the legislation to give effect to the agreement, including the New Zealand Indian Central Association under the president Veer Khar, who’s welcomed the agreement publicly and pushed for cross-party support. And the India New Zealand Business Council, led by the chief executive Sunil Kaushal, who called the signing of the agreement “a momentous occasion”. I know those community leaders have been watching this legislation pass through the House, and will be welcoming the passage today.
As I mentioned earlier, getting to the signing or to passage of legislation, often requires work across parties for a number of years. Certainly, that has happened in this case; beginning, in many ways, in February 2020 with Labour’s India - New Zealand 2025 plan that talked about the development of the relationship to this point.
And that focused on things like strengthening our PhD programmes with the University of Auckland, growing diplomatic relationships, and opening technical dialogue on how cyber-relationships could develop and evolve. I mention this because we had some critique from New Zealand First members about how we were going to engage in the cyber-technology space. That work has been done over the last several years and it replicates some of our agreement with the EU and the UK as well. So this isn’t a piece of legislation that has arrived in the House without that work being done in the background. I do think members ought to be confident and that there has been that cross-party support for years and for years.
Now, in terms of getting to this legislation being in the House, Labour was privy to some discussions in the lead up to the legislation being presented to the House. We were very firm on our view that there was a need for protections and the labour space to match this legislation being brought to the House. So capacity for the labour inspectorate, but also legal advice being provided to those individuals who were coming to New Zealand, to ensure that we didn’t end up with a problem where we would have an escalation in terms of individuals who were being exploited through entering New Zealand on those visas. We will continue to monitor that as this legislation passes and is enforced.
I would caution the House on the irresponsible use of language in terms of those visas. I spoke to this at the second reading of the bill yesterday in that the settings when you look at them—and you just need to read through the settings of the visas—do not stretch our commitments to India in a grandiose, new, novel way. They reflect the visas that we already have under New Zealand law. They continue to allow for the Minister’s discretion in terms of policy settings, much like the other visas that we have as well. Indeed when you look at the student visa settings, they are lower in terms of the guarantee of employment. I do think that once this legislation passes, I would just caution members of the House to be responsible with their language in regards to what this legislation does and what it does not.
Likewise, in terms of the investment commitments that multiple members have spoken about today and yesterday in the House, this is a duty to promote and it is not one where benefits in terms of tariff reduction can be clawed back retrospectively. So at the 15-year point, if a determination is made by India that we have not met that promotion obligation, the businesses, the exporters who have benefited over that 15-year period time of time cannot have those benefits removed from them. It is very much forward-looking.
Yesterday, in committee of the whole House, the Minister was questioned by New Zealand First members about the investment provisions into New Zealand, and the Minister made the very good point that those investment provisions in this legislation are a cut and paste of the provisions that are offered under other agreements as well. So there isn’t preferential treatment. There is nothing new here, and if New Zealand First members are objecting to the investment provisions internally in relation to this agreement and this legislation, then one would think that they would also object to the identical provisions in the EU agreement, which they did not disagree with. That is the point of discrimination that I spoke to earlier as well. So again, for those members, if they are validly concerned, that needs to be a line that they hold across agreements, and it is simply not, in this case.
New Zealand First members also lamented many times that they hadn’t had sufficient say in this agreement, and asked when New Zealand First had. They had it in Cabinet. They had more of a say than many parties in this House and there was certainly an opportunity if their intention was to change or alter the agreement and the legislation in any way, to do it in that scenario. As a member of the Government, in terms of committing to this legislation, what should have happened at the stage that Cabinet agreed as a whole was that there should have been a commitment from the Foreign Minister to give effect to the promotion clause of that agreement, which must now be worked on. There must be a commitment going forward.
Politics is politics, but we must remember that this is one in four jobs we’re talking about in terms of export. There is an opportunity here for New Zealand to begin a relationship that we can certainly develop and improve on in the coming decade-plus, and we would hope that members across the House can continue to work on this in the coming years ahead. I commend this bill to the House.
Hon Dr SHANE RETI (National—Whangārei) (10:45): Thank you, Madam Speaker. I’m very pleased to be a small part of this bill and to support it. For those naysayers in the House over yesterday and today, I think the mantra, with time, will become true; that success has many fathers and failure will be an orphan. And I think those orphans will become fathers very quickly. With that, I commend this bill to the House.
ASSISTANT SPEAKER (Maureen Pugh): This is a split call. The Hon Dr Phil Twyford—oh, sorry, the Hon Phil Twyford.
Hon PHIL TWYFORD (Labour—Te Atatū) (10:46): Thank you, Madam Speaker for that temporary elevation. I want to just add a few comments—actually, three key points to those that have been made by my colleagues in this debate.
As has been said a number of times, this agreement is far from perfect. It’s not the agreement that Labour believes that it would have negotiated, but on balance—and this is the important point—we believe that this agreement is in New Zealand’s national interest, and that’s why Labour is supporting it.
The key elements, I think, are significant reductions in tariffs for a list of key New Zealand exports. That will make a difference. That will create jobs and generate wealth that our country needs.
The argument about immigration and labour mobility in this agreement has been revealing in many ways. I want to echo Vanushi Walters’ comments that the immigration provisions in this bill do not open the floodgates, as some people have been arguing in this House and outside. They are actually quite constrained and quite modest and fit well within New Zealand’s existing policy settings.
The third and hotly debated issue has been the question of the commitment that New Zealand makes in this agreement to promote up to $33 billion of investment from New Zealand into India over 15 years. And we’ve raised questions about that from the beginning of this process. Questioning its credibility and how wise, how prudent it is to have that kind of commitment in this agreement. Ultimately, it is about best endeavours. It’s a commitment to promote, and the agreement does contain mechanisms for India, over time, to be able to review and assess whether or not New Zealand has met its commitment in this regard. I guess it’s our hope that New Zealand exporters will price in and will factor in any risk associated with that clause. And by the time that the Indian Government does come to assess whether or not we’ve met our commitments, that in fact so much shared value will have been created through this agreement that that particular provision will pale into insignificance.
I want to say, in relation to New Zealand First and Green Party colleagues in this debate, that it is always OK, I believe, to be debating economic policy and policy considerations around trade agreements, whether you’re coming from an economic nationalist perspective or other perspectives. And to David Wilson, I would say that I don’t believe anybody, certainly on this side of the House, has suggested that New Zealand First’s opposition to this bill or its conduct in this debate is in any way racist. I don’t think it is. But, actually, when New Zealand First’s leaders in this House routinely denigrate people on the basis of their ethnicity or country of origin in this House and in the community and use anti-immigration and anti-migrant rhetoric, that ramps up a hostile and abusive climate towards people who have come to this country as migrants at some time in the past, that is racist and is highly regrettable.
I want to make the final point that the geopolitical environment really is critically important in this, and Vanushi Walters made, I thought, some excellent comments on this. The direction of US foreign policy under the Trump administration, really, removing the United States as any kind of reliable ally, whether it’s in trade or security or anything else, has meant that under New Zealand’s independent foreign policy—which, hopefully, will become a lot more independent after the coming election—we have to look at other partners and other relationships. India is the most populous country in the world, well on the way to becoming a great power. We must develop and deepen our bilateral relationship with India and other friends in Asia, including ASEAN. This trade agreement is an important way that we can do that, and so I’m glad to commend this bill to the House.
KATIE NIMON (National—Napier) (10:51): To the doubters and the haters: the doubters that thought we wouldn’t get this done in a term, and yet here we are, and to the haters who think this is not going to make a difference, it will. It’s going to make a massive difference for the people of Hawke’s Bay and for New Zealand. With that, I commend the bill to the House.
Hon PRIYANCA RADHAKRISHNAN (Labour) (10:51): Thank you, Madam Speaker. This legislation, as many of us in this House have said, is enabling legislation. It brings the New Zealand - India Free Trade Agreement, which has already been signed, into effect. It does a bunch of things: it amends the Tariff Act 1988, and, basically, it makes changes to allow for preferential tariff rates that have been agreed through the free-trade agreement (FTA). That is good.
As many of my colleagues on this side of the House have already said, while this is by no means a perfect FTA, and it is not one that Labour would have necessarily landed on—and I will touch upon some of that in a short while—it does for the first time give us preferential access for New Zealand honey, for example. That has a 66 percent tariff that will be cut to about three-quarters of that over a five-year period, and this amendment to the Tariff Act allows for this to happen. New Zealand wine: a 150 percent tariff going down to at least 50 percent, or perhaps a quarter—25 percent—over 10 years, and further reductions that will match improvements that are granted to future FTA partners, as well. This part of the legislation goes towards allowing for the tariff reductions.
There is also a part of this legislation that goes towards investment screening, and so it amends the Overseas Investment Act 2005 and the Overseas Investment Regulations 2005 to lift the consent threshold for non-Government Indian investors in significant business assets from $100 million to $200 million. On the point of the investment clause, though, that is a risk that Labour has repeatedly raised with the Government. It is a risk of the necessity for effort towards NZ$33 billion being invested in India, but, again, there are a number of companies that asked for bipartisan support for the FTA and they, ultimately, will have to wear the risk if, at the end of the 15-year period, India unilaterally decides that New Zealand hasn’t put enough effort into progressing that $33 billion of investment.
That is one aspect of it that we didn’t agree with. But, on balance, as many others have said, we have supported the agreement and, therefore, we support the enabling legislation that we are debating in the House today, as well.
Of course, this legislation also allows quota management systems for apples, for kiwifruit, and for mānuka honey to be established through regulation. An Amendment Paper that was already debated in the committee stage has split the bill in two, which brings me to a point around the process of this legislation, given that it is enabling the FTA off that, as well.
The Government knew that they didn’t have the numbers to pass this legislation and that they would need Labour’s support to bring the FTA into force. Astonishingly, they chose to exclude us from the negotiation phase of it, from the early briefings, and from any copy of unredacted advice at any point of this, and that is not how enduring trade policy is made. That is not how you treat the other major party in Parliament who you will need to rely on to rescue your legislation.
Hon Todd McClay: What did you do when you were in Government? Not an invite, not a single shared briefing.
Hon PRIYANCA RADHAKRISHNAN: Well, the Minister for Trade and Investment said, “What did we do in Government?” We didn’t have a split Government that was fighting amongst themselves where one part of the Government wouldn’t support what the other part of the Government was doing, where the Foreign Minister exited the chat, and—
Hon Todd McClay: What about the CPTPP?
Hon PRIYANCA RADHAKRISHNAN: If we’d relied on the other major party in this House, we wouldn’t have treated Parliament as an afterthought. We would have included the other major party right at the start of that process.
This is a shoddy process from the Government, and I will also then make the point that while the previous speaker Katie Nimon, who resumed her seat before I spoke, said that there were many doubters who claimed that this Government wouldn’t be able to negotiate within one term, implying that it was all down to this Government’s negotiation skills. It wasn’t.
Tom Rutherford: That’s right—got it done.
Hon PRIYANCA RADHAKRISHNAN: It wasn’t, Tom Rutherford. That’s not right, because it was very clear from the Indian side that geopolitical changes had meant that while New Zealand also had to look to diversify our trade, so did India. India has been actively negotiating 10 trade agreements in this time, whereas they had not been quite so inclined to be supportive of bilateral trade agreements prior to the US administration.
While members opposite may quibble about this, it is very clear from the Indian side that it wasn’t down to just the power of negotiation by this Government. Of course, there was a huge amount of work that was done before by the former Labour Government—by Nanaia Mahuta, by David Parker, and by Damien O’Connor—to strengthen the foreign relationship between the two countries that led to this, as well, but the major point there is the shift in geopolitical necessities, or the US administration, basically, requiring India to look differently.
The other point that I wanted to touch on in terms of what I said I would come back to previously with regard to the fact that Labour would have done this differently is our focus on our trade-for-all policy agenda. That was developed by David Parker in the previous administration to ensure that trade delivers broad, equitable benefits across communities while also upholding Te Tiriti obligations and environmental standards, none of which, of course, is taken seriously by the current Government in terms of their focus on negotiating trade agreements.
I will also quickly touch on some of Labour’s caveats. When we agreed to support the FTA—and now the enabling legislation, as well, which brings that agreement into force—we were very clear that we would also want to ensure that we strengthen protections against migrant exploitation in this country and that the Government then needs to expand the labour inspectorate to fund at least 14 additional staff that are focused on addressing migrant worker exploitation, serious and complex immigration offending, and a few other things around faster visa changes and progressing the Modern Slavery Bill, all of which the Government has agreed to in principle but must also deliver in full, including progressing the Modern Slavery Bill. Of course, the previous Government had done a fair bit of work on that, and all this Government needs to do is to progress that work.
I also want to touch briefly on the reason why certain other parties like New Zealand First have stated quite clearly that they won’t support either the FTA or this enabling legislation, and that is the narrative around immigration. I agree absolutely with what my colleague the Hon Phil Twyford has said. I know that David Wilson in his contribution specifically pointed to what I have said in the second reading.
To underscore or to highlight what Phil Twyford said in response, which is absolutely correct, I was not referring to any New Zealand First members’ contributions in the House on this legislation. What I was referring to were comments made by the leadership of New Zealand First, by senior Cabinet Ministers, who have continually subjected Indian New Zealanders to a rhetoric that paints them as a problem rather than a community to be valued, where through their claims of “unfettered migration”—I won’t repeat the supposed hyperbole by some of their senior Cabinet Ministers where they paint Indian migration to be something that is out of control, a narrative that others an entire group of New Zealanders, that has led to a barrage of vile and hateful comments online, graffiti outside an Auckland school that a number of Indian children attend, graffiti that calls for violence against Indians. That is hateful, racist, and xenophobic. We all know that online violence can translate into physical violence in real life as well, and therein lies the irresponsibility of the Foreign Minister and senior Cabinet Ministers to stoke division and hate and to make a group of people feel less safe and like they don’t belong, simply because they may have a different skin colour or have been born somewhere else. The Prime Minister, who did absolutely nothing, called it out as racist but refused to act on it. For a party that talks about being tough on consequences, there were no consequences here, and that is wrong.
MILES ANDERSON (National—Waitaki) (11:01): Thank you. Madam Speaker. I’m thrilled to be able to take this call on the India Free Trade Agreement Legislation Amendment Bill. As the chair of the Primary Production Committee and as a farmer and grower myself, this piece of legislation is going to make a huge difference to the primary producers in New Zealand. I think it’s a disgrace that some parties are scaremongering to justify their opposition to this bill. With that, I’d just like to commend the bill to the House.
Dr Hamish Campbell: Madam Speaker.
Hon Rachel Brooking: Madam Speaker.
DEPUTY SPEAKER: Hamish Campbell—Hamish Campbell clearly was up first.
Hon Rachel Brooking: He hadn’t sat down; he hadn’t finished.
DEPUTY SPEAKER: No, I’ve made the call.
Hon Rachel Brooking: Point of order.
DEPUTY SPEAKER: I’ve got a point of order from the Hon Rachel Brooking. I hope it’s not questioning my judgment. I have got very good peripheral vision, and if it’s a point of order about something else, I will take it.
Hon Rachel Brooking: It’s a clarification, Madam Speaker, and that is that the member who had been making this speech, Miles Anderson, had not finished when the next member was standing up next to him. He was standing up before me—I’m not disputing that question. Is the ruling now that you can stand up whilst a person is still taking their call and that that counts?
DEPUTY SPEAKER: No, it’s not, but Miles Anderson had clearly suggested he was signing off, at which point Hamish Campbell stood. You both stood up really quickly, but Hamish Campbell was first.
Dr HAMISH CAMPBELL (National—Ilam) (11:03): Thank you, Madam Speaker. It’s a great honour to stand up and speak in support of the India Free Trade Agreement Legislation Amendment Bill. This is a once-in-a-generation agreement that gives our exporters amazing access to 1.4 billion customers and an economy which is soon going be the third biggest in the world. Therefore, I commend it to the House.
A party vote was called for on the question, That the India Free Trade Agreement Legislation Amendment Bill and the India Export Quotas (Apples, Kiwifruit, and Mānuka Honey) Bill be now read a third time.
Ayes 93
New Zealand National 48; New Zealand Labour 34; ACT New Zealand 11.
Noes 29
Green Party of Aotearoa New Zealand 15; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
Bills read a third time.
DEPUTY SPEAKER: I declare the House in committee for consideration of the Local Government (System Improvements) Amendment Bill.
Local Government (System Improvements) Amendment Bill
Committee of the whole House
Part 1 Amendments relating to system improvements
CHAIRPERSON (Maureen Pugh): Members, the House is in committee on the Local Government (System Improvements) Amendment Bill. I am aware that the Government released two Amendment Papers containing substantive new policies just a few hours before the House started sitting. This committee stage may, therefore, take longer to ensure that members have time to fully examine those new Amendment Papers. We start with Part 1, which is the debate on clauses 4 to 22, “Amendments relating to system improvements”. The question is that Part 1 stand part.
TANGI UTIKERE (Labour—Palmerston North) (11:06): Kia orana, thank you, Madam Chair. Thank you for identifying the fairly late landing of those two Amendment Papers. My first question is just seeking some clarity to help us move through this as swiftly as we can but also in a logical form. The two Amendment Papers from the Minister of Local Government—the most recent ones—I take it that 803 is dealt with in Part 1, and his other one is dealt with in Part 2, but, perhaps, the Minister can assist the committee in terms of clarifying that.
I’ll move on to couple of the issues that I have in terms of wanting to raise them with the Minister. The first is clause 4. I’m just signalling that—certainly as Labour’s local government spokesperson—it is my intention to move through these matters in a chronological clause order, and as I dispense with things, I’ll just move on to the next one, rather than jumping all around the place. If we start with clause 4, this is the amended purpose for the piece of legislation. What it is seeking to do—and this was clarified in the in the select committee in terms of a starting point—is to, effectively, remove a broader approach in terms of what the purpose of local government is.
Now, what we see there is a little bit of a change in terms of the ordering of the language that is there. But my question to the Minister is: why is it the case that the Government intends to simply remove a reference to local government, given they are decision makers and representatives, just like every single person in this Parliament is, of the local community? Why is it that there is a need to remove that reference of, effectively, councils and decision makers playing what is a clear broader role in terms of meeting the needs of local communities and replacing it with what is a much more narrow definition in terms of that focus on infrastructure? This is not to say that infrastructure needs are not being addressed by local government, perhaps, in terms of their consideration. There are other conversations around revenue around that and what the prioritisation might be, but this is fundamentally around what the purpose of local government is in terms of its existence. So my first question is really around why that broad nature of the role has been removed and a pure narrow focus on the issue of infrastructure, on services, and on the regulatory functions that councils undertake.
Hon RACHEL BROOKING (Labour—Dunedin) (11:09): Thank you, Madam Chair. I will follow Tangi Utikere’s lead in terms of how we’re working through this, but I do very much encourage the Minister of Local Government to engage with us on these late Amendment Papers and where he sees those fitting into the debates—it’s just a very basic process question there. But my question on clause 4, which is “Section 3 amended (Purpose)” is that, as we’ve just heard, there’s now this focus on things—so that is infrastructure, public services, and performance of regulatory functions. And I’m looking at the bill, rather than one of the Minister’s Amendment Papers. So noting that there is this big Amendment Paper 565, and that appears to be the whole bill, but in the Amendment Paper form, and then there are these two newer Amendment Papers released yesterday, and they are 803 and 755, so we might have a bit of jumping around. I’m looking just at the bill as it was reported back from select committee.
As I was saying, the purpose moves on to things, and those things are infrastructure, public services, and performance of regulatory functions. When I looked back at the Local Government Act 2002, there doesn’t appear to be any definitions for “infrastructure” or “public services” or “performance of regulatory functions”. I couldn’t see one in either what is reported back from the select committee or when I’ve been looking at the Minister’s amendments. Could he please comment on whether he expects that there will be interpretations or definitions for them somewhere, that I’ve misplaced, and if there are no definitions for them, then what does he see them in?
In terms of infrastructure, we’ve just had a lot of discussion in the resource management replacement bills about infrastructure and whether or not this can include, say, green infrastructure—so it might be trees that are going to soak up the rain and prevent flooding, can they be considered as infrastructure? That’s a real question.
We’ve had the Aotearoa Circle do a lot of work on the importance of nature-based solutions. Does that fit into the definition of “infrastructure”. Then we’ve got public services, and I note there’s other changes that we’ll get to that talk a bit more about what might be public services. Does the Minister think that a public service would be putting on a Matariki festival. Is that a public service? Or does he see public services as being more about the libraries and the swimming pools? Where are the public services?
I think the simplest one in that list of three is the performance of regulatory functions. I take that to mean—but I’m interested in the Minister’s comment as well—that those are the functions that, at the moment, councils have under the Resource Management Act, that they have under the Dog Control Act, that they have under the reserve management Act, that they have under the Waste Minimisation Act, and under the Litter Act—and all the other pieces of legislation from this House that require councils, and local authorities, to undertake regulatory functions. That one is much more simple, and I’m just looking for the Minister to say “Yes, yes, Rachel Brooking, you’re quite correct. The performance of regulatory functions are those that are required by legislation that comes from this place.”; if not, if it’s anything wider than that.
The second questions relate to those definitions of “infrastructure”—how narrow or wide does the Minister expect it to be? And public services again—how narrow and wide? Are these terms defined anywhere, or does he expect them to be interpreted in relation to the definitions that are found in some other pieces of legislation?
My first question was, again, if he can take us through his Amendment Papers and what parts of the debate he expects those to be covered in.
MIKE DAVIDSON (Green) (11:14): Thank you, Madam Chair. Like my colleagues, I too want to work through this one clause by clause and also get some clarification exactly where the new Amendment Papers sit in this debate we’re having at the moment.
I do also want to start on clause 4, the amended purpose, which is, obviously, changing section 3(d), which is around the broad role in promoting social, economic, environmental, and cultural wellbeing, and obviously that’s been changed to focusing on infrastructure, public service, and the performance of regulatory functions.
My question is actually whereabouts environmental enhancement and protection sits within that scope, which is obviously quite an important remit that councils have had for a long time, and to remove that visibility from the purposes is concerning. I do have an Amendment Paper that is time stamped 16 September 2026, 09.07, which just adds one wee extra point to this clause, so there will be a (d)(iv) “environmental enhancement and protection”.
I think it’s really an important addition to the purpose, because it does ensure it’s in plain sight, that roles of council will be to look after their environment, because the environment is actually really important in many aspects, including the waterways, wetlands, reserves, that also act as a kind of infrastructure. I know my colleague talked about the definition of “infrastructure”, so it’s important that we do consider what that looks like, but the actual role of councils in environmental enhancement and protection I think is also required into this purpose, to ensure that they have the ability to clearly be outlined with the role of the local government, that that is a core component of the purpose of local government.
My question is: will the Minister accept my tabled amendment around including environmental enhancement and protection, and if not, why not? Thank you.
Hon SIMON WATTS (Minister of Local Government) (11:16): Thanks, colleagues, for questions, and I will do my best to engage regularly in regards to the back and forth on the questions I’m being asked in regards to this bill.
In regards to the questions asked around the Amendment Papers (APs) from my perspective, Amendment Paper 755 amends both parts of the bill, and Amendment Paper 803 deals specifically with Part 1.
From a point around definition, the definitions included—
Hon Rachel Brooking: Point of Order. Can the Minister put up his microphone? And can you repeat what you said about the second Amendment Paper? You said something; I couldn’t catch it. Thank you.
Hon SIMON WATTS: Amendment Paper 803, which is in regards to development contributions, it does not amend the bill as reported back, it is all new in that context. It is related to Part 1 from my assessment. Obviously, the Clerk may have a differing view but I’m just giving you my view.
CHAIRPERSON (Maureen Pugh): Can I just suggest that the Schedule 2 that is in that AP is in Part 2.
Hon SIMON WATTS: OK, we’re all on the same page on that?
Mike Davidson: Point of Order. Sorry, I also couldn’t hear the very first amendment, so—
Hon SIMON WATTS: I’ll repeat again. Thanks, colleagues, I was just giving you all some kudos, engaging in saying we’ll do so proactively. In regards to AP 803, that Amendment Paper will relate to Part 1. In regards to Amendment Paper 755, that amends both parts of the bill.
In regards to the questions around definitions, I refer the member to section 197, which does include a number of definitions regarded, that was actually some of the feedback from the select committee process, to have more defined terms as part of the legislation.
There was a question in regard to community facilities asked by the member, and the definition of that. The core services are services that the public generally accept as being core council business. In regards to core services related to community facilities—which was an area that the select committee requested to be added to the bill, which we accepted—would include aspects such as libraries, museums, reserves, and other community and recreational facilities.
CAMILLA BELICH (Labour) (11:19): Thank you, Madam Chair. It’s a pleasure to take part in this committee stage on the Local Government (System Improvements) Amendment Bill. I just had a few questions around the initial clauses for 4, 5, and 6, which, if I may surmise to say that they are looking at, essentially, what the Minister or the Government is amending the purpose of the local government system to be.
The reason I wanted to take a call on this—and I know colleagues have had some very specific questions about this—is to ask the Minister of Local Government this. I stand here as an MP from Auckland and I know that the Minister is also from Auckland, and I reflect on the comments that the Minister and his colleagues have made around the importance of localism over an extended period of time. I wanted to ask; how does the stated role of local authorities fit with the Minister’s—and I know we’re talking about the amendments in more detail today. But in terms of how they fit with the purpose, how does he see the local governments that are working within New Zealand—specifically speaking from an Auckland context—being able to meet the priorities that they establish for themselves and their communities when the Minister and his colleagues have consistently undermined that through making unilateral, unconsented decisions around the internal process that lead to decision making for their community?
Does the Minister think that local authorities—when we look at their purpose and when we look at how they must “play a broad role”, as it states in clause 4, “in meeting the current and future needs of their communities”, are they able to make independent decisions, as local representatives, about the types of views and perspectives that they take into account before setting their priorities? It’s all very well to say that local government must, as a purpose, meet the current and future needs of their communities, but how, Minister, are they meant to be able to do this when they have central government coming in and stating that the way that they choose to make their decisions and the people that they choose to be involved in what they determine is important for their local communities are unilaterally—according to central government—not good enough?
Hon SIMON WATTS (Minister of Local Government) (11:22): Thanks, Madam Chair. Well, firstly, I strongly refute the statements made by the member in regard to this Government. What we inherited as a Government was a situation around the purpose of local government that was “wellbeings”. Well, no one in this country can define the scope of wellbeing. It, basically, includes everything, and, as a result of that, we’ve got councils as monopolies spending local community and ratepayer money on everything. We’ve got so many examples, including if you go down the road in Wellington here, of just wasteful spending.
I make no apology for narrowing the definition in the purpose statement, in regard to new section 3(d) in clause 4, to say that they need to meet “the current and future needs of their communities for good-quality, cost-effective, and local—(i) infrastructure; and (ii) public services; and (iii) performance of regulatory functions.” I make no apology for being very specific on what local government should deliver and what it should not, and one of the challenges that we inherited was that the definition was so loose and wide that councils did not have clarity of what their core purpose was. The changes that we’ve made—which were recommended through the select committee process—in regard to clauses 4, 5, and 6 have defined that.
We should have “cost-effective,” in the definition. We should ensure that councils are delivering services to their community in a cost-effective manner. I mean, that sort of, for many, is common sense. I appreciate that many on my left don’t have that same common sense, but that is the reality and that’s what we’re doing.
CELIA WADE-BROWN (Green) (11:24): Thank you, Madam Chair. I wondered if the Minister of Local Government would like to elucidate a little further on wasteful spending. Does he think wasteful spending includes buying the land and then the building for the Tākina conference centre, which is surely fundamental to economic wellbeing? Does he think wasteful spending in Wellington would include the support for Zealandia and for Predator Free? Or does he think that supporting World of Wearable Art, as an event that brings a huge number of people and a huge amount of positivity to the city, would be an example of wasteful spending? If not, does he think that local communities are incapable during consultation of saying what they think is important for a city or a district?
TANGI UTIKERE (Labour—Palmerston North) (11:24): Thank you, Madam Chair. I think I infer from the Minister of Local Government’s most recent exchange—I was going to ask him what evidence there is around the previous definition there, basically, preventing councils from operating effectively. I infer from the Minister’s response that it’s because this definition of wellbeing is something that can’t be kind of measured. That’s what I’m hearing from the Minister, and so I’ll move on to my next question.
When we’re looking at the purpose, which we know is the overriding focus of local government and what it can, can’t, should, or shouldn’t do, the question for the Minister is: how does this suggested change outlined in clause 4 as the purpose provide any assistance to councils in the sector who are dealing with a whole range of issues that, on first glance, you may actually think are not perhaps covered? Some aspects of that are things like community safety and how councils are going to address issues of community safety outlined under the proposed purpose here. If it’s still possible, where would he see that fitting in?
Another example could be around the engagement of young people, or homelessness in terms of the approach that that might bring for councils—and I see the responsible Minister is just in the Chamber here today. How are these sorts of things going to be able to be undertaken by councils, given the change in definition?
We could go a little bit further and talk about climate adaptation. Yes, there are aspects of infrastructure there, but if councils are not either pre-emptively or responsively undertaking some infrastructure piece but are doing pieces of work to mitigate or to adapt, where does that fit in terms of the proposed change outlined in clause 4? It might be that maybe the Minister actually thinks that those are things that fall outside the purpose of local government, and so I think it is important to get some clarity around whether that is the case or not.
I would like to also just focus on economic growth, and Celia Wade-Brown has just touched on that. Where in clause 4 is the provision for councils to have, as their purpose, economic growth opportunities for their communities? Where there are communities where there is potential population decline, how are councils able to turn their minds to effectively doing work in that space, if at all?
Actually, it would be interesting to hear whether the Minister sees that there is a role for local government in that regional economic development space. If I think about my own community, our council, alongside our neighbouring Manawatū District Council, effectively funds the local economic development agency, CEDA—the Central Economic Development Agency. Where would those sorts of spending decisions or priorities fall within the purpose, because I think that there is an acceptance—certainly, in my community—that the work they do is really important in terms of generating opportunities. Where does economic development sit within the purpose? It would be helpful for the Minister to identify that.
Hon RACHEL BROOKING (Labour—Dunedin) (11:28): Thank you, Madam Chair. Now, going back to my question about definitions of infrastructure, public services, and performance of regulatory function, the Minister of Local Government mentioned in his answer to me before “section 197”, and I presume he means section 197 of the principal legislation, the Local Government Act 2002. That says, “In this subpart, and Schedule 13,—” and then it lists some definitions. I can’t see any amendments to section 197 in this bill, although they might be in an Amendment Paper that I haven’t picked up. But those definitions in section 197 are limited to that specific part of the Act, and that part of the Act has to do with things like development contributions.
Then, there’s more, because not only does that not apply to the purpose section; it also doesn’t use the same words. Some of the words are familiar. The word “infrastructure” is used, but only with the word “community” in front of it, and that “(a) means land, or development assets on land, owned or controlled by the territorial authority for the purpose of providing public amenities; and (b) includes land that the territorial authority will acquire for that purpose”. Because that definition is “community infrastructure”, and is what is applied to development contributions, it is different from infrastructure, which I presume would be wider. Maybe the Minister was saying, well, community infrastructure is a subset of infrastructure and infrastructure, in fact, includes much more than community infrastructure—because also defined at section 197 of the principal Act is “network infrastructure”, and that means “the provision of roads and other transport, water, wastewater, and stormwater collection and management”. But there are still many types of infrastructure that we can argue over that would not be included in either network infrastructure or community infrastructure.
I note, going back to these Resource Management Act debates that we’ve had recently, we’ve been told by every provider of everything that they are critical infrastructure and should be considered infrastructure. I think we even got to the level of private early childhood centres being infrastructure. So it is really important that we are clear about what this definition of “infrastructure” means in the purpose of the Local Government Act and if it is wide or narrow, because the Minister has told us that it’s important that we get rid of the wellbeings because they are not specific enough. He said, “We’re being very specific.” This definition is not very specific; it could mean a whole lot of things. And I have heard, I think, this Minister, or definitely other Ministers from his Government, say that a garden on the roof of a bus stop is terrible wasteful spending. Now, when I have seen gardens on top of bus stops, they have been stormwater infrastructure. There is a whole lot of science behind this, as well. They are there to slow down the water getting to the roads and causing flooding. Is that included in the definition of “infrastructure”? Sorry, his answer before gave me no help whatsoever.
And then, public services—they’re not defined in section 197 of the principal Act, either. Neither is the “performance of regulatory functions”. I know he went over the page to new section 11A, inserted by clause 7, where there is this change so that museums are specified—something else is specified; I can’t see it now—but that does not address my question of the definitions of these words. Do we look to other legislation? Is he saying that existing section 197 is it? Are there any other changes to section 197? Does he take my point that, if these are left undefined, then, in fact, he is undermining his own objective, which is to be very specific? By having these terms undefined, it’s not specific and, therefore, it will be important for the Hansard that he gives some indication of where he thinks they will go. And do those public services include the festivals that have now been mentioned a couple of times? The Minister has not answered that question.
Hon SIMON WATTS (Minister of Local Government) (11:33): Thank you for that. If I could just ask—if you could mention the clause that you’re referring to, it will help me to be more specific with my answer in regards to that. There are 22 clauses in this part, and I know that we’ve just focused on one so far.
The purpose question related to clause 4: the new purpose does not stop any councils from doing these things. The question was related to economic growth more broadly; however, the new purpose does force councils to prioritise on that purpose first and foremost. One of the aspects is obviously infrastructure, and infrastructure investment enables economic growth. We don’t want the legislation to try and legislate for every single activity that one can imagine and think of. We know that that is not practical nor going to be possible. Any legislation, including this, uses broader terms which are outlined very clearly in the clauses, which talk about community purpose, the cost-effective aspect of that, and the delivery of the public services. I’ll leave it there.
CAMILLA BELICH (Labour) (11:34): Thank you, Madam Chair. I just want to continue the conversation with the Minister of Local Government in relation to his Amendment Paper 755, amended clause 5(1A), when we’re talking about the clause that defines “cost-effective”. I think this is a very interesting intervention on behalf of the Government and I have a few questions for the Minister around this.
When we are looking at “cost-effective”—and I appreciate his comments that it’s not possible for the Government to legislate for every different type of activity that the local government may do; of course that’s the case. But what the Government has decided to do is to put a definition into a bill that governs the actions of local government and put that definition of “cost-effective” in, but it isn’t clear to me—and I’m interested in the Minister’s answer to this question—who is the arbiter of whether or not a decision is cost-effective, because there are a few things and, reading the clause, there are issues that the clause itself raises in terms of the types of functions that local government could be involved with—for example, infrastructure; for example, public services—that may have decisions that need to be made on the basis of common sense and the basis of knowledge of their community. It may be that there are infrastructure decisions that might be more expensive than the cheapest possible option, but that infrastructure is likely to last longer. That infrastructure is likely to require fewer repairs, therefore saving the ratepayer over the long term. Those types of decisions are a matter of judgment, and what we have seen with this Government and the attitude to local government is a refusal to allow local government a respectable level of autonomy to be able to make those types of judgments.
What I want to know is, when he talks about “cost-effective”, is it in his view what is cost-effective, or is it in the view of what the local council considers to be the most cost-effective, accepting that they are elected and they have the right to make decisions on behalf of their community and they may have more awareness than central government? Or is it an objective standard that some third party will be able to able to impose? Or, conversely, is it something that would only apply in situations where there is such a clear lack of compliance with this particular clause that that would be the only place or the only time that there would be a challenge in relation to the cost-effectiveness of local government? Or is this simply meant to be a directional instruction from central government, which we know delegates responsibility to local government to say, “Well, you should be cost-effective, but we’re actually not going to follow up on this.”?
There’s a lot in here, and there are a few examples that I think the Minister may want to think about. In Auckland, we know that we had devastating floods in relation to the Auckland floods in 2023. We know that the city wasn’t prepared for the amount of water that came down, and we had terrible consequences for the people who died in that tragedy, we had terrible consequences for homeowners, and we had terrible consequences for infrastructure. It was a tragic event and it was near to Cyclone Gabrielle, which also had impacts on Auckland, but it was generally a very, very disruptive and terrible chapter in relation to how our infrastructure was able to deal with the effects of climate change - induced severe weather events.
If the Auckland Council is making decisions that are more expensive but do provide greater resilience for their communities in relation to flood protection, will they be compliant with this clause 5(1A), which sets out the definition of “cost-effective”, or won’t they be, and who will be the judge of that? When we look at decisions that council makes that may be a choice, a judgment call, is the Minister saying with this clause that he’s going to be stepping in and involving himself in those judgment calls, or is he going to allow local government the respect to be able to make decisions in the best interests of the community that are cost-effective in the short or the long term?
Hon SIMON WATTS (Minister of Local Government) (11:40): I thank the member for the question in regards to clause 5(1A) on page 4. That clause actually includes the definition that the member is referring to it. So it is a defined term and it outlines, clearly, what we are referring to in regards to what is cost-effective. Again, the member can see that it’s also based on the definition of “public value” in the latest Government procurement rules. So we have taken that consistency. It is important to be clear and concise in regards to what we expect of local government to deliver, and, again, that is more helpful than something that is undefined and, therefore, is open to significant interpretation.
But the points that the member has raised in regards to infrastructure, such as waste water or stormwater, to prevent flooding, which I acknowledge to the member, and for many in the room, is a significant issue and concern for our communities. The definition clearly states that when these decisions are made, they need to be considered from a perspective of value for money. They need to be using resources effectively and economically and without waste, and taking into account the total costs and benefits. So I don’t think those are, again, at all unreasonable, but, at the moment, those checks and balances aren’t specified in a way in which we are intending they are here. As a result of that, local governments can proceed with decision making in a more robust manner than what they have been able to do in the past.
Hon RACHEL BROOKING (Labour—Dunedin) (11:41): Thank you, Madam Chair. I’ll move on to clause 5 now as well, which is the interpretation. I’m just wondering about community outcomes, which is defined, again, in relation to that infrastructure, public services, and performance of regulatory function. But what I’m interested in is the link between the outcomes that the local authority aims to achieve and meeting the current and future needs of communities for those infrastructure, public services, and performance of regulatory functions. So just if the Minister of Local Government can clarify that those outcomes are quite different and if he could explain how it is that the outcomes are different from the underlying infrastructure, public services, and performance of regulatory functions. Would an example be that you have infrastructure and the public service to provide public transport, but the outcome you are looking for is people using buses? Is that how he sees that link between the outcome and his listed three things that go to the purpose of local government?
And then a subsequent follow-up question from the definition discussion, if we can call it that. The performance of regulatory functions, does he consider that it includes biodiversity functions that are included in the Resource Management Act? That’s a specific question on that performance of regulatory functions that wasn’t in the list—well, I mentioned the Resource Management Act, but I was actually thinking more of the consenting functions under that Act, rather than the biodiversity—also biosecurity functions as well. Thank you, Madam Chair.
MIKE DAVIDSON (Green) (11:43): Thank you, Madam Chair. I also have some questions on clause 5(1A). They’re different questions to what we heard before around “cost-effective”. My questions relate to 5(1A)(a) and 5(1A)(b). The first one is where it talks about “using resources effectively, economically and without waste”. That’s actually a very strong term, “without waste”—“using resources effectively, economically and without waste”. I think it’s really important to establish what this actually means. Are we saying that cost-effective means that councils need to aim for zero waste in their delivery of infrastructure and public services, given those words “without waste”? Because, if that’s the case, that’s actually significant legislation. It’s very rigid, it’s not flexible—it’s rigid; it says “without waste”.
So it would be good to get some clarification on that, because the way that can be interpreted is that, actually, councils need to look at their projects and actually do them as zero waste projects, which is actually good, but it would be nice to know if that’s the case when he refers to “without waste”.
The other part of that is 5(1A)(b). Taking into account the total costs and benefits of decisions or actions, and, obviously, benefit-cost ratios (BCRs) are very topical in councils and especially transport projects. I’m curious if the Minister has any thoughts on: if you look at a transport project, is there a BCR in mind—a threshold—that a transport project should meet for it actually to be considered cost-effective? For example, maybe, two? That’s getting real value for money; if for every dollar you invest, you get benefits of two. So it’d be really good to know if there is, I guess, a threshold the Minister would recommend, and, actually, BCRs should meet, when councils take into consideration costs and benefits.
The other question I have around 5(1A)(b) is, I guess, the total cost. For clarity, do the total costs mentioned in this new definition refer to the total cost of the infrastructure of public services delivered over time or just in the short term, and what would that look like in practice for a new infrastructure project like a bridge?
So there’s three questions I’m asking around that definition of “cost-effectiveness”: one is around the definition of “without waste” and whether that means that councils need to be aiming for zero waste in their projects; the other one is around the BCRs, and does the Minister have in mind, when we’re looking at transport projects especially, a BCR threshold that councils need to meet for transport projects before they are considered cost-effective, which I think is, actually, a really important clarification to make so councils can actually know what to aim for when they’re doing their projects.
Lastly, is around the total cost and actually are we looking at total costs for short term? Are we looking long term over the span—especially infrastructure projects which are designed to last for four generations. So they’re my three questions around clause 5(1A)(a) and (b) around the interpretation of cost-effectiveness.
Hon SIMON WATTS (Minister of Local Government) (11:47): I thank the member Mike Davidson for his questions in regards to clause 5(1A)(a) and (b)—three questions there. The question in regards to total costs relates to the long-term view.
In regards to the questions around specific examples on the benefit-cost ratio for transport projects, it is not the intent of the legislation to be definitive around the specific threshold points in which is deemed appropriate. Those mechanisms in regards to assessment already exist within the transport arena. The purpose, here, is to ensure that there is consideration around any deployment of investment with those rigour, and, obviously, at the moment, some parts of our system already have that but other parts don’t. So this is to ensure we have consistency.
Lastly, the question in regards to “without waste”. That doesn’t mean zero waste, but it does imply and mean that councils, when making decisions in regards to investment decisions, that they should do so in a way in which is, obviously, minimising waste as much as possible. At the end of the day, the assessment or the mechanism—to the member’s point around who will judge—at the end of the day, that will be the ratepayer in the community that will have that assessment judgment. Again, the precedent here is to apply that that needs to be a consideration. I think some of the feedback that we’ve had from councils as is, you know, the ability to be quite specific around expectation, and having that within legislation, then ensures that through their processes and procedures that apply, that they have those questions as part of a formal decision-making process. And a result of that, the intent is that the finite amount of capital that is available to be deployed by councils to a wide range of projects, which communities want, will be best targeted or more efficiently targeted than the status quo.
TANGI UTIKERE (Labour—Palmerston North) (11:49): Thank you. Minister, I have a question on clause 5, but just on clause 4, I do have an Amendment Paper 651 that the Minister of Local Government hasn’t indicated whether he supports it that not. So I’ll just park it with him. I also have an Amendment Paper relating to amending clause 5, which is Amendment Paper 652. It will seek to delete subclause (1) in its entirety. I think I know what the Minister’s view on that might be, but I’ll give him the chance to indicate that. But just in terms of clause 5, section 5 amended, when we’re looking at the definition of community outcomes, the word that’s used there on behalf of the local authority is where it “aims” to achieve something. Now, we all know that the definition of “aim” can be aspirational in many regards, from community to community. That does, obviously, depend on context. But I take on board the responses that the Minister has given around who makes these decisions. It sounds as though it’s a little bit up in the air there.
But I’m interested in his thoughts around the definition in clause 5, permitting or encouraging councils to, effectively, prioritise lower-cost options about anything—a whole range of different things—over what might be a higher-cost option but it could provide a more durable, longer-lasting solution to something. Now, we’ve already touched on climate adaptation, for example, where some of the costs could be perhaps not the lowest-cost option, but still could ensure longevity in that the investment is such that you’re actually saving money in the long run because you are mitigating against particular decisions that most of us know in this House will naturally happen over time.
So I guess it’s just from the Minister—and maybe the saving word is around “good-quality”, so maybe it is a qualitative view on a particular decision to be taken by a council, which financially, in terms of the raw dollar cost, might not be the cheapest option, but, in the greater scheme of things, might still be the better option for the community in the long run. So I just wanted to get some clarity that this is not going to fully constrain council’s democratic ability to make decisions in that particular sort of vein.
Hon SIMON WATTS (Minister of Local Government) (11:52): Thanks, Madam Chair. Just for the member Tangi Utikere’s feedback, I do apologise, but I won’t be accepting his Amendment Papers, nor for the member from the Greens either. They are not consistent with the Government policy.
In regards to the member’s question around cost-effectiveness and does this, in effect, mean lowest cost, the answer is no in that regard. This is about—as the definition notes—value for money. The clear definition in regards to effective and economic and in regards to the point around waste, it’s an “and, and, and” consideration. This is about value for money. Obviously, when we think about adaptation or, say, flood resilience projects, then the total cost and benefit across the project needs to be considered, including the fact is that investment going to be effective, economic, and reducing waste. So in that context, that is for the council to decide in terms of the appropriateness of deployment of that investment to meet the needs of the problem they’re trying to solve.
CAMILLA BELICH (Labour) (11:53): Thank you, Madam Chair. Just following on from the Minister’s response to some of those questions, I thank the Minister, the Hon Simon Watts, for being engaged in this committee of the whole House stage.
Hon Rachel Brooking: Not with my questions.
CAMILLA BELICH: Well, excepting that there are some questions on the table.
The answer that the Minister gave in relation to my previous questions on clause 5, amended section 5(1)(a), appeared to be that there will be no necessary way of checking or enforcing cost effectiveness, apart from the election that all local government representatives are subjected to anyway. I’m happy to be corrected, but that appeared to be his response to that question. So that, essentially, is the status quo, that members of the public are able to hold their elected representatives to account if they don’t like the spending decisions or the decisions that they make collectively for the community.
So I wanted to know what then is the purpose, apart from signalling that this is something that the Government thinks is good—which may be a legitimate policy or legislative flag—is there any other way that this is actually going to be effective? Because what he’s just described is what happens currently at the moment. There is a tiny fish-hook to that, which is when you put obligations in legislation, there is a much clearer pathway for individuals who may want to challenge the decisions of their locally elected authorities through mechanisms such as judicial review determinations to take those particular cases—they may not like a project, they may not want to wait until the next local body election in order to cast their vote for someone else, who stands for something different. So they may take matters into their own hands and they may say, “Council, you are acting inconsistent with clause 5, amended section 5(1)(a) of the Local Government (System Improvements) Amendment Bill. I am going to take a judicial review and I am going to get you to respond to that, because you’re not being held to account.”
So if we think about the use of public money and the Minister’s stated objective here of making sure that every cent of local government spending is used in the most cost-effective way possible, that outcome appears to be contradictory to that, because that would mean that local government is spending money justifying decisions that they’ve already made. The reason that they’re able to do that is partly empowered by the change that the Minister has put in place, which, essentially, allows, in his summation of the effectiveness, exactly the same procedure that currently exists in terms of holding democratic elected members to account. So just wondered, from the Minister, if I was correct.
Hon SIMON WATTS (Minister of Local Government) (11:56): Thanks to the member Camilla Belich for that question. I mean, look, the reality of what we are doing here is to set a very clear expectation through legislation around what the purpose is of local government. It is therefore the role of local government to take that on board and get on with it and deliver those services to their communities.
The Minister of Local Government, as the member will be aware, does have a range of powers to intervene in local government matters, as and where the threshold is met, which is generally a very high threshold for intervention. But there are powers that, from time to time, Ministers in this role across Governments do utilise where the governance mechanisms within council are not delivering upon their purpose and therefore there is intervention. I think that is the subtle balance that one is operating here. What we are doing here is being very clear and concise on what we require as the purpose of local government. As a result of that, that clearer definition around purpose ensures that what they do do will be delivering services that communities expect in a way in which delivers value for money. That versus the status quo is an important point of difference.
CHAIRPERSON (Barbara Kuriger): I’m just going to make a point before we carry on. Obviously, at the beginning of this committee stage, we talked about how a few hours before the House started sitting there were some Amendment Papers, so I’m not wanting to rush this section. I’m just wanting to say that we’ve spent quite a bit of time on clause 5, so if anyone wants to take a call if there’s anything to round up on clause 5, we could then move forward again, OK.
Andy Foster: Madam Chair—Madam Chair.
CHAIRPERSON (Barbara Kuriger): Hon Rachel Brooking—oh, sorry, I know; I’ll come to you. I’m aware you want to take a call.
Andy Foster: That’s OK. It’s a question.
CHAIRPERSON (Barbara Kuriger): Great, thank you.
Hon RACHEL BROOKING (Labour—Dunedin) (11:58): Thank you. A small question on clause 6, section 10 replaced, which is the new purpose of local government, rather than the purpose of the Act, and then I’ll move on to clause 7.
On clause 6, at replacement section 10(c), I’m wondering if subsection (c) is just totally redundant or not, and if the Minister can explain why it’s not redundant. That is because of the use of the phrase “by fulfilling”. So subsection (c) is about supporting local economic growth and development—excellent. Then is says, “by fulfilling the purpose set out” above, which is the needs of the communities for infrastructure, public services, and performance of regulatory functions. So is that use of the word “fulfilling” supposed to restrain the purpose of local government with regards to local economic growth and development? Because it’s only doing that growth and development where it’s carrying out its functions regarding infrastructure, public services, and performance of regulatory functions. Or are they able to do more than that as well? Is the use of the word “fulfilling” constraining the work supporting the local economic growth, or am I over-reading that? But if I’m not over-reading it, if it is constrained, then what is the point of that subsection (c)? It would seem redundant.
Now, moving on to clause 7, inserting new section 11A, and the Minister of Local Government was referring to it a little bit before. These are the core services, and the core services are listed at subsection (1)(a) through to (e), and I think it’s the same on the Amendment Paper—yes, it is—but what I’m interested in is how these new paragraphs (a) to (e) differ from subparagraphs (i) to (iii) of section 10, replaced by clause 6, that we’ve been talking about in the preceding clause. All the purpose language is about “infrastructure”, “public services”, and “regulatory functions”. Yet here the language is different and its “network infrastructure”—presumably, that is a subset of infrastructure—it is “public transport services”, etc., and I note that, “In performing its role, of local authority must have particular regard to [these] core services”.
Could the Minister explain to us why it is that those core services are chosen and how they differ from the infrastructure, public services, and performance of regulatory functions? And if the particular regard is just to say, “Oh, if you’re wondering whether or not something does fall under section 10(b)(i) to (iii)—‘infrastructure’, ‘public service’, or ‘regulatory functions’—and you’re not sure if it is, don’t worry because you can still have particular regard to it under new section 11A if it is a public transport service, for example.”, is that how it’s supposed to link? Or is it actually acting in totally the reverse, and is it meant to be a narrowing of those subparagraphs (i) to (iii) —“infrastructure”, “public services”, and “regulatory functions”? Is it saying, “Actually, when you’re performing your role, council, what we really want you to look at is just these core things, even though we’ve just told you that your purpose is wider than that”? My question is about that interaction, the systems interaction, between the purpose of the local government, which is for all infrastructure, versus the core services, which is not all infrastructure—it is restricted to network infrastructure—and then there’s other things that are listed. That is a sort of structural question.
Then I have one other question on this, and that is at new section 11A(1)(e), inserted by clause 7, where the Minister referred to the specification here of “libraries, museums, reserves and other community and recreational facilities.” I’m particularly interested in that word “facilities”, because that sounds like it must be a thing to be a facility. My question here is a specific one and that is: is subparagraph (e) only related to CapEx? Is that only capital development for the library, the museum, and the reserve, or is it also for the operational expenditure of those things; if so, should “facilities” include some other word like “functions” or “operations” as well?
Hon SIMON WATTS (Minister of Local Government) (12:03): Thanks, member, for the question. I refer the member to correspondence from the chair of the Governance and Administration Committee, Camilla Belich, on 17 November, which outlines all of the background on the questions of which the member is asking in regards to that. That is on public record.
CELIA WADE-BROWN (Green) (12:03): Thank you, Madam Chair. You did invite us to continue a little bit on clause 5, so I wanted to—
CHAIRPERSON (Barbara Kuriger): I’d rather the member didn’t, because I asked just before if anyone had any questions on clause 5 and we moved forward, so I’m not taking calls on clause 5.
Mike Davidson: Point of order. I agree that you did ask that, but we still had stuff we wanted to discuss on clause 5—
CHAIRPERSON (Barbara Kuriger): I asked that question at the time—
Mike Davidson: —and we stood up, but then a member stood up and went straight to clause 6, which didn’t give us that opportunity to—
CHAIRPERSON (Barbara Kuriger): No, no. On the point of order, there were about five people standing up and I said, “Does anyone have anything on clause 5?”, and no one indicated that that was the case, so we moved on, and I’m not taking—
Mike Davidson: Sorry, just speaking to the point of order.
CHAIRPERSON (Barbara Kuriger): No, I don’t want you to trifle with the Chair. I asked the question and nobody who was standing at the time gave me the indication that they had any more on clause 5, so we’ve moved forward. That is my ruling. We’re moving forward. Celia Wade-Brown, you’re welcome to take a call if it’s after clause 5.
CELIA WADE-BROWN: I would be delighted to, thank you. I have to say I appreciate the Minister of Local Government trying to make it clear, but I actually find, even with the changes, that there is a lot of repetition. We’re talking about the purpose of local government to meet the current and future needs, and then in clause 7, it talks about “Core services to be considered”, and they’re almost the same, but they’re not quite the same. I think that this, whether it’s going to be a judicial review, whether it’s going to be debated at the council table, is going to be very difficult. I wondered if the Minister could give me some answers on two things.
How many mayors or councils or organisations like Local Government New Zealand or Taituarā actually supported the changes in clause 6 that replaces section 10, the “Purpose of local government”, which says it’s “to enable democratic local decision making”, which is awesome—that’s real localism—but how many submissions actually supported that? I would also like to find out a little bit more—it was touched on by my Labour colleague—about “local economic growth and development”. I do acknowledge that the Minister of Tourism has put out a very useful road map. I have great respect for her in that role, though not in every ministerial portfolio she holds, but she’s been very positive—
CHAIRPERSON (Barbara Kuriger): Well, go back to the purpose of the bill.
CELIA WADE-BROWN: It says “local economic growth”—does that definitely include funding regional tourism organisations that are pretty critical to spreading our tourists out around the regions and supporting local economic growth? Or will some do it and some not? And will the Minister be likely to intervene in either case as to whether they should support regional tourism organisations or not?
I also wanted to ask, where you say to meet the current and future needs of communities for good quality, cost-effective, and local public services—which might mean library assistance and lifeguards—does he have any view as to how requiring a council making their local decision to pay the living wage, both for social reasons but also because people who are paid enough not to have to work three jobs can actually participate, can support their children, and so on, does he feel that paying the living wage is a perfectly reasonable thing to do under good quality, cost-effective local public services?
Hon SIMON WATTS (Minister of Local Government) (12:08): Thanks, Madam Chair. I refer the member to when questions in regards to submissions were received, I mean that’s all outlined in the Governance and Administration Committee report back, so I’m not going to cover that. The other question I answered around libraries; I’ve provided responses already, so I’ll be replicating myself again in that. The question in regards to “Should councils be paying a living wage?”, well, first and foremost, we have a minimum wage, which is a legislative requirement in this country, and I expect councils to be complying with the law. I also expect that councils are delivering value for money for their ratepayers. The fact that they feel like they want to be spending more for whatever reasons needs to be on the basis that their ratepayers are of the view that that is value for money. I would expect, first and foremost, that they meet the requirements under the law, which is minimum wage, and at that point, over and above that, will be based on the performance deliveries of the functions of that council.
ANDY FOSTER (NZ First) (12:09): Thanks, Madam Chair. There are two areas I wanted to ask questions about, if I can, on this part. The first one of them is that we specifically identify there in the legislation—and that’s stayed there, I think, right the way through the select committee process—the “supporting local economic growth and development”, which are obviously two separate things. I’m really interested, because that’s specifically been identified as different to all the other ones about infrastructure, public services, and so on. Although, you could regard it as a public service. But I’m specifically interested in how that interfaces with—we’ve already had the question. I don’t think I heard an answer about RTOs—support of regional tourism organisations—but also how that interfaces with arrangements that might be between the Crown and local government in terms of regional deals, because there are going to be significant elements of that which are about economic development. I’m really interested to understand because that’s been specifically identified there so it doesn’t get lost. I can see separately we’ve got the rates-capping legislation. I would argue that they should have been together, but that might be one of the casualties. Councils could quite easily go, “How can we save some money? We’ll do it there.” I would take that the intention of having it identified here is that that doesn’t happen, and we’re saying, “Actually, that is important. It’s important that councils are involved in the economic development growth of their area.” So I’d really like some feedback on that as to what you’re anticipating there.
The second one is just in terms of the core services. Again, we’ve got the rates capping, and one of the issues that councils have brought up time and time again is the concern that rates capping could erode their ability to be able to manage core services and to maintain assets. We’ve got an issue across the board, and we know that the Crown is more guilty than local government in terms of asset management and maintaining hospitals, education facilities, and so on. We know that’s really, really important, so we’ve been driving towards that. The Infrastructure Commission has said that’s really, really important, and we’ve all said, “That’s great. That’s really important.”, but what I’m really interested in is: what does the core service mean in terms of the rates capping? If the council is rates capped at a certain level and it can’t manage to maintain those core services, those core assets, what happens and what gives? What is the penalty, effectively, for councils? What’s the regime that a Minister might say, “Well, actually, you’ve spent money on things which are not core services there; you’re not managing the core services.”? What is the regime going to be there, and is there an ability to make sure that councils are going to be able to manage those core services so we don’t end up with them being continued to be depreciated, which has happened not only in local government but also in central government over many years? I look forward to the answer. Thank you.
Hon SIMON WATTS (Minister of Local Government) (12:12): I thank the member Andy Foster for his questions. Obviously, you’ll be aware that the rates-capping legislation is in front of select committee, and so that is something that will be considered in that regard. But the interrelationship point around the definition is the point that the member is raising. The purpose of this legislation is to clearly define what are the core services that local government should deliver. It links back to the member’s first point around whether activity A or B is in or out, and I answered that question earlier today, so I don’t wish to repeat myself, but it is an important point to note that the legislation here does not prohibit any specific activity X or Y. However, it does prioritise what the activities are that local government must deliver first and foremost before anything else. That is the important point of detail in regards to that, which does not exist in the current model where community wellbeing is the definition of what councils must deliver. As the member will be aware, that is a much broader definition of “delivery of services and activities” than what is being proposed.
In regards to the questions around decisions that councils will need to make in an area where they are needing to meet a rates cap threshold versus the services they deliver, again, that will be down to respective councils and the way in which they manage their affairs, and it will be upon them to ensure that they structure themselves to deliver the core services first and foremost. Then that will take them to a position, and then they will need to, obviously, consider where they are at in terms of their ability to sustainably deliver any other core services that are over and above that. Of course, there will be challenges for some councils. We have 67 councils, so there will be a range of differing views around that, but the important point here is that we need to make sure that they are focused on the delivery of core services first and foremost.
TANGI UTIKERE (Labour—Palmerston North) (12:14): Thank you, Madam Chair. Now, my question to the Minister of Local Government is: what is this letter that he talks of? This letter that he talks of from the former chair of the Governance and Administration Committee. I’ll tell you one thing: if it was from Ms Belich, I know it would be very, very good letter. But what is it? It’s not on the Table, and we are in urgency, and it might be part of the public record. The reason I’m asking you, Minister, is that given the answer to the questions that have been raised, for example, from my colleague the Hon Rachel Brooking around the facilities component being capital expenditure or operational expenditure. If we could just have a little bit of clarity around this letter.
Now, can I just also have a look at clause 7? This is the proposed new section 11A. Now, when it comes to (1)(e), this is the “libraries, museums, reserves, and other community and recreational facilities.” Now, further down in new subsection (3), if you do a bit of a cross-check, you can see that the definitions are for many of those items actually referenced in other pieces of legislation. For “civil defence”, that’s no problem, and also for “reserve”, and “waste management and minimisation”, but it does beg the question: what does “community and recreational facilities” actually cover and capture if we’re looking at other parts or terms that have been identified in that section being cross-referenced by a legislative definition in another piece of legislation? Could the Minister just provide some understanding of what particularly the “community and recreational facilities” would actually seek to lead?
Can I move on to clause 8. This is looking at subclause (2) in clause 8. There’s a change there which seeks to basically remove “environmental wellbeing” as part of that. It’s simply saying, “the social, economic, and cultural interests of people and communities;” This is something that at a principled level, the principles would relate to the functionality of local authorities. Now, why is it that environmental wellbeing has, essentially, been removed as part of that, and does, actually, the Minister accept that environmental considerations specifically go to the heart of infrastructure cost implication considerations that councils might actually need to be making? It seems very strange that you wouldn’t have a reference to environmental aspects for consideration. You’re expecting councils to be focused on infrastructure. I understand that as one of the tenets outlined in the purpose, but when we’re looking at clause 8, the only one that would go would be environmental if we’re looking at the four wellbeings that are contained there. So I do want to know how councils are expected to turn their minds to the environmental considerations and, in particular when thinking about infrastructure, where that responsibility or priority might lie?
Hon SIMON WATTS (Minister of Local Government) (12:17): I was referring to a letter from the Department of Internal Affairs to the chairperson of the Governance and Administration Committee, dated 17 November 2025, titled “Local Government (System Improvements) Amendment Bill—Responses to information requests”. This letter can be found on the parliamentary website
Hon Rachel Brooking: And what does it say?
Tangi Utikere: What does it say?
Hon RACHEL BROOKING (Labour—Dunedin) (12:17): Thank you. The question is: what—
Hon Simon Watts: Google it!
Hon RACHEL BROOKING: Oh, I’m just being told to google it. Is it what the Minister just—
Hon Simon Watts: It’s on the parliamentary website. It’s publicly available. I’ve said that about three times.
Hon RACHEL BROOKING: OK. I just want it to be on the record that the Minister is telling me to google it. I’ve asked him specific questions about wording, and he’s referring me somewhere else rather than answering them here in this Chamber when those answers would be in the Hansard for everybody to look at when they’re trying to work out what these words mean. That is shameful, and that is the approach of this Government. It is callous; it is reckless. It is a reckless approach to lawmaking to refer off to some third document rather than answering the question: are operating expenses included? It’s a simple question. Yes or no? It’s easy. Just tell us, please.
I’m going to move on, though, because the Minister wants to be reckless. I do not want to be reckless, and I want to get to these big parts that the Minister’s just dropped on us this week. However, I’m not there yet. At clause 10, “Section 39 amended (Governance principles)”, I’m interested in this term—and we’ll come to more of this, I think, later on in the bill when we’re talking about how councillors work together. But this is this term that a local authority “should foster” the free exchange of information and “should foster” the responsibility of its elected members to work collaboratively. My question to the Minister is: what weight does he think that this phrase “should foster” should have? There are a lot of shoulds here. Is it a term already used in legislation, or is this a new term that comes with these amendments or not?
Does the Minister agree with me that “should foster” is a subjective term—that it’s an apple pie type of term? I’m not saying that I disagree with it, but if he could comment on how subjective it is, how apple-pie it is, and if there is any other reference to “should foster” in legislation—and what his expectation is that this requirement of “should foster” will lead to. Is it just to give a council some comfort, if they’re having a meeting with people to share some information, that if somebody tries to take some sort of review against the council for its decision-making processes, the council will then be able to go back to this amended section 39 and say, “Hang on, we’re supposed to foster this, and this is what we’re doing, so don’t give us a hard time.”? Is that why it is included, or is it included for some other reason?
I know we’re going to get to—I think, in the other part—the code of conduct. Again, I’ll be interested in asking the Minister what happens if councillors breach the code of conduct—we’re not there yet—and also, what happens if there is no fostering of the exchange of information. It’s not “making”—because “making” is a requirement—it’s a “should”. It’s not at the “making” level. What happens if the council doesn’t foster elected members to work collaboratively? What happens then? Is there any consequence for not fostering, and why is it in here? What is the mischief that the new clauses here are trying to deal with? Is it a well-known term that I’ve just not noticed before, or is it a new one? I think it would be useful for the Minister to give us a little bit of clarity on what his expectations are and the reason for including these amendments to section 39.
Hon SIMON WATTS (Minister of Local Government) (12:22): Thanks to the member the Hon Rachel Brooking for the questions in regard to clause 10. The purpose, and the broader intent here, is to ensure that we have a standardisation of these expectations, to provide greater consistency and transparency for councils across the country and to provide clear expectations for elected members.
In regards to the question in regards to the governance principles that was asked before, the aim of the principles is to set out the high-level expectations on local government to provide for the good governance of local communities and the accountability of councils to their communities. Obviously, the interpretation is left to councils, in terms of how they deliver those.
MIKE DAVIDSON (Green) (12:23): Thank you, Madam Chair. I just note that my colleague the Hon Rachel Brooking just spoke to clause 10; however, I haven’t had a chance to speak to clause 7.
CHAIRPERSON (Barbara Kuriger): That’s fine.
MIKE DAVIDSON: Excellent; thank you very much. I do have just one call to make on clause 7, because I think it’s quite an important clause. Obviously, it’s creating a kind of hierarchy for what councils need to focus their mahi on, especially when you take that together with the eventual rates cap. There’s obviously going to be less room for councils to move, so this is actually a really important clause, and it’s really going to, in a way, dictate what councils can and cannot do.
A number of us from the Green Party have put forward a number of amendments, just to see if we can add a little bit more there, because it is quite prescriptive and it is really important that nothing is missed that is actually really important to communities and what councils do. When you look at clause 7, new section 11A(1)(e), it does list “libraries, museums, reserves, and other community and recreational facilities.”, which, I assume, will be like community halls, gyms, etc. There are some definite things that are missing there, and a lot of these are captured within our amendments. We’ve done them separately because we don’t want the whole lot put into one and then all ruled out of order. We’re not quite sure why, in this space, we’re missing things like public spaces—it’s not a reserve; it’s a public space—like a street mall, like the square in Christchurch, spaces that don’t actually fit in here but are really good public spaces. I note that we have got libraries and museums, but we don’t have art galleries, and also missing from that is heritage, as well. There’s nothing around economic development and, also, adaptation. This is why, I say, we’ve done these amendments separately: to ensure that, actually, if there is something where the Minister says, “Oh, actually, that should be in here”, we can have a look at that one tabled amendment and potentially include it.
I’ll quickly just go through what we have added as amendments for the Minister to consider—and potentially, he may recognise that that was missing from there—because it is a little bit concerning, when we do list things like libraries and museums, that suddenly we’re ruling out—and I take what the Minister said; it doesn’t technically rule things out. But, when you put a rates cap on, it means things will fall right to the bottom, and therefore the pressure on councils will mean that stuff won’t get looked at. So we have amendments and, if it’s OK, Madam Chair, I won’t talk to the time stamps, because that will take a lot of time—because there are several amendments—but they are all dated 16 September at 9.09, and then a few seconds after that.
The first one is around public spaces, which I spoke about earlier. That just makes sure it gives local government particular regard to pedestrian malls and town squares. The next one is around natural hazards and the activities that improve resilience to natural hazards. Then there is one around community support, to ensure that councils actually look at community support. There is another one around environmental enhancement and protection, which I think is quite important Then there is another one around facilities. It’s actually putting the words “and activities”—so “facilities and activities”. We have one that is to add “art galleries”. I see art galleries are excluded from this—and, as I mentioned earlier, also heritage. They are the extra additions that we’ve put in amendments individually for, and it would be great if the Minister could actually have a look at those amendments and say, “Actually, that one probably should sit within there, because it makes sense that councils need to prioritise.”
That could be art galleries or something, but I think it’s really important. We know councils have a responsibility in that space, and then suddenly, by legislation, they’re not allowed to prioritise an art gallery, when we say they have to prioritise a museum. Or the town square, for example—that’s something that doesn’t get prioritised. I think we’re going to see, from that, councils and communities actually being worse off. Those are my questions for the Minister on clause 7. Thank you.
Hon SIMON WATTS (Minister of Local Government) (12:27): I thank the member Mike Davidson for the questions. I think the member’s questions relate to similar questions that I have provided a response to, where I said clearly that the point of the definitions is not to prohibit but to prioritise.
Again, on this side of the House, we make no apology that the impetus, in terms of the need for change, is driven by the double-digit rates increases that we’ve seen across the country, in some areas up to 20 percent year-on-year increases. That is not affordable for communities, nor ratepayers, and the need to prioritise is something that I think all New Zealanders have to do as part of their daily life, as a result of the realities of the fact that their income needs to match what their expenses are.
I appreciate that, in prior lives, some in this House may have been in a position where there was a bottomless pit of money. That is not the reality in which we are operating now. We need to prioritise, and so does local government. I make no apology for that.
CHAIRPERSON (Barbara Kuriger): I’m just noting that, up to about clause 10, we’ve taken quite a few calls. We’d just like to finish off that section, and also just make sure that people know there is an Amendment Paper from 11.37 a.m. today, which you may or may not have seen.
MIKE DAVIDSON (Green) (12:29): Thank you very much. I do have a question, and it’s a new amendment I’ve got—it’s actually a new clause 9A—but, before I go on to that, I just want to quickly touch on something. The Minister of Local Government, just in his response, talked about double-digit rates increases year on, year off, and I just want to get some clarification around that. What were the drivers that were actually creating those double digits? There is a lot of blame being put on councils for being out of control with spending, but my understanding is that the drivers for that, Minister, were actually things like inflation in the construction industry—because, obviously, councils don’t buy cereal; they build roads—and interest rates as well. I think we need to be a little bit clear with people who are watching that, actually, there are a lot of drivers that were outside of the control of councils, and it’s unfair, I think, to blame elected members and councils for putting rates up when a lot of that was out of their control.
I’ve tabled an amendment to insert new clause 9A. I hope the Minister is really responsive to this, because he mentioned so in earlier discussions that we’ve had in this House. Obviously, what we’re aware of through his Simplifying Local Government reform is that there are a lot of councils that are going through this reform at the same time they’re having to representation reviews, which comes at a significant cost to the councils—a cost that actually may be absolutely pointless, because they may not exist. This tabled amendment actually just alters section 24A. What it does is it says, “After ‘Schedule’, insert ‘or if a council has a proposal submitted under the Head Start process as part of Simplifying Local Government reform’ ”. It’s basically going to exempt them from going through that process. The amendment is timestamped 15 September 2026, 4.45.00 p.m.
I hope the Minister really takes this amendment under consideration, because I know he expressed some concern at the time about this extra cost that’s going to be placed on councils for something they probably don’t need to do. I was working through it and trying to work out, well, what could be an amendment that we could hang onto this system improvements bill now to actually ensure that they don’t have to go through that, and then we can get that sorted right now, and it’s done. I think this is a really good win for the councils—and for the Minister if he accepts this amendment—because, actually, this is about saving money and not doing something that is just not needed.
It would be great if the Minister could take really good consideration of that amendment, because I think he would see some really good benefit in it, as well as local governments, and there are a number—a number—of councils that are forced to go through this representation review at a significant cost when there is absolutely no point of doing it, because they’re going through a reform that the Government have initiated right now. I would like the Minister to consider that and hopefully accept that amendment. Thank you.
Hon SIMON WATTS (Minister of Local Government) (12:32): Just in regards to that last point around representation reviews: I won’t be proceeding with the member’s tabled amendment as part of this legislative process. However, I have made statements in regards to the feedback that we’ve seen through the proposals on Head Start, which, again, is out of scope of this, but just to the members point, it is something that we are taking advice on, and we’ll have more to say on that later.
TANGI UTIKERE (Labour—Palmerston North) (12:33): Thank you, Madam Chair. Thank you for drawing our attention to the recent Amendment Papers—this is just terrible process from the Government, given that this reported back from the Governance and Administration Committee in, I think, November of last year. Anyway, we’ll get to that one.
Look, just for clarity, the Labour Party does support Mr Davidson’s tabled amendment that he just referred to. I know you said clause 10—
CHAIRPERSON (Barbara Kuriger): I’m just sort of nearing the finish of up to that point, so if you have another question, I haven’t closed that point off just yet.
TANGI UTIKERE: I actually want to ask a question on clause 9 that I don’t think has been addressed yet. These are related to what are commonly known in local government circles as section 17A reviews. They are often looked at in terms of a council going through a particular process to identify whether a way of doing something is the most efficient and not necessarily cost-effective but effective for the community. It is, as the Minister of Local Government knows, often similar to the special consultative process in terms of the consultation, and councils, from time to time, do utilise section 17A reviews—often to think about whether a council-controlled organisation is the best away of delivering for a library service or a museum or something like that.
This is a proposed change that seeks to repeal section 17A, subsections (1) through to (4), and just talks about more of the infrastructure and public service but removes the localised aspect to it—which I find fascinating, given that the modus operandi of this Government taking office was about localism, and yet they want to strikethrough a lot of these aspects here. I mean, day by day, it just gets worse.
My question to the Minister is: how will councils still have an ability to determine whether the delivery of services, whether they’re in-house or otherwise, is still efficient and effective? These are changes to section 17A in terms of the review of how the delivery of services is actually undertaken, so my question, fundamentally, is why is this change being promoted, and what can councils and therefore their communities expect in terms of an ability to participate in any consultative process that councils might choose to adopt to review?
Now, I think this is actually quite a—section 17A reviews, as they are currently, are a very good way of councils engaging with the community to check how they are achieving the particular delivery of certain services. That’s important. That also aligns with the point of democracy that we’ve already covered, back in clause 6 replacing section 10, the “Purpose of local government”, which talks about the enablement of local decision-making for that to be democratic. I just want to get some clarity from the Minister around what is the only change, as I understand it, to the way in which section 17A is delivered.
Hon SIMON WATTS (Minister of Local Government) (12:36): In regards to the questions on the removal of the requirements under section 17A around service delivery reviews and the impact of that on cost-effectiveness of council services, we’ve covered that extensively in earlier conversations around the definitional changes that include cost-effectiveness within that definition and the reality that, actually, undertaking service delivery in a cost-effective way should be a business-as-usual expectation for local government. That is the purpose of the changes that we are making there. Removal of the strict rules around these reviews will allow councils to carry out this work in a way that is most cost effective for each of them. The new “Purpose” of the Local Government Act, which we talked about earlier, around clauses 4 and 5 that we’ve moved on from, makes it very clear around that definitional change and will ensure the delivery of more cost-effective public services.
CELIA WADE-BROWN (Green) (12:37): Madam Chair, may I just check before I start, am I able to ask a short question on something on clause 8?
CHAIRPERSON (Barbara Kuriger): Yeah—and then I think we’ll move on to clause 11 forward, but I’ll let you have a question there, because we haven’t closed that piece off yet.
CELIA WADE-BROWN: Thank you, Madam Chair. My question to the Minister of Local Government is really—we’re talking about amending section 14 in clause 8. We talk about replacing section 14(1)(h)(i) with “(i) the social, economic, and cultural interests of people and communities”, which sounds fairly close, may I say, to the four wellbeings, but it misses one of them out.
CHAIRPERSON (Barbara Kuriger): I think we’ve had that question, so is it a different question on that point, because someone over here in your team asked that question before—I think it was Mike Davidson—about the environmental wellbeing.
Hon Rachel Brooking: It was Tangi.
CHAIRPERSON (Barbara Kuriger): Oh, it was Tangi Utikere—sorry. I remember the question. Sorry, I apologise if I didn’t get the right member, but I think that question has been asked.
CELIA WADE-BROWN: I didn’t hear an answer that explained why “environmental” was missing, other than the general disregard for the environment.
CHAIRPERSON (Barbara Kuriger): I’m going to take a call now from Lemauga Lydia Sosene, but we are moving forward—clause 11 onwards. Thank you.
LEMAUGA LYDIA SOSENE (Labour—Māngere) (12:38): Thank you, Madam Chair. I’ve been listening really carefully to the questions on the different clauses but also the Minister of Local Government’s responses—it’s really important.
I do have a tabled amendment with regards to clause 16 amending section 57, which is to delete clause 16. I wanted to ask the Minister, in terms deleting clause 16, for clarification on the skills of directors of council-controlled organisations. I’m interested because the actual section—section 57(3)—talks about “When identifying the skills, knowledge, and experience required of directors of a council-controlled organisation, the local authority must consider whether knowledge of tikanga Māori may be relevant to the governance of that council-controlled organisation.” The Minister has explained very clearly that the Government is moving to restrict or reduce in terms of local government functions, and the Government is wanting to focus on the specifics.
Minister, I wanted to ask: what advice did officials give to you with respect to when directors are being considered for CCOs—the skills that they bring to the table? Because, in my view, specifically within Auckland Council, we hold a very strong view in supporting the knowledge of tikanga, the knowledge of local iwi and hapū, which is really important. Why this is important in decision making of the governance side of council bodies is the understanding of whenua, the understanding of iwi participation, the understanding of hapū, and the Māori communities that are embedded in our local communities.
I’ve been listening in very carefully to the Minister’s answers to the different questions around community participation, but for directors, in terms of the skill set that they bring to the table when making decisions with local councils, can the Minister advise, please, the House and for those listening, how the expectation or the skill set of removing tikanga expectations or knowledge benefits local communities? I’ve understood that the Minister has been very clear around the Government’s intention to move towards a very definitive skill set. That is important, but so is tikanga and so is knowledge of iwi and hapū participation from those communities. So if the Minister could answer those questions. Thank you, Mr Speaker.
Hon SIMON WATTS (Minister of Local Government) (12:41): Yeah, I thank the member Lemauga Lydia Sosene for the question, and the member is correct that under the changes in this legislation, it will no longer require councils to consider the relevance of tikanga Māori knowledge in council-controlled organisation (CCO) director appointments, affecting Māori participation and council decision-making.
The member will be aware, I recall Mike Hosking—I think it was—on the radio the other morning making commentary in regards to this, and again, the purpose of the changes here is to remove this requirement, but removal of that requirement does not prohibit councils from considering the relevance of tikanga Māori knowledge. Instead, it provides the flexibility for councils to determine the appropriate skills and knowledge and experience that are best required in order to guide and deliver the objectives of that CCO. As the member will be aware, we’ve got some CCOs that are delivering and are responsible for billions of dollars of assets, and the appointment of the directors for those CCOs needs to be a matter of precision around timing and capability and experience. It is not this Government’s view that we should be letting the law get in the way of councils making good appointments to deliver services in regards to those areas. That is the change that we’re making, and that’s the basis for it.
Hon RACHEL BROOKING (Labour—Dunedin) (12:43): Thank you, Madam Chair. Madam Chair, I am ready to move on to this Amendment Paper 803, which is about new clause 18A. I don’t know if you want to check with other members, or if you’re happy for me to press—
CHAIRPERSON (Barbara Kuriger): No, it’s OK. You go ahead.
Hon RACHEL BROOKING: Thank you. This Amendment Paper is one of two amendments on the amendment, and this is the one—Amendment Paper 803—that deals with development contributions and how they apply to fast-track approvals. That is what I have a range of questions on; I’m happy to come back to them if we want to jump back and forth.
But I would like the Minister of Local Government to comment on this. This is a substantive policy change that has just come into the House dealing with an issue that the select committee that I was on in 2024 was advised of by local government submitters: that there was a gap in the local government legislation around development contributions. My understanding is—and I’m happy for the Minister to tell me if my understanding is wrong at all—that there are many areas that are zoned something like rural, but they’re certainly not zoned for housing development. That has meant that those councils do not have development contribution policies to apply to those parcels of land, because it is not anticipated that there would be development there and, therefore, it hasn’t been anticipated that there would be a need for development contributions for those areas. Of course, we all know that the fast track just jumps over any community planning.
Am I correct in that statement? And is the purpose of this Amendment Paper 803 to fix the problem that I’ve just described and to enable development contributions to be applied to those fast-track developments that don’t have appropriate policies in relation to those particular areas of land? That’s the bigger question. I know that when we get to the Part 2 debate, then we will be—and Madam Chair, you weren’t in the Chair when we discussed this, but we discussed that Schedule 2 of this Amendment Paper is in Part 2 of the debate, and that relates to the transitional provisions. Why that is relevant, and I won’t ask questions on it now, is that the transitional provisions mean that whilst this might be a fix for future fast-track applications, it isn’t a fix for those applications that have already been determined or substantively determined. But we’ll get into that later on. That was my big-picture question.
Then if we come to new clause 18A, which is “Section 102 amended (Funding and financial policies)”, this is quite a messily written clause, because it says—just listen to these words: “In addition, subsection (4) does not apply to a development contribution policy to the extent that the policy provides for a development in relation to which a resource consent approval has been granted under the Fast-track Approvals Act”. On the face of it, it’s difficult to understand what that clause means with all of those words like “does not” and “to the extent” and “in relation to”. I take it to mean—and the Minister can tell me, again, if I’m wrong—that what this particular clause is doing is saying that where section 102(4) has a requirement for consultation to amend or develop a development contributions policy, that requirement for consultation does not apply in relation to this fast-track approvals part fix/not fix.
So my question is, am I interpreting new clause 18A correctly? And then I’ve got more questions on other clauses, but those are my first two questions. So, overarching, they are: why are we here in urgency and debating this Amendment Paper that was tabled yesterday; and second question, am I correct that new clause 18A, the first substantive clause in this Amendment Paper, is just to say that that requirement for consultation does not apply?
Hon SIMON WATTS (Minister of Local Government) (12:48): Yeah, I thank the member the Hon Rachel Brooking for the question and reference to the Amendment Papers that were tabled yesterday at 9 and 9.30, which is an important context. The change, particularly around the fast-track portion, is obviously in response to the need for the ability for councils to be able to obtain the support and mechanisms from developers to be able to ensure that we can recover those costs in order to put in place infrastructure needs to support some of these fast-track aspects. There’s been some clear feedback from the sector that this change will provide significant benefits for that enablement of infrastructure to occur ahead and with these fast-track projects, so that’s the purpose of that. I will, as a member noted as we come to the end of this part, cover off more aspects around that specific portion in later parts, as has been highlighted.
Hon RACHEL BROOKING (Labour—Dunedin) (12:49): Thank you, Madam Chair. I’m surprised that Government members are wanting to speak on this part. I hope they’re not trying to close the debate, because we are in urgency and we have just—
CHAIRPERSON (Barbara Kuriger): Yeah, and I’ve made the point that there’s a new Amendment Paper, so I’ve got no intention of taking any closure motion at this point.
Hon RACHEL BROOKING: Thank you, Madam Chair.
Dr Lawrence Xu-Nan: Auckland MPs.
Hon RACHEL BROOKING: Yes, maybe the Auckland MPs want to talk about their Auckland issues. I don’t think the Minister answered my question about whether that new clause 18A, which is amending section 102 of the principal Act, is just to remove that requirement for consultation for the development contribution policy, so when he answers the next question, he could go back to that. I think it’s a yes; I think it will be easy for him to say.
Now, another big question, then—thank you for answering my first question about why we are here in urgency with this amendment—is that if he can also talk us through why the amendments are needed when already the wording in the principal Act around development contributions has various different trigger points. There is the trigger point of when a resource consent is granted under the Resource Management Act, there’s also a trigger point of building consents, there’s also the PIMs—the property information memos—and also service connections, and so there’s a range of different trigger points for the development contribution to be invoiced, to be requested, if the policy applies for it.
My question is, given that there’s been a resource consent or deemed resource consent granted under the fast track, why is it that we cannot rely on those other triggers—the later triggers—because, of course, you get your resource consent first, then you would get your building consent and build your house, and then you are going to plug in to some pipes. Why is it that we need this change to apply at that first stage, or at the consent stage, rather than at those later stages? That’s one question, as well as my previous question about the consultation.
Then at what is proposed clause 18B, “New section 102A inserted (Development contribution policy in relation to resource consent approval under Fast-track Approvals Act 2024)”, I’m interested in the tense here. So at new section 102A(1) it says, “This section applies to a territorial authority if a resource consent approval is granted under that Fast-track Approvals Act”, and it’s the tense of “is granted”. Does this mean and is it the scheme of the amendment that before the council can initiate a change to their development contributions policy, there has to be a grant under the Fast-track Approvals Act—and I think that is the answer, and is that why “is granted” is there?
If the Minister can put his mind to being a council—let’s pretend he’s Queenstown and, say, the Queenstown district council doesn’t have a development contributions policy in effect for its rural zoned land. To then amend that policy, does it have to wait before it can amend it until a fast-track proposal is approved, and then it amends its development contributions policy, or is there an ability when it sees that a fast-track project is listed or it’s been referred for it to start that process?
Why I’m asking this is because the word “the” development is used throughout this clause, and so is the scheme of this that it’s fast-track development by fast-track development leads to then a consequential change to the development contributions policy? So the project has to be in the fast track and it has to be approved under the fast track, and once that happens—and we’re not talking about ones that have already been approved—then it’s for the council to amend its development contributions policy without consultation, I think, and within six months, because “6 months” is referred to in new section 102A(3), and it goes through development by development.
So if the Minister is Queenstown Lakes District Council—and we know there’s one. I’ve visited Ridgeburn, outside of Arrowtown by the river there, in rural zoned land, and then I visited, on the same day, one in Fernhill, and so it’s quite a different part of the town. It’s above an established area, but at high, rocky altitudes, and so it’s very expensive to build on. Would that Queenstown Lakes District Council then have to do two different changes to its development contributions policy for those two different projects?
That’s my question. There is the use of the word “the”—so if you look at section 102A(2)(a) and (b), it says, “to require a development contribution for the development;” and then “the development.” What is the sequence of when things pop into the fast track—this is my bigger question. When something goes into the fast track, it seems here, under subsection (1), that approval has to be granted. It has to be all the way through the fast track, and then that is the moment and that is the mechanism for the council to be able to say, “OK, you’ve gone specific project—project by project—you’ve gone through the process, and now we have the permission to amend our development contributions policy to include you.” That’s the question there.
Hon SIMON WATTS (Minister of Local Government) (12:56): Look, I thank the member Rachel Brooking for the question. I think it’s important to note that Amendment Paper 803 on the Table is putting in place a different trigger than is required for a resource consent under the fast-track approvals process.
The answer in regards to the amendment of the development contribution is, yes, it is amending the development contribution after a fast-track resource consent process. I think in regard to the member’s questions in regard to how this will interact between the developer and the council, it would be for the developer and the council to also have the ability to be able to establish a development agreement at any time, and so that will provide the mechanism and the flexibility around that.
CHAIRPERSON (Barbara Kuriger): Members, the time has come for me to leave the Chair for the lunch break. The committee is suspended and will resume after question time.
Sitting suspended from 12.57 p.m. to 2 p.m.
House resumed.
Visitors
Kiribati House of Assembly—Business Committee
SPEAKER: Members, I’m sure you will want to join with me in welcoming the Business Committee from the Republic of Kiribati House of Assembly, who are with us here in the House today.
Privilege
Unauthorised Release of Confidential Select Committee Proceedings
Referral to Privileges Committee
SPEAKER: Members, I’ve received a letter from Tim Costley raising as a matter of privilege the divulging of a draft report of the Governance and Administration Committee contrary to Standing Orders. Mr Costley’s letter refers to a report published in The Post titled, “Leaked FENZ inquiry report rips into leadership dysfunction, calls for board replacement”. Previously, I received a letter from the Hon Jan Tinetti on the matter but, at the time, no media report had been published. The unauthorised release of confidential select committee proceedings has previously been considered a contempt. It is essential that the confidence of proceedings is respected to enable committee members to work together. Furthermore, the House is entitled to be the first recipient of the finding of its committees. This is a serious matter, not merely a technical one.
I find a question of privilege arises and stands referred to the Privileges Committee. It is unfortunate that the Parliament has just over two weeks left until dissolution, but the timing of this matter was not a choice made by me or the House. However, it cannot be overlooked, and I encourage the Privileges Committee to meet as soon as possible.
Oral Questions to Ministers
Finance
Question No. 1
DAVID MacLEOD (National—New Plymouth) (14:02) to the Minister of Finance: Does the Government intend to introduce a capital gains tax?
Hon NICOLA WILLIS (Minister of Finance) (14:02): No. In some circumstances, gains on sale are considered income for tax purposes, and that has long been the case. However, the Government has no intention of introducing a specific capital gains tax.
David MacLeod: Why is the Government not considering this?
Hon NICOLA WILLIS: Well, a capital gains tax would increase taxes on savings, investment, and entrepreneurship, loading more costs on to households and businesses—the complete opposite of what the economy needs—and capital gains taxes around the world are always very complex. Compared to other types of tax, compliance costs are high. These costs apply not just to wealthy people and big companies but to ordinary taxpayers, who, in many cases, will need specialised advice when buying and selling property or when running a small business. The biggest beneficiaries of a capital gains tax would be valuers, accountants, and lawyers.
David MacLeod: Would a capital gains tax make people pay tax on inflation?
Hon NICOLA WILLIS: Well, it does depend on how the tax was designed, but if there was no allowance for inflation, a capital gains tax on long-held assets would be grossly unfair. Over 25 years, for example, a property might go up 75 percent in value because of inflation alone, and not through any underlying increase in real value. A household or business selling that property would have to pay capital gains tax when they are no better off. With no allowance for inflation, people would end up with large tax bills on what are only paper gains.
David MacLeod: Has a capital gains tax previously been considered for New Zealand?
Hon NICOLA WILLIS: There have been several major reviews of New Zealand’s tax system over the past 25 years. Those reviews have had a range of opinions on a capital gains tax, but no Government in that time has decided to go ahead with one. Case in point, a previous Prime Minister said quite emphatically, “I’m confirming today that under a Government I lead, there will be no wealth or capital gains tax after the election. End of story.” That was Chris Hipkins in 2023.
SPEAKER: Yep, good. Can’t use a question like that. The Hon David Seymour.
Rt Hon Chris Hipkins: Here comes the cavalry.
SPEAKER: Yeah, just leave it. The Hon David Seymour and no one else.
Hon David Seymour: I’ll do the jokes.
Hon Members: Ha, ha!
Hon David Seymour: Will the Government need to—[Interruption]
SPEAKER: No, no, no. Wait, wait, wait. In spite of everything, we’ll just have the question asked with no other commentary around it.
Hon David Seymour: Will the Government need to save money in order to balance the books with no new taxes; and if so, what plans does the Government have to do that?
Hon NICOLA WILLIS: Yes. In order to ensure that their taxes can remain low and that new taxes don’t need to be introduced, the Government will have to remain very fiscally disciplined. This will require prioritising new spending towards its most important priorities, continuing to eliminate wasteful programmes, and ensuring that we get maximum bang for every taxpayer buck. Thank you to my knight, the Deputy Prime Minister.
Hon David Seymour: Is it possible that the Government can get better outcomes for people while spending less money, or is spending the only kind of aroha that a Government can show?
Hon NICOLA WILLIS: Well, no Government should be simply judged on the size of the cheques it writes on others’ behalf. The question is what impact and outcome you get for the dollars that you invest, because, after all, those dollars initially belonged to hard-working Kiwis, who always have a good use for their own money.
Prime Minister
Question No. 2
Rt Hon CHRIS HIPKINS (Leader of the Opposition) (14:06) to the Prime Minister: Does he stand by all of his Government’s statements and actions?
Rt Hon CHRISTOPHER LUXON (Prime Minister) (14:06): Yes, and I just want to reassure the member that we will not be introducing a capital gains tax that taxes inflation, and that this Government is focused on more things than roaming charges.
Rt Hon Chris Hipkins: Does he accept that the average worker’s pay has fallen in real terms under his Government, with New Zealand having the lowest real-terms wage recovery in the OECD?
Rt Hon CHRISTOPHER LUXON: Well, that’s why this Government is working incredibly hard to make sure we control spending, we bring inflation and interest rates down, we get the economy growing, and also we get people into work. I just want to assure the member that the forecasts are that in the next four years, we’ll have 220,000 new jobs added to this economy; the economy will be growing at 2.7 percent, on average, per year; and, most importantly, wages will be growing faster than inflation and prices.
Rt Hon Chris Hipkins: How will freezing the minimum wage for three years help Kiwis get ahead, given minimum wage workers have already had a real-terms pay cut for three years in a row under his leadership—yet another reason working New Zealanders cannot afford three more years of this Government?
Rt Hon CHRISTOPHER LUXON: I’ll just say working New Zealanders can’t afford more taxes, because that takes money out of their back pockets, and that’s not a good thing. But I reject the characterisation of the question, because that’s not what we’re doing.
Rt Hon Chris Hipkins: How does he expect Kiwi families to pay 20 percent more for their electricity when their wages have been going backwards in real terms under his leadership while the electricity companies have been gouging them for billions of dollars in profits?
Rt Hon CHRISTOPHER LUXON: Well, the way you do it is you don’t pass a bed tax that two-thirds will be paid for by Kiwis who might be going to visit a friend or a motel. You don’t add in a capital gains tax that’s going to be paid for by businesses in tax inflation. You don’t actually just keep adding taxes and taxes and taking money off working New Zealanders. Frankly, if the member actually cared about it, instead of petty point-scoring, and wanted to problem solve something, what he would have done if he cared about working New Zealanders is actually support tax relief for working New Zealanders—first time in 14 years.
Rt Hon Chris Hipkins: Supplementary question.
SPEAKER: Just wait. Just remember that there are reasonably strong rules about how questions should be asked but also answered, and both sides were outside those in that last exchange.
Rt Hon Chris Hipkins: How does he expect Kiwis to pay for their groceries, like mince, which is up 30 percent; butter, which is up 40 percent; and bread, which is up 67 percent, when their wages are going backwards while the supermarkets make millions of dollars in excess profits?
Rt Hon CHRISTOPHER LUXON: Well, look, I just want to say to the member—I would like to reassure him that tomatoes are down 29 percent in the last year, eggs are down 16 percent, lettuce is down 15 percent, tinned spaghetti is down 6, chicken’s down 4, butter’s down 2, and I just—[Interruption]
SPEAKER: Sorry, we’re going to have a repeat of yesterday if that sort of barrage continues. Ask a question; expect an answer.
Rt Hon CHRISTOPHER LUXON: So can I close it up? I’d just say to the member when he visits his bach, he’s more than welcome to make some nice cheesy chicken omelettes or maybe some chicken parmigiana—it’s going to be cheaper.
Rt Hon Chris Hipkins: Supplementary question, Mr Speaker.
SPEAKER: Just wait—just wait.
Rt Hon Chris Hipkins: Why should New Zealanders believe him when he says he’s going to do another review of supermarkets to maybe consider breaking up the supermarkets, given his own Government received advice saying they could have saved shoppers $2.9 billion, yet they sat on that until the eve of an election, while the supermarkets continue to gouge them for millions of dollars in excess profits?
Rt Hon CHRISTOPHER LUXON: Sorry, I may have missed something, but I haven’t seen a policy to help solve a problem from that member around supermarkets. He had six years; he did absolutely nothing apart from some market studies. We are determined to make sure we get change in the supermarket sector—structural change. You had your go; you didn’t do it.
Rt Hon Chris Hipkins: Was the Deputy Prime Minister, David Seymour, wrong when he told media today that the National Party doesn’t actually believe in breaking up the supermarkets, which is why they’ve announced another review—so that they don’t actually have to do it?
Rt Hon CHRISTOPHER LUXON: The Deputy Prime Minister, with all respect, doesn’t speak for the National Party.
Rt Hon Chris Hipkins: When real wages have fallen, power prices have gone up, insurance prices have gone up, rates have gone up, insurance has gone up—all by more than 20 percent, under his leadership, in just the last two years—will he now admit that the cost of living crisis is not only not over; it’s getting worse under his leadership?
Rt Hon CHRISTOPHER LUXON: What I’d say, again—you know, cry me a river. But I’d say if that member was serious about supporting people, why didn’t you support tax relief for the first time for working New Zealanders? Why don’t you come out and support a council rates cap? Why don’t you come out and support structural separation for supermarkets? No idea. [Interruption]
Hon Kieran McAnulty: Three question times left—that’s all he’s got.
SPEAKER: Let’s just—
Hon Kieran McAnulty: Absolute novice.
SPEAKER: If you don’t mind?
Hon Kieran McAnulty: No, I—
SPEAKER: Beg your pardon? You what?
Hon Kieran McAnulty: Well, you gave me an option, if I don’t mind—
SPEAKER: No, no, no. It was actually more of an instruction than a question, but I’m not surprised there was no understanding in that. Just a general sort of, I suppose, observation that we are very close to the end of this Parliament, close to the election itself. Naturally, there’s going to be heightened tension, but just a little bit of decorum would be good.
Prime Minister
Question No. 3
Hon MARAMA DAVIDSON: Kei te Pirīmia, comrade. E tautoko ana ia—
SPEAKER: Whoa, whoa! Hang on—sorry. Just ask the question.
Hon MARAMA DAVIDSON (Co-Leader—Green) (14:12) 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) (14:12): Yes, and I just want to reassure that member that we won’t be lifting the income tax rate to 45 percent for those earning $160,000 or more, but I do want to commend the member for at least having some ideas. I don’t agree with them on supermarkets, but that’s better than what we’ve seen from the Labour Party.
Rt Hon Chris Hipkins: Point of order, Mr Speaker. How is that question possibly in order, other than just to reflect the Prime Minister’s absolute desperation at this point?
SPEAKER: Well, two things: firstly, before I can even make a decision about that, you were on your feet to take the point of order and I’ve obliged you by hearing it. In making your point of order, you’ve also made your point.
Hon Marama Davidson: Did his Government weaken the Natural Environment Bill’s protection of the environment following discussions with industry?
Rt Hon CHRISTOPHER LUXON: No, we met with industry groups and we also met with the environmental NGOs, as we’ve discussed yesterday.
Hon Marama Davidson: Whose words got put into the bill?
Hon Chris Bishop: PCO’s.
Rt Hon CHRISTOPHER LUXON: Well, actually, the Parliamentary Counsel Office (PCO), who drafted the bill, as you well know, but I’d just say to the member that on this side of the House, we engage with many stakeholders. We want to hear the perspectives of as many New Zealanders as possible. We don’t just take our advice from officials and box-tick it through.
Hon Marama Davidson: Supplementary. [Interruption]
SPEAKER: Just give yourself a moment while everyone composes, so that we hear your question without any other interference.
Hon Marama Davidson: What message does he think it tells New Zealanders when he allows the agricultural industry privileged access to Government, while at the same time coalition parties have taken over $1.143 million in political donations from agribusiness-linked donors since 2022 and hundreds of thousands of donations from mining—
SPEAKER: OK. Well, look, the member is making a point, but it’s well outside the provisions of the Standing Orders. Ask a question without the dress up.
Hon Marama Davidson: Whose words from which groups that his Ministers met with were finally put into the Natural Environment Bill?
Rt Hon CHRISTOPHER LUXON: As the member understands, PCO drafts legislation that comes before this House, but, of course, as a great Government, we’re interested in the interests of all New Zealanders. We take advice from officials, we take advice from—in this case—industry groups, and also the environmental NGOs. [Interruption]
SPEAKER: Well, when everyone is quiet, I’ll the Hon David Seymour.
Hon David Seymour: Does this Government have a habit of listening to people affected by laws that it’s making—
Hon Priyanca Radhakrishnan: No.
Hon David Seymour: —and, if so, how long has this been going on?
SPEAKER: Wait—whoa. Sorry, would whoever was interrupting there like to just apologise to the House for not being able to constrain themselves.
Hon Priyanca Radhakrishnan: I withdraw and apologise.
SPEAKER: Thank you. It was very generous of you—you were surrounded by people who were equally guilty. We’ll have the question from the Hon David Seymour, with no one making any comments.
Hon David Seymour: Does this Government have a habit of listening to people affected by the laws it’s making, and, if so, how long has this been going on?
Rt Hon CHRISTOPHER LUXON: It’s a bit of a surprise to me to hear from the other side that this is not normal practice but that you actually engage and listen to lots of stakeholders and everybody across the community.
Hon Chris Bishop: Can the Prime Minister confirm—[Interruption]
SPEAKER: Whoa, just a minute. Is it necessary?
Hon Chris Bishop: Can the Prime Minister confirm that the following well-known friends of the National Party have had secret closed-door meetings with the Minister Responsible for RMA Reform: Lan Pham, Julie Anne Genter, the Hon Rachel Brooking, and Greenpeace?
Rt Hon CHRISTOPHER LUXON: I can, and I just commend the Minister for his very open interest in understanding the perspectives of everybody.
Hon Marama Davidson: Supplementary. [Interruption]
SPEAKER: The Hon Marama Davidson, and no one else.
Hon Marama Davidson: What feedback from other groups that his Ministers met with, including the Parliamentary Commissioner for the Environment, local and regional council, iwi and hapū groups, and environmental groups, made it into the actual drafting of their bill?
Rt Hon CHRISTOPHER LUXON: Well, I don’t know how to make myself any clearer: PCO draft the bill and the legislation that comes before the House here. Again, we engage, when we’re developing policy, with many people across the whole of the New Zealand, as we should, as a good representative Government.
Hon Marama Davidson: Why should New Zealanders trust that this Government is going to protect nature when he allows the industries who pollute land and water the most to write the rules?
Rt Hon CHRISTOPHER LUXON: Well, I reject the characterisation of that question because this Government in this last quarter has had the lowest level of emissions in this economy since records began in 2010. This Government in the last quarter has had record high renewable energy consumption, at 96.4 percent. We can do both things, but we are going to grow this economy, and we make no apologies about that.
Housing
Question No. 4
KATIE NIMON (National—Napier) (14:17) to the Minister of Housing: Is the Government considering removing interest deductibility on residential property?
Hon CHRIS BISHOP (Minister of Housing) (14:17): No.
Katie Nimon: Is the Government considering limiting, rather than removing, interest deductibility on residential property?
Hon Member: Great question.
Hon CHRIS BISHOP: That is a good question; thank you for that compliment. Also no. The Government is emphatically not leaving the door open to removing or limiting interest deductibility. We are not considering a half ban—for example, where 50 percent of interest can’t be deducted. If someone provides a rental earning $30,000 in rent and pays $25,000 in interest, their profit is $5,000. With deductibility, tax at 33 percent is about $1,650. Under a half ban, tax is about $5,775 on a property that only made $5,000 profit. This is a great way to disincentivise people from renting out their property or punish people who’ve had to reluctantly rent out their property after a change in personal circumstances. Halfway to unfair is still unfair.
Katie Nimon: What reports has he seen on interest deductibility for residential property?
Hon CHRIS BISHOP: I’m still making my way through the Inland Revenue Department’s (IRD’s) 2021 and 2023 regulatory impact statements. They are riveting—or I could be a slow reader; could be both. Page 17 of the 2021 paper is very clear about who ends up paying the price of removing interest deductibility. It says: “upward pressure on rents” from this policy are “more likely to disproportionately impact low-income households, young people, Māori, and Pacific peoples”—the New Zealanders least likely to own their home. It notes, “around 43 percent of [New Zealand] children are living in rental accommodation”, and that “upward pressure on rents could have negative impacts on child wellbeing and child poverty.” The same page warned that higher rents may mean more “spending on the accommodation supplement and temporary additional support.”
Katie Nimon: What do the reports he has seen say about the rationale for removing interest deductibility?
Hon CHRIS BISHOP: The 2021 regulatory impact statement outlines that the key policy problem was housing affordability. The problem definition section noted there were concerns about rental affordability and maintaining an adequate supply of new housing stock. However, the same regulatory impact statement went on to describe in detail how removing interest deductibility was unlikely to fix the first problem and would make the other two worse. IRD said additional taxes on rental housing are unlikely to be an effective way of boosting housing affordability; they said it would put upward pressure on rents and may reduce the supply of new housing developments in the longer term. The rationale for removing interest deductibility is a shameless tax grab.
Finance
Question No. 5
Hon BARBARA EDMONDS (Labour—Mana) (14:20) to the Minister of Finance: Does she stand by all her statements and actions?
Hon NICOLA WILLIS (Minister of Finance) (14:20): In context, yes—particularly my statement that imposing vast additional new taxes on the economy would put it at risk.
Hon Barbara Edmonds: Is partially privatising a State-owned asset an asset sale?
Hon NICOLA WILLIS: Well, the member would have to elaborate on exactly what she’s talking about.
Hon Barbara Edmonds: Is partially privatising Kiwibank an asset sale?
Hon NICOLA WILLIS: Well, it would depend on what the proposal is that the member is referring to.
Hon Barbara Edmonds: Is asset recycling an asset sale?
Hon NICOLA WILLIS: It would depend on the proposal that the member is referring to. Does she have any?
Hon Barbara Edmonds: Will she rule out partially privatising Kiwibank?
Hon NICOLA WILLIS: Well, what I’ll rule out is that member ever coming up with a useful idea for the New Zealand economy.
Hon Barbara Edmonds: Point of order, Mr Speaker. [Interruption]
SPEAKER: Just a moment. Everyone, calm down.
Hon Barbara Edmonds: I know it’s a very difficult time for some members on the other side of the House and we are close to an election. However, the Minister’s comments—
Hon Chris Bishop: It’s not as tricky as it is for you. How’s your fiscal plan going?
Hon Barbara Edmonds: —were a revelation to this side of the House, and particularly to me.
SPEAKER: Hang on. Look, someone is talking and could leave the House right now—Mr Brown. One of you was talking—was it you, Mr Goldsmith? Away you go.
Hon Chris Bishop: It was me—it’s me.
SPEAKER: Oh well, OK—thank you for the honesty. Off you go. Sorry, I can’t warn all the time and nothing happens. Mr Bishop is leaving the House by volunteering to.
Question 5 interrupted.
Withdrawal from Chamber
Hon Chris Bishop
Hon Chris Bishop withdrew from the Chamber.
Oral Questions to Ministers
Finance
Question No. 5
Question 5 resumed.
SPEAKER: We’re just going to wait for everyone to be quiet. It’s a point of order, and we don’t talk during them or comment on them.
Hon Barbara Edmonds: Point of order, Mr Speaker. My point of order was that the Minister failed to address the question.
SPEAKER: Well, a question about addressing a question is quite a wide one, but I’ll let you ask the question again, and we’ll listen very carefully to the response.
Hon BARBARA EDMONDS (Labour—Mana) (14:23): Will she rule out partially privatising Kiwibank?
Hon NICOLA WILLIS (Minister of Finance) (14:23): Well, what the member defines as partial privatisation is another mystery in the Labour Party policy agenda.
Hon Barbara Edmonds: Who should Kiwis believe when just yesterday morning, Christopher Luxon and Simeon Brown said they were looking at asset sales and will have an announcement soon, then the Minister has ruled them out, then Simeon Brown rules them out, and then, just a few hours later, she puts asset sales straight back on the table, as reported by the media?
Hon NICOLA WILLIS: Well, that question is full of mischaracterisations.
SPEAKER: Question No. 6. [Interruption] It would be a really great question time if there were actually no members here at all—I’d just read them to myself.
Agriculture
Question No. 6
MILES ANDERSON (National—Waitaki) (14:24) to the Minister of Agriculture: Is the Government considering a land tax on farms and orchards?
Hon TODD McCLAY (Minister of Agriculture) (14:24): No, we will not be implementing a land tax on farms and orchards, just as we will not be implementing any new taxes. Instead, the Government is keeping taxes low so all New Zealanders, including rural New Zealand, can keep more of what they earn and have more choices about what they and their families can do with their money.
Miles Anderson: What reports has he seen about a land tax on farms and orchards?
Hon TODD McCLAY: Well, I’ve seen a report by a reputed and respected commentator and journalist that says about land tax that “An average sheep and beef property could face around $43,400 a year; an arable farmer, nearly $49,000 a year.”, and they said, “That, folks, is $1,000 a week.” This would of course be even more if there were other taxes like a capital gains tax or a wealth tax. Instead of more taxes, the Government will continue to support farmers and growers to grow, like with Investment Boost, so that people can invest and innovate, grow their businesses, and create more higher-paying jobs.
Miles Anderson: Has he seen any other reports about a land tax?
Hon TODD McCLAY: Well, yes, I’ve seen a report of a land tax being described as “fantasy posing as policy”. That could well be said about any new tax that would harm New Zealand households and rural New Zealanders, sending our economic recovery backwards. This is why the Government won’t be implementing a land tax or any new taxes on New Zealand farms or orchards.
Miles Anderson: Has he seen any other reports about taxes on farms and orchards?
Hon TODD McCLAY: Yes—a report by Federated Farmers about the harm that a land tax and any other tax would do to rural New Zealand. Simon Donald Roy Cameron of Federated Farmers, as well as Winston Peters—sorry, Winston Churchill; I often look and confuse the two of them—and Winston Churchill both said: “For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” Minister Peters could well have said that. That’s why we have ruled out a land tax, a capital gains tax, a wealth tax, a ute tax—in fact, every one of the new taxes I have seen proposed by others this year.
Health
Question No. 7
Hon Dr AYESHA VERRALL (Labour) (14:26) to the Minister of Health: Does he agree with the Minister of Finance’s statement that “We’re currently recruiting 2,300 new nurses”; if so, what is the expected growth in nursing FTE from recruiting these nurses?
Hon SIMEON BROWN (Minister of Health) (14:27): Regarding the first part of the member’s question, in the context it was made, yes. Regarding the second part of the member’s question, I’m advised by Health New Zealand that in relation to that statement, all 2,378 roles are fulltime-equivalent (FTE). As would be expected, I’m advised that the exact net growth in nursing FTE would depend on a range of factors, including normal workplace movements such as retirements, resignations, and parental leave.
Hon Dr Ayesha Verrall: Point of order, Mr Speaker. The second part of the question was: what is the expected growth in nursing fulltime-equivalents from recruiting these nurses? Now, the Minister was speaking into his chest a little—it was hard to hear his full answer—but I don’t believe there was a comment on the expected growth from those 2,300.
SPEAKER: Well, he did say that the exact number would be dependent on a number of usual employment factors. I think that was a reasonable address to the question.
Hon Dr Ayesha Verrall: Does he stand by his statement that the nursing turnover rate is 8.4 percent, and, if so, is it also correct that Health New Zealand needs to hire 3,000 nurses just to keep a workforce of 35,000 nurses at the same size?
Hon SIMEON BROWN: Yes, the turnover rate, I am advised, has decreased from 11.7 percent in September 2023 to 8.4 percent in March 2026, which shows that the retention of our nursing workforce is improving. Ultimately, that is why we are continuing to recruit to both fill vacancies and to grow the workforce.
Hon Dr Ayesha Verrall: Is it correct that the Government could be recruiting 2,300 nurses and not be growing the nursing workforce at all?
Hon SIMEON BROWN: Well, the member is asserting an annualised figure and applying it to recruitment that is happening right now to fill vacancies and to grow the workforce. Ultimately, we are focused on growing our nursing workforce, filling vacancies, and that’s why Health New Zealand is recruiting to so many roles right now, today.
Hon Dr Ayesha Verrall: Is the Government committing to a net growth of 2,300 nurses?
Hon SIMEON BROWN: We’re committing to growing our workforce, filling vacancies, and ensuring that we are recruiting as we have been since we came to Government, with 2,100 additional nurses since we came to Government.
Hon Dr Ayesha Verrall: When will net growth of 2,300 nurses be achieved by?
Hon SIMEON BROWN: Well, as I said in my answer to the primary question, as would be expected, there are other factors, including normal workforce movements such as retirements, resignations, and parental leave. My expectation for Health New Zealand is that they fill vacancies, grow the workforce, and also grow the services that are delivering for New Zealanders.
Hon Dr Ayesha Verrall: Why should New Zealanders believe that after only hiring 54 nurses over two years, and after repeated attempts to conflate gross hiring with net growth of the workforce, they’re actually going to start hiring nurses again?
Hon SIMEON BROWN: We are hiring, as I said in answer to the primary question. Health New Zealand is hiring 2,378 fulltime-equivalent roles now, and we’ve hired an additional 2,100 nurses since we came to Government. There is more work to do and we’re getting on and getting it done, whilst also improving on all of our health targets.
Rt Hon Winston Peters: Can I ask the Minister: how many times has Ayesha Verrall asked that question, and when do you think the facts will sink in?
SPEAKER: Well, you can’t be commenting on other members. Can I—
Hon Dr Ayesha Verrall: Especially when they’re right.
SPEAKER: Just a minute. Can we go now to question No. 8; I call Dr David Wilson.
Police
Question No. 8
Dr DAVID WILSON (NZ First) (14:31) to the Associate Minister of Police: What recent announcements has she made about fighting organised crime?
Hon CASEY COSTELLO (Associate Minister of Police) (14:31): Earlier this month, I announced that the Government is establishing a multi-agency chief executive board (CEB) on Transnational, Serious, and Organised Crime (TSOC). There are a huge range of agencies that have a role in fighting organised crime, and establishing clearer governance and stronger accountability across the system, with a ministerial lead, was a core recommendation from the ministerial advisory group on TSOC. TSOC groups are sophisticated, well networked, and commodity agnostic. They will do anything to make money and will exploit vulnerabilities. This executive board will help deliver a better-organised Government to fight organised crime.
Dr David Wilson: Why is this an important move?
Hon CASEY COSTELLO: It is important because organised crime is too big a challenge to ignore or not tackle head on. These people don’t care about the damage they cause. Illicit drugs drive cycles of addiction, poverty, violence, and murder. Money made in drugs is supporting international criminals to invest in their businesses and do even more harm. But this is about more than drugs. Organised crime affects every New Zealander every day. It’s why we now live in a world where we have to question the legitimacy of every email and message we receive. Organised crime also undermines legitimate business, drives exploitation and people trafficking, and syphons away Government revenue. Making New Zealand a much harder place for organised criminals to do business is our best chance to protect New Zealanders from all of this harm.
Dr David Wilson: How are we progressing our response to transnational, serious, and organised crime?
Hon CASEY COSTELLO: I’ve now met with all the chief executives involved in our response to organised crime. I’m intending for the CEB to have its first meeting in October, at which point they will have their priorities and an initial work programme established. I would add that we haven’t been standing still until the formation of the board. Without getting into an exhaustive list, in the last year we’ve made real progress on actions from the TSOC plan, including adding an additional money-laundering team at Police, posting more customs and police staff offshore, and strengthening capability and cooperation in the Pacific. This has seen huge amounts of drugs stopped offshore and at the border, and in the last year, the Police organised crime group seized 200 kilograms of cocaine, close to a tonne of meth, and 137 firearms. Encouragingly, recent waste-water results are showing decreasing meth use, and we want to see this trajectory continue.
Dr David Wilson: What examples, if any, can she provide of successful cross-agency work to tackle organised crime?
Hon CASEY COSTELLO: We’ve seen, in recent media, 14 large-scale grow houses shut down in just one operation—a testament to what’s possible when agencies use all of their powers to identify and take action on organised crime activity. I’ve previously announced an action group on illicit tobacco, where Customs, Police, Health New Zealand, and the Ministry of Health have joined forces to target and dismantle the illicit tobacco trade. The previous siloed approach meant that we weren’t using all the tools available to us for the illicit trade. Now, we’re better coordinated and more proactive.
Revenue
Question No. 9
DAN BIDOIS (National—Northcote) (14:35) to the Minister of Revenue: Is the Government considering ending Investment Boost?
Hon SIMON WATTS (Minister of Revenue) (14:35): No, Investment Boost is tax savings for businesses to enable a stronger, more productive economy. We want New Zealand businesses investing, expanding, and growing, because when businesses grow, they create jobs, they lift wages, and create more opportunities for New Zealanders. Investment Boost is about backing businesses to do exactly that.
Dan Bidois: Why is Investment Boost important for growing the New Zealand economy?
Hon SIMON WATTS: If we want higher growth and a more productive economy, we need New Zealand businesses to be growing and investing. That means buying new machinery, farm equipment, vehicles, technology—that all helps them produce more and be more productive. Investment Boost helps make those investments more affordable by providing an immediate 20 percent deduction for eligible new assets.
Dan Bidois: What evidence has he seen that Investment Boost is encouraging business investment?
Hon SIMON WATTS: Early evidence is very encouraging. Inland Revenue found that businesses who were aware of Investment Boost said it was increasing how much they invested. Looking ahead, almost half of businesses planning to invest over the next five years said Investment Boost was having a positive effect on their plans. That tells us that Investment Boost is doing what it was designed to do: getting businesses investing and growing.
Dan Bidois: Did the Government consider putting a cap on the amount a business could claim through Investment Boost?
Hon SIMON WATTS: The Government deliberately chose not to impose an arbitrary cap on Investment Boost because our Government doesn’t want to cap aspiration or economic growth. Putting barriers in the way of productive investment, or introducing new taxes, is the last thing we should be doing if we want New Zealand to be a high-growth economy.
Commerce and Consumer Affairs
Question No. 10
ARENA WILLIAMS (Labour—Manurewa) (14:37) to the Minister of Commerce and Consumer Affairs: Ngā mihi o te wā o te Wiki o te Reo Māori, Mr Speaker. Why does he defend sustainable price rises when one in three Kiwi households are struggling to afford food?
Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (14:37): I do not defend high grocery prices. New Zealanders, as I have repeatedly said, pay too much for groceries. What I support is low and stable inflation, rather than inflation running at 7.3 percent, as it was in 2022. The Government is also working to increase grocery competition by making it easier to consent and build supermarkets, improving overseas investment pathways, strengthening competition settings and supplier protections, and backing Commerce Commission enforcement. I would also note that independent cost-benefit analysis, released today, estimates restructuring Foodstuffs could be worth around $200 to $1,300 a year per household by full roll-out.
Arena Williams: Are the supermarkets gouging New Zealanders, or is he telling the people who are worried about the price increases of 88 percent for butter, 33 percent for milk, and 31 percent for lamb, since his Government took office, to “cry me a river”, like his Prime Minister?
Hon CAMERON BREWER: As I have repeated said, and I will repeat again, New Zealanders pay too much for their groceries, and that is why we are doing the work that I just outlined. But if I can also point out that food price increases for the year to July 2026—the past year—were 1.9 percent. That compares to 12.5 percent to the year to June 2023, under the last Labour Government.
Arena Williams: Are we up to the third—[Interruption]
SPEAKER: Wait, wait, just wait. Okay.
Arena Williams: Are we up to the third or the fourth or the fifth review that the Government has done to find out whether the supermarkets duopoly still controls around 80 percent of the market, and prices continue to rise?
Hon CAMERON BREWER: This Government is doing a lot of work that I continue to outline. I can read that paragraph again. I would note that under the last Government, when they had an absolute majority and 65 MPs, food prices went up nearly 22 percent in three years.
Arena Williams: When is his Government going to finally deliver on the commitment from Nicola Willis to lower grocery prices?
Hon CAMERON BREWER: As I have said, I would encourage the member to get on to the Ministry of Business, Innovation and Employment website and review for herself the independent cost-benefit analysis that shows what could be achieved through potential structural reform.
Hon Nicola Willis: Can the Minister confirm that, in fact, lower food prices have been delivered across several grocery categories in the last 12 months, including chicken, down 4 percent; tomatoes, down 29 percent; eggs, down 15.5 percent; and tinned spaghetti, down 6 percent?
Hon CAMERON BREWER: I can confirm all of those. But, most notably—[Interruption]
SPEAKER: Hang on. Just a bit of calm.
Hon CAMERON BREWER: Most notably, I can confirm that fruit and vegetables are down 1 percent in the past year, compared to increasing by 22 percent in the year to June 2023 under the last Labour Government.
Arena Williams: Why is he highlighting—
SPEAKER: Just a moment. Just a moment.
Arena Williams: Why is—
SPEAKER: Hang on a minute. There is far too much noise coming from the Government benches.
Arena Williams: Why is he highlighting his hard work to bring down the price of spaghetti when this tin of spaghetti [Member holds up tin] has come down 1c under National?
Hon CAMERON BREWER: If I can—[Interruption]
SPEAKER: Just a minute. I know that a topic like spaghetti excites the House. You add in a bit of pineapple, and the place is out of control. Can we just, please, let the answer flow.
Hon Nicola Willis: Supplementary.
SPEAKER: No, you’ve still got one.
Hon Dr Megan Woods: He’s still got to answer.
SPEAKER: Just a minute. I’ll tell you what we’ll do: we’ll try and be really nice—no, we won’t have the question again; just answer the question.
Hon CAMERON BREWER: Even a small decrease in prices is a lot better than the huge increases that they saw under the last Labour Government in food prices.
Hon Nicola Willis: Can the Minister confirm that in one single 12-month period under the last Labour Government, tinned spaghetti went up 35.4 percent, and is it the view of the Minister that if members opposite wish to cherry-pick price increases for particular goods, including mince, including bread, and including toast, then they should be aware that two can play at that game?
Hon CAMERON BREWER: I can confirm those numbers.
SPEAKER: That was, while the question was being asked, completely unacceptable interjection. We’re moving on, we’re moving on. We’re moving on. He’s got to answer a question.
Hon Kieran McAnulty: Point of order. Mr Speaker, I certainly don’t dispute that, but order in this House is a two-way street, and if Ministers are quite clearly going to refer to the other side of the House and that isn’t pulled up, there’s only one option available to us, and that is to respond.
SPEAKER: Yeah, but the member will also know that it’s quite acceptable for Ministers to refer to historical matters that might have been the circumstance when they came into Government. I thought that question was right on the edge of that, but we’ll get a quick answer, and then we’ll move on to Arena Williams.
Hon CAMERON BREWER: I always agree with what the Minister of Finance says. Can I put the contrast? There is no better contrast than fruit and vegetables falling by 1 percent in the past year, compared to increasing by 22 percent under a year under the Labour Government.
Arena Williams: Is that what Kiwis deserve—1c off a tin of spaghetti and a letter from National to the Commerce Commission asking them to do a review?
Hon CAMERON BREWER: What they don’t deserve is a 22 percent increase in food prices that they saw in three years under the last Labour Government. Our work continues, and our results will be a lot better than what they achieve, even with an absolute majority.
Prime Minister
Question No. 11
DEBBIE NGAREWA-PACKER: E te Pīka—[Interruption]
SPEAKER: Hang on. Just stop all the conversation. Are we stopping the conversations?
Rt Hon Christopher Luxon: I wasn’t talking.
SPEAKER: No, you’re not, but the people behind you are. Debbie Ngarewa-Packer and no one else.
DEBBIE NGAREWA-PACKER (Co-Leader—Te Pāti Māori) (14:45) to the Prime Minister: E tautoko ana ia i ngā kōrero me ngā mahi katoa a tōna Kāwanatanga?
[Does he stand by all his Government’s statements and actions?]
Rt Hon CHRISTOPHER LUXON (Prime Minister) (14:45): Yes, and I want to reassure the member that we won’t be introducing a capital gains tax that would put a wrecking ball through the economy.
Debbie Ngarewa-Packer: Does his Government have any plans to increase community ownership of electricity generation so that communities share in the benefits generated from their whenua, wai, and natural resources?
Rt Hon CHRISTOPHER LUXON: Our real focus is making sure we increase the supply of electricity across the country. That’s what we’re doing, with a renewables boom under way. We’re also making sure we’ve got thermal energy in place to support lower wholesale electricity prices.
Debbie Ngarewa-Packer: Will he rule out spending an additional $1 billion on oil and gas exploration under any Government he leads?
Rt Hon CHRISTOPHER LUXON: Well, again, liquefied natural gas plays a very important part, as you’ve seen. Wholesale electricity prices are down 35 percent under this Government as a function of a much more sensible, reasonable energy policy, unlike the Labour-Greens proposal of an oil and gas ban, which shot up wholesale electricity prices to $800 per megawatt hour. That led to regional mills closing and working people, who they used to care about, losing their jobs.
Debbie Ngarewa-Packer: Supplementary. [Interruption]
SPEAKER: We’re just waiting. In the meantime, can we remove that visual aid off the bench there. It’s clearly causing a high degree of distraction across the House. When we’re all quiet, Debbie Ngarewa-Packer.
Debbie Ngarewa-Packer: Why did his Government abandon the 100 percent renewable electricity target while committing public money to expanding the fossil fuel supply?
Rt Hon CHRISTOPHER LUXON: Well, look, I think this is just really quite illustrative of the other side’s poor understanding of energy policy, because under a Labour-Greens Government, they killed oil and gas and sent a chilling effect right through international investment. We ended up importing Indonesian coal rather than domestic gas.
Hon Kieran McAnulty: Point of order. Aside from the fact that what the Prime Minister is saying is untrue—[Interruption]
SPEAKER: No, hang on—hang on. Wait—wait. Hold on.
Hon Kieran McAnulty: All right—inaccurate.
SPEAKER: Hold on. I can work out where you’re going with this. Just make the point of order and let me rule on that.
Hon Kieran McAnulty: Speaker’s ruling 205/4: he cannot bring parties that aren’t involved in the question into it. He’s done it the last two times. In fact, he’s done it the whole term, but since you’re pushing back on it, I’m going to raise it today.
SPEAKER: Right. We’ll just have an answer directly to the question without any other extraneous matter being brought in. Debbie Ngarewa-Packer, ask your question again.
Debbie Ngarewa-Packer: Why did his Government abandon the 100 percent renewable electricity target while committing public money to expanding fossil fuel supply?
Rt Hon CHRISTOPHER LUXON: Because it raised energy prices and people lost their jobs.
Debbie Ngarewa-Packer: Of the 31 permits that were stopped, how many were producing in that period?
Rt Hon CHRISTOPHER LUXON: If the member would like to put that question in writing, we’ll make sure she gets a proper answer.
SPEAKER: Funny how you ask a question if you know the answer, but anyway, can we have a supplementary. Have you finished?
Prime Minister
Question No. 12
CHLÖE SWARBRICK (Co-Leader—Green) (14:48) 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) (14:49): Yes—in particular, our desire never to introduce an inheritance tax.
Chlöe Swarbrick: Should Woolworths and Foodstuffs be allowed to continue making excess profits of $1 million a day as New Zealanders struggle to afford their groceries?
Rt Hon CHRISTOPHER LUXON: Well, that’s why you’re seeing announcements from us this morning on that.
Hon Kieran McAnulty: Point of order. Sir, the Prime Minister is answering on behalf of the Government. The Government has not made an announcement on that today.
SPEAKER: That is a point. I think the Prime Minister could answer that in a different way.
Rt Hon CHRISTOPHER LUXON: Well, we agree, having looked at all the previous reviews of the previous Governments where nothing changed and nothing happened, that there is a real structural problem in the supermarket sector. It’s important that in the future that is addressed.
Chlöe Swarbrick: Does the Prime Minister understand that his officials’ analysis shows that the biggest possible benefit for consumers to achieve more affordable groceries would be breaking up both Woolworths and Foodstuffs?
Rt Hon CHRISTOPHER LUXON: I disagree, given the analysis I’ve seen on that.
Chlöe Swarbrick: Why does he think that New Zealanders can publicly own an airline but not a supermarket?
Rt Hon CHRISTOPHER LUXON: Because I have visions of a Labour-Greens Government sending bureaucrats up and down this country, going into supermarkets with clipboards, assessing the price of oranges and Weet-Bix and everything else, and I’d just say that is not the answer. That is a Soviet step backwards, big time.
Hon David Seymour: In the Prime Minister’s experience of employing people, would running a cafe in Mount Eden for three weeks qualify you to run a supermarket?
SPEAKER: Wait on. Sorry. People may want to interject, but don’t. We’ve had one member leave the House. We’re nearly there at the end of question time, and so we’ll have the Hon David Seymour’s question without any interference.
Hon David Seymour: In the Prime Minister’s experience of employing people, would someone who ran a cafe in Mount Eden for three weeks be qualified to run a supermarket chain?
Rt Hon CHRISTOPHER LUXON: Well, I have to give the Greens credit, because they are actually—
SPEAKER: No, no. Sorry.
Chlöe Swarbrick: If 2022 Christopher Luxon said that intervening in the supermarkets would be a “disaster”, and 2026 Christopher Luxon is advocating for structural separation of supermarkets, just how long will it be until Christopher Luxon starts advocating for a publicly owned supermarket with an affordability mandate?
SPEAKER: The question has just being pulled up because the Prime Minister answered as leader of the National Party when he should be answering for his Government, so there’s a different way you could put that question.
Chlöe Swarbrick: What exactly is the difference between public ownership of an airline and public ownership of a supermarket?
Hon Todd McClay: Supermarkets don’t fly.
Rt Hon CHRISTOPHER LUXON: Well, the bottom line—
Hon Members: Ha, ha!
SPEAKER: Sorry, that may be amusing to some, but not particularly to me. The Prime Minister will answer and we’ll have the answer without any comment from anyone.
Rt Hon CHRISTOPHER LUXON: Sorry, can the member repeat the question.
SPEAKER: Just a minute.
Rt Hon Winston Peters: Try and try again.
SPEAKER: Oh, Mr Peters, please. We want to move on. It’s the last question.
Chlöe Swarbrick: What exactly is the specific difference between public ownership of an airline and public ownership of a supermarket?
Rt Hon CHRISTOPHER LUXON: Look, as I said, the thought that we would have bureaucrats and officials roaming around with clipboards trying to implement the—[Interruption] No, no, hang on. Calm down. Calm down, people, calm down. It’s all good. Calm down.
SPEAKER: Right. OK, absolute silence for the balance of that answer, which should be very brief.
Rt Hon CHRISTOPHER LUXON: I want to thank the Green Party for contributing to solving a problem that we have in our supermarket sector with their idea. I don’t support their idea, but at least they have an idea and a policy unlike what we’ve seen from—
SPEAKER: That’s it; don’t bring them into it. That ends—[Interruption] That ends oral questions. Members and people in the gallery need to leave without making any noise.
I declare the House in committee for consideration of the Local Government (System Improvements) Amendment Bill.
Bills
Local Government (System Improvements) Amendment Bill
Committee of the whole House
Debate resumed.
Part 1 Amendments relating to system improvements (continued)
CHAIRPERSON (Teanau Tuiono): Members, when we suspended for the lunch break, we were considering the Local Government (System Improvements) Amendment Bill and were debating Part 1. Part 1 the debate on clauses 4 to 22, “Amendments relating to system improvements”. The question, again, is that Part 1 stand part.
Hon RACHEL BROOKING (Labour—Dunedin) (14:55): Thank you, Mr Chair. I was eager—eager—amongst all the noise in here.
Just before the lunch break—when, I can inform the committee, I did not have canned spaghetti—we were talking about the link between when a fast track has to be approved and then when the development contributions policy can change. I think the Minister of Local Government’s answer was that, yes, I was correct, in terms of fast track has to be approved, and then the council can change its policy.
I think what the Minister was, in part, answering with his answer was that, well, despite that sequencing issue, the developer and the council can make a development agreement that would cover off what would have been covered in the development contributions policy. If he can confirm that when he’s—I see he’s nodding, but when he next gets up, if he can confirm that, that would be useful.
Then one of my questions around that was: does it have to be development by development? The Queenstown examples I gave before lunch—I don’t know where in the process those ones are, but if you have two separate developments that are unlikely to be covered by development contributions going on at the same time, is the council able to do a development contributions policy that applies to more than one fast-track project, or does it have to be a separate process for each discrete fast-track project? That was the question that I would like an answer to as well as the nods that the Minister was just giving. Thank you.
MIKE DAVIDSON (Green) (14:57): Thank you, Mr Chair. Before lunch—the member who just spoke obviously had moved to clause 18—we were still actually quite a little bit further back at clause 11, amending section 40. I just want to stay where I was talking earlier and just finish off a question that I hadn’t asked on that clause.
I have a tabled amendment to this, and it’s timestamped 16 September 2026, 9.09.11 a.m. It’s quite interesting when you read clause 11(2), inserting, after section 40(1)(f), new paragraph (fa), “how the local authority is acting in accordance with the governance principles set out in section 39(f) and (g)”. It’s a little bit bizarre, because obviously this is about the governance principles, and there are a number of governance principles that are actually in the Act, so this is just two more that are going to get added on after paragraph (e)—so (fa) and (g).
It just seems a little bit bizarre that a local authority has to act in accordance with the governance with the governance principles set out in section 39(f) and (g), but then, to me, this is saying they can then ignore (a), (b), (c), (d), and (e). I don’t think that’s the intention of what this new clause is meant to do; it’s actually meant to ensure that the local authority acts in accordance with all the governance principles that have been set out.
What I’ve just tabled is a very straightforward amendment, and it’s really just to remove (f) and (g) from that clause, so, instead of saying that they need to act in accordance with the governance principles set out in section 39(f) and (g), it’ll simply say that they need to act in accordance with the governance principles set out in section 39. That will therefore capture everything to ensure that local authorities are actually sticking to the governance principles that have been created in the Act, including the two additional ones that focus on the free exchange of information. That’s just a simple amendment that I’ve put forward to, hopefully, get rid of any confusion that may happen. We understand that once we put this stuff into legislation, it becomes quite rigid. I’d hate for councils to think they can, therefore, ignore and not act in accordance with all the governance principles that are actually set out. It’s a small amendment, but I think it’s an amendment that actually should be considered, because I think it actually will clarify and make sure there’s no uncertainty within an Act. It’s really important, when we do these bills, that we don’t actually create any uncertainty moving forward. It would be good if the Minister could consider that in good faith to try and actually make that a bit more straightforward. It’s just a simple question. I’ve tabled the amendment to make that better, and I’d like the Minister to reflect on that. Thank you.
Hon SIMON WATTS (Minister of Local Government) (15:00): I thank the member for the question. We won’t be proceeding with that member’s tabled amendment. It’s not consistent with Government policy.
In the context of the question from the member around applications, they are separate applications. However, where the applications are all put in at the same time, then there is the ability to do so concurrently.
Hon RACHEL BROOKING (Labour—Dunedin) (15:00): Sorry, just the word there—he was using the word “applications”, and this is important because proposed new section 102A(1)—that’s in proposed clause 18B—says that this section applies if the approval is granted. It’s not to do with applications; it’s to do with grants of fast-track approvals. Can he confirm that when he was talking about “approvals”, he means “grants”, because I don’t think—and this is what my questioning was going to as well—that the sequence of events is that it has to be fully granted the fast-track approval before the council is able to amend its development contributions policy. I need confirmation on that point.
Then the second point I think what the Minister of Local Government is saying is that if there were multiple granted fast-track approvals in the same area, then the council would be able to include those multiple projects into its amendment to the development contributions policy. Is that right?
Hon SIMON WATTS (Minister of Local Government) (15:02): Yeah, well, it would be helpful, firstly, if the member the Hon Rachel Brooking could state the clause specifically that she’s asking a question in regards to, so that I’m not repeating myself in regards to that. The question that was put to me was whether those needed to be separate requests, and my answer to that is yes. However, when they go in together at the same time, then they can be concurrent. I won’t repeat myself again.
Hon RACHEL BROOKING (Labour—Dunedin) (15:02): Sorry, I would like an apology, actually, from the Minister of Local Government, because I very explicitly said which clause I am talking about, as I almost always do, and I was telling you it was proposed new section 102A, which is at proposed clause 18B. These words are important, and I don’t think I heard the answer from the Minister about the “granted”, at proposed new subsection (1). I’m now looking on page 2 of his Amendment Paper 803, right at the top, to be very specific.
Hon Simon Watts: What line?
Hon RACHEL BROOKING: Oh, I’m looking at the second line there, which is that “a resource consent approval is granted”. Why I am now using a different tone of voice from normal is because this is a ridiculous approach. We are here in urgency. No select committee has seen this. I’m asking some very basic questions, and it would be considerate, if nothing else, if the Minister actually tried to, in good faith, answer them so we have something on the record. But it is typical of the reckless approach to this Government with fast track that the Minister is not undertaking that, so I’m giving him an opportunity again. I’m asking very reasonable questions about drafting that we’ve only seen and that has not gone through any process and that nobody has made submissions on. So how does the sequencing work, Minister?
Tim Costley: You weren’t even on the committee. You don’t know.
Hon RACHEL BROOKING: I beg your pardon?
CHAIRPERSON (Teanau Tuiono): Take a call if you want to make a contribution.
Hon RACHEL BROOKING: Someone was saying I wasn’t in a select committee. That is right, and neither was this amendment, to those members across there. Perhaps if they’d been following this debate, they would know that we are discussing an amendment that has been tabled subsequent to the select committee process. It is a very serious issue that we are debating because it goes to the cost that will be imposed on ratepayers by developers, some of whom we know are donors to that political party. That’s interesting, isn’t it? At the moment, ratepayers will be paying for this, while these developers, these donors, they will just get by without development contributions.
Now, the Government had seen that this is a problem; it’s not going to fix it—because that goes to Part 2; we’ll get to Part 2 soon—for the problems that are already existing, but, for new ones, it is. I am asking questions about the new ones. A fast-track approval comes in and it is approved—this is my question: is it that only then the council can make a change to its development contributions policy under this amendment that members in that select committee have clearly not paid any attention to? That is the question. Please answer it.
CHAIRPERSON (Teanau Tuiono): Just before I do take the next call, just to sort of note what the Hon Rachel Brooking was talking about there. There is an Amendment Paper that has hit the Table today, I understand, and maybe all members are not aware of that, so just to note that for the committee. So questions about that Amendment Paper are important questions to put to the Minister and to the committee as well. Just to acknowledge that. If we can just focus on those particular questions and on the particular clauses and not those external issues, that would help us to move through the bill.
TIM COSTLEY (National—Ōtaki) (15:06): I move, That debate on this question now close.
Hon RACHEL BROOKING (Labour—Dunedin) (15:06): Well, doesn’t that say what this Government thinks about this important issue? Shameful. Now, I’ve asked many questions that have not been answered, and I invite the Minister of Local Government to answer my questions.
My next questions are very simple. Running through this Amendment Paper, at clause 18C, it appears that there is no change here except for a reference, a cross-reference, and then again the other amendments—I’m turning now to page 3 of Amendment Paper 803—it seems that there are some other changes there; where, most of it, on its face, is not a policy change. There is one policy change in clause 19C and that is an amendment to section 197, and it’s about cross-boundary developments. I understand that the Government has a policy that works through this Amendment Paper, that, where a fast-track development goes across two different territorial authorities, then they can work together to charge a development contribution for those. The question is a very basic one: apart from that change that we can see in the interpretation at clause 19C, are there any other policy changes from 18C down to 19D? That’s a simple question. No? OK.
Moving on then to new section 198A, inserted by clause 19E, and we go to page 4 of the Amendment Paper. At the top of the page there, it says this is the “Purpose and application of section 198B”. These are all provisions that are being inserted into the development contributions part of the Local Government Act—being the principal Act. It says here that the purpose is to “provide the territorial authority with another basis on which to require a development contribution if a resource consent approval is granted under the Fast-track Approvals Act”. I note that “basis” is used in sections later on, and I’m wondering if the Minister can inform us why the word “basis” was chosen, because I’m not sure that this is a term that’s referred to elsewhere in the legislation.
However, elsewhere in the legislation, as I discussed in an earlier contribution, there are different trigger points for a development contribution, and those are not only resource consents but also when you hook on to the networks or you have a property information memo or a building consent. Does “another basis” mean in addition to those other things, those triggers, or is the idea that it’s something different? It’s not the triggers, it’s a new thing; it’s a new concept, this other basis, for these fast-track approvals. So that is my question about clause 198A.
Just reminding the Minister, I was asking him if there’s any policy changes in those proceedings sections, other than that cross-boundary development, that I understand is a clear policy position from the Government.
And then going back to clause 18B, that is that the fast-track approval has to be granted, and my sequencing question, which the Minister still hasn’t answered with the language that is used in these clauses. It’s a precise question about the sequencing—and I remind the Minister that after he criticised me for not telling him which clause I was on, when I had, that he was saying applications, and an application is what you do before something is granted. That is why I’m asking this question about sequencing.
In my mind—maybe the Minister’s mind is different, but an application is the thing that’s in the process and then once it comes out of the process, it’s been granted and it’s no longer an application. That is why I’m asking these questions. Back to clause 18B, about the sequencing of when the councils are going to be able to do these amendments to their development contribution policies.
Hon SIMON WATTS (Minister of Local Government) (15:11): In regards to clause 18C, no, and clause 198A(1) are standing drafting legislation.
MIKE DAVIDSON (Green) (15:11): Thank you, Mr Chair. I’m just going to move on to clause 21. Obviously, my Labour colleague may still be on clause 18, as well; I’d note that.
I have a couple of amendments. Obviously, we’re stepping into regulations here, and these are pretty simple ones as well. I guess it’s a little bit disappointing that the Minister is just refusing to actually give any consideration to these amendments when we’re trying to actually improve this bill and iron out some of the wrinkles. Like, it’s a bad bill, but let’s get a couple of improvements along the way. It would be really good if the Minister could take a little bit of time to actually consider these in good faith and actually potentially see the merits of some of the amendments that we’re putting forward.
I just want to quickly talk to the first one. This one is actually in the name of my colleague to my left: Celia Wade-Brown. Once again, we’d like to do simple amendments that are actually easy to understand and actually improve the bill for people that actually read it when it becomes legislation. This one is timestamped 16 September 2026, 9.09.14. It deals, in clause 3(1) to new section 259(4)(aa). If you read that section, it gives an example to differentiate between particular local authorities or types of classes of local authorities—for example, regional councils and territorial authorities.
I find this puzzling because, obviously, a lot’s changed since this was originally done. Like, this was obviously, before I actually came into Parliament. I wasn’t part of the select committee process, so that’s going back over around a year, now, that this happened. But obviously, since then, there’s been a clear desire to remove regional councils from existence. Therefore, we’re about to pass legislation that still refers, as an example, to regional councils that won’t exist soon.
Therefore, Celia Wade-Brown has a simple amendment that will actually just remove the word “regional” and replace it with “unitary”. That just actually clears it up so that actually, no one goes back and goes “Why are we talking about regional councils? What is a regional council?” Like I said, it’s a very simple, simple amendment, that actually makes it just a little bit more common sense, easy to understand.
The other amendment that we have is on clause 21 and this is to replace new section 259(4)(b).
CHAIRPERSON (Teanau Tuiono): Have you got the time and date stamp?
MIKE DAVIDSON: Time stamp? Yes, thank you, Mr Chair. That is 16 September 2026, 9.09.15. The amendment is to replace new section 259(4)(b)(aaa) with “consult all local authorities impacted by the regulations”.
And this is just to ensure that all local authorities that would be impacted by your proposed regulations are consulted instead of “all relevant local authorities”, which is technically up to interpretation—what you, the Minister, would consider to be relevant. I think it’s really important that we just remove that which is subject to interpretation and just basically put in the words “all local authorities that are impacted by that regulation”, which is a straightforward amendment. But it just removes some of that uncertainty—something that’s up for interpretation—you know, as to what is the relevant local authority. I think if we actually drill down and go “all local authorities”, it’s a straightforward easy amendment that actually does make the bill a lot clearer when it becomes legislation.
So just a couple of amendments that I’d like the Minister to consider.
Hon RACHEL BROOKING (Labour—Dunedin) (15:15): I’m still on Amendment Paper (AP) 803. The Minister of Local Government gave some answers there. I think he said “18B, no”. I’ve got no idea what one of my questions on clause18B the “no” relates to.
Hon Simon Watts: C, sorry; 18C.
Hon RACHEL BROOKING: It was 18C.
Hon Simon Watts: Any policy changes.
Hon RACHEL BROOKING: OK. No policy changes on 18C. Thank you. It’s helpful to talk in full sentences when we’re here, for the Hansard.
So 18C—there’s no policy changes. Is that the same for the preceding sections? Clauses 19B, 19C; I’ve discussed 19D. I did not hear an answer about clause 18B, and that is the sequencing and if the fast track has to be granted rather than being an application.
Does the Minister understand what I am asking in terms of the timing?
Hon Simon Watts: I’m just looking at the clock, sorry.
Hon RACHEL BROOKING: The Minister is looking at the clock. Wow.
Hon Simon Watts: Ask the question.
Hon RACHEL BROOKING: This is a terrible, reckless way to make laws.
CHAIRPERSON (Teanau Tuiono): I’m going to ask people just to talk through the Chair.
Hon RACHEL BROOKING: Thank you, Mr Chair. I would encourage the Chair to encourage the Minister to focus on the questions being asked and to answer questions so that it can be on the Hansard, noting that this amendment has not gone through a select committee process. The people who know about this sort of law have not had time to make any submissions on it, and so I am trying to go through it to ask the Minister what it means, and he seems to be refusing to do this, which is outrageous.
If the Minister can please explain the sequencing in clause 18B, noting the difference between an application for a fast track—because, of course, these can be referred or they can already be on the list—and the granting of that approval. Does it have to be granted? The Minister said “application”; the words in the bill: “is granted”. There is a difference between an application and something that is granted. That is the question I’m asking the Minister. Did he misspeak? Did he mean granted, or is there something else in here that is not apparent to me asking these questions?
Going through then, I don’t think I heard an answer on the use of “basis” at clause 19E inserting new section 198A. Again, if the Minister wants to take us through what is happening at section 198B.
Also at clause 19E—looking at page 4 of the AP here—is the power to require development contributions in relation to resource consent approvals under the Fast-track Approvals Act. There’s a lot here that it seems to be a discretion on the council. The territorial authority “may require a development contribution” after the territorial authority has adopted or amended their plans. And, of course, that contribution must then be consistent with the content of that development contribution policy.
And then we go through to clause 19F, which is new section 199AA inserted. This is the “Basis on which development contributions may be required in relation to the Fast-track Approvals Act”. Again, it refers to “a development” at subclause (2) and at (1). At subclause (2), it refers to “a development”—not a development contribution; just a development—“if the effect of the development”. Again, these are singular terms, which is why I was asking before if every amendment made under these sections has to be discrete—its own fast-track approval. And then going further down to new section 199AA(7), it says, “This section does not prevent a territorial authority from requiring the development contribution that is to be used to pay, in full or in part, for expenditure already incurred by the territorial authority or a service provider in anticipation of the development.” I presume that is the normal development contributions clause, or the normal language, but it would be useful if the Minister of Local Government could confirm that what is outlined in these subsections of new section 199AA, in clause 19F, is what would normally happen in a development contributions policy; or if there is any difference from the primary legislation in its development contribution provisions to this legislation, that would then be specific to these fast-track approvals. Is it different or is it just simply the same terms rejigged a wee bit because we’re talking about these Fast-track Approvals Act again? That’s a question there.
That same question applies to the next paragraphs that all look to me like normal development contributions sections, in the legislation, that are simply amended for this fast-track process. I would, rather than going through them one by one, invite the Minister to tell us if there are any differences in these, that go to some policy that mean that a development contributions amended policy for a fast-track approved project will be different somehow from a development contributions policy that would apply to a normal non - fast-track project. That’s a series of questions.
My last question on this Amendment Paper, before we get to Part 2, is that I see in the Minister’s tabled amendment this morning—I think it was tabled around 11.30 a.m.—he’s deleted clause 22A, which is the last clause before we get into the schedule in Part 2, and that is clause 22A, “Section 290 amended (Development contributions)”, and it’s about transitional provisions. I’m wondering if the Minister can explain why this Amendment Paper 803, which is an amendment to Amendment Paper 565, which is an amendment to the amendment bill, has now been amended with a tabled amendment at 11.30 a.m. this morning, and if it’s significant or not.
Hon SIMON WATTS (Minister of Local Government) (15:23): In regards to clause 18B, I was referring to the word “granted”. In regards to clause—
Hon Rachel Brooking: Sorry, Minister, I can’t hear.
CHAIRPERSON (Teanau Tuiono): He said “granted”. He was referring to the word “granted”.
Hon SIMON WATTS: It seems to be we’re both having a bit of challenges hearing each other. Clause 18B, I was referring to the word “granted”. In regards to new section 199AA, inserted by clause 19F, it is predominantly what normally happens. There is no difference with the exception in the interests of cross-boundary, which is new. The Amendment Paper placed on the table today relates to technical drafting issues identified by the Parliamentary Counsel Office.
CELIA WADE-BROWN (Green) (15:24): Thank you. Mr Chair. While understanding that there may be some more questions on the development contributions areas, I want to ask some questions on clause 21(2), first of all, where it talks about inserting after section 259(1)(dd) and talks about “prescribing the groups of activities that … must [be included] in the long-term plan, annual plan, and annual report:”. I wonder whether the Minister of Local Government could clarify, because I was on the Governance and Administration Committee at the beginning, but it has been a wee while since then and there have been amendments floated around and maybe you could clarify: do you also mean the asset management plans? Because they may be as important as the annual plans. And do you also mean the drafts, or is it only the final that you’re prescribing the groups of activities for? So that’s one on that particular section.
I think my colleague has mentioned some concerns I have in that amendment we put forward about taking the word “regional” out. That’s not because we don’t love regional councils; it’s just that we’re trying to clarify what does the Minister mean by “types or classes of local authority”. Do you mean that there might be different regulations depending on the size, and that might be geographic or it might be population size? Do you mean that it might be different regulations for rural and urban? Which would make some sense, but the example doesn’t really clarify that at all.
I do also have some questions on new subsection (4AB), inserted by clause 21(4), where you’re saying it must not relate to water services. My particular interest in water services is where we’re using natural processes to either reduce the risk of flooding or to protect headwaters. So you’ve got the natural environment, and maybe you’re saying it would make more sense to plant up the banks of this river than it would to do concrete down the side, for example. Now, as I recollect, from looking at the Local Government (Water Services) Act, natural infrastructure was potentially included but it wasn’t very explicit, so, presumably, we can still talk about protecting headwaters and reducing flooding by planting, maybe by the community, maybe by contractors, maybe by staff, but I would like some clarification on that, please.
TANGI UTIKERE (Labour—Palmerston North) (15:27): Kia orana. Thank you, Mr Chair. I have a number of questions. They actually also relate to clause 21 as well. When we’re looking at the groups of activities—which is very common in local government circles to understand what they are—I guess my question for the Minister of Local Government is: with this change, which will allow regulations to, effectively, be much more direct around what those activity groups will look like, why is it that he believes that Ministers are better placed to determine those sorts of things rather than local communities, who elect people around decision-making tables to make those decisions? Because that is exactly what clause 21 is seeking to do. It is essentially seeking to put into regulation-making powers an ability to describe how particular groups of activities could actually work out. The groups of activities have been with local government for a very long time, so my first question is why he believes that Ministers in central government are better placed to determine what those might be and how they might work, and just also on what principle that is justified as well.
There is a new provision here in the Minister’s Amendment Paper 755, which just landed on 15 September—and I look at the clock over there that has the date, so it landed today—and it does have a few changes in here, but this does propose a new clause 21A. While most of that Amendment Paper relates to Part 2, my understanding is that Part 1 comes into play here because the new clause 21A is, effectively, standing up the regulation-making powers for Orders in Council to be made around exceptions here. My question for the Minister, and this is in relation to new section 260A, inserted by clause 21A, is that this will provide an ability to exempt some from the application of three clauses: clauses 23(4), 30A(6B), or 31A(1) of schedule 7, and they’re related to three things there. I’m not going to go through all of them, but the one that is perhaps of relevance is the “any class or type of non-elected member”. Now, we will get to the specifics of that in Part 2 for sure.
There is an ability there for an order, on the recommendation of the Minister, to do a couple of things: one is time bound, either an unspecified period of time or a specified period of time, and the other, new section 260A(2)(b), is “with or without conditions.” What does the Minister see some of those possible conditions might be? It clearly is not related to the timebound nature of it, because that is captured by new subsection (2)(a), but new subsection (2)(b) is there.
A question for the Minister: what is this new regulation-making power seeking or intending to cover, particularly those three clauses that I have identified? Further to that, what are some of the possible conditions, or what might be envisaged as the types of conditions, that could or could not be applied, in terms of the Minister recommending to the Governor-General that an Order in Council may or may not be made?
Hon SIMON WATTS (Minister of Local Government) (15:31): Thank you very much, members, for those questions. In regards to Celia Wade-Brown’s questions around the groupings of activities, the question in regards to whether they apply around asset management plans: no. There was a question around whether they apply to draft plans: yes. Do they apply to different types of councils? Again, the answer is yes.
In regards to questions relating to the centralised reporting, by Tangi Utikere, in regards to, and also including, clause 2(b), councils are still primarily responsible to their communities and ratepayers and should be reflecting their needs and wishes in their planning and reporting. Across the country, councils provide similar services and facilities, and plan for and report to their communities, and providing consistent information that is easy to access and helps increase the transparency and accountability of councils to ratepayers is a way in which we will ensure that localism remains.
MIKE DAVIDSON (Green) (15:32): Thank you, Mr Chair. Actually, I just have a couple of questions. This is on the Minister of Local Government’s recent Amendment Paper 755, which is, obviously, an amendment to Amendment Paper 565. It’s in relation to clause 21A, inserting new section 260A. I have a couple of questions on that, because, obviously, this has been very recent and there has been no real time to scrutinise these new clauses.
I’m just curious: “New section 260A inserted (Order in Council may specify exemptions in relation to non-elected member provisions)”—how will the Minister make the decision on when to recommend that an Order in Council be made under proposed new section 260A(1), exempting non-members from clause 31A(1) of Schedule 7 and enabling them to vote on council committees?
My other question in relation to new clause 21A: will an Order in Council under the proposed new section 260A(1) be able to be made in regards to those specifically excluded from voting by new clause 31A(4) of Schedule 7, to enable them to vote? It’s some, really, quite technical questions around this new clause 21A and this new section 260A. I think it’s really important, because we haven’t had time to scrutinise it, that we get a fulsome answer on how this is actually going to work, especially when we have seen a committee be excluded in a later part of this bill. Thank you.
CAMILLA BELICH (Labour) (15:33): Thank you. I just wanted to make sure I had the opportunity to comment on Amendment Paper 755, following on from the discussion that my colleagues have had on this Amendment Paper. It’s a very specific question in relation to the changes that the Minister of Local Government is bringing in and the definition in clause 5(1A)—not as we originally discussed but as amended by the Amendment Paper—of “non-elected member”.
The reason I am asking this is that it is a commonly utilised provision to allow for, if there is a vacancy within 12 months of a local body election, the first non-successful—arguably, non-elected—member for a local board or for a council to be able to take up the position on the governing body of that authority, in the instance of a vacancy within that 12-month period. My question for the Minister is: as this is a very common occurrence, would that person who was co-opted on be considered a non-elected member under his Amendment Paper 755, or not?
Hon SIMON WATTS (Minister of Local Government) (15:35): Just in regards to that last point, just to clarify: when that occurs, it is not a co-option mechanism; it’s generally as a result of the candidate ceasing to be a candidate and therefore the need to re-appoint, and they take the next person on the list, who has been voted in and who has a position on the list that is second after the one that is in place.
Mike Davidson: That’s incorrect.
Hon SIMON WATTS: No, it is correct. In regards to clause—
Tangi Utikere: It’s an appointment.
Hon SIMON WATTS: Are we doing a question and answer?
CHAIRPERSON (Teanau Tuiono): Communicate through the Chair, thank you very much. I can give that side a call if they want some clarification.
Hon SIMON WATTS: Thank you, Mr Chair. In regards to the questions relating to new clause 21A, the Government’s clear expectation is that non-elected members will not vote. We haven’t made decisions around what types of exemptions will be made at this point, but the key premise underlying this is that there should not be responsibility without accountability.
MIKE DAVIDSON (Green) (15:36): Point of order, Mr Chair. Thank you, Mr Chair. I’m very concerned because the Minister of Local Government just gave us an answer that is not correct. It’s really important that that gets clarified, so it’s actually in the Hansard as the correct answer. Elected members on councils—if they step down, there is a by-election; they do not come back from the next off a list. It would be great if we could actually get a proper answer to that question.
CHAIRPERSON (Teanau Tuiono): I think what we will do is, if you put those questions again—and I suspect Mr Utikere wants to do that—that might give the Minister further time to reflect, or actually to reject what is being said by members around the committee. Is that OK? I was going to go to Tangi Utikere.
TANGI UTIKERE (Labour—Palmerston North) (15:37): Thank you, Mr Chair. My question to the Minister of Local Government is on what basis he reaches that determination, because my understanding is that that is not correct. Where there is a vacancy—and, I mean, we had the situation where Mr Arbuckle himself vacated his local government seat—
Tim Costley: Or Mike Davidson’s community board role.
CHAIRPERSON (Teanau Tuiono): Excuse me, I do not want people communicating across the Chamber.
Tim Costley: They just did it for the last 10 minutes.
CHAIRPERSON (Teanau Tuiono): Communicate through the Chair.
TANGI UTIKERE: What’s going on here? Where there is a vacancy at a local government level, if it falls within 12 months of the scheduled date of an election, there is the ability for the local authority, if it chooses to, to fill that vacancy by appointment.
Now, it might be a common practice that the successful person who is appointed to take that role may very well be the next highest-polling person, but history will show that in this country that is not always the case. It is entirely within the purview of the council to determine who is going to be appointed—if they choose to do that at all. I am, along with Mr Davidson, concerned that the Minister is giving advice to the committee saying that it is always going to be the next highest-polling person. Our understanding is that that is not the case.
The question from Camilla Belich is still there, around what role that person then takes. Does the Minister’s Amendment Paper cover the appointment of a member, who then becomes an elected member by definition, in relation to clause 5(1A), or not? It’s important to understand whether or not the Minister’s intention is that someone who is now appointed to fill a role is going to be captured by an inability to vote on matters, because they are not deemed as elected.
Hon SIMON WATTS (Minister of Local Government) (15:39): To clarify the question—the example that is being given by Tangi Utikere—where that individual is appointed, they will be able to vote. A person who is appointed to a vacancy in the 12 months before an election is treated as a councillor under the law. Hopefully that clarifies the point that is being asked.
RYAN HAMILTON (National—Hamilton East) (15:39): I move, That debate on this question now close.
Hon RACHEL BROOKING (Labour—Dunedin) (15:39): Thank you, Mr Chair. I’ve just got a few questions, one going back to Amendment Paper 803.
I thank the Minister for his answer that proposed clause 18C is not a policy change. I think that’s what he said. The Minister said in his answer that there is this cross-boundary change at proposed clause 19C, but can he just confirm if there’s anything else in there that is a policy change. I take his point that proposed clause 22A, the change in his other paper is a drafting change, not policy change. So just if he can confirm that there’s nothing else that we haven’t covered in here that’s a policy change—he’s shaking his head, so we’ll get that on the record, and he’s shaking it in the “no”, sideways. It is a horizontal rather than a vertical shake.
Now, going back to the bill as reported back from the select committee, I was wondering if the Minister—I’ve just got three small questions on this. One is at clause 20. That is “Section 200 amended (Limitations applying to requirement for development contribution)”. There are words in this about third-party provision, so I’m wondering, again, similar to my other questions: is this a policy change to enable more third-party provision of the infrastructure that would normally be charged for or could often be charged for by development contributions, or is it simply some sort of rewording? That’s my question. That’s at clause 20: is that a policy decision to enable more third-party work, or is it simply some other reason?
Then if we move on to clause 21, the “(Regulations)” clause that’s been mentioned a wee bit, I have a couple of questions there. One at new paragraph (dc) is “prescribing parameters or benchmarks”. I’m wondering how those two things are different—a parameter versus a benchmark. Does the Minister imagine that a parameter is a specific measurement and a benchmark could be a more quantitative statement? Is that the difference between the two of them? And then I note that there is “(ii) performing specified activities or groups of activities in accordance with best practice:”. Does that “best practice” mean that the regulation will prescribe what the best practice is, or does the best practice come from somewhere else?
Then my last question on this is at clause 21(3)—so still on clause 21, subsection (3). There is a new regulatory power to “prescribing processes, time frames, and other matters relating to a request for access to documents under clause 26A(2) of Schedule 7:”. I haven’t looked at what that reference is there, but I was wondering if the Minister can let me know if this is different from a requirement under LGOIMA, under the—now I can’t remember what LGOIMA stands for, the Local Government Official Information—
CHAIRPERSON (Teanau Tuiono): I think we all know what you mean.
Hon RACHEL BROOKING: Yes. However, that is the LGOIMA. This is what happens when you say a word for 20 years and then you forget that it’s actually got proper words inside it. If this is in addition to LGOIMA—or what is the interaction with the time frames that are already prescribed in LGOIMA at new paragraph (fa). Thank you, Mr Chair.
Hon SIMON WATTS (Minister of Local Government) (15:43): In regards to questions on clause 20—is it a policy change?—no. In regards to the point of clarification around parameter versus benchmark, parameter—I think, as the member outlined, parameter is a range and benchmark is a target.
TANGI UTIKERE (Labour—Palmerston North) (15:44): Thank you, Mr Chair. I’m still waiting for a response from the Minister around the items contained in his Amendment Paper in terms of various conditions that may or may not be imposed as part of the regulation-making powers.
I want to ask the Minister about clause 22. This is the next step from the performance measures and activity groups that have been identified in clause 21. It actually introduces a role for the Secretary for Local Government to make some rules or to define some parameters around performance measures.
Very first question: why is it that the secretary is being seen as the appropriate vehicle to, essentially, impose upon local councils what it is that they should be doing in terms of the performance measures? Is this not just an attack on the very localism that the Government sought to get elected on at the last election, removing the ability for local councils to be making some of those determinations themselves? Certainly, on face value and even at a more basic level, that’s exactly what it looks like. My question to the Minister is: why is it that the secretary is being asked to have not just a role but a fundamental role in terms of setting the performance measures for councils all around the country?
In terms of the particular process that the secretary must go through before making these rules, which is defined in replacement section 261B(3)(b). This is where the secretary, firstly, must consult with all relevant local authorities. But the second one specifies whoever the secretary considers to be appropriate. This is putting into that person’s domain quite a significant level of influence in that particular space, so why is it that this Government, who apparently hail on the issue of localism and yet all their actions certainly indicate and show something quite different, is seeing the secretary as the appropriate vehicle to undertake that work?
SAM UFFINDELL (National—Tauranga) (15:46): I move, That debate on this question now close.
TANGI UTIKERE (Labour—Palmerston North) (15:46): Thank you, Mr Chair. There’s still no response in that particular space, but maybe we’ll just keep asking questions. I mean, let’s not forget that some of these changes were only tabled in the Parliament on 15 September—so not that long ago, really, in terms of that.
Is it that the position of the Government is such that there isn’t going to be any communication between the Government and the Secretary for Local Government? The suggested changes that have been made through the select committee process talk about the connection between the Minister providing some advice to the secretary, but, actually, reference to the Minister seems to no longer exist, in terms of that part of the clause. Originally, it had that “the Minister advises the Secretary that the Minister considers it appropriate to consult”, so this is removing that responsibility from ministerial purview into a completely different area. It would be helpful for the Minister to provide a little bit of clarity around that.
I also think that it is still important, given that his Amendment Paper is new and it does give the regulation-making powers, which are, as we know, secondary legislation, so this does provide a limitation on, in this sense, an elected member’s or a committee’s or a local territorial authority’s ability to either do certain things or not do certain things. I don’t think it’s unreasonable for the Minister to explain to the committee or to, indeed, guide the committee through his thoughts around what that will mean in terms of the imposition of regulations for elected members who are duly elected by their communities—whether they are elected or appointed, they are none the less elected.
Hon SIMON WATTS (Minister of Local Government) (15:48): Thanks for that question. In regards to replacement section 261B(3) and the role of the secretary, as the member will be aware, the secretary is probably the most senior public servant within that department. This is not some new element in the context that this is amending an existing section, which makes it more flexible. The secretary already has similar powers to make performance measures. While the member is trying to imply that this is something new, that is not the case.
The question around clause 21(3), again, in regards to prescribing regulations around the Local Government Official Information and Meetings Act process—to clarify, this is separate to that process. That covers off all the questions that are outstanding.
Hon RACHEL BROOKING (Labour—Dunedin) (15:49): Point of order. I’m getting the feeling that we will move on from Part 1 soon. I just want to confirm with you, while you’re in the Chair, that Schedule 2 for Amendment Paper 803 is related to Schedule 2 which is in Amendment Paper 565 and will be considered in the Part 2 debate.
CHAIRPERSON (Teanau Tuiono): That’s a lot of numbers!
Hon RACHEL BROOKING: I’m just asking that because it says, “in Schedule 2, after new clause 70, insert”, but, in fact, in Amendment Paper 565, in Schedule 2, it goes to 69, not to 70. So that’s why I’m just double checking that—
CHAIRPERSON (Teanau Tuiono): That it’s in this debate and not somewhere else?
Hon RACHEL BROOKING: That it’s in the next debate—it’s in Part 2.
CHAIRPERSON (Teanau Tuiono): That it’s in the next debate. Oh, hold on a sec—I’ll just have a quick read.
Hon RACHEL BROOKING: Yep, thank you.
CHAIRPERSON (Teanau Tuiono): It’s definitely in the debate.
Hon RACHEL BROOKING: In this debate—in Part 1?
CHAIRPERSON (Teanau Tuiono): In Part 2—Part 2.
Hon RACHEL BROOKING: In Part 2. Thank you.
CHAIRPERSON (Teanau Tuiono): I feel we are naturally coming to a close.
MIKE DAVIDSON (Green) (15:50): Yeah, and actually, you might have just answered my question. I was just checking if Schedule 2 is in Part 1 or Part 2.
CHAIRPERSON (Teanau Tuiono): Part 2.
MIKE DAVIDSON: Part 2. Thank you.
SAM UFFINDELL (National—Tauranga) (15:50): 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 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s tabled amendments to Amendment Paper 803 amending Part 1 be agreed to.
A party vote was called for on the question, That the amendments to the amendments be agreed to.
Ayes 88
New Zealand National 48; Green Party of Aotearoa New Zealand 15; ACT New Zealand 11; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 34
New Zealand Labour 34.
Amendments to the amendments agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendments to Amendment Paper 565 amending Part 1 set out on Amendment Papers 755 and 803 as amended be agreed to.
A party vote was called for on the question, That the amendments to the amendments as amended be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Amendments to the amendments as amended agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendments to Part 1 set out on Amendment Paper 565 as amended be agreed to.
A party vote was called for on the question, That the amendments as amended be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Amendments as amended agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Tangi Utikere’s amendment to delete clause 4 set out on Amendment Paper 651 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Mike Davidson’s tabled amendment to clause 4 replacing new section 3(d) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Tangi Utikere’s amendment to delete clause 5(1) set out on Amendment Paper 652 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Celia Wade-Brown’s tabled amendment to clause 5(1) replacing the definition of “community outcomes” be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Francisco Hernandez’s tabled amendment to clause 5(1A), paragraph (a) in the definition of “cost-effective” be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Mike Davidson’s tabled amendment to clause 5(1A), paragraph (b) in the definition of “cost-effective” be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Mike Davidson’s tabled amendment to clause 5(3) replacing new paragraph (a) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Francisco Hernandez’s tabled amendment to clause 7 new section 11A(1)(e) inserting “public places” be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Steve Abel’s tabled amendment to clause 7 new section 11A(1)(e) inserting “and activities” be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Dr Lawrence Xu-Nan’s tabled amendment to clause 7 new section 11A(1)(e) inserting “art galleries” be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Mike Davidson’s tabled amendment to clause 7 new section 11A(1)(e) inserting “heritage” be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Mike Davidson’s tabled amendment to clause 7 inserting new section 11A(1)(f) relating to natural hazards be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Celia Wade-Brown’s tabled amendment to clause 7 inserting new section 11A(1)(f) relating to community support be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): Mike Davidson’s tabled amendment to clause 7 inserting new paragraph (f) relating to environmental enhancement and protection is out of order as not being in the correct form of legislation.
The question is that Mike Davidson’s tabled amendment deleting clause 8(2) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Mike Davidson’s tabled amendment to clause 9(3) inserting “delivery and” be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Mike Davidson’s tabled amendment inserting new clause 9A be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Francisco Hernandez’s tabled amendment to clause 10 new section 39(1)(f) inserting a reference to the code of conduct be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Mike Davidson’s tabled amendment to clause 11 new section 40(2)(fa) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): Francisco Hernandez’s tabled amendment to clause 12 replacing new section 42(2)(i) is out of order as being inconsistent with a previous decision of the committee.
The question is that Lemauga Lydia Sosene’s tabled amendment deleting clause 16 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): Celia Wade-Brown’s tabled amendment deleting clause 16 is out of order as being the same in substance as a previous amendment.
The question is that Mike Davidson’s tabled amendment to clause 16 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Mike Davidson’s tabled amendment deleting clause 18(2) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Barbara Kuriger): The question is that Celia Wade-Brown’s tabled amendment to clause 21 new section 259(4A)(a) replacing “regional” with “unitary” be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
A party vote was called for on the question, That Part 1 as amended be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Part 1 as amended agreed to.
Committee of the whole House
Part 2 Miscellaneous provisions, and Schedules 1 and 2
CHAIRPERSON (Barbara Kuriger): Members, we come now to Part 2. This is the debate on clauses 23 to 30—“Miscellaneous provisions”—and Schedules 1 and 2. The question is that Part 2 stand part.
Hon RACHEL BROOKING (Labour—Dunedin) (16:13): Thank you, Madam Chair. I’m just noting that Part 2 is a bit messy. As you said, it’s these “Miscellaneous provisions”, but, then, I know that we have this quite substantive policy change with Amendment Paper 755, which I know a lot of people will want to speak on, and we’re still also dealing with another big policy change with Amendment Paper 803. I know that members will want to have a lot of discussion on Amendment Paper 755 and also on changes to the codes of conduct and other changes.
I’m going to start back on Amendment Paper 803, and this is the one with the development contributions for fast track. There’s just really one clause to talk about on it, so I’ll try and do it in one contribution. I’ll start with the easy part of it. New clause 71 restricts—this is, for the Minister, on page seven of Amendment Paper 803, and it’s new clause 71 in Schedule 2. Interestingly, it says, “after new clause 70”, but if I look back on his Amendment Paper 565, that seems to only get numbered to clause 69, so I don’t know where clause 70 is. That’s my first question. Is there a clause 70?
Then my second and very simple question is on the specified provisions at new subclause (2), which has got a lot of letters in it. Is this all just bringing over the development contributions, rights, and provisions to work for the fast track, or is there some policy changes in all of those letters? That is new subclause (2)(q). Then, on that, at (q), I see that his tabled amendment, tabled this morning around 11.30, deletes (q), which is “section 290(2) (development contributions).” There’s no longer a specified provision. I presume that that is a not a policy decision but a technical change, but I’m going to ask the Minister to take us through these changes. I think that would be useful to have on the record.
But my more substantive contribution is on new subclause (1). This is about what fast-track approvals these new development contribution provisions will apply to. It will not apply to the over 3,000 houses at Sunfield, and it will not apply to the 1,200 houses at Delmore, because—and the Minister is free to tell me that I’m wrong here—this goes to the commencement date of when these provisions start to stick, and that is that they “do not apply”—that is a very important word at new subclause (1). They “do not apply” if the “resource consent approval … has been granted”—so that is both Delmore and Sunfield; then there’s a colon—“: (b) a substantive application for a resource consent approval in relation to which the authorised person has been provided with—(i) a copy of a draft decision document …; or (ii) draft conditions”. My reading of that is that the things that have been approved—Sunfield and Delmore—are out of it but also that, if you have got your substantive application in and the panel has come back with something to you, then you are also out of this process. However, if you are a substantive application and you have not yet, at that stage, by the time these provisions commence, then the development contributions policies can apply to you. You’ve applied, maybe you’ve thought about the development contributions and maybe you haven’t, but they will apply to you if there hasn’t been some sort of draft decision.
I saw the Minister nodding, but I think it’s important that he takes a call on this and explains the provisions. But my main question is: what analysis has there been into how many projects have already been approved or have already had a substantive decision and have had a draft decision come back? How many houses are missing? This is the mischief that we’ve all been talking about and that councils have been talking about since 2014—that their development contributions provisions won’t apply. So it seems that they’re not going to apply to the Sunfield project, to those 3,000 houses, and to Delmore, to those 1,200 houses, and, of course, we know that this mischief was enabled by this Government through the beneficiaries who happen to be their donors. This is a very bad gap we have in our system. We have donors being able to reap the rewards of not paying development contributions, because of legislation that this Government has put in, and this doesn’t fix it. It doesn’t fix it. What analysis is there of how many houses are going to go through this process and not have these development contributions provisions applying?
Has the Minister considered, or would the Minister consider, my tabled amendment from 7 p.m. last night to remove the “not” so that these provisions do apply to those large controversial projects on land that are totally out of development contributions areas and are the mischief that, surely, everybody here who wants to hold their head up and say that we are constitutionally sound wants to fix? So those are my big questions.
I have one other smaller question. I presume that where an approval has already been granted, that grant is at the panel stage and not what comes back from an appeal—because, obviously, if the appeal undid the grant, then it wouldn’t be granted, and, if the appeal let the fast-track development continue, then it would still be granted. However, there may be circumstances whereby an appeal leads to quite a different result. It may be that conditions change in an appeal, say, so that there could be quite a lot of changes to that development. Has there been any consideration of that type of situation and whether or not these new development contribution provisions would apply to that situation or not?
So questions on my understanding of what’s in and what’s out; also whether or not there are any policy differences from normal development contributions frameworks in this clause; why it is that (q) has been deleted by the tabled amendment; and the appeal question.
What analysis has the Government done about how much this is going to cost councils? When things cost councils, that means that they cost ratepayers, so this is very much a cost of living issue—this is very much. The Government says that they want councils to reduce rates; it is going to have the opposite effect because the councils are still blocked from doing what they would normally have had an opportunity to do and recoup from the developer. Development pays for development. They would have recouped for that because they would have had a development contributions policy. It is only because the fast track has come in in an out of sequence manner that we now have this problem that we’re trying to address today, but we’re not even fixing it. Will the Minister actually fix the problem? Will the Minister agree to my amendment?
CHAIRPERSON (Barbara Kuriger) (16:22): Just before the Minister speaks—and I am going to call the Minister—I just wanted to make a note for this particular part the member rightly talked about what was on this side and the other side of the commencement. We don’t want to turn it into a debate about commencement. It’s about the process—one side or the other. The member, actually—the way you approached that was correct, so I just wanted to make that really clear at this point.
Hon SIMON WATTS (Minister of Local Government) (16:22): Thanks to the member for those questions. In regard to specific points relating to Amendment Paper 803, new clause 71(1)(a) and (b)(i) and (ii) of Schedule 2, to clarify the points around policy and technical, there are no policy changes in that area.
You asked the question around—I think it was—new clause 71(2)(q) of Schedule 2, relating to section 290(2). That, as simply referred to, is going to be deleted by another part of the bill. So, again, a technical matter in that regard.
The member asked, in terms of interpretation of new clause 71(1) of Schedule 2 around the words “do not apply”. The member’s interpretation is correct. It doesn’t apply, as the legislation outlines, where resource consent approval has been granted, and the reason why is because making a change or including that would be retrospective in nature, and that is inconsistent with this Government’s policy.
Hon RACHEL BROOKING (Labour—Dunedin) (16:23): I’m very interested in that retrospectivity point, because the Minister’s raised it. How does his logic—that it is retrospective—then apply to applications that have been made but are in the process? Why then does it apply to them? That is one question.
But, two, I want to challenge the Minister on two things to do with his comments about being retrospective. One is: when has that ever stopped this Government before? We have seen them do retrospective after retrospective changes all of the time, so that doesn’t seem to be a good argument. But, more importantly, the better argument that I am interested in is that it is not in fact retrospective, because the houses have not been built. The development has not yet happened.
It is a well identified quirk in the system that because of the fast track—because of the many disastrous provisions of the fast track that is enabling this jumping of community plans and planning documents—that the mechanism for councils to pay to get some contribution for the development growth that they’re going to have to provide is missing.
But the houses are not built, so it’s not retrospective in the sense that a house buyer is going to come and say, “Oh, look at this. I don’t have to pay development contributions.” We’re not at that stage yet. We’re just at the stage where these developers have—who knows even if they were aware that they wouldn’t have to pay development contributions. I suspect they were aware of that. But let’s presume that they weren’t aware of that. Why is it retrospective if it’s a mechanism and arguably—I mean, you can argue about it—councils might have some other tools to them in the form of targeted rates to pay for some of this, and that is just the machinations of the different tools that councils have and when they click in. They all click in later, when the development starts to happen, and we’re not at that stage yet. There has been no development, so how would it be retrospective to enable the councils to fix up their paperwork as they would and to apply it in the same way. And we’ve heard the Minister say over and over again, “No, there’s no policy change from a normal development contributions policy for these fast-track approvals.” So how is that retrospective? The houses have not been built. No development has started. All we have is the fast-track approval—and we’re not saying to undo that fast-track approval. That’s all we’ve got.
Now, the Government has been saying over and over again “We think that growth should pay for growth.” I’ve heard that from Ministers’ mouths over and over again. “Growth should pay for growth.” This is a mechanism for growth to pay for growth. The growth hasn’t happened yet, so it’s not retrospective. Tell me why I’m wrong, Minister.
MIKE DAVIDSON (Green) (16:27): Thank you, Madam Chair. I want to just refer to the Amendment Paper that was recently dropped, Amendment Paper 755, which was amendments to Amendment Paper 565. I just still want to go into new clause 25.
This Amendment Paper we’re seeing now in this Part of the bill are around the removal of voting and quorum rights of non-elected members on council committees that they’ve currently had. And, obviously, they’ve had that for over 50 years. This is kind of setting the scene because we haven’t had time to scrutinise this. It hasn’t gone through any select committee stage. There’s been no consultation, and it’s a bit of a shame.
I just want to know: what evidence did the Minister actually have to actually make this decision to remove from these people that are not elected their voting rights and their quorum rights? I ask this because I’m not too sure, when I read through everything, that there’s anything that backs up doing this actual change through the evidence that’s been provided. In fact, it’s the reverse because, as I mentioned before, this has been happening for 50-odd years, where councils have used experts to actually add value, which is actually at the benefit of the ratepayer.
As the Minister’s aware, I’ve asked several questions of him through this process about how many people have actually complained to him. How many elected members have made a complaint to him about non-elected members being on council committees? It took a lot of time to actually finally get a straight answer from the Minister, and it turned out: one. There has been one elected member over the last year that’s actually complained about non-elected members on council committees, and that elected member was a councillor from the Far North—an ACT-aligned councillor, so no surprise there.
The other question I asked him was how many people from the public—how many of the public—have actually complained about non-elected members on council committees. How many have given a formal complaint? I still don’t have that answer, and it’s a simple question. It would be great if the Minister could tell me how many formal complaints he has received from the public this year from people that are saying complaints about non-elected members on council committees. So my question to start this debate on quite a serious amendment that’s been dropped, is: how many people have formally complained to the Minister about this issue, and what evidence has he used to justify this change in local government that has been working successfully over the last 50-plus years? They’re my questions to start with, and I have some more questions to follow that up with.
Hon SIMON WATTS (Minister of Local Government) (16:30): Thank you for that question. The question is relating to why this Government is removing the ability for non-elected members of committees on councils not to be able to vote on the spending of ratepayer money. The question asked is have I received any complaints, and “It’s been fine for 50 years, Minister, so why don’t you just leave it in place?” Well, I’m sorry, but that is not how it works. We make no apology for removing the ability of non-elected individuals to vote on decisions of spending ratepayer money, because that is not democratic. We are making that change in order to correct that issue in the legislation. That means that ratepayers can have accountability at the ballot box to ensure that the people that they elect are the ones that make decisions about how their rates are spent. That is why we’re doing this. We make no apology for that, and democracy is not something we should cut corners on.
Hon WILLIE JACKSON (Labour) (16:31): What a load of nonsense from that Minister. Why don’t you tell John Key that?
CHAIRPERSON (Barbara Kuriger): You don’t have to like the answers, all right, but just ask the questions, OK?
Hon WILLIE JACKSON: Well, I’m coming to the question. Here’s the question for the Minister: why don’t you tell John Key that? Why don’t you tell John Key that, who had a totally different view and a National Government that supported the Auckland Independent Māori Statutory Board having voting rights and having speaking rights? Why didn’t the Minister tell Rodney Hide that, who set up the Independent Māori Statutory board so that Māori could have an opportunity in terms of having input? You talk about 50 years; for the last 14—
Tim Costley: What do you know about the capital gains tax?
Hon WILLIE JACKSON: You wouldn’t know, fool, shush up. For the last 14 years—for the last 14 years—National and ACT have supported Māori in Auckland having voting rights and having speaking rights. I’m going to ask this Minister: why did you not meet with the members from the Auckland Independent Māori Statutory Board, who asked—who asked—this Minister to explain to them why, all of a sudden, he falls back into the easy arguments that he’s rolling out. “Oh, this is about democracy.”—it was about democracy for the ACT Party. It was about democracy for the National Party. It was about democracy for John Key. It was about democracy for Rodney Hide. They were all there, and this Minister wasn’t even anywhere near Parliament.
Hon Melissa Lee: What’s this bill about?
Hon WILLIE JACKSON: Melissa Lee—you all supported it. They all supported it. I have to say, this is a very, very strong topic, and the Auckland mayor’s already said this lot can go jump in the lake—good on “Brownie”, I say. The Auckland mayor has already said this lot can go jump in the lake, that he’ll chuck the regional deals down the tube, because of this Minister deciding to breach good-faith agreements and partnerships with Māori. That’s the question, and it’s absolutely related. Ngāti Whātua, for instance, who have a co-governance arrangement worked out with the National Government—who all of a sudden don’t like co-governance—and they’ve worked with Ngāti Whātua through the years. There’s been partnership relationships, partnership agreements, and it’s good to see the Hon Judith Collins in here, because she was a supporter of this relationship until this lot came along. No wonder the Hon Judith Collins got out of that lot over there—
CHAIRPERSON (Barbara Kuriger): OK, you’re off track, Mr Jackson. If the people to my right could be quiet, I did deem that Mr Jackson’s question was relevant, even if the speakers over to my right didn’t think so. Your questions—just stick to your questions.
Hon WILLIE JACKSON: I have a number of questions. Why did this Minister not meet with the Auckland Independent Māori Statutory Board? They’ve had this in place for 14 years after Judith Collins and John Key and Rodney Hide set up the Auckland Independent Māori Statutory Board to give Māori an opportunity in Auckland who were not getting on to city councils, who were not getting input, who were not playing their part in democracy that this Minister loves to talk about. Well, how come you’re OK in 2012 with the Hon Judith Collins and John Key and Rodney Hide, but this useless lot, they want to put a whole new spin on it? And what are they trying to do? They’re trying to placate the voters six or seven weeks out.
So why did he not meet with the Auckland Independent Māori Statutory Board? Why was there no proper process in place? Why was there not a proper amendment in place? Why was there no consultation with local Māori? Why was there not a kōrero with Ngāti Whātua, who are one of the most primary and most important and most influential groups in this country, and who have strong relationships with this Government? The people don’t understand. Also, what is he going to say to Mayor Len Brown—not Len Brown; Mayor Wayne Brown, “Brownie”, who said that National, this Government, can go jump in the lake now. You breach your word with Māori, and “Brownie” says that he’s finished with you lot. What are you going to say to “Brownie” now—a Minister who loves democracy so much?
Hon SIMON WATTS (Minister of Local Government) (16:36:34): I thank the member for his questions. I can be very clear and categoric to the member that the changes which we are putting in place through this bill do not specifically target iwi Māori. They do not specifically target race. They target the ability of those that are democratically elected into their roles to be able to vote, and those that do not and are not democratically elected to not be able to vote—to spend ratepayer money. This is not about race. This is not about iwi Māori. This is about democracy, and I make no apology around being categoric around that change. I take no accountability in regards to why those changes were done in the past, but as Minister, I stand here today, I look at the problem, and I have an obligation to make that right, and the changes which we are doing make that right. They restore democratic accountability. That is the right thing to do for New Zealand ratepayers, and, again, I make no apology for that.
CAMILLA BELICH (Labour) (16:37): Thank you, Madam Chair. It’s a pleasure to be able to take a call on this. I will continue with new clause 31A, set out on Amendment Paper 755, as my colleague the Hon Willie Jackson has raised this, as well as my colleague in the Green Party. I do know that there are other provisions prior to this in Part 2 which haven’t been touched on, especially the code of conduct and standing orders, which other members wish to contribute to.
It’s an honour to be an MP from Auckland, and today I do stand for Auckland in this Chamber, because I think what the Government has done in relation to new clause 31A is just totally—you just cannot understand why they would make such a decision. We’ve heard a passionate defence of why we should have Houkura, which was originally the Independent Māori Statutory Board, from the Hon Willie Jackson, and we’ve heard a passionate defence from the Mayor of Auckland as to why these arrangements are working for Auckland and have been working since they were established—again, by the National Government at that time when they enacted this.
I do want to ask the Minister how he can stand by his statement that he isn’t specifically targeting Māori when we look at new clause 31A and we look at the explanatory note, which explains what new clause 31A in Amendment Paper 755 does, and we see that specifically the Minister and this Government have decided to make sure that the members of Houkura, formerly the Independent Māori Statutory Board in Auckland, are no longer able to vote under the—and this was originally enacted under the Local Government (Auckland Council) Act 2009. To me, that seems like they have specifically decided that the members of that board no longer should have a say in their city, in Auckland, and no longer contribute in a way that has been universally concluded as to be extremely helpful and extremely productive for the city of Auckland.
This is targeting Māori. The people on that board are Māori. The reason that the Minister has excluded this is clearly to target this particular board. We don’t need to look further on the Order Paper to see that there are other bills that we will be discussing today which have a similar theme.
For the Minister to say that it is simply a matter of restoring democratic rights is frankly not entirely believable, because it seems to be that this change has been brought up—no consultation. We haven’t had an answer around the extent of consultation that has been had with Houkura or the Auckland Council. There has been no call for those that we have heard in Auckland to change these very sensible, longstanding, productive relationships that have benefited our city. Suddenly, a year after this was reported back to the House, we are here in the dying days of this Parliament with an Amendment Paper that hasn’t been through select committee, taking away the right of the Independent Māori Statutory Board in Auckland, Houkura, to actually vote on what is best for their city.
This is a shameful situation to be in. It’s inexplicable to understand why this has been done in this way. These are longstanding relationships. These are people who are respected. They have mana within Auckland and within the rest of the country. What they were doing was working. The council didn’t call for this. Yet for some reason we are here. Why? That is a genuine question to the Minister. Why has he decided to do this? What harm has the fact of those members of that board—it is not part of the elected governing body. What harm have they been doing?
I had a lot of other points that have been raised by members of the community who have not been able to submit on this particular point in this Amendment Paper. I’m hoping that we have the opportunity to be able to go through some of these, but we do have concerns around some of the decision making in respect of this specific decision. It does specifically target this particular board in Auckland, and it’s listed in the explanatory note. It’s a genuine question to the Minister. Why has he decided to do this? Why has he targeted Houkura, the Independent Māori Statutory Board?
Hon SIMON WATTS (Minister of Local Government) (16:42): Thank you to the member Camilla Belich for the question. In short, the answer to that question is one of consistency. The principle which the governance has around its overall policy, as I have noted before, is that voting on council committees should rest with democratically elected members. The reality is that the Houkura Independent Māori Statutory Board in Auckland, while having a unique status under legislation where it appoints its members onto the Auckland Council committees—the agreement by this Government is that that committee, alongside all other committees, should be treated consistently, and it is the case that if they are not democratically elected then they should not be able to vote. This is not singling out or any other aspect. It is consistent application of policy at a national level.
If you look at it from the counterfactual point of view—and I had made a decision to exclude them because they’re nice and other comments that the member has noted, which, with respect, are not basis—then it would be inconsistent and every other committee that has had that principle applied to them would be treated inconsistently. That’s not how I do business, nor this Government.
In regards to the reality of that committee, the committee will still exist. It will still contribute and provide advice and feedback to Auckland Council, which is very positive, and that will continue. The point which we are dealing with is the ability to vote. Whether it’s this committee or any other, the point of consistency on this side of the House is that from a democratic point of view, those that vote should be those that are democratically elected by the people. Again, we are not going to cut corners in regards to democracy.
CELIA WADE-BROWN (Green) (16:44): Thank you very much, Madam Chair. I do have some questions on a different area of the code of conduct, but I would like to continue this area of questioning for the moment regarding Amendment Paper 755.
I support the intent of the questions from my colleagues Camilla Belich and Willie Jackson, but my area is a little bit different. It’s a very specific committee that all councils have in some form or other. It’s the Audit and Risk Committee. Consistently, Mayor Prendergast, myself, and Mayor Foster all appointed independents who are unlikely to stand for council themselves. They are chartered accountants, they are professional directors, and, again, some members of councils. Councillor Coughlan, myself, and Mayor Prendergast did the Institute of Directors courses, but that is not the general practice of most elected members. Therefore, we appointed to our Audit and Risk Committee some very senior and very experienced people who did not make decisions on expenditure, but they did make extremely useful contributions on whether we were looking at the right risks, interacting with Audit New Zealand, and so forth.
Does the Minister of Local Government realise that decisions on expenditure in the annual plan, projections in the long-term plan, all fees and charges, all development levies are agreed by the full council? We do not have unelected members on the full councils which make those decisions. It’s only on some of these specialist and important committees that these people are present. Does the Minister not feel it’s somewhat insulting to people to say, “Oh, come on the committee, but you can’t vote.”?
Hon SIMON WATTS (Minister of Local Government) (16:46): I thank the member Celia Wade-Brown for the question. The question relates to, in this case, a specific committee of an Audit and Risk Committee. I want to clarify clearly for the member that councils can continue to appoint expert representatives on to those Audit and Risk Committees. They can continue to participate. They can continue to provide their expert advice to the committee, but they cannot vote. That, again, from our perspective, is not going to impact the ability of the Audit and Risk Committee in this instance to be able to ensure that their council is making appropriate decisions in regards to technical matters in that area. It does not preclude or prevent or prohibit the ability for a council to have expert advice. What it prohibits is the ability for non-elected members to vote.
TANGI UTIKERE (Labour—Palmerston North) (16:47): Thank you, Madam Chair. This is my first opportunity to ask the Minister of Local Government some questions on Part 2. I do want to start with the proposed new clause 31A. I acknowledge that this, by way of an Amendment Paper, has only been landed on today’s date. The concern that I have is that this whole suggestion, and a lot of them—actually all of them, but this whole suggestion has not had an opportunity to go through a select committee process. In a moment I will refer to an email that I’ve received from someone who has indicated their views on this, because they don’t have the normal process that we would have to go through in terms of sharing their views.
The first question for the Minister is why he considers it appropriate to, effectively, bypass the select committee process. He has floated the notion of removing the voting rights from non-elected members for a wee while now but has waited until the 11th hour to land the specifics as to how that is going to work. Talking about sort of transparency and the like, this is far from it.
What is called into question here is the approach of the Government. The Minister says that it should only be elected members, but he negates or doesn’t head down that path of relying on this notion under this Government that localism is an important thing. On the one hand, they want localism—although let’s be very clear: a lot of the decisions and directions that they’re taking fairly indicate something else—but they’re not actually prepared to back councils who, at a local level, can identify what the skill set is that we need around decision-making tables to make good decisions for our community. What this is about is about how worthy—and the value that central government places on people around the decision-making table.
When it comes to Houkura, Minister, you might as well just invite them to do the karakia and that’s it. How rude it is and devaluing it is to suggest that actually, no, they can come along and they can participate, but they just cannot vote. That is the fundamental issue there.
Now, on the applicability of this, iwi Māori, yes—one, our colleague Celia Wade-Brown has touched on the audit and risk opportunities. Actually, in many councils, that role of chair is filled by that particular external skillset. So the Minister is saying, “Well, no, they can still participate and be part of that, but they actually can’t be part of the decision-making process.” What that is going to do is potentially hand over an inability to focus on financial aspects, where elected members can’t rely on that. I just do not understand why this Government wants to strip away local decision-making’s capacity and ability to determine who is best placed to sit around that table—that is by majority vote. This is not people just cherry picking who they want to sit around the decision-making table. This is a by majority council elected-member decision as to the role, if any, those particular appointed members would play.
So the first question is around why we are going through this process without actually allowing the public to have their say. I think people like Mayor Wayne Brown and others have had to resort to sharing their views publicly because they haven’t been able to rely on a select committee process. The Auckland City deal was already off to a bad start, and already we hear from Mayor Wayne Brown around the future of that.
The email that I want to refer to, and I want to ask the Minister’s response on this, because he has not allowed a select committee process for this to be shared—this is from someone who emailed me and said, “The Government is overturning provisions that have been part of local government legislation for 125 years, without undertaking any proper policy analysis and without taking the changes through select committee—the greatest irony, given the changes are purportedly around saving democracy.” So my final question to the Minister is: what does he say to that person who has been unable to actually engage in a full select committee process, saying that this Government is simply seeking to turn on its head many, many years, in terms of what has been in existing legislation, for something that is going to have a huge impact in terms of councils all around the country?
MIKE DAVIDSON (Green) (16:52): Thank you, Madam Chair. I just want to continue where I left off, because the Minister of Local Government, obviously, broadened the question quite a bit when he stood up proudly and talked about this being about democracy. I just want to ask the Minister then: if this is about democracy and, actually, we have to have elected people on these committees, why then did this Government, just this year, create the Auckland Regional Transport Committee, which is joint between the Crown and the Auckland Council? I can guarantee you now, there won’t be MPs on the Crown side; they’ll be appointed people. So if this is all about democracy, why then is the Government making decisions to be able to appoint people on to committees—
Tim Costley: Speak to the bill.
MIKE DAVIDSON: —including in this bill, where you’ve done it right at the very start, that non-elected members also include a member of a commission? They’re not elected. So this is double-standards. Why is it that councils cannot appoint people to committees, but the Government can any time they want?
It is double-standards once again from this Government that clearly has no clue what council committees do compared to actual councils. Does the Minister actually understand how a council works and how committees and subcommittees work? Because from what I’m seeing here, he doesn’t. He still cannot tell us any evidence that backs what he’s trying to do. He just talks about this being about democracy. Well, a democracy is when the elected councillors make decisions about how their councils are governed. It’s the elected councillors that make the decision about who sits on those committees. That is democracy, and that is how democracy works at a local government level. You are riding roughshod over that completely. So my question is, once again: what evidence are you using to actually come to this decision, Minister?
While I’ve got time in this call, I do want to discuss a couple of amendments that I have put forward. Because, like Mayor Wayne Brown, who is shocked with this shameful decision up in Auckland, we’ve got similar concerns down in Greater Christchurch, where we have the Greater Christchurch Partnership, which is a joint committee of Christchurch City Council, Selwyn District Council, Waimakariri, Canterbury Regional Council, and mana whenua. Once again, this bill will actually remove voting rights from one part of that committee. The committee is not impressed, because it is a committee that functioned extremely well for the benefit of the subregion.
So I have an amendment here, and it is timestamped 15 September 4.45.01 p.m. It actually puts into Schedule 7, after clause 30A(6C)—inserted by Amendment Paper 755—that the Greater Christchurch Partnership Committee being a joint committee of Christchurch City Council, Selwyn District Council, Waimakariri District Council, and the Canterbury Regional Council, will actually be included in the list of committees that are joint. This will include both quorum and voting rights.
I also have from the Christchurch area another amendment, timestamped 15 September 2026 4.45.02 p.m., which is to actually include in Schedule 7 the Ōtākaro Avon River Corridor Regeneration Committee as well to ensure that, actually, what has been established in Christchurch maintains the work that’s been done. Because it’s very important, Minister, when we actually have a look around the country, that we have very, very successful joint committees that are working, that include representatives from councils and representatives from mana whenua making joint decisions for the benefit of the communities.
If the Minister was not aware, once again, these decisions that they have are delegated to them from a full elected council, who are the ultimate decision makers, not the committee. So the Minister needs to actually please respond to the questions that we’re asking for, because he’s just not making sense about where he’s coming to, apart from to say that this is about democracy, when it’s clearly not about democracy, it’s about what he thinks is best for local government without any evidence to back it.
CHAIRPERSON (Barbara Kuriger): Hon Simon Watts—oh, sorry, no, we’re changing Minister.
Hon WILLIE JACKSON (Labour) (16:56): It’s good we have an Auckland person, so that’s very good. The Minister’s—
CHAIRPERSON (Barbara Kuriger): We had an Auckland person before.
Hon WILLIE JACKSON: That’s right, yeah, but he’s over the bridge, I think.
CHAIRPERSON (Barbara Kuriger): Right, on with the questions.
Hon WILLIE JACKSON: Oh, sorry, Minister Stanford—my apologies, Minister. That previous Minister, the Hon Simon Watts, did not answer the questions in terms of consultation. Māori up there—I’m not sure if the Minister knows the history here in terms of Auckland’s Independent Māori Statutory Board, but it was a landmark decision to set up that Māori statutory board. Rodney Hide, the ACT MP who was here, should learn some history, because it was the ACT Party who promoted—believe it or not—and actually entrenched and supported and set up the Māori statutory board, which gave these Māori representatives voting rights—it gave them voting rights.
It was a brilliant move, because the reality was it was borne from Māori frustration of not getting on councils. So we organised marches in Auckland, we marched in our thousands. And in around 2010 and 2011, a Māori statutory board was born. Not perfect, too, might I add, but Rodney Hide put it up and was supported by John Key. That’s why I keep talking about John Key.
Tim Costley: This guy loves John Key.
Hon WILLIE JACKSON: What’ve you got to say about John Key? What’s your problem?
Tim Costley: You love him.
Hon WILLIE JACKSON: Yeah, no, well, you loved him, and now you’ve—
CHAIRPERSON (Barbara Kuriger): Don’t bring me into the debate. You’re talking to the member over there.
Hon WILLIE JACKSON: No, no, no. Well, I’m sure you did too, Madam Chair.
CHAIRPERSON (Barbara Kuriger): Don’t cast aspersions on what I said. Just don’t talk to me, talk to the members.
Hon WILLIE JACKSON: But the reality is, the history of this—and Rt Hon Winston Peters just walked in, and he knows the history better than anyone in terms of the statutory board—the statutory board was supported by the ACT Party, supported by National. Not so much support from that other side over there, and that’s the history of it. The Rt Hon Winston Peters knows this better than anyone. So he can’t say something in 2012, and then say, “Oh, good, the Minister’s back.” And then change your mind in 2026 and start talking about democracy and saying that, “Oh, that’s not the way now.”
Now, I have some questions from the deputy chair of the Auckland Māori Statutory Board, former Minister for New Zealand First, Tau Henare—that was a sad part of his life—and former National Party member of Parliament Tau Henare, who said to me that he’s shocked that the Minister did not even decide to meet with the Māori team. He says, “Why not tag the amendment to the legislation? Why no select committee process?” Tau Henare also says, “We don’t even have a vote on the governing body. Our voting happens before the final vote of the governing body.”
What is the problem, Minister? What is the problem? Or was it like my good colleague Tangi over here says, who says, “Do you just want the Māoris do the karakia?” Is that what you want us to do? We just do the karakia, do the mihi, and then shut up and go into the corner! I see my good mate Nuk over there—another good National man. I think he’s sick of you lot too. Nuk Korako over there, who—
CHAIRPERSON (Barbara Kuriger): It’s not appropriate to bring our guests into the debate. He didn’t ask you to do it, but he’ll talk to you later!
Hon WILLIE JACKSON: I’m only bringing him up because another example of hypocrisy from this Government, because they supported it in the past, in terms of going on to ECAN down there in Christchurch, absolutely supported by National and then, all of a sudden, they start bringing in the democracy nonsense—“Oh, that’s not democratic now, Nuk. We can’t support you now.” But when it suits—when it suits—this Government. I am asking the questions that Tau Henare is asking today also. Why no select committee process?
Tangi Utikere: Good question.
Hon WILLIE JACKSON: That’s a good question. We don’t even have a vote on the governing body; our voting happens before the final vote of the governing body. Why was there no process in terms of a negotiation with Māori? Why were there no talks with Ngāti Whatua in terms of something so significant—so significant? I ask the Minister to stand and respond to those questions.
ANDY FOSTER (NZ First) (17:01): Thank you, Madam Chair. I have two amendments to talk to, so I want to deal with the first one of them first, which is Amendment Paper 664. I can’t remember exactly when this was lodged, because this bill has been a very long time in its gestation.
Tangi Utikere: Yes, it has!
ANDY FOSTER: In fact—yeah. When we started this bill the first reading was 17 July last year, not this year—17 July 2025—and at one stage there were two bills going literally in parallel, because at the same time the Public Service amendment bill was introduced, also July 2025. That got its third reading in May 2026—so it got advanced a bit further.
The first amendment I’ve got is around the appointment of the chief executive. In new clause 62A we have some changes that are on the last page, page 19 of the document here. We have some changes to the terms of employment of the chief executive for local government which allows essentially in the first instance a chief executive—normally in local government is appointed for five years and then you have the right to appoint for another two years by mutual agreement without going to market. This bill says we’re now going to go five plus five as the maximum. The Public Service amendment bill, now an Act of course, at one stage they were literally on the same day, but because this one got delayed, we didn’t speak to them on the same day. The Public Service amendment bill took away the right to reappoint a chief executive and not go to the market.
In one piece of legislation, we were saying you can only reappoint a person in the Public Service bill by going to the market. In this one, we’ve got five years plus two before you go to the market, and we’re actually now going five plus five. The first reason for this amendment is because those are completely inconsistent. One of them is going in one direction, and the other is going in exactly the opposite direction. The question will obviously be why and why it was the Government was thinking those two different things, or whether people weren’t actually looking at the two pieces of legislation and saying, “These two are not consistent with each other.”
The second reason for doing this—consistency is important, but the second one is this issue of power imbalance. We hear a lot about power imbalance between chief executives and councils. A CEO is supposed to provide advice. A CEO is supposed to challenge councils, but then they’re supposed to implement what the council does. A lot of the time that doesn’t happen. In fact, the CEO has an enormous amount of power. Councils, at the moment, are elected for three years. The CEO: five, and then five plus two, and then maybe five plus five. I know the council has the ability to say, “We’re not going to give you that extra time.”, but that extra length of time makes a difference in terms of power. It makes a huge difference in terms of power, and so there is an issue there about power imbalance. If you look at ratepayer comments, often they will says, “Who’s in charge?” They will tend to say that it’s not the elected council. Now, I might disagree with them. A good council can certainly manage their chief executive, but a lot can’t. They look at this and say there is a power imbalance at the moment, and it is in favour of the unelected person. The amendments that we’ve just been talking about are all about power to the elected people—the elected councils, the elected mayors—but this extension would actually undermine that.
The other thing that I wanted to mention there is of course that we have a bill that must have been supported by the National Party, because that is a bill in the name of Stuart Smith, who has actually just stood up, and that is a bill that is deliberately trying to balance that imbalance at the moment, in favour of more of the elected members. That is the Local Government (Management of Local Authorities) Amendment Bill. That has gone through its first reading; it’s now awaiting the whole select committee process. That is, in this case the National Party and the House has said, “Yeah, we agree with that. We want to send that to a select committee process.”
Tangi Utikere: There won’t be any late Amendment Papers on that one.
ANDY FOSTER: Look, I don’t know, but my point is that that is a piece of legislation that is endeavouring to rebalance the power between elected members and chief executives. This bill at the moment, with that one change, is doing the opposite, so the amendment I have got, Amendment Paper 664, simply says exactly the same as what we have put into the Public Service bill—it’s nice to see the Hon Judith Collins here, because I think she sponsored that; lovely to see you here—to say that it is five years. It is exactly the same as what we said for the Public Service: the chief executive gets five years, and in the local government sector the chief executive gets five years—to bring them into line. It’s consistency but it’s also in line with the directions being taken with several pieces of legislation and the intent of the amendments, in fact, Minister that you’ve made in terms of elected members only being able to vote in committees.
Hon SIMON WATTS (Minister of Local Government) (17:07): Thank you very much to the member Andy Foster. I acknowledge his background experience in local government. I’ll take the two Amendment Paper in order.
Firstly, in regards to the chief executive’s appointment: it is our view that the change to the chief executive reappointment process is intended to support reduced operating costs for councils, and it is also important to acknowledge that it subject to a review of the chief executive’s performance. On that basis, we will not be supporting the proposed amendment by the member.
In regards to the second amendment from the member, again: this is not consistent with Government policy. The member indicates that the purpose is to reinforce accountability over these decisions. This is already achieved by the Government’s Amendment Paper on non-elected members, Amendment Paper 755. On that basis, we will not be supporting that amendment.
CHAIRPERSON (Barbara Kuriger): I call the Hon Rachel Brooking. I just want to make the member aware that we are getting quite close to a couple of important valedictory speeches, so we’ll just monitor the time as we go through. We’re going to be wrapping up this section at 5.15 p.m. I’ll give you the specifics at 5.15 p.m.
Tim Costley: I can help, Madam Chair.
CHAIRPERSON (Barbara Kuriger): Mr Costley, I am chairing this session, thank you.
Hon RACHEL BROOKING (Labour—Dunedin) (17:08): Thank you, Madam Chair. I am very happy to be stopped midstream if that means we are making way for what I am sure will be two wonderful valedictory speeches, from two of our very esteemed and accomplished and experienced colleagues, which I am very much looking forward to.
I’ve got two different things that I want to talk about. The first is in response to some of the discussion that has happened from the Hon Willie Jackson and from the Minister of Local Government, talking about various different committees or boards and that, whilst they can vote on some things, my issue is that the delegations that go to those different groups are normally limited. The Local Government Act—the principal Act—already reserves different types of decisions to only be made by the full council itself. Those, from memory, include things like rates determinations—decisions on rates—the making of by-laws, and long-term plans. If the Minister can confirm that I’m correct and that, in fact, there are many legislated decisions that can only be made by elected councillors in the first place, and then, if he agrees with me, doesn’t that diminish his argument somewhat that somehow we’ve got to a situation where democracy is at an end because of these various different committees who’ve been delegated some decision making? That is the first question.
The second one is quite different. If we go to Amendment Paper 755, and if we’re looking at, for example—I think there’s a couple of examples of this, but if we go to clause 25, you will see in clause 25, at inserted subclause (5), it says “Subclause (4) does not apply in respect of—” and then it names some specific things, like the Ohai Railway Fund Committee and the Raupo Drainage Committee and a specified committee. My question here is just quite a simple one, and it’s because this has come in in the Amendment Paper that was only tabled on Tuesday: can the Minister explain to us why those exceptions were chosen, what analysis went in to working out why it is those exceptions that need to be named in the legislation, and should there be anything else?
I say that because I know that there are many interesting organisations that are part created by councils—for instance, you might have some bodies that are constituted by a number of different organisations. They might be a council-controlled organisation but also have a relationship as a State-owned enterprise. They might be creatures of statute—so, for instance, the Otago Museum that is created by statute and there’s different funding mechanisms that relate to the various different councils in Otago. I’m just aware that there are many of these interesting bodies that serve our communities up and down the country throughout our communities, and they’re very important.
My question is, just simply: what analysis has been undertaken of all of those different groups and why is it that this railway fund committee and one drainage committee makes it specifically into the legislation, and are there other things that should also be in it? I see you’re giving me a look, Madam Chair, so I will sit down and look forward to the rest of the contributions.
CHAIRPERSON (Barbara Kuriger): The Minister has just indicated that he wants to give a brief answer before we—
Hon SIMON WATTS (Minister of Local Government) (17:12): I thank the member for the questions and acknowledge the valedictories that are about to commence very soon. In regards to the committees noted by the member that are exempt, they are historical statutory committees with mandatory non-elected members, created through local government reorganisations and formally established in secondary legislation. The aspects in regards to those are considered different, and on that basis they are exempt.
CHAIRPERSON (Barbara Kuriger): Members, in accordance with the Business Committee determination that valedictories will begin at 5.15 p.m., this committee is suspended and will resume at 7 p.m. Once Mr Speaker is here, we will start with the—here he is—valedictories.
House resumed.
SPEAKER: Members, I’ll indicate now that at the conclusion of the valedictory statements, the House will suspend for the dinner break and resume in committee at 7 o’clock. Can we have the real Andrew Bayly stand up. No? In that case, to make his valedictory statement to the House, I call on Andrew Bayly.
Valedictory Statements
Hon Andrew Bayly
Hon ANDREW BAYLY (National—Port Waikato) (17:14): Mr Speaker, colleagues, family, and friends, and all of you who have come tonight to make sure that I actually leave this place. I note that valedictory speeches normally begin with the departing MP droning on about themselves—don’t worry, that will come later, but I want to begin with seven wonderful women: Barbara Knowles, Lynne Richardson, Jane Hancock, Judith Tucker, Sally Sumner, Trish Wanden, and Sally Reid. Between them, they have given more than 80 years of service. These are the people in all of our electorate and parliamentary offices who quietly and sensitively handle thousands of requests for help without seeking recognition; they simply see it as their job. You are kind and caring people. You make people feel that they’ve been heard. I love you for it and thank you.
Like everyone who’s never done it, I assumed I would be good at politics. That’s one of politics’ little traps. Whatever I thought I knew, the people of Hunua and Port Waikato soon corrected. They did not care where I sat in caucus; they cared only whether I turned up, listened, and actually waited for the answer. Sometimes my constituents were confused why I turned up at all. One such instance occurred on a Sunday morning in the remote settlement of Glen Murray. As I sped past, I saw 30 cars outside a hall. Now, no self-respecting MP can resist such an audience. I stopped. The front door was unlocked, and the key was in it—isn’t that classic New Zealand? I went inside, heard muffled sounds, and opened a second door. Inside were 30 women all in a position I could not contemplate. There are moments when your training takes over; this was not one of them. I mumbled something like, “I think my wife does something like this” and just got the hell out of there. Behind me came shrieks of laughter and then, “Was that the local MP?”.
But electorate work is not just about the good times. People often come to an MP because something has gone wrong—sometimes, something terribly wrong. Nothing affected me more deeply than the suicides during COVID. The Auckland boundary did not simply divide my electorate on a map; it divided families and communities. People who lived only a few kilometres apart suddenly found themselves on the opposite sides of it. One family had a son living nearby who was struggling with serious mental health issues. They believed the restrictions meant they could not visit him. After three days trying to contact him, they emailed me. I said, “Please get in the car, just go to him now.” They found that he had taken his life three days earlier. We then had to help bury their son under COVID restrictions. At the very moment they most needed people around them, the rules kept these people apart. As we all know in this House, there are things in politics we celebrate, there are things that we defend, and then there are things that we always carry. I have carried that ever since.
After the 2020 election, Judith Collins appointed me treasurer and placed me third in our team. She told me she believed that I was the person best qualified for the role. Judith, you saw something in me, you backed me, and I will never forget it. The new role let me focus on the economic consequences of COVID—particularly business owners wondering whether they would survive. I knew what it was like to lie awake at 3 o’clock in the morning wondering how we were going to pay our 150 employees. Wages are not an accounting line; they are groceries, rent, mortgages, and those little things like school shoes. I spoke in this House on behalf of business owners who were watching years of their work slip away through no fault of their own. They feared for their staff, their families, and everything they had built. I believed the Government was moving too slowly. At the end of that speech, I finished with three words: “I am ashamed.” The video went viral because people living through it finally thought that someone understood.
Becoming a Minister was a great honour. I had waited nine long years. I wish to thank the Prime Minister for making me New Zealand’s first Minister of manufacturing: an industry vital to our economy but too often overlooked. Across my portfolios, my purpose was to make New Zealand a better place to build and run a business and to give New Zealanders greater control over their financial future. I knew the pride of employing someone new. I also knew the fear of signing a personal guarantee and putting everything that you built—including the family home—on the line.
We advanced open banking, completed the first major insurance law reform in 30 years, simplified legislation, and began the first serious review of New Zealand’s competition settings in decades. We also negotiated agreements with banks and telecommunications companies regarding financial scams. In respect of ACC, I commissioned two major reviews, including how its $50 billion fund might be better managed.
One of the biggest reforms I wanted to achieve was an overhaul of the Companies Act, which affects every business and director in New Zealand. A year before the 2023 election, I asked Roger Wallis of Simpson Grierson to begin redrafting it to modernise, simplify, and digitise the law. Roger did much of this work on a pro bono basis. A lawyer working for nothing is sufficiently rare that I thought it needed to be recorded in Hansard. Roger, you truly broke the mould.
Another priority was getting more New Zealand capital into New Zealand businesses. About $35 million a day currently goes into KiwiSaver. In 25 years’ time, New Zealand KiwiSaver balances are likely to be worth $1 trillion. Too little of that is invested in great New Zealand businesses and manufacturers. I wish to acknowledge Lloyd Kavanagh from Minter Ellison, who hosted many of my discussions with KiwiSaver providers and other industry participants.
Two other changes mattered to me. The first was requiring Government agencies to pay their bills within 10 working days. It is vital that smaller entities are paid regularly and quickly by their bigger customers. The deliberate strategy of publishing their actual payment times every six months was a great incentive to bring about this improvement. Using the Government as a precedent, I think that the requirement should now be extended to cover councils and large corporates. Its real value will become apparent during the next financial crisis, when small businesses are paid first—not last.
The second change was financial literacy. As a business owner, I saw employees struggle with basic financial decisions. Poor financial literacy is both an educational issue and a society issue. Before the 2023 election, I met organisations delivering financial literacy programmes. Immediately after the election, I raised the possibility of a nationwide delivery of these programmes in schools with the Hon Erica Stanford. She agreed immediately. Erica, I want to thank you for your leadership in now making financial literacy part of the curriculum.
Some of my work was completed. Some remains unfinished. Some will take years before its full benefit is realised. But together, it was a programme shaped by one belief: that people willing to risk their money, employ New Zealanders, and build something in New Zealand deserve a fair chance to succeed. None of this was achieved alone. To my advisers and ministerial staff, thank you for your hard work. I want to acknowledge Leonard, Jack, Paul, Grace, Sam, Jasmine, Kathleen, Andy, and the two Wills and two Bills, among others. I am proud of what we achieved together.
Ministerial office was one of the greatest privileges of my life. Losing it was one of the most brutal experiences of my life. It began with a six-minute meeting with three of my advisers. During a brief discussion, I placed my hand on the upper arm of one of my male advisers and said, “We can do this.” Then I left and thought no more about it. The next night, I was told a serious allegation had been made. I could not believe it. Later, on a flight, I told Tina, my wife, that I may have to resign. She did not say anything. She simply turned away from me, towards the window, and began to cry. Tina does not cry easily. That was when I understood this was no longer just about a ministerial job. It was hurting the person I loved most.
Next morning, I flew back to Wellington to meet the complainant. When I landed, I was told he was unavailable but the Department of Internal Affairs (DIA) wanted to question me. DIA said that all three people present at the meeting had corroborated the allegation. That was critical. I might contest one account or maybe two, but if all three corroborated a serious allegation, I could not remain a Minister. It was on that premise that I took the decision to resign.
That premise was false. Just before I announced my resignation, I again asked to meet the complainant. I wanted to apologise directly for my conduct and for making him feel uncomfortable. During that conversation, he told me that he had not made a complaint and would not have done so. The next day, the second witness described the meeting as “a storm in a teacup”. Three months later, Public Service Commissioner Sir Brian Roche confirmed in writing that the ACC chief executive had initiated the investigation. He also wrote, and I quote, “DIA has confirmed that no formal complaint was, or has been, made about Mr Bayly’s conduct.”
Ministers must be accountable. I have always believed that. As a Minister, I should not have put my staff in a position where they felt uncomfortable. For that, I sincerely apologise. Accountability must, however, rest on facts and a fair process. Mine did not. I leave others to decide how and why it failed. I put this on the record because it is part of my parliamentary story but not the whole story.
What this horrible episode did reveal was the kindness shown by some people. Soon after the matter was first raised, my adviser Grace Ridley-Smith rang me from Nelson. She was in the middle of her honeymoon. She did not ring merely to ask how I was. She rang to say that she was coming. Grace cut short her honeymoon—left her new husband to finish the honeymoon alone—and flew to Auckland to stay with my wife and me while we tried to understand what had happened and what we might do next. Who does a thing like that? Who does a thing like that? Well, Grace did. Grace, what you did was an extraordinary act of loyalty and love. Tina and I will never forget it.
Then Sally Reid rang. Sally had worked for me for six years before retiring two years earlier. She did not ring to offer advice. She rang to announce that she was coming back. No discussion, no interview. She had decided that I needed protecting, so she came out of retirement. Sally has also taken on another difficult assignment: teaching me French. Merci de toujours prendre soin de moi. Tu es peut-être petite, mais tu as un cœur de lionne.
When I felt abandoned by the system, Grace and Sally did not move away from me; they moved towards me. I had lost office. I had not lost them.
You may not have realised it, but after my resignation, I went into a very dark place. To those in this House and the few journalists who stopped and asked how I was, I thank you from the bottom of my heart. It helped me find a way back. I would also like to make a special mention of my year group, who are around me today, who supported me during that process. To start to put events in order, I began writing a book. Hopefully, some of you might buy it when it’s published!
I also returned to my work on Antarctica. In 2019, I’d helped organise the first Antarctic Parliamentarians’ Assembly in London. MPs from 20 countries came together to discuss how to protect a continent that is a place of peace and dedicated to science. I decided that the next assembly should be held in New Zealand. The Rt Hon Winston Peters backed the project from the outset and generously provided foreign affairs staff to help host it. Winston, I am greatly, very grateful for your unwavering support. Following the successful assembly, I was appointed chair of the steering committee and tasked with organising the next gathering, likely in Norway in 2027. I’ve also finalised the constitution for the organisation, giving it an enduring structure, with parliamentarians meeting every two years. Helping to establish this permanent, international forum is something I hope will form part of my legacy.
A valedictory should not only look back; it should also look forward. So I want to finish with New Zealand’s biggest financial issue: superannuation. It represents a long-term promise to all New Zealanders. However, a promise is only as good as we can afford to keep it. Late last month, Leonard Hong and Emmanuel Jo and I published a paper in the Asia-based International Review of Public Administration on preserving universal superannuation. Treasury measures the cost against GDP. Government’s don’t pay superannuation out of GDP; they pay it out of taxation. Our analysis shows that, by 2065, superannuation, health, and education will consume almost 80 cents of every tax dollar, leaving only 21 cents for every other portfolio, every other Government activity.
We propose a gradual increase in the age of eligibility by one month every year starting in 2029, reflecting the improvement in life expectancy and avoiding abrupt policy changes. We also propose linking increases in superannuation to inflation rather than wage growth, with a review every five years to ensure the pension remains fair and adequate. Finally, we recommend that those unable to continue working because of poor health or because of physically demanding occupations should be able to draw their pension earlier. Other countries provide this option; New Zealand should too. Future Parliaments will have to address this issue. If we don’t deal with it soon, a change will have to occur—probably not in the next financial crisis, but probably the one after that. That’s when the change will be brutal, and there will be a major lurch in policy.
Finally, as we all know here, Parliament consumes time. If you’re not careful, it consumes all of it. Before politics, I knew I’d worked too much while our little boys were growing up. I could not recover those years, but I could still create something special for each—not a holiday, but a journey with a purpose. So, I made a plan. When each son turned 20, we would go on an adventure of his choosing. James and I dragged sledges to the North Pole; Dan and I crossed Jordan on camels following the routes of Lawrence of Arabia; and George and I lived with the Dukhas, the last of the reindeer herders in Mongolia in the mountains next to Russia. We came home with more than photographs; we came home with lasting memories and having seen each other in different ways. To my three boys, it has been a privilege sharing remote campsites and watching you grow into wonderful men. To my parliamentary colleagues, can I suggest, there is always another meeting, but some appointments with your children must be made before the opportunity disappears. I do admit, however, that our version of a family holiday was a little extreme!
Now, to my wife, Tina. There’s something I need to say to you publicly: politics was my choice. The death threat that named you and our boys was not something that you chose. I remember ringing you at work. It was already dark. As I told you what had been written, I heard your voice begin to tremble. I’m deeply sorry that my public life brought that into yours. You did not choose it, you did not deserve it, and for that, I will always be sorry. For 12 years you’ve had space. You’ve run the house, made decisions, and you even know where everything is—unlike me. Now, I’m going to be there every day—with time and ideas. You seem to have identified this as a significant risk. I’m sure that I will have some proposals for reform. However, I suspect none will survive consultation! I’m proud of the offices I’ve held. I’m proud of the work I did. But that is not what matters most. What matters is who is still beside you when the title has gone. Tina was there before Parliament, she was there through it, and she will be there when I walk out of this Chamber tonight.
To the people of Hunua and Port Waikato, thank you for trusting me. To my supporters, electorate volunteers, and National Party, thank you for your loyalty and friendship. To my staff, thank you for making me better than I was. To colleagues across the House, thank you for what you taught me. For the wonderful parliamentary staff, I enjoyed our quiet conversations. And to my family and friends above, thank you for coming, for staying, and for catching me when I fell.
I came here wanting to make a difference. I know not how history will judge what I did. I know only that I gave it everything I had. Thank you.
[Applause]
SPEAKER: I think there’s going to be a bit of a changeover in the gallery, so we’ve got about five minutes before the people here for Maureen Pugh’s valedictory take their seats in the gallery. We’ll try and leave most of the congratulations to Andrew until the conclusion of the next speech.
Maureen Pugh
SPEAKER: I thank members for their patience while we had the gallery change over. Just to reiterate, when the speech from Maureen is concluded, the House will be suspended for the dinner break. It’s now my pleasure to call on Maureen Pugh to deliver her valedictory speech.
MAUREEN PUGH (National—West Coast-Tasman) (17:47): Thank you very much, Mr Speaker. It is a profound privilege to stand in this House—oh, God! Harden up. It is a profound privilege to stand in this House today to deliver my final address. In fact, it has been a privilege every time I have walked into this place. No matter how often I’ve crossed its threshold, I’ve never lost sight of what an extraordinary honour it is to represent New Zealanders in our Parliament.
Twenty-eight years ago, I was first elected to the Westland District Council, where I worked for 15 years—nine years as mayor. Local government gets a bad rap sometimes, Mr Watts, but I always found that being on the coal face of community was a great place to work. My thanks to Diane Maitland for being the greatest executive assistant and for your 43 years of service so far. Eleven years ago, I stood here as a brand new list MP to give my maiden speech, arriving 14 months after my classmates of 2014. I joked back then about starting off the bench. I promised my team I wouldn’t drop the ball, score an own goal, or give away a penalty. Looking back over the last four terms, from the 51st to the 54th Parliaments, I almost always kept that promise, though there were definitely a few times the referee’s whistle blew.
Thinking back to that day when I looked up into the gallery and saw all those wonderful people who had supported me, I think today of those who are not here to be with me as I retire—my beautiful daughter Haley, my amazing husband John, and my dear old dad Trev. I’ll start my valedictory with acknowledgement of those who have supported me to get here and to stay here, and who did the best to make me look good along the way.
My family, of course, have been incredible. You’re likely to wish I was back at work when I start to annoy you all once I’m fully retired!
I’ve been blessed with great staff over the years, and the current ones I say goodbye to now. Tracy, Rob, Emma, Charlie, Cheryl, John, and Carolyn, I hope you know how much I appreciated everything you have done for me. We’ve helped a lot of people over the years, and we’ve had a great deal of fun along the way.
My classmates of 2014, thank you for being my confidants, my friends, through good times and bad. Having our regular debriefs has kept us connected and sane.
A huge thankyou to the staff in Parliament, from everyone from Bryce, who keeps us fed; the security team that keep us safe; and the travel team who got me everywhere I needed to be. I have a particularly soft spot for our House team. Our select committee clerks, they’ve been extraordinary, making sense of the diverse and sometimes rambling conversations we have about the business in front of us and turning it into professional reports. A massive acknowledgment to our Speakers’ team, especially Suze, Pav, Kellie, and, of course, recently retired Roland, who makes sure the people in the Chair are always well prepared as much as that’s possible.
Representing the West Coast - Tasman electorate as their MP has been the absolute honour of my career. People often ask me how I manage to keep smiling after long and sometimes emotional days of select committee hearings or a two-day commute back to the electorate. I tell them it’s simple: when you represent the most beautiful part of New Zealand, you have a lot to smile about, especially because it’s filled with some of the best miners, farmers, and growers New Zealand has to offer.
No one gets to this place alone. To the National Party leadership, Sylvia; my regional chair, Dean; and my tireless electorate teams over the years, especially my current chair, Jo, thank you for the part you and our supporters have played.
No MP is an island, and I’ve had the unique privilege of serving under seven very different National Party leaders. I entered this place inspired by Sir John Key and his infectious high energy belief in New Zealand’s prosperity. When the baton passed to Sir Bill English, we traded that corporate optimism for deep public policy and serious social investment, a legacy that is thriving.
Then came seasons of change. I served alongside Todd Muller, a man with a wonderful, authentic heart. There was a short period of a few days where the Hon Dr Shane Reti was in charge. Then I navigated the Opposition trenches beside my very good friend Judith Collins. Judith’s wisdom and political nous was incredible. However, being forgotten and left on a deserted island in the scorching sun with no hat and no water tested our friendship—a story for another day, Mr Speaker!
I am wrapping up my career in Government under a current Prime Minister, Christopher Luxon. His relentless focus on efficiency, delivery, productivity, and outcomes means New Zealand will be in good hands for many years as he “Fixes the basics and builds the future of New Zealand.”
There is one leader I haven’t mentioned, and this leads me to my reflections on the media. My relationship with the media has been quite ordinary, my local paper being the notable exception—thanks, Paul. Here’s a great example: even when I put out a short media release at the beginning of this year to announce my retirement, some lazy journo must have done a google search and picked up that the biggest story I was involved in was about a not very nice comment made about me. So next time you want to reference that incident, how about telling the whole story? That comment was made by a man who had never even had one conversation with me, had never been in my office, nor me in his. And here’s how it ended: he lost his job and I got promoted.
My work in this House has always been about taking the fight from the regions straight to Wellington. When Cyclone Ita hit us in 2014, along with my very good friend the Hon Dr Nick Smith, we championed the recovery of fallen trees on conservation land, a temporary piece of legislation. Years later, I turned that into the Adverse Weather-affected Timber Recovery on Conservation Lands Bill 2020—still in the biscuit tin. And I followed that up with the freedom camping amendment bill 2021. Now, as we know, members’ bills are incredibly tough to pass from Opposition, and neither made it past the first reading, but they did what I hoped they would do. They got this Parliament to listen to the West Coast and Tasman and have helped to put us on the political radar, where we have stayed.
I’ve spent a decade in the engine room of select committees, covering everything from commerce and education to law and order, but most of my years focused on social services. It is here that I got to witness the difference in approaches to how we support our most vulnerable Kiwis. I don’t consider myself a victim of anything, so it goes against who I am to make victims of our most vulnerable people. When people are taught to rely on the State, they become victims of the State. To me, it’s like the story of throwing a man a fish and you feed him for a day but teach him to fish and he feeds himself for life. The more we teach our young people, the more they learn, and the more independence and empowerment they build for themselves. If we just hand someone a solution, we are keeping them dependent, but when we teach them how to solve it themselves, we set them up for life. That’s what we owe our youth. Every time we teach them a new skill, we aren’t just giving them knowledge; we are handing them the keys to their own freedom. Education is that key. So when an emergency safety net becomes a lifelong ceiling, we have failed the very people we promised to protect.
Freedom is one of those words we use often, but freedom isn’t simply the absence of barriers. Freedom comes from being capable. A person who can read, write, work, solve problems, and contribute is truly free. That is why education matters. That is why skills matter. That is why personal responsibility matters. The greatest thing we can do for someone is not make them dependent on us but help them become independent of us.
It would be remiss of me not to mention mining. My great-grandfather came to this country to work in a West Coast coalmine, my grandfather was a coalminer, and my dad worked on the steam trains shifting coal east. It’s in my DNA. So it makes my blood boil, as quickly as the kettle boils on my coal range, when people want to shut our communities and industries down without understanding the consequences for those families, businesses, and communities who rely on them. As hard as it may be, we will look past the disruption of protests and stay focused on getting the job done.
So here’s my message to protestors: targeting the supply chain is a completely broken strategy. It’s lazy, and it’s easy to fire at an immobile bull’s eye like a worksite and its community. Shutting down local production does not eliminate the world’s need for these materials. Until idealistic activists shift their focus from trying to choke supply to reducing actual consumer demand, their efforts are only tokenism. Maybe they could lead a reduction in demand themselves by giving up the very devices and modern products they use—all those things that are made from mined materials. But I’m quite sure they will never do that. And therein lies the hypocrisy. But perhaps their ultimate mission is to do their own mining, by mining and storing the email addresses from all the petitions they use to build their database.
As part of my role here, I got to go overseas a few times for various reasons—to Australia, Britain, South Africa, and Japan. More recently, I was part of a cross-party delegation to Taiwan, an incredibly positive experience. Thank you, Jo-Anne.
In this my final Parliament, my circle closes as an Assistant Speaker. Sitting in that big chair gives you a completely different view of this room. Trying to maintain my neutral poker face while keeping order during a rowdy committee of the whole House is one of the hardest tasks in here. Sitting in that chair also teaches you a great deal about human nature. In fact, it’s even taught me a bit about physics. You see, light travels faster than sound, which is why some people appear incredibly bright until you hear them speak.
I’ve been taught many lessons, mainly about people, especially those we are here to serve. I’ve learnt that the moment public service becomes self-service we lose our way. The best people I’ve met in politics are those who never forgot that they were here to serve others not themselves. Politics can be a brutal business. Elections are won and lost. Opportunities appear and disappear. Critics appear from everywhere. And occasionally you become tomorrow’s headline for all the wrong reasons. But resilience is a choice. Every set back, whether it is here or in our personal lives, gives us two options: become bitter or become better. I’ve certainly strived to get better.
When I gave my maiden speech, I wore this piece of jewellery that was inspired by the incredible honeybee. For me, that represented showing up every single day as a positive, loyal, hard-working representative for the people in West Coast-Tasman and my National Party team. I’m pretty sure I achieved that. As I prepare to step out of Parliament as member No. 1,422 and woman member No. 131, I leave with a very full heart, knowing that if I’m facing another midnight sitting, it’s because I’m surrounded by friends and family, and likely with a beer in hand.
To West Coast-Tasman, thank you for placing your trust in me. To my colleagues and friends, thank you for the journey, and, to my family, thank you for sharing me with this place for longer than any of us ever expected. My time as a member of Parliament may be ending, but my love for the West Coast of New Zealand never will. Go well all you wonderful people.
Thank you, Mr Speaker.
[Applause]
Sitting suspended from 6.03 p.m. to 7.00 p.m.
Bills
Local Government (System Improvements) Amendment Bill
Committee of the whole House
Debate resumed.
Part 2 Miscellaneous provisions, and Schedules 1 and 2 (continued)
CHAIRPERSON (Teanau Tuiono): The House is resumed. Members, when we suspended for the valedictory statements and the dinner break, we were considering the Local Government (System Improvements) Amendment Bill, and we were debating Part 2. Part 2 is the debate on clauses 23 to 30, “Miscellaneous provisions”, and Schedules 1 and 2. The question is that Part 2 stand part.
TANGI UTIKERE (Labour—Palmerston North) (19:01): Kia orana, Mr Chair. Thank you. I want to ask the Minister some questions about clause 25. These are related to the suggestion that there would be a standard approach, in particular a standard approach to a code of conduct. I mean, I don’t think anyone would disagree that there absolutely needs to be a code of conduct for local authorities. I guess the issue is around a standard one and what that might look like.
The other one that relates to the standardisation is more specifically around the standing orders. I want to really focus on this aspect. The Minister will be aware that this is a proposed amendment to Schedule 7, specifically new clause 15A, inserted by clause 25(3B). The Minister may be aware that I do have an Amendment Paper, obviously in my name, that’s related to this. It’s Amendment Paper No. 653, and hopefully the Minister has had time, because it’s been sitting there for a wee while.
I guess my concern that I’d be keen for the Minister to respond to is that in many circumstances, standing orders, and some that have been prepared by Local Government New Zealand, for example, I accept they are adopted by a number of councils, but there are some that actually don’t do that; they have their own bespoke form of standing orders. Where there is a circumstance or a situation where, for example, a standardised set might limit the ability for members of the public to go and share their views, raise issues—I think about a number of councils where, for example, their standing orders set aside a public comment component as a particular standing order that sets aside a committee meeting for 30 minutes. I mean, I’m familiar with the Palmerston North ones. That’s what happens there.
That’s a particular decision that the council from my constituency has a bespoke set of standing orders. They don’t rely on the ones from Local Government New Zealand. They’ve been developed over quite some time. They seem to be standing orders that work for that local community. I guess the concern about standardising things is that you might have arrangements or provisions, for example, to allow for public participation at the start of a committee meeting or at the start of a council meeting or a public forum—they all have lots of different names. How is the Minister going to ensure that there are those aspects of a standing order approach that still allow for community feedback and community engagement? I think on the one hand you’re wanting to potentially ensure that there’s some consistency across the country, but where that consistency is disadvantageous alongside some existing standing orders—I’d be keen to get a response from the Minister around how that could be encouraged or allowed.
Hon SIMON WATTS (Minister of Local Government) (19:04): I thank the member for the question in regards to standing orders, and the points raised by the member are absolutely legitimate. What has occurred is that a process has been undertaken, including consultation, to prepare and put in place standing orders that are standardised across the country. The point I think the member was raising is: is there a mechanism ongoing where if changes or modifications to enhance or improve those or potentially deal with an issue that comes up subsequently—is that available? The answer is yes. The mechanism, while not formalised, allows the secretary to be able to take on board those points. The standing orders will also look to be periodically reviewed as well.
From the intent of this, this is making sure that the standing orders are fit for purpose and are continually reviewed and updated on a periodic basis. As and where, potentially, if there are issues identified that need to be strengthened or enhanced, then there is absolutely no prohibition around that—actually, quite the opposite. As we do in this place, improvement of standing orders is just part and parcel of business as usual.
CELIA WADE-BROWN (Green) (19:05): Thank you, Mr Chair. My question is also on the code of conduct, and I certainly agree with my colleague Tangi Utikere on some of the matters, particularly participation, that should be included. I agree about what are offences and what are the penalties that might be quite sensible to standardise across local authorities.
My concern is about remote participation and how the rules for that vary currently across councils. The issue is about whether it’s pretty much discretionary as long as you give notice or whether it’s only if you’re ill. Again, they differ, but it seems to me that the rules for—let’s take an urban, relatively concentrated council like Hutt City. Frankly, there’s not many reasons why somebody shouldn’t be able to get physically to a meeting. You take the South Wairarapa and the vulnerability of the bridges, or Tararua, which has got hundreds of kilometres of rural roads and also potentially poor connectivity.
I looked into this a little bit. Queenstown requires, if you’re going to be part of the quorum, that you actually have to have your camera on at all times. Marlborough says, “Our connectivity”—or at least it used to—“might not be adequate.”, and as long as you were present and could hear and be heard, that counted. These seem to me genuine differences between councils.
The last part, Minister, was that there are differences in connectivity, so Queenstown requires, for remote access, that you must be on camera all the time. It doesn’t say what your background might be, but, you know, that’s something. But Marlborough has not got such good connectivity, or it didn’t have, perhaps, at the time they wrote their standing orders, and they allow you to be present and count towards the quorum and count your vote if you just can be heard and hear. I just think there are some variations in not perhaps every part of the standing orders, but there are some real areas that we ought to be able to allow different councils some discretion on.
Hon SIMON WATTS (Minister of Local Government) (19:08): Yeah, I thank the member for the question, and I can provide assurance to the member that the way in which the standing orders are drafted in regards to remote participation actually are at the discretion of the respective councils to put in place the policies and procedures and mechanisms that are applicable for that particular council. On the points that the member is making around geographical variation, etc., that is the way in which the standing orders are. It isn’t one standardised mechanism for remote participation at a national level; it is at the discretion of each council. That should cover that point.
Hon RACHEL BROOKING (Labour—Dunedin) (19:09): Thank you, Mr Chair. A few different questions and reminding the Minister that just before those valedictories—lovely as they were, as I predicted—he answered one of my questions but did not answer the other question, which was about the many different things that the Local Government Act already specifies can only be done by the full council. If you’re doing a motion on your rates, that has to be done by the full council. The question there relates to, well, why are we so worried about voting rights that have already been delegated when the bigger issues and those most important things already have to be by the elected councillors?
Then second to that, and related, the Minister has been saying in many of his answers that, you know, this is all to do with democracy. Therefore, I would infer that he’s saying that this is a constitutional bill; that this is important for our constitutional arrangements, as democracy applies to local government. So my second question in this contribution is why, then, are we doing this, effectively, through all-stages urgency? It’s come in as an amendment in the committee stage—
Ryan Hamilton: Just a little one.
Hon RACHEL BROOKING: Oh, someone’s saying it’s a little amendment. I think if we’re talking about our constitutional arrangements, then size does not matter, Mr Ryan Hamilton—maybe it does. But this is an important amendment. The select committee has not had a chance to look at it, nor has anyone been able to look at any submissions. Surely, if it is as important as the Minister says it is, then it should go through a robust democratic process here, and it’s not doing that. We only saw this Amendment Paper as we walked into our caucus meetings on Tuesday morning. Today, it is Wednesday. Nobody else has spent much time looking at this. We heard from the Hon Willie Jackson that Tau Henare has been texting him about how outrageous it is. Apart from that, that is where we are with the analysis. People are going, “What the—?” This appears terrible, and it is terrible. I would very much like to hear the Minister justify this terrible process whereby nobody is involved apart from a few of us here asking questions.
Now, I do have some other questions, as well. One is going back—so I’m now on the Minister’s Amendment Paper 755, and I’m at clause 25. This is the same clause that I was talking about before that refers to the railway fund and the drainage committee, and the Minister answered and said that they had very specific arrangements. I would like to know if the Minister could comment on how robust the analysis was—
CHAIRPERSON (Teanau Tuiono): What page are you on in Amendment Paper 755?
Hon RACHEL BROOKING: Page 5. The question there was how robust was that analysis that only the railway fund and the drainage committee need to be specifically listed, rather than, say, the Tūhara Otago Museum or any other number of entities that exist around the country?
My next question there is that these new clauses refer quite often to any Treaty settlement and things made under other pieces of legislation. Now, at the moment, the Resource Management Act (RMA) is still the law of the land in terms of resource management. This Government brought it back and have not yet completed their RMA reforms, and even when they do complete their RMA reforms, most of it won’t commence until about 2030. One of the things in the Resource Management Act that sometimes relates to Treaty settlements, although not always, are mana whakahono ā rohe, and they also relate to this other legislation. I’m wondering how this legislation—this amendment that we’ve had since yesterday—relates to mana whakahono ā rohe, and, whilst the Government’s other amendments and different pieces of legislation are happening, is there any interaction that will happen as a result of this legislation to those mana whakahono ā rohe given these references to Treaty settlements and other enactments? Thank you, Mr Chair.
LEMAUGA LYDIA SOSENE (Labour—Māngere) (19:14): Thanks, Mr Chair. Thank you. I refer to the provision that we are on—clause 25(14). Minister, you did have a question before the dinner break with respect to this provision. I do have an Amendment Paper. What I wanted to ask the Minister, and I can’t recall exactly your clear statement that you made, with respect to—
CHAIRPERSON (Teanau Tuiono): Can you tell us the Amendment Paper—the time stamp?
LEMAUGA LYDIA SOSENE: Yes, the Amendment Paper—all I’ve got in front of me is, “The proposed amendment is clause 25(14)”?
CHAIRPERSON (Teanau Tuiono): Oh, OK. So it’s 15 September, 4.46, right?
LEMAUGA LYDIA SOSENE: It was 15 September, 4.46.
CHAIRPERSON (Teanau Tuiono): Yep, cool.
LEMAUGA LYDIA SOSENE: Thank you. Apologies for the late reference. Minister, what I wanted to understand was, we’ve heard a lot of evidence that you’ve provided, and also with information from the officials, but what is the understanding or what is the advice that you’ve been provided in terms of the clause that will replace the two with the five years for chief executive officers? I wanted to understand what the considerations were of extending to five years and, also, the analysis that has been provided, because you have spoken with respect to going back in terms of democracy and going back to the local government basics in terms of policy intent. It would be helpful to understand, because I have put a provision forward in there to replace the five years with four, because you’re doubling up.
So what I want to understand, Minister, is what is the analysis behind going from two years to five years, but also the different considerations, because that is not just a double term; it extends the CEO responsibility in the second term. It would be helpful to understand the thinking but, also, the decision making behind that specific provision. Thank you.
CHAIRPERSON (Teanau Tuiono): I encourage members not to use “you” and “your” and bring the Chair into the debate.
Hon SIMON WATTS (Minister of Local Government) (19:16): I thank the member Lemauga Lydia Sosene for the question in regards to her Amendment Paper, which is in relation to the time period of the term of the chief executive, which is currently appointed for a first term of five years and the second term for up to two years. The bill proposes that the second term length will increase to five years, taking the maximum combined duration of the first and second terms to 10 years.
The question was around analysis that was undertaken by officials in regards to that change, particularly in regards to the frequency and the costs related, and actually links to the feedback in regards to an Amendment Paper that was noted by one of the other members this evening that we did not progress on the reasons that the cost-effectiveness aspect was considered to outweigh the benefit in regards to the change. So that’s in regards to that amendment. We won’t be progressing with that proposal.
There were questions before, also, in regards to delegations in the context of delegations from the governing body of a local council to subcommittees. There are certain aspects that can’t be delegated. However, there are some elements that can, including, for example, the allocation and decisions around the allocation of a particular grant. In that instance—
Hon Rachel Brooking: Is that the problem?
Hon SIMON WATTS: —there is an issue—I’m just giving you an example, which is one of the questions that I was asked in regards to that, and the clarification and the certainty provided that only democratically elected individuals are able to vote in regards to that ensures that there is consistency across the piece.
ANDY FOSTER (NZ First) (19:18): Mr Chair, thank you. I’m just going to go back to the question that I asked prior to the valedictory statements. Minister, you responded to my Amendment Paper 664 and then you also responded to Amendment Paper 665, even though I haven’t actually spoken to that, so I’ll speak to that in a moment. But just on Amendment Paper 664, the response you just gave us was about the term of a chief executive, and you talked about the analysis by officials. Now—
CHAIRPERSON (Teanau Tuiono): Try not to use the “you” and the “your”.
ANDY FOSTER: Oh, sorry, my apologies. “Your” is different—
Hon Willow-Jean Prime: “The Minister”.
ANDY FOSTER: “Minister”. “Minister”, “you”—no: the Minister talked about the analysis by officials. Now, I was on the Governance and Administration Committee that considered this bill and asked exactly questions around that, and we didn’t really get any clear steer as to why that decision was made. I specifically was doing it in the context, as I said earlier, of the Public Service Amendment Bill, which was done at exactly the same time. The answer that you gave us—sorry, the answer that the Minister—I can’t avoid using the word “you”—
CHAIRPERSON (Teanau Tuiono): Well done. Appreciate the effort.
ANDY FOSTER: The answer that the Minister gave us was that it was an issue of cost, but what we’ve then got is that we are concerned about the cost to local government of saying that the chief executive can only be appointed for five years, but at the same time—and, literally, it was the same time—we had a piece of legislation saying, “We are not concerned about the cost of reappointment in the public sector to a taxpayer.”
It is the logical inconsistency which is the challenge here, and that is what I would really appreciate. Look, I get the bit about saying, “Yeah, we want to reduce costs because we want to make sure that we don’t have to keep going to the market in terms of chief executives.”, although there are some costs to that in the sense that the chief executive then has a greater and greater power in relation to the democratically elected members. That’s an issue which instead is really, really important and yet is being undermined here, but that issue applies to ratepayers but not to taxpayers. It’s the logical inconsistency that I find challenging. It has been challenging, and I’ve raised that in this House several times over the last, well, six, seven, eight months, and I have yet to see a logical answer as to why that logical inconsistency is something that the Government supports.
The second one is Amendment Paper 665. You just talked about the issue around my Amendment Paper 665. You talked about the issue of delegating. There are certain aspects that can’t be delegated. There’s a list in the schedule in the Local Government Act. It says that the council cannot delegate the making of rates, by-laws, borrowing monies, disposing of assets other than in the long-term plan (LTP), adopting the LTP annual plan or annual report, appointing the chief executive officer, LTP policies, etc., and remuneration and employment policies.
The amendment that I’ve got there, which you responded to and said, “No, we’re not going to do that.”, is an amendment which says that it’s the power to adopt a strategy, a policy, or a management plan under the Reserves Act 1977 or a district plan, a district plan change, or variation to district plan change. Those things are really, really important pieces of policy. They are critical. Collectively, they are the most important things that councils do, and yet councils can choose to delegate them to a body.
We’ve got these amendments talking about unelected members and unelected members not voting. You’re dealing with that, but you’ve still got unelected members around a table who have influence on those things. Those are some of the most critical things that councils do, and you’re saying it’s fine to delegate them. All this amendment was saying is, actually, just like we do in Parliament, there should be a process of saying that you have your first reading, effectively—your first process. The committee makes some decisions around that, and then it gets kicked up to council, and the council have a second think about it.
Otherwise, what will happen with some of these things is you will end up with them literally turning up, as we’ve had with amendments—we’ve had the complaint here about amendments turning up. You’ll have it turning up a couple of days in advance of a council committee meeting. The council committee meeting will have delegated authority to approve it, to go out to consultation, or to go out and actually finalise it. That could be a district plan. Those things are really, really, really important, and yet for some reason, we think it’s OK that the council itself doesn’t even have to have a view on them. I would suggest to you, from 30 years of experience, that that is not a good way of doing things and we should be thinking about that a different way. That amendment is very, very simple.
The second part of that one is the issue around avoiding doubt. This is because I’ve got to say some councils—and I have one council not too far from here playing silly buggers with that. It basically said that because we have delegated the power to recommend a long-term plan to the council, we cannot override that: “We, the council, which theoretically is the sovereign body, cannot override that decision.” That is a nonsense, and that is that council which was playing games with the law. That should not be happening, and that’s why the second bit is in there as well.
To the Minister of Local Government, with respect, I ask you to think about that one again. It really simply is just extending the list of the things that council cannot delegate final approval of—things like district plans, management plans, key policies. Those things are important, and they should have the dignity of going to a council, not merely being dealt with at a committee level.
Hon RACHEL BROOKING (Labour—Dunedin) (19:24): Well, on a similar vein—and I’ve got a few contributions to make, but on the contribution from former Mayor Andy Foster, I think it was a very good point that he is making about what can and can’t be delegated.
The Minister of Local Government, in reply to my question, talked about the fact that the legislation already says that some things cannot be delegated and it is the elected members that are making those decisions. He said that grants can be delegated. Is that why we’re here? Are we here because of the grants being delegated? What are our banned words? Did somebody give a grant for wellbeing, or did they give a grant for equity or maybe, horror of horrors, a circular economy project? These are words I know this Government hates. It has spent so much time trying to delete them from everywhere. But I want to offer the Minister some help. I’m very happy to prepare an amendment here, if he wants me to do so, to say that the grants decisions cannot be delegated. If that is the issue, we could fix that—not a problem. That’s one thing.
The second one goes back to this wider issue of the constitutional importance that the Minister has been saying relates to democracy in local government. I will ask him if he can tell us his theory of localism. I say this because I watched the Minister closely when he was in Opposition. We would speak at some similar conferences, and he had a lot to say about localism and the importance of localism and how his new Government was going to end centralisation. I’m very interested in his theory of localism and how that applies to this legislation and how it is that local people are going to be making more decisions as a result of his work. That’s my second question.
My third question relates to these codes of conduct. If we look at the bill as reported back from the Governance and Administration Committee, on page 10—so clause 25, “Schedule 7 amended”. I’m interested here in the codes of conduct. It says that the following persons must comply with the standard code of conduct and then it lists some people. Then if you turn the page, so on page 12 at new sections 36B and 40, there are these words: “must comply”. Each member of each local authority board must comply with the standard code of conduct. Then that’s repeated at new section 40. I’m interested in the language here that you must comply. I know Celia Wade-Brown started to mention this in her contribution, but I don’t think she asked the question that I’m going to ask. That is: what happens when a member does not comply with those codes of conduct? What are the consequences? Does this legislation change the current situation where you can have some reviews and people can say, “We’re displeased.” Is there any change in this legislation around non-compliance with codes of conduct? If not, can the Minister justify why they are even a thing, let alone having a standard code of conduct? Thank you, Mr Chair.
Hon SIMON WATTS (Minister of Local Government) (19:28): Thanks, members, for those questions. I’ll run through my feedback in regards to those in order. In regards to the amendment proposed verbally in regards to grants, no, we won’t be progressing with that. I did answer the question in regards to localism previously this evening and gave quite a comprehensive response in regards to that, so I don’t wish to repeat myself in that area.
The feedback in regards to Andy Foster on what I think is a fair and reasonable point that when we look at the broader Local Government Act, there are number of areas of opportunity for improvement—we would both absolutely agree with that. The view and my view is that in similar areas such as taxation where we do regular reviews of the legislation on more of a regular cadence, the Local Government Act is one of those areas which I think we should continue to look to review and enhance. I look forward to doing so constructively in the future.
MIKE DAVIDSON (Green) (19:29): Thank you, Mr Chair. I just have a couple of questions to ask, and it’s quite important to get some clarification around this, because obviously this amendment that I’m going to be talking to—Amendment Paper 755—has just dropped recently. Obviously, there are a lot of changes and it’s important that we understand the impact of these changes. One of them is obviously—and we’ve just heard about the delegations of funding grants to committees, etc. Also, at many times at councils, staff get delegated minor funding decisions. Obviously staff aren’t elected members, but the elected members have made that decision—democratically—to pass on these delegations to staff. My question is: will staff be able to continue to make these delegated decisions around minor grants that they’ve had for many, many years, or will that be gone as well?
I have a question, and I asked this earlier but I never got an answer, so I think it’s really important to ask this again. It’s in new subclause (12B) in Schedule 3, new section 31A(4). It’s obviously where it’s basically excluding the “member of the board established under Part 7 of the Local Government (Auckland Council) Act”, etc. My question I asked earlier is: even though they have been singled out, are they still able to apply for the exemption like many other joint committees that have—
CHAIRPERSON (Teanau Tuiono): Could you let us know whereabouts you are? You talk about Amendment Paper 755, right?
MIKE DAVIDSON: Amendment Paper 755—
CHAIRPERSON (Teanau Tuiono): Which page?
MIKE DAVIDSON: This is page 7.
CHAIRPERSON (Teanau Tuiono): Page 7, all right.
MIKE DAVIDSON: It’s the new clause 31A(4). It’s obviously in reference to the removal of the joint committee, and the question is: even though they’ve been singled out, do they have the ability to apply for the exemption that has been mentioned earlier on in this bill? I think that’s really important, because I still didn’t quite get the answer why this has been singled out. Why has the Houkura board been singled out as actually not being able to continue in their current form with non-elected members voting? I’m just struggling to understand why, and it would be good to get an answer from the Minister about why this group has been singled out in the way it has. We haven’t quite heard a good reason for that, but what I’d really like to know is: can they apply for that exemption?
The other question I’d like to ask the Minister: will appointed members of reserve management committees convened and supported by councils but established under the Reserves Act 1977 be captured by the non-voting proposal? Currently, if we look around Banks Peninsula, there are 15 of these types of committees. I think it’s really important to understand and get some clarity around whether these committees—which obviously have non-elected members on them—will actually be able to continue as they are, or will they also be affected by the non-voting proposal?
There are just three questions that I put in front of the Minister. One is around minor delegations to staff, whether they are now going to have to stop. The other question was around whether the Houkura board can apply for an exemption, and actually also why were they singled out considering the significant amount of joint committees—or committees as well—that have non-voting members on them? Lastly around the reserve management committees that were established under the Reserves Act 1997. Thank you, Minister.
Hon SIMON WATTS (Minister of Local Government) (19:34): I thank the member Mike Davidson for those questions. I’ll also come back to the Hon Rachel Brooking’s questions around code of conduct and “must comply”. The question’s relating to what the consequences are in regards to that. The consequences in regards to non-compliance and penalties are included within the broader Local Government Act. One of the consequences, for example, is that the individual can be removed or the removal of a committee member. I think it is fair to say that the penalties are an area that the Government has identified as part of a future work programme around looking at strengthening that. But within the time available within this term, that’s not going to be possible. But it’s definitely an area of future policy consideration and I’m happy to work constructively with the member in regards to her ideas in that area if she wishes.
In regards to the reserves—
Hon Rachel Brooking: Always! Always!
Hon SIMON WATTS: Thank you, I appreciate that. It feels like our relationship is starting to warm a little bit more from before the dinner break.
Tom Rutherford: Get on with it!
Hon SIMON WATTS: We’ve got love on all sides here. The Reserves Act 1977 not captured—just in regards to the question before.
Delegation to staff also was a question: that is not impacted.
No committees in particular have been singled out. I raised this and noted this before the dinner break in regards to consistency of the application of the inability for non-elected members to be able to vote. That is a consistency point. It isn’t a case of any particular sub-committee over another. The reality in regards to the question around exemptions: the exemptions mechanism does apply in that context, and that would be for the discretion of the Minister of Local Government to consider that.
TANGI UTIKERE (Labour—Palmerston North) (19:36): Thank you, Mr Chair. I thank the Minister of Local Government for his response around the standardisation of standing orders and also for the code of conduct. I think it’s important to make that distinction, because the standardised approach to standing orders, while I still might not agree, none the less will be something given over to councils, and the expectation is they would just roll that out, whereas the standardised approach to codes of conduct, I do think the think piece—perhaps—around the consequences is a really important one. I know the Minister talked about the consequence being potential removal from committees. I think everyone can look to Dunedin City Council and see that they are working through a process—or have been for quite some time with one particular elected member—to the point where many would think that it’s just farcical, some of the stuff that’s going on down there. I infer from the Minister’s response that there’s nothing in the legislation that would allow for consequence—for example, removal from office—as opposed to—[Minister shakes head] Thank you to the Minister for confirming that. But that might be something that’s on the horizon, perhaps, moving forward for the Parliament.
I want to ask the Minister about Amendment Paper 654, which I haven’t spoken to yet. This is an issue that relates to access to information, and I think one of the changes that has been made in this particular bill—I will say there are a couple of things that I’m OK with, but overwhelmingly not so. But one is this issue as to who makes final decisions around access to information that’s held by the local council. I do think it’s a positive step in the right direction to ensure that those final decisions are taken by the council, as opposed to the chief executive, particularly when it concerns access to information by elected members. Now, the Minister will know—because I did float this in the second reading—that this was an issue that has been raised by submitters throughout this process, and the bill that has been reported back hasn’t addressed this. I understand Dr Dean Knight had raised this as a particular concern with the committee, and I do think it’s a fair one and I’m interested to sort of understand from the Minister whether he would entertain correcting what is perhaps a little bit of an oversight there.
By ensuring that the governing body is able to make the decision about access to information that’s held, rather than the chief executive, there is the possibility that an unintended outcome or consequence has now arisen, because it removes the ability for an elected member who might be unhappy with the decision that has been taken by the governing body around access to information. It removes their ability to actually complain to the Ombudsman, because the decision has been made, effectively, by the territorial authority itself—not by delegation but by the authority itself. It is important that the decisions around access to information do have proper motive. We all know that, just like this place, councils can be politically charged. If there are decisions that have been taken which are on a numbers kind of basis as to who has the most votes, that doesn’t necessarily lend itself to a fair or proper consideration around whether the information should be withheld or the extent of it being released.
The Amendment Paper 654 in my name seeks to insert a new clause 26A(4) which would basically allow for elected members to still go through the process of engaging with the Ombudsman. It’s not to say that the Ombudsman would necessarily agree, but it gives them that avenue, rather than having to go through an expensive judicial review process, which is the only way that the decision around access to information could sought to be addressed by an elected member.
I do think that the Minister, I hope, is aware of this issue, and I’m just interested as to whether he sees that what may have been an oversight can be corrected to ensure that there’s a fair process here.
Hon SIMON WATTS (Minister of Local Government) (19:40): I thank the member for Amendment Paper (AP) 654. We will not be proceeding with this amendment, and I’ll explain the reasons why.
This is not Government policy. My Amendment Paper 755 will actually delete the clauses that this AP 654 will rely on. Therefore, I expect subsequently that the Clerks will probably rule it out of order because of that interrelationship between the two sections.
However, in addition to that, the Ombudsman has indicated that they would not support this proposal on the basis that the proposal raises constitutional issues about the Ombudsman having a role in overriding a decision of a democratically elected council.
TIM COSTLEY (National—Ōtaki) (19:41): I move, That debate on this question now close.
Hon RACHEL BROOKING (Labour—Dunedin) (19:41): Thank you, Mr Chair. I know my friend Tangi Utikere will have another question on that exchange on the amendments in Amendment Paper (AP) 755. Of course, the amendments are new and have not been to a select committee. I’m looking at Amendment Paper 755 and this new section 260A, inserted by new clause 21A, which we can see on page 3, which is that the “Order in Council may specify exemptions in relation to non-elected member provisions”. My questions about this are not policy-related at all; they are just about the wording here.
The wording is very open. What this is saying is that an Order in Council—that is, secondary legislation—can be made to specify an exemption for any class or type of specified committee—
CHAIRPERSON (Teanau Tuiono): What page is that?
Hon RACHEL BROOKING: Page 3 of AP 755—any class of non-elected member of a particular specified committee. So this is very wide and it can be made indefinitely and with or without conditions.
Normally, a clause like this—that is, an empowering clause for exemptions to be made by a Minister so it doesn’t have to go through this House—would have some sort of overarching principle or criteria or guardrails for justification, a test that would have to be met before the Minister decided to invoke this Order in Council. I can’t see any of that here; it might be somewhere else in the legislation—only, at new section 260A(4), “The Minister must not recommend the making of an order under subsection (1) unless they are satisfied that the exception is necessary or desirable.” That is a very wide—
CHAIRPERSON (Teanau Tuiono): I didn’t want to interrupt the member’s flow, but that section is in Part 1. If you could make it link to the terms of this discussion.
Hon RACHEL BROOKING: Yes. Well, of course, because these are exemptions that come through in Part 2. The issue is how the exemptions in Part 2 can be made, basically, by the Minister deciding without any criteria, and if the Minister thinks that there are criteria somewhere within the legislation. If somehow it would go back to the purpose statement or somewhere else in the legislation or somewhere in this new framework that is inserted by Amendment Paper 755, how that would work?
It’s obviously very difficult for us to see this, remembering, of course, that this is an amendment that has come in after the select committee. The whole paper has come in after the select committee, and normally, changes such as this would go to a select committee and they’d be sent off to the Regulations Review Committee—I’m looking at the clerk who used to be involved in that at some point when I was—and the Regulations Review Committee would, of course, say, “What are the criteria for making this decision? Where are they?” If the Minister could point to where those criteria are, that would be very useful.
TANGI UTIKERE (Labour—Palmerston North) (19:45): Thank you, Mr Chair. I thank the Minister for pointing out his reference in his Amendment Paper 755. This is one of the things where we don’t have a lot of time to address things that land late.
I just want to get some clarity around that, because, as I understand, the Minister’s response is that, effectively, subclauses (2) through to (4) of new section 259 is to be removed. The ability for access by elected members to information held by the local authority would exist but—is the Minister saying that it would in line with processes established by the authority or by the council itself? That raises still the question around the ability for an elected member who still may be unhappy with whatever those council internal processes might be around decisions taken to release information, to not release information, or to limit the scope and scale of release.
Does this change still enable an elected member to seek any other avenue apart from a judicial review over a decision to access the information? I think the Minister’s response was, “Well, no, the role of the Ombudsman should not be to interfere with a decision of a democratically elected council.” The point of difference, of course, is that often some of those decisions around access can be political and if it’s left with the chief executive, I’m still not clear around whether this actually adequately mitigates the concern about an elected member not being able to utilise a particular avenue to address concerns around the inability to release information to be accessed.
TOM RUTHERFORD (National—Bay of Plenty) (19:47): I move, That debate on this question now close.
TANGI UTIKERE (Labour—Palmerston North) (19:47): Thank you, Mr Chair. It would be helpful to get a response from the Minister if that is possible. I see he’s taking some advice, so that might be possible.
I want to move on to clause 32B, which has not been referenced yet. This is around the expenditure on consultants and contractors. What we see in this bill is the introduction of a requirement for councils to effectively—well, they already do an annual report, but to include certain things as part of that annual report process.
Clause 32B on page 14 talks about the annual report needs to include a report on all operating and capital expenditure. I mean, we had a question earlier in the evening or in the day around the difference in terms of facilities—we didn’t actually get an answer around that, but I think that was in Part 1—on consultants and contractors.
I find this really, really interesting. What is the whole basis on which the Government wants to include this information specifically? The annual report includes a whole pile of information, from how much remuneration decision makers receive right through to different particular quantum or focus on the activities or groups of activities that exist there. This is coming from—I mean, the track record of a Government that, when we look at transport, for example, where the Government spends on consultants and contractors is such that their Roads of National Significance is so out of whack that there’s a significant financial fiscal hole. I do find it rather strange that the Government are wanting to have a focus on consultants and contractors, yet, in other parts of their own operations, they don’t seem to be so willing to have a bit of spotlight or sunlight in that particular space.
I’m assuming from this, Minister, that the annual report, which has a whole pile of information—you are expecting a level of detail around the contractor spend and consultant spend. What evidence is there? What is driving this? I mean, I know we talk about cost effective and all of those sorts of things and a requirement around infrastructure focus, public service, regulatory functions—all of those sorts of things. But why do we suddenly have an inclusion consultants and contractors given this Government’s terrible track record in that space?
MIKE DAVIDSON (Green) (19:50): Thank you, Mr Chair. I just have a question around Schedule 2, new section 60, “Local governance statements”, new subsection (2) where it talks about “A local authority need does not need to comply with section 40(1) (as amended by the amendment Act) within 6 months after the 2025 general election of members of the local authority but must instead comply with that section within 6 months after the commencement date.” Now, obviously, when this was originally done, this was introduced to the House in July 2025, and it’s clearly taken a quite a while to get to this point. We’re a year into a council term. By the time this gets put into place, you’re well past halfway through a council term, and there’s a lot of money that the councils are going to have to spend when they redo their local governance statements to comply with this new Act. It just seems like, if we’re trying to curb council spending, that we shouldn’t actually be increasing costs on council.
I have an amendment, and my colleague Celia Wade-Brown has an amendment just to fix this up just slightly just to bring it up to date so, therefore, we’re not focused on an election that has been and gone last year in 2025. It seems a little bit absurd to have an Act that talks about a past date. It just doesn’t make sense. This amendment, which is time stamped 16 September 2026 9.09.18 in the name of Celia Wade-Brown recommends to replace new section 62 with “a local authority does not need to comply with section 41 (as amended by the amendment Act) until following the 2028 election of members of the local authority”.
I know, Minister, that you obviously, throughout this committee of the whole House stage haven’t accepted any of our amendments, which is a shame, because a lot of the amendments we’ve been trying to do are actually to improve this bill. We don’t support the bill, but we still try and make some improvements in there—especially if we realise there are some issues that have been created, and especially how old this bill actually is from when it was first introduced. This is a pretty straightforward amendment. It will save councils money and just put the actual time for them to do this work after the next 2028 election. I’d like to get the Minister’s thoughts on whether he’d accept that amendment, which would actually push out a bit of that time and save some money. It’s quite common sense, I think, to do that, and it will let the councils do their governance statements after the next election.
Hon SIMON WATTS (Minister of Local Government) (19:53): I’ll just answer those three questions. The amendment, to the member—and I do appreciate his very helpful ideas in regards to improvements of the bill. However, in this case, it’s not going to be consistent with Government priorities. Again, we seem to have a theme there. But, anyway, criteria—we had a question before around criteria for the Minister around exceptions. I’d refer the member to Amendment Paper 755, particularly clauses 260A(4). It refers there, in terms of the wording of the criteria, to “Necessary or desirable.” Official advice to us is that that terminology is consistent with other aspects of legislation. In order to add more context to that, subsequent to and subject to this bill passing, the Minister of Local Government will be writing to all councils to outline, clearly, expectations in regards to that. That will provide additional context around the expectation of the criteria as well.
There was another question in regards to consultants and contractors. The mandatory reporting is to drive transparency and comparability across the sector. As members will be aware, you can already request—and councils are often burdened by a significant amount of requests—this through the official information request process. This mechanism, in effect, will standardise that reporting across all councils and mean that it is freely available, and, therefore, it will reduce the need for individuals to request it on a council-by-council basis.
Hon RACHEL BROOKING (Labour—Dunedin) (19:55): Thank you, Mr Chair. Picking up on the Minister of Local Government’s answer to one of my questions about criteria, he said that the vague words were the normal statutory guidance. I would disagree, but he’s then said that the Minister will write to local government and that will set out expectations. I think what the Minister is telling me is that this primary legislation—what will become an Act—is going to say, “Minister, you are empowered to make regulations, secondary legislation, with very vague criteria, but, in fact, you are going to retrofit that by writing, in a non-statutory process, to councils.” How does that help? I don’t think it helps at all when we are here in the Chamber, trying to understand what those guard rails are in our primary legislation that goes to our secondary legislation, which is also legislation. I do wonder, then, about the Minister’s complete flip-flop on localism, because what he is saying is, “I, the Minister, central government in Wellington, am going to tell you, all councils, what my expectations are. I’m not even going to bother to put it in the Amendment Paper that I’ve tabled the Tuesday before the day that we’re starting to debate this legislation in Parliament.” That is woeful.
The Minister has an opportunity, now, to make an amendment that actually includes some criteria for that secondary legislation in the primary legislation. He could do that right now, and I would appeal to him to do so, or at least put on the Hansard what he thinks those criteria might be. But that doesn’t fix the problem, because this legislation doesn’t fix any problems, it seems.
Going further in Amendment Paper 755 on to page 8, new clause 66A, “Non-elected members”, this is: “(1) The specified clauses do not apply until 6 months after the commencement date.” My question is around these timings and the “6 months after the commencement date”—we’re not yet at the commencement provisions, but, presumably, that’s at least six months away. Does the Minister anticipate that there will be some regulations that go to the exemptions in the specific clauses before that six-month period? When he says that he is going to write to local government, is that part of a process to determine what the exemptions should be? Is that the reason for the six-month period, or is the six-month period there for more logistical reasons around the fact that people—I don’t know, they might be getting paid, they might not be getting paid, agendas might have already been set out, there might be delegated decisions being made already, and they need to have time to finish off those decisions. So why is the six-month time frame there? Is it because of these logistical type matters that I’ve just raised, or does it relate to the exceptions, or is it for some entirely different, other reason that he’d like to tell us about?
Hon SIMON WATTS (Minister of Local Government) (19:58): Yeah, I thank the member Rachel Brooking for the question. The six-month period is to provide time for councils to transition to the new law that will be put in place and that we are discussing this evening.
TANGI UTIKERE (Labour—Palmerston North) (19:58): Thank you, Mr Chair. This will be a very short question because I’m still keen to get a response from the Minister about the access to information held by a local authority. He has pointed me to Amendment Paper 755, but my understanding of that is that the provisions, from what they were, seem to be watered down and rolled back. He’s referenced the fact that this is around the structure of internal processes to consider the nature of information that would be available to decision makers. That, in essence, leaves a lot of that responsibility with the chief executive, even directly or by delegation.
Already, actually, in this Chamber today, I think it was Mr Foster who cited the fact that one of the Government’s own members has a bill that’s currently in front of a select committee that seeks to strengthen the role that the governing body, effectively, has over the work that the chief executive would do. Why is that? Because for far too long in this country, there have been examples where chief executives have gone down a particular route and have made decisions that are at complete odds with the governing body, and yet that’s still what is permitted.
I know that’s a separate piece of legislation. But I am still none the wiser around whether or not what the Minister is proposing is a further weakening of or an eroding of the provisions that were there, whereas what we were seeking to get from the Minister was a strengthening of the capacity for elected members to be able to head down a pathway to address concerns around a lack of access to information.
TOM RUTHERFORD (National—Bay of Plenty) (20:00): 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 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Mike Davidson’s tabled amendment to Amendment Paper 755, amending clause 25(12A) and (12B) relating to the Greater Christchurch Partnership Committee, be agreed to.
A party vote was called for on the question, That the amendment to the amendments be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment to the amendments not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Mike Davidson’s tabled amendment to Amendment Paper 755, amending clause 25(12A) and (12B) relating to the Ōtākaro Avon River Corridor Regeneration Committee, be agreed to.
A party vote was called for on the question, That the amendment to the amendments be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment to the amendments not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Mike Davidson’s tabled amendment to Amendment Paper 755, amending clause 25(12B) to delete new section 31A(4), be agreed to.
A party vote was called for on the question, That the amendment to the amendments be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment to the amendments not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendments to Amendment Paper 565 amending Part 2, set out on Amendment Paper 755, be agreed to.
A party vote was called for on the question, That the amendments to the amendments be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Amendments to the amendments agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendments to Part 2 set out on Amendment Paper 565 as amended be agreed to.
A party vote was called for on the question, That the amendments as amended be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Amendments as amended agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Tangi Utikere’s amendment to clause 25 set out on Amendment Paper 653 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Tangi Utikere’s amendment to clause 25(9) set out on Amendment Paper 654 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Andy Foster’s amendment inserting clause 25(12A) and (12B), set out on Amendment Paper 665, be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 63
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 59
New Zealand National 48; ACT New Zealand 11.
Amendment agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Andy Foster’s amendment replacing clause 25(14) set out on Amendment Paper 664 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 63
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 59
New Zealand National 48; ACT New Zealand 11.
Amendment agreed to.
CHAIRPERSON (Teanau Tuiono): Lemauga Lydia Sosene’s tabled amendment to clause 25(14) is out of order as being inconsistent with a previous decision of the committee.
A party vote was called for on the question, That Part 2 as amended be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Part 2 as amended agreed to.
CHAIRPERSON (Teanau Tuiono): We come now to Schedule 1.
A party vote was called for on the question, That Schedule 1 be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Schedule 1 agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s tabled amendments to Amendment Paper 803 amending Schedule 2 be agreed to.
A party vote was called for on the question, That the amendments to the amendments be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Amendments to the amendments agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Hon Rachel Brooking’s tabled amendment to Amendment Paper 803 amending Schedule 2 clause 71(1) be agreed to.
A party vote was called for on the question, That the amendment to the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment to the amendment not agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendments to Amendment Paper 565 amending Schedule 2 set out on Amendment Papers 755 and 803, as amended, be agreed to.
A party vote was called for on the question, That the amendments, as amended, to the amendments be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Amendments, as amended, to the amendments agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that the Minister’s amendment to Schedule 2 set out on Amendment Paper 565 as amended be agreed to. Have I done that one? No.
A party vote was called for on the question, That the amendments as amended be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Amendments as amended agreed to.
CHAIRPERSON (Teanau Tuiono): Tangi Utikere’s amendments to Schedule 2 set out on Amendment Paper 653 are out of order as being inconsistent with a previous decision of the committee.
The question is that Andy Foster’s amendment to Schedule 2 deleting new clause 62A of Schedule 1AA set out on Amendment Paper 664 be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 63
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; New Zealand First 8; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 59
New Zealand National 48; ACT New Zealand 11.
Amendment agreed to.
CHAIRPERSON (Teanau Tuiono): The question is that Celia Wade-Brown’s tabled amendment to Schedule 2 replacing new clause 60(2) be agreed to.
A party vote was called for on the question, That the amendment be agreed to.
Ayes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Noes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Amendment not agreed to.
A party vote was called for on the question, That Schedule 2 as amended be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Schedule 2 as amended agreed to.
Committee of the whole House
Clauses 1 to 3
CHAIRPERSON (Teanau Tuiono): We now come to clauses 1 to 3. This is the debate on clauses 1 to 3—title, commencement, and principal Act.
TANGI UTIKERE (Labour—Palmerston North) (20:19): Thank you, Mr Chair. The interesting thing is that the title clause should really talk about what this bill seeks to deliver, and the one that’s proposed at the moment—although it might be commonly known because it’s been on the Order Paper for quite some time since this bill was actually reported back in November of last year—talks about system improvements. My question for the Minister is: why does the bill have a name that does something completely the opposite in terms of the direction?
Now, it may have been a focus on system improvements perhaps, prior to the late landing of these Amendment Papers that have now littered the Table of the Parliament, but when we look at the content of these Amendment Papers—for example, the removal of voting rights from democratically elected councils, who determine what that skill set base should be—when it talks about the desire of councils to focus on a whole range of other stuff that this Government would like them to, where it goes against the grain of localism, which, again, this Government seemed to campaign into office around, why is it that there is no Amendment Paper in the Minister’s name seeking to amend the name of this bill to truly reflect what it seeks to deliver? That’s the first question.
Often, we hear this a lot in this House, don’t we—that the label should be what’s on the tin; when you open it up, you should know exactly what you’ll get. How on earth can you get, from “(System Improvements)” from what has been contained in this particular bill? There could be a whole range of different suggestions: the “(Anti-democratic)”, the “(Anti-localism)” bill, perhaps. My colleague the Hon Rachel Brooking asked the Minister whether he was keen for her to prepare an Amendment Paper around the provision of grants or thereabouts. We on this side of the Chamber are very willing, at very late and short notice, I guess—take a leaf out of the Government’s book in terms of when they land their Amendment Papers—to assist with a particular title that is going to truly and accurately reflect that. I’ll leave that there. I’ll come back to the commencement and the like in due course.
Hon RACHEL BROOKING (Labour—Dunedin) (20:22): Thank you, Mr Chair. I am going to start, then, with the commencement, because most of the Act comes into force on the day after Royal assent—presumably that is soon—but then there’s a “However”, in clause 2, about section 26(2), (3), and (5). I think those are references to what’s in Schedule 10, but it would be useful for the Minister of Local Government to clarify what it is that comes into force at a later date, and why. What is the rationale for those aspects coming in at a later date? That is my first question.
Then, if the Minister can also clarify that the fast-track amendments in his Amendment Paper—they come into force on the day after Royal assent, because I don’t think they’re in that “However” clause. That means that, for any fast-track applications that could be in the substantive decision phase—as long as there have not been draft conditions or a draft decision—if we’re at the time that is the day after Royal assent, these provisions will apply to those fast tracks, and the councils will have six months to do a development contribution for them once the fast track is approved, if it is approved. Those are my questions around the commencement.
Now, moving back up to clause 1. We are on clause 1, which is page 3 of the bill as reported back from the select committee. As my colleague Tangi Utikere was saying, he had some suggested different names for it, because we do have this as the Local Government (System Improvements) Amendment Bill. Tangi Utikere was referring to localism and getting rid of localism, but I would put to the Minister that a better word, rather than being anti localism, is just “centralisation”. In fact, it could be the “Local Government (Centralisation) Amendment Bill”. I think that’s one thing that would work.
Of course, these Amendment Papers are also significantly changing the bill as well. The bill that went through the select committee is now in a very different form from what we will have before us when, one day, all these amendments are put into the bill. Normally, that would be for the third reading, but I don’t think that’s going to happen, because I think we’re going to go straight on to the third reading.
The Amendment Papers have identified this problem that was identified by submitters in 2024 when the Fast-track Approvals Bill was at the Environment Committee. The Government didn’t listen then. The Government has been warned all year that there is a significant problem for councils, who are not able to impose development contributions on these fast-tracks out of sequence. This amendment is supposedly fixing that problem, but we know it is not fixing the problem for Delmore, it is not fixing the problem for Sunfield, it is not fixing the problem for the donors of the National Party, so it’s not fixing anything. Another more appropriate title, I think, would be the “Local Government (Not Fixing a Well-signalled Problem and a Complete Failure Again) Amendment Bill”. That’s one more suggestion.
Tangi Utikere referred to my discussion with the Minister, because another major change—that again has come after the select committee process; that has come in as a separate Amendment Paper—is the changes to non-elected members and the delegations and any voting rights that any of them might have, even if they are established under statute. The Minister told us, “Oh, well, sometimes decision making on grants can be delegated.” We could fix that, but he has not done that, so it could be the “Local Government (Really No System Has Been Improved At All) Amendment Bill”.
Another would be about something this bill had been doing when it went to select committee, and for the whole time this Government has been talking about it, and that is to get rid of that terrible word that this Government is so scared of—because they do everything against it—and that is “wellbeing”. It could be that this bill is the “Local Government (Removing the Banned Term ‘Wellbeing’) Amendment Bill”. I think that is the most fitting title.
MIKE DAVIDSON (Green) (20:27): Thank you, Mr Chair. The Local Government (System Improvements) Amendment Bill—I think that name is completely wrong. It is not fitting for this bill, a bill that is trying to remove the wellbeings that local government has been doing for some time. You get a National Government and they remove the wellbeings, but local government continues to look after the wellbeing of the people they represent, because, actually, it’s a really important role of councils. Once again, we have a National Government removing the wellbeings. They’re not just removing the wellbeings; they’re also prescribing what councils need to focus on. By doing that, they’re pretty much telling councils what they should not focus on.
If you are a ratepayer and you value heritage, tough luck; this Government does not think councils should be involved with heritage. If you value art galleries, you’re out of luck; this Government does not think councils should focus on art galleries. If you believe councils should work in economic development—bring in some All Blacks tests, raise GST revenue for this Government—tough luck; this Government does not think councils should focus on economic development. Climate adaptation? Tough luck. It’s not one of the prescribed core services of councils. Public spaces and places? Sorry, ratepayer, you’re out of luck; this Government does not believe councils should prioritise public spaces and places. Environmental protection enhancement? Nope. Housing? If you’re a ratepayer who believes that councils should look at after housing, tough luck; this Government does not believe councils have a role in that space. Community support and funding? Once again, tough luck. Even though our volunteers contribute so much—for every dollar that’s invested by a council, they return at least $8—unfortunately, when you look at this Government’s prescribed list of core services, that is not included.
What we’re seeing is roads, reticulation, rubbish, and rates—the four “R”s. We’re going back to the 1980s. This Government does not care about community; they care about the past. And this is why I have an amendment that is time stamped 16 September 2026, 9.09.02. I know the Minister of Local Government—who’s previously been sitting in the chair—has said no to every single Amendment Paper; I think he will like this one and I think he should consider it. Also, Andy Foster, I hope New Zealand First consider this, because we’ve supported you and this is a good one. My amendment is to remove “System Improvement”, and put in “(Building the Past)”, because this is what this Government is doing. They are building the past; they’re not improving anything; they are going backwards. This is a bill that, when passed, will just see councils go backwards, and communities will suffer.
This is just one of three amendments that the Greens have put forward for the title of this bill, which should not be called “System Improvements”, so that one is “Building the Past”.
The other amendment in the name of Francisco Hernandez is time stamped 16 September 2026, 9.09.03, and this one I think is also very clear with how this Government act around local government, and the role that they like to play. This one is also a simple one where we remove “System Improvements” and it’s simply called the “Local Government (Do as You’re Told) Amendment Bill”, because this is what we’ve seen from this Government. A National Government that campaigned on localism suddenly get into power and all they do is “You do as you’re told local government. Do as you’re told. We know best; you do not. Even though we don’t have experience in the local government sector, we’ll tell you how to act and what to do, and what is important for your communities that have elected you.” That’s right. This Government do not care about local government, and that is why that amendment in the name of Francisco Hernandez is called “Do as You Are Told”.
A third amendment that we have tabled as well—[Time expired]
CAMILLA BELICH (Labour) (20:32): Apologies to my colleague Mike Davidson in full flight. I did want to take a brief call around these preliminary clauses, and I had a couple of suggestions which I think are really helpful, and I think the Minister should consider. The first thing I want to talk about is the issue of commencement. I’m struggling to think if I’ve seen a bill that has so many different Amendment Papers from the Government: four different amendments, one tabled so recently that it doesn’t even have a number, it is just referred to by the time it was tabled. That is quite unusual, and I have to say that for people who want to look at this bill and actually understand what it looks like, it’s almost impossible to piece it all together. You have to kind of look at it very carefully, you have to look at the new clauses and go through and amend them all. And it’s so different that I think it deserves to come in at a later stage.
The reason I say that is because I believe that it would benefit from some additional scrutiny that it hasn’t been able to have. The Amendment Papers haven’t been able to have a post-legislative scrutiny. I know that’s been talked about quite a bit as a concept, and that’s mainly because we’ve had so many bills go through in urgency under this Government. Now, this is slightly different from many of those other cases in the sense that this did have a select committee stage. In fact, it was so long ago that it was when I was chair of—well, at least part of it was when I was chair of the Governance and Administration Committee. I have to say I don’t recognise this bill now. It is so different, it’s almost totally, totally different.
So I do think something to consider that would be beneficial for people looking at this bill—and let’s not pretend that these Amendment Papers have been introduced without impact. The last amendment, I appreciate, has mainly got little—I think there’s hyphens and there’s capitalisation, and those type of things I think we can we can live with; although sometimes those things can have a big impact as well, but they’re not the major things. But Amendment Paper 755 specifically that gets rid of the rights of people to vote when their democratically elected councils—local bodies—have decided that they should be able to vote is very, very concerning. The fact that it has turned around such a long history, especially in relation to Auckland Council, which is my council—it’s extremely disturbing to see that. I think a way of remedying this—and so this is a helpful suggestion of a way of getting around potentially quite a big political problem for the Minister—is to add in to the commencement an additional subclause, (5), to say that all of these particular sections will come into force either on Royal assent or at a date set aside in Order in Council, apart from the changes that are implemented by Amendment Papers 755, 803, 565, and—it is regrettable that that we don’t have a better, more formal term—additionally, the last tabled amendment, which was tabled on 16 September, 11.37 a.m. this very morning.
I do think that is a helpful suggestion, and I think that that would give the opportunity for scrutiny to be put towards those particular Amendment Papers. And then either that could come into place after a period of time—say, I would suggest a year—then if there were any issues—which there may be issues, because we’ve had a bill tabled for a year in this case, and only this morning we’ve had a tabled amendment fixing up a few changes. The likelihood of there being errors in this bill because of the four different amendments that have been put forward is extremely high. It would be beneficial if those particular changes had a bit more time. It would mean that it could be remitted back to the committee of the whole House, I believe, and then it could be brought in with those changes fixed.
CHAIRPERSON (Teanau Tuiono): We’re getting pretty close to it, but I will take one from Mr Utikere.
TANGI UTIKERE (Labour—Palmerston North) (20:37): Thank you, Mr Chair. Well, there we have it: the former chair of the Governance and Administration Committee doesn’t even recognise the bill because there’s been so much time and so much change. That’s, of course, what you get when this bill was reported back in November of last year. It is a very apt observation, because the bill has been changed quite significantly without select committee input.
I want to make my comments strictly related to clause 2, and to ask the Minister of Local Government—who hasn’t responded to questions around the titles, or taken up the offers of some assistance in that space, or indeed the commencement. But it is extremely rare to have a Minister who had his first set of Amendment Papers that were published earlier in the year—there was a lot of conversation about what was coming—and then just yesterday morning, the most recent—well, not the most recent; the penultimate most recent amendment was landed, which identified a few things. And then again, today, this morning, while this very committee was working its way through the relevant parts of this bill, yet another tabled amendment—as my colleague Camilla Belich says—so late in the piece that it doesn’t even have a descriptor or an identifier. Three sets of amendments in the Minister’s name.
Now, surely, Minister, that must give some weight to the suggestion that the commencement provisions perhaps actually can last a little bit of time. When we’re thinking about the nature of what is going to come into force, what is the rush in terms of the day after Royal assent? Many of these particular provisions relate to a number of things that are yet to get under way. If we think about the nature of the standardised code of conduct process, when we think about the nature of some non-bespoke but standardised Standing Orders, they are not going to be stood up the day after Royal assent. So there really is no rush to give effect to many of these provisions.
If there is a rush to give effect to those provisions, then I’d be keen for the Minister to identify which particular provisions he is hanging on for an earlier commencement date under clause 2(1). It is clear, as has been indicated by colleagues, that there are other provisions that come in in a default of 2030 for clause 26(2), (3), and (5). If the regulation-making powers are not called into effect, then, essentially, the default is just under four years away.
The question for the Minister is why is it that there is a—well, we’ll call it a willingness, but a desire to, basically, have this come in on the day after Royal assent, given that he himself has had to table a number of Amendment Papers to correct what are clearly some very sloppy approaches to Government decision-making in this House. I know we’re getting used to urgency, and it seems to be the new norm and modus operandi, but is there any willingness on the part of the Minister to look at amending the commencement provisions in order to reflect what is a track record of shoddiness?
TOM RUTHERFORD (National—Bay of Plenty) (20:41): I move, That debate on this question now close.
Mike Davidson: Mr Chair.
CHAIRPERSON (Teanau Tuiono): I want to hear something significant.
MIKE DAVIDSON (Green) (20:41): It’s always significant, Mr Chair—always significant—and, hopefully, I can last the time with this one. I want to continue with the amendments that my colleagues and I have put forward because I actually think this is really important.
We have seen a number of amendments that have been dropped late in the piece from the Minister of Local Government on this bill, and so it’s really important that we do interrogate it. That also includes the title of this bill, which is the Local Government (System Improvements) Amendment Bill, and we’ve clearly worked out that that’s just not the case. Therefore, when we looked just recently at what is happening with these Amendment Papers, we’ve seen more and more concern that it’s gone beyond just the trying to prescribe exactly what councils do, but it’s actually then removing some of the democratic rights that they should be afforded when they are voted in by their local communities. I’m referring to the Amendment Paper that would remove non-elected members off committees, joint committees, and subcommittees. They’d remove their voting rights and their ability to make up a quorum.
The Minister has talked about how this is about democracy, but I just continue to think he forgets that the democracy is actually the local election where people elect the councillors and the community boards, and then, as part of that localism and democracy, those elected members can determine who sits on those committees to actually make decisions. Obviously, those decisions they’d make have been delegated down, and they cannot strike rates and other things that are substantial. Those decisions can only be made by elected members in a council decision, and so it’s actually a really good way of how democracy works to get better decisions for the local community. If local communities did not like that, then every three years, the local communities have the ability to not elect those councillors—they can kick them out.
What we’re seeing from this bill and from what the Minister is trying to put forward from not just the original bill but then the amendments, is that he’s trying to actually suppress localism. Clearly, a party that campaigned and talked about how important localism is has gone into Government and has totally forgotten what they spoke about.
This amendment in the name of Celia Wade-Brown which is time-stamped 16 September 2026, at 9.09.08, is, once again, a simple amendment, but a good one. I think it’s right on the money, where we we are going to replace “(System improvements)” in the title and put in “(Suppression of Localism)”.
I know, Minister, that you have said no to all the amendments that we’ve put forward so far. I actually think this one’s pretty good, and it would be great if you considered this one, along with the other ones we’ve put in, for the title. They’re all pretty spot on the money for what this bill is actually trying to achieve. I think it’s a little bit disingenuous to say that it’s system improvements when it’s clearly not, and so I would love the Minister’s opinions on these amendments that were put forward by the Green Party on the title.
Hon MELISSA LEE (National) (20:45): 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 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
CHAIRPERSON (Teanau Tuiono): Mike Davidson’s tabled amendment to clause 1 is out of order as merely being an attempt to criticise the bill.
Francisco Hernandez’s tabled amendment to clause 1 is out of order as merely being an attempt to criticise the bill.
Celia Wade-Brown’s tabled amendment to clause 1 is out of order as merely being an attempt to criticise the bill.
A party vote was called for on the question, That clause 1 be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Clause 1 agreed to.
A party vote was called for on the question, That clause 2 be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Clause 2 agreed to.
A party vote was called for on the question, That clause 3 be agreed to.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Clause 3 agreed to.
Bill to be reported with amendment.
House resumed.
CHAIRPERSON (Teanau Tuiono): Madam Speaker, the committee has considered the Local Government (System Improvements) Amendment Bill and reports it with amendment. I move, That the report be adopted.
Motion agreed to.
Report adopted.
DEPUTY SPEAKER: The Local Government (System Improvements) Amendment Bill is set down for third reading immediately.
Third Reading
Hon SIMON WATTS (Minister of Local Government) (20:49): I move, That the Local Government (System Improvements) Amendment Bill be now read a third time.
As I said recently when we were discussing—
DEPUTY SPEAKER: Just a question: does the Minister have a legislative statement, or no?
Hon SIMON WATTS: No.
DEPUTY SPEAKER: OK. Thank you. Carry on.
Hon SIMON WATTS: As I said recently when we were discussing the rates capping bill, this Government is focused on easing the cost of living pressures and getting councils back to basics. Across the country, households are grappling with rising costs. A significant contributor to that pressure has been the steady increase in council rates. For many families, rates are amongst the largest bills that they face each year. Capping those rates is and has been part of the solution, but communities have also been clear that when councils focus on the basics, manage their finances responsibly, and deliver value for money—when councils don’t get this right, that undermines confidence in local government.
New Zealanders deserve a local government system that is disciplined, transparent, and focused on delivering essential services. This bill delivers that while helping ease the cost of living pressures. Councils will need to prioritise the delivery of good quality, cost-effective local infrastructure and public services. We are putting this in law to strengthen the alignment between decision-making, financial management, and community expectations.
The bill refocuses the purpose of local government on delivering good quality, cost-effective local infrastructure and public services. It reinstates councils’ core services and introduces a new financial management principle requiring councils to consider these responsibilities when making financial decisions. That will help with public understanding. It also improves information sharing requirements so that elected members have what they need to make informed decisions.
This bill improves democratic accountability in councils by reserving voting on council committees for elected members. Only those that have been elected by their communities should be responsible for decisions because they can be held accountable by their communities through the electoral process. Councils can still choose to appoint non-elected members to their committees to benefit from specialist expertise and community perspective, however these roles will not have voting rights nor count towards quorum of meetings. Councils will have six months to make any changes to ensure that their committee arrangements are compliant with the new requirements.
There are some exceptions to this policy. Where non-elected members are required under legislation other than Local Government Act 2002, they will continue to be able to vote. The bill also includes a pathway to grant exceptions under limited circumstances. Where it is necessary or desirable that non-elected members will be able to vote on council committees, councils will be able to request an exemption from the voting and quorum restrictions. I will release more information about this pathway shortly.
The bill provides regulatory relief by removing outdated or unnecessary requirements that have added cost without delivering additional value. It also makes a number of minor and technical fixes to improve the legislation, such as ensuring consistency in water reporting requirements for councils and broadening elected members’ entitlement to council information. Finally, changes to the bill were made at the committee stage so that councils have the tools that they need to recover infrastructure costs from fast track developments and lower the risk that ratepayers will need to pick up the cost.
Local government holds real value for New Zealanders but council services need to delivered through a mechanism that delivers value for money. These reforms give councils the tools, the clarity, the direction that they need to focus on the basics and to operate more effectively, responsibly, and transparently. I want to acknowledge the Governance and Administration Committee for its thorough and constructive consideration of the bill. I also want to thank the submitters for their contributions.
Finally, I want to acknowledge local government. I know that you have been waiting for this bill to be passed. I wish to thank you for your patience. Your job now is to deliver for your communities. I commend the Local Government (System Improvements) Amendment Bill to the House.
DEPUTY SPEAKER: The question is that the motion be agreed to.
TANGI UTIKERE (Labour—Palmerston North) (20:54): Thank you, Madam Speaker. It was interesting listening to the Minister of Local Government indicate to local government as a sector that he thanks them for their patience. This is not a bill that the local government sector has been waiting for. It is not a bill that they actually want. When the Minister, in his contribution this evening, talks about local government holding value, the actions contained in this bill and the last-minute actions of this Government in terms of the amendments that have been progressed without the opportunity of going through a select committee indicate that, actually, this is a Government that’s more about words rather than actions and the suggestion that there is value in local government as a sector is something far removed from this bill that we see in front of us tonight.
This is a Government—and it’s been said many times today in this House—that was elected on this sense of localism. This is a Government that constantly spouts off about localism. This is a Government that has no idea what localism actually is about and what it actually means, and, of course, we get that from a Government with Christopher Luxon, who is out of touch. The focus on “core business”, in practice, is going to do nothing more than gut the liveliness of communities all around our country. Let’s not kid ourselves: this is yet another example of a power grab by this Government and an attempt to centralise all of the control here in Wellington—yet another example of simply undermining localism, undermining local democracy, and undermining local government as a sector.
I and others have been rather perturbed, really, by the late nature of many of these amendments that are now in this bill. There has been no select committee process, so while the Minister thanks the Governance and Administration Committee—a committee that reported this bill back in November of last year—this bill contains so many aspects that are not just detrimental to councils and to communities, but actually the committee itself had no opportunity to examine, had no opportunity to receive advice, had no opportunity to consider the specific submissions as to what was being proposed.
We know why that is: because we know that if the Government actually had the guts to put this through a select committee process, they would hear, loud and clear, from the community about aspects like removing voting rights from non-elected members—what that would actually mean for communities all around the country. They would rather steamroll these changes through urgency without actually fronting up to the community, eyeballing them to understand what the concerns are.
We’re not just talking about the removal of Māori knowledge considerations through council-controlled organisations for directors; it goes much stronger than that and it hits at the heart of localism and local democracy, the opportunity that councils have to establish really strong relationships with communities of interest, with Māori, with iwi, with rural communities, with youth sectors, with those in areas of audit and risk who have a particular skill set that we know makes a huge difference.
This is, yet again, a Government that has forced local government as a sector to focus on a number of things that, actually, they’ve had to deflect what it is that they have been focusing on themselves. This is a bill that, at its heart, will remove the four wellbeings. This is a Government that is afraid of wellbeing. They are afraid of the word “wellbeing”. When it is uttered in this House, the shivers go up their spines because they know, actually, that wellbeing means many things to many communities. Why is it that they are prepared to strip away a focus on wellbeing at the heart of communities through their councils and the decision-making process? Why is it that they are so afraid of that? This is a bill that would seek to strip away social considerations, cultural considerations, economic considerations, and, of course, environmental considerations.
Those four wellbeings have for quite some time been an opportunity for councils to chart a particular course, focusing on their local community needs. This is a Government that tonight will gut all that from communities and say that they want to focus on cost-effectiveness. Now, cost-effectiveness is all right, but you can still have a focus on wellbeing and deliver for communities in those areas: social, cultural, economic, and environmental concerns. They can go hand in hand, but this is a Government that does not want to look at that. In fact, they want to narrow the focus. They’re saying, “Let’s focus on infrastructure. Let’s focus on the regulatory functions. Let’s focus on public services.” Those things are important, but they are not the be-all and end-all of what brings vibrancy to communities all around Aotearoa New Zealand.
I want to touch on the concerns around the stripping away of voting rights for non-elected members. Earlier today, I shared with this House the contents of an email, around the fact that these have been provisions that have lasted here in this country for more than 100 or 125 years. Yet, this is a Government that tonight wants to strip that away from local communities, and yet again they talk about localism, but they don’t understand what that is about. We have already heard from Mayor Wayne Brown in Auckland. He said: “How dare you!” to the Government—how dare the Government want to head down this path of yet again telling them what to do.
Now, we know that Mayor Wayne Brown is saying to Government, “You want to do this? Then the likelihood is high of withdrawing from the Auckland City deal.” This is something that the Government wants to celebrate and acknowledge, but, actually, it’s all about what is in it for the Government rather than what is in it for communities and what is in it for the people of Auckland and other parts of the country. I really do think that what we are seeing demonstrated by this particular Government when it comes to the responsibility and the involvement of iwi Māori and others in terms of decision-making opportunities is that the Government would prefer that they’re only at the table to give the karakia and then leave.
That is fundamentally what this Government is sending as a very strong signal to communities all around New Zealand: that they don’t value partnership and that they don’t value the opportunity to work alongside iwi Māori and others. They only want them there when it’s convenient for them and for their purposes, and if they’re going to be sitting at the table, this National Government will say, “Well, if you’re going to sit there, that’s fine. You can maybe have a little bit of kōrero, but beyond that, oh no, no vote for you.”
Now, that can be extended to include all those decisions that are taken in the finance, audit, and risk space. The number of councils that have particular skill sets that are represented and often chair those committees is numerous. Why? Because local councils acknowledge that there is a particular skill set that is needed to assist them in making good decisions for their communities and ensuring that there is an independent set of eyes over decision-making capacity and opportunities that this Government wants to strip away because they are afraid of what that means for local communities and local councils all around the country.
This Government has not given a single example of something that has gone wrong as the genesis or reason as to why this change is so desperately needed—because it is not. It is a change that is not needed. It is a change, a set of changes, that has not been called for by the local government sector, yet they don’t seem to have any evidence as to what has gone wrong and why this change is absolutely necessary. This is yet another “reckon” from the National Government about what they think needs to happen.
Now, there has been a lot of conversation about the shoddiness of these changes, the fact that the Minister has had to come to this Parliament and has had to have three Amendment Papers seeking to correct change after change after change. Yet they don’t seem to be open to acknowledging the fact that this is a set of changes that is not called for by the local government sector. This is a bill that is—obviously—being rushed through urgency today but has not been well thought through. It has not had adequate scrutiny. Actually, it has not had a basic, base level of scrutiny through the select committee process that we all rely on.
I can accept it if there are some changes I don’t agree with if they have gone through the select committee process. The overwhelming nature of concern about this bill in front of this Parliament is something quite different. I think this Government should hang its head in shame tonight. It is sending a very strong message to local government that is not about localism and is not about democracy, and this is a sad day for this Parliament.
MIKE DAVIDSON (Green) (21:05): Thank you, Madam Speaker. I rise on behalf of the Green Party to speak against this bill, this terrible bill for local government and local communities. Once again, I find myself in this House debating a bill that is anti-democratic and completely contrary to the localism promise that the National Party made last election. Not only does it take away the ability for democratically elected councils across the country to support the wellbeing of their communities and organise their governance in a way most appropriate for their communities but also the Minister has completely skipped the select committee process for one of the changes that will impact communities the most. He skipped public scrutiny, skipped transparency, and skipped consultation with councils and iwi. I could hear Mayor Wayne’s Brown reaction from here in Wellington!
It has been very clear from the start that this Government does not give a damn about local government. When we look at this bill, we see that what they did straight away was remove the four wellbeings—social, cultural, economic, and environmental—with absolutely no evidence to back that decision. They just removed it because this Government does not believe in councils looking after the wellbeing of their communities. It’s been absolutely shocking to see what has happened throughout the passage of this bill. This Government decided that councils do not have the ability to look after the communities that have elected them, so they tell the councils, “We are going to tell you what your communities want from you.” So, suddenly, they create a list of core services that must be prioritised, and that list means that a lot of things are going to be left untouched by councils, who are shortly also going to be faced with a rates cap.
Communities elect their councils to make decisions on their behalf. Communities respect councils for the decisions they make, and if they don’t like it, they vote them out. It is the councils that are elected that make these decisions around things like housing.
Cameron Luxton: That’s the point.
MIKE DAVIDSON: Take a call and make it last more than a minute. There are things like housing that are no longer a priority for councils—things like art galleries, economic development, climate adaptation, public spaces and places, environmental protection and enhancement, and community funding and support. They’re all not prioritised by this Government, who is focused just on roads, reticulation, rubbish, and an attempt to drive down rates when they refuse to acknowledge that, actually, what was pushing rates up was the result of inflation, insurance, and interest. Councils do not want to increase rates—they do whatever they can to keep them as low as possible—but they have to ensure that the services provided are actually there for the community.
What happens when councils keep rates extremely low, which has happened in the past? Those services eventually break, those pipes burst, and the councils get blamed for not fixing them because they didn’t increase rates. All we hear from this Government is, “Do as you’re told, local government; you’re no good.” This Government is trying to hide their failings by blaming local government, and what we have just seen recently in an Amendment Paper that was on the Table just the other day, from the Minister, was the removal of voting rights for non-elected members on the councils—something that’s been happening for generations. Councils have been putting non-elected members on committees for generations because it actually strengthens local decision-making. It makes it better for communities and for ratepayers to have people with the expertise sitting on these committees to ensure that councils, who end up having the final decision, actually make decisions with the best information available.
But what happened? We had a councillor from the Far North complain that there were too many Māori on a committee and she wrote a letter down to the Minister of Local Government, and suddenly we’re getting a change to this bill. One councillor across the country—one councillor across the country wrote a letter—
Steve Abel: ACT councillor.
MIKE DAVIDSON: An ACT councillor wrote a letter to the Minister, and next minute we’re seeing non-elected members removed from committees. No more voting for non-elected members. They can’t make up the quorum. Why? Because one ACT councillor didn’t like Māori being on a committee. Quite frankly, this is disgusting. If it looks like a duck, if it swims like a duck, if it quacks like a duck, it is a duck. This decision is political racism at its worst. There is no way to get around what this decision is. It is based on racism, where this Government does not like Māori to have decision-making ability on council committees. It is absolutely disgusting and this Government should hang its head for what they are doing right now.
Once again, with this decision, with this amendment, there is absolutely no evidence at all that there’s any adverse effects for ratepayers by having non-elected members on council committees—none at all. In fact, I would say that, actually, councils and the ratepayers would be the ones that benefit the most from having these people with expertise on the committees that they have. But, unfortunately, what we have once again is a Government that does not listen to council. I was shocked—I was absolutely shocked—to hear the Minister say that local government holds real value for New Zealanders. What a joke. Have you not seen what he is doing with this bill? He does not care about local government. He does not care, because this bill clearly shows what he thinks of local government, what he thinks of localism, and what he thinks about democracy. This Minister clearly has no clue about democracy—absolutely no clue.
Communities elect their councillors every three years. That is a democracy, and then those elected councillors have the ability to create committees that actually then have decisions delegated to them. How is that not an example of local democracy? But we have a Government—a failing Government—that has no clue. This Government has no clue about local government—absolutely no clue. It’s very clear when they’re doing this type of bill and skipping through some of the really most important aspects of a bill’s passage—which is actually the select committee process, engaging with important stakeholders and letting the community have a say—the reason why they did that is because the people know this is a stupid decision. To remove the ability of non-elected members on council committees to actually vote is just stupid.
This is because this Government have no clue about what local government actually does and how it works, because all they want to do is just criticise them. They don’t actually want to work with them. They want to stand above them and tell them how things work and how things should be. Maybe they should spend some time with them and understand exactly the role that local government plays and how important they are for their community to make sure that we get the best outcomes. I ask again, what happened to the promise the National Party made to increase localism last election? They promised to reset the relationship between local and central government, but they’ve completely broken it.
Steve Abel: Reneged.
MIKE DAVIDSON: They promised enduring regional and city deals but reneged on the first one within months of signing it. They promised Local Water Done Well and councils in control, but they’re already stepping in because they don’t like how it’s being done. What is the purpose of government, both local and central, if it is not to look after the wellbeing of its people, to build communities to ensure they have a thriving environment to live in, to ensure their cultural identity and practices are actively upheld, and to support them in times of need? This National-led Government are clearly not up to the task, but those who know their communities best let them get on with their job.
CAMERON LUXTON (ACT) (21:15): Thank you, Madam Speaker. I’m glad to have a chance to rise and speak on this bill after I was baited into taking a call, as the last contributor said. I mean, it had the resemblance of a man yelling at clouds, but let’s try and talk about some stuff on the ground. The four wellbeings are being replaced with something quite sensible, and it’s having local government focus on the things that can only be provided locally: cost-effective and good quality local infrastructure, local services, and regulation that has to be done locally, and many people have experience with that. I for one have experienced that in building consenting authorities. They like to focus on delivering that regulatory service well and cost-effectively. I think having that focus for local government is a good idea. It’s reinstating the specific roles that local government must have regard to.
Now, it was quite interesting. We’ve had the last two contributions talk about democracy manifest in a way, and I had an experience in the Chamber earlier during the committee of the whole House stage that I didn’t think would be repeated, but it was in the last two contributions, and that was an elected member of the House getting up in the House of Representatives and saying things like, “People should be able to vote without anybody having the ability to kick them out or put them back in.” It was actually quite unbelievable listening to MPs in this House claiming that having people make decisions on behalf of the ratepayers—and, you can only assume, taxpayers after those contributions—but aren’t actually accountable to those very ratepayers and taxpayers—truly unbelievable, but we heard it from the last two.
The absolute scenes when somebody in this House who is an elected member, who I’m not going to name because I like him, gets up and says, “What has gone wrong?” What has gone wrong is that this idea of democracy, where the demos has its contribution to the body politic so that we can make decisions, is undermined by the very people who we entrust with our vote and appointing people, whether it’s a youth council in Hastings, whether it’s an iwi rep in Tauranga—I mean, I could only imagine the absolute scenes on that side of the House if, in some part of this country, there was a council that had elected, I don’t know, the head of some kind of business association to sit on a council and make decisions. Imagine if there was a representative of our supermarkets voting; imagine if Federated Farmers had voting rights on committees. What would the other side of the House say? It would be outrageous, and I tell you what, we are putting an end to it. I commend this bill to the House.
ANDY FOSTER (NZ First) (21:17): Madam Speaker, thank you. I’m rising on behalf of New Zealand First, and also as a member of the Governance and Administration Committee, which considered this bill about a year ago. It’s taken a long time to get here, so it’s actually great that it’s got here. I would also make the point that, in the meantime, we’ve had another piece of legislation, which is the rates-capping bill, and you might actually think that it might have been quite good to put the two of those together, because they do talk to each other a lot. In fact, at the moment, this one went through the Governance and Administration Committee and the rates-capping bill is proposed to go through the Finance and Expenditure Committee, so they’re going through different committees in different Parliaments, when they could have been together, which might have been a good idea.
There’s been a lot of big changes in local government. We’ve gone through, in this Parliament, the Local Water Done Well; we’ve got the systems bill; we’ve got, as I said, the rates-capping bill; and then we’ve got all the structural reform which is being proposed, which has, I have to say, got councillors somewhat in a spin, but some of them are making some good progress on it. I would say—and we heard some comments from the Opposition about the changes which are being made to local government—this is something that, sadly, local government has been all too familiar with for a very long period of time. I can remember that, when I was the mayor, we had Government change the Resource Management Act on us twice; once with two days’ notice, and it would change the face of all the cities across the country—that was the three-by-three stuff—and we got two days to make submissions. It was very perfunctory. That was what the last Government did to us. This is something that local government is, sadly, very, very familiar with.
Then, of course, we had three waters. Remember that? This was, “Councils, you can choose to be part of three waters”, and then you could say—[Interruption] They’re all arguing with each other.
CHAIRPERSON (Barbara Kuriger): I have to say, they are not interjecting on you, they’re interjecting on your colleagues who are also interjecting on them.
ANDY FOSTER: “You could choose to be part of three waters”, and then it was, “Oh, you could choose not to be part of three waters”—the opting out—and then it was, “You damn well will be part of this whether you like it or not.” That was the approach which was taken by the last Government.
I think there’s some “pot calling the kettle black” on some of these things, and local government has had these issues facing it for probably decades, sadly. Of course, in that situation, we had local government then saying, “Gosh, you’re taking away resource management, you’re taking away water. What’s left? Please can you do some work on what the future for local government is.” Of course, that was the afterthought, not the forethought, which it should have been—it was the afterthought—so let’s not throw stones too much on this particular thing, of who’s beating local government up.
The overall direction of all these reforms, if you look at them all, is about aiming to tackle rates increases, because rates are compulsory; they’re unavoidable for property owners. With that compulsion should come some responsibilities for councils to act responsibly, because they are taking money compulsorily out of people’s pockets. The Taxpayers’ Union did some analysis—and you might say, “Oh, it’s the Taxpayers’ Union, so don’t worry about it.” But the numbers are the numbers. The average in the last three years, of rates increases, was 34.4 percent. Inflation in that time was 13.7 percent. Of course, it’s a bit lower now, under this Government, but 34.4 percent is clearly utterly unsustainable, and it’s made rates, actually, a very large component of inflation. That has to change.
That’s what all this legislation is really trying to do: it’s trying to say, “We’ve got to get some control.” We talk about the cost of living crisis; this is part of it. We’ve got to get some control of it. People can look at any number of different projects that local government undertakes and pick their most hated one, their most wasteful-looking one—you know, you could have a $500,000-plus bike rack; we’ve got one round the corner up here. You could have a $2.5 million loo with all the whistles on it. Jamie was telling me about trying to find $3,000 per bus shelter to get bus shelters around Blenheim, and they come up with a $300,000 one, which they could have done a hundred bus shelters for. I mean, that’s the kind of nutty thing you sometimes do. You’ve got to have some discipline, because that is money compulsorily taken away from ratepayers.
One of the things in the committee of the whole House was that we had some discussion about the fact that it’s not just about driving down to the lowest possible cost. There were some questions around cost-effectiveness: you’ve got to look at that in terms of the previous words that have to be read, which are “good quality”. Sometimes, good quality doesn’t mean the lowest possible price, and the Minister said quite clearly that it’s not always going to be the cheapest; it’s got to be the best value for money. That’s really, really important, because it’s not about driving things down to the bottom level.
There’s obviously lots of things which have been raised, but a lot of this bill is about core services. Defining core services has always been very, very difficult. I can remember, going back to Rodney Hide’s day—
Celia Wade-Brown: Oh!
ANDY FOSTER: —and I can see Celia Wade-Brown is going, “Oh my gosh!”—and he said that you’ve got to focus only on core services, whatever those might be. And about a day later, what we all got asked was how much money we were putting into the Rugby World Cup. They lost the argument straight away, because if you think the Rugby World Cup was a core service, then what else was not a core service? And, actually, when we started having that conversation in this Parliament, we had exactly the same thing: core services. Almost the next day, there was Wayne Brown and Melissa Lee, as Minister for Culture and Heritage, I think it was, at the time saying, “Well, we’re supporting a flower show in Auckland.”
Again, with core services, it is very challenging, but at least this bill is trying to be a little bit less defined about that, and it is saying there are a range of different things there which are core services. It’s not saying you can only do core services; it’s saying they are the first things you do and then you can do other things as well. I think that is a much more mature and much more sensible proposition. It does just say that you’ve got to have particular regard to those core services, not that you can do only them, and not that you can’t do the other non-core services, because that would have been a real issue.
The issue which concerns New Zealand First, and which also is really concerning to councils, is this tension between the rates cap and maintaining core services, because, if you screw the cap down too much, you’re not going to be able to maintain those assets. That has been a fundamental issue for local government, but also for central government, for a long, long time. We know there’s been long-term under-investment in assets and asset renewals right across the board. The Audit Office: we’ve had them in front of the Governance and Administration Committee as well, and they reported a 25 percent under-investment in water infrastructure across the board, not just in Wellington, where we have all the highlighted pipes breaking, but everywhere.
Hon Dr Duncan Webb: Well, you’ve got a story to tell there. You should hang your head in shame, Andy Foster. Moa Point—your fault.
ANDY FOSTER: They said there had been a 25 percent under-investment for decades, and yet that wasn’t really called out. Central government, Mr Duncan Webb, is every bit as bad, if not worse. That’s why Minister Bishop is talking about legislating to require Government agencies—and I’m thinking of Health and Education, and so on, who half the time don’t even know what assets they’ve got—to undertake proper asset management. We have to do this sort of thing. There’s a real tension between core services and rates capping, and we need to make sure we can thread that needle. We need greater discipline right across the board. I think some councils are kind of acting as if there’s no limit to the amount of money that they can require from ratepayers, and that is a problem. We must not have a blank cheque. There must be the ability for us, and this is what this bill is doing, to say, “No, you can’t do that. You can’t do that, because ratepayers can’t afford it.”—34.4 percent is completely unsustainable, and, looking forward, they might be lower than that, but they’re still way, way, way above inflation rates.
Just to finish off with a couple of other things: the decisions that Government itself makes are going to make a difference as well. For example, the New Zealand Transport Agency, in the last couple of weeks, has talked about changing the funding assistance rates. Now, that is the amount of money that they give to councils across the board to maintain roads, and all those sorts of things. They’re proposing to reduce the funding assistance rates for some of the smaller councils. That will go straight on to those councils’ rate lines. In terms of what Government does, those unfunded band-aids—they are the thing that Government says they’re going to give no money for but are going to demand that councils do something about—are things that councils hate. We’ve got to be very, very thoughtful about those things as we are combining these issues of rates caps and core services, because Government can make a lot of difference there. There is plenty of fat in the system; I know that’s the case. You could do a lot in terms of organisations’ overheads, and removing regional councils is undoubtedly going to save money, but Government also needs to play its part in that area.
Finally, I just wanted to finish off by just saying thank you to the House for the support of New Zealand First’s amendments. First of all, it will lift the importance and status of full councils as opposed to their subordinate committees. In terms of some of the discussions we’ve had around representation, full council can only have elected members on it. So that’s an issue there. Also, it brings the local government chief executive officer (CEO) appointment term into line with what Parliament agreed less than four months ago for central government. Four months ago, we said, for central government, five years for chief executives, and no right of renewal—you’ve got to go to the market. We were proposing, originally, for local government to go to five years plus two. We were proposing in the legislation before it got amended—thank you, guys—five plus five; they’re now aligned, which is a logical consistency.
One last thing on the powers of CEOs, which I didn’t mention in the committee of the whole House but I think it did get alluded to, is that also shows why it’s so important to have that balance of power sorted out, and that, at length, covers the ability for elected members to actually get the information from CEOs, who sometimes block that, to do their job properly. Thank you again for the support for the amendments, and I commend the bill to the House.
DEPUTY SPEAKER: This call is a split call—Oriini Kaipara.
ORIINI KAIPARA (Te Pāti Māori—Tāmaki Makaurau) (21:27): This bill arrived into this House masked with a tidy little label of “system improvements”, but tonight that mask has slipped. This bill doesn’t improve local democracy; it narrows it and it centralises it. Through an amendment, introduced after the public submissions process had ended, it deliberately removes Māori from the decision-making table. The Government decided that members of Houkura, the independent Māori statutory board in Tāmaki-makau-rau, may attend Auckland Council committees, may speak, may advise, may carry the history and knowledge of mana whenua into the room, but they may not vote.
In other words, Māori can have a voice, provided that voice carries no power. That is a clear breach of Te Tiriti o Waitangi. That is a flagrant assault on tino rangatiratanga guaranteed to Māori under Te Tiriti. Houkura was not invented as a political favour; it was established in legislation because the Auckland super-city arrangements failed to provide guaranteed Māori representation. Its role is to promote the cultural, economic, environmental, and social wellbeing of Māori and to help Auckland Council act consistently with its statutory responsibilities to Māori.
Mana whenua, mātāwaka, and taurahere representatives bring those interests and mātauranga of the iwi and hapū of Tāmaki-makau-rau into council decisions. For Ngāti Whātua Ōrakei, for Te Kawerau ā Maki, for Te Ākitai Waiohua, for Ngāti Pāoa, and the other mana whenua of my rohe, local government decisions aren’t abstract administrative exercises; they concern their whenua, they concern their wai, their moana, their maunga, their wāhi tapu, their taonga, and their responsibilities as kaitiaki.
The Government says Houkura may continue to provide advice. Mana whenua have been giving advice to the Crown for generations. The problem isn’t that Māori have lacked advice. The problem—and let me be very clear on this—is that successive Governments have refused to share power. Even the Government’s own regulatory impact statement couldn’t justify this change. Officials said the Minister’s preferred option carried greater costs than benefits. They admitted they had limited evidence. They admitted there had been no proper consultation with councils, iwi, or Māori. They warned that iwi and hapū appointments would be pushed towards advisory roles rather than shared decision-making. Then the Government drove the amendment through under urgency anyway, and that is bloody shocking. That is democratic erasure.
Submitters also rejected the bill’s wider attack on the purpose of local government. Auckland Council identified provisions that were inconsistent with Auckland’s existing governance legislation. Local Government New Zealand said there was no clear evidence that the four wellbeings caused rates to rise. Officials themselves acknowledged that a wellbeing-based purpose had not added costs to the sector, yet this bill removes social, economic, environmental, and cultural wellbeing from the statutory purpose of local government. Those four wellbeings are not luxuries. A library isn’t a luxury. A community centre isn’t a luxury. Climate resilience isn’t a luxury. Protecting our taiao isn’t a luxury. Supporting whānau before they reach crisis isn’t a luxury. The Government talks about core services as though communities can be reduced to pipes, roads, rubbish, and balance sheets, but a city isn’t just the infrastructure beneath our feet; it’s the people who live above it.
Yes, some committee stage amendments are sensible—councils should be able to recover infrastructure costs created by fast-track developments; ratepayers should not subsidise private development; councillors should have reasonable access to the information they need—but a few practical changes can’t rescue the central purpose of this bill: this legislation takes authority away from local communities, away from Māori. It replaces locally determined standing orders with Crown-designed rules. It removes wellbeing while pretending to address rates. We call it—Te Pāti Māori calls this bill—what it is: watering down Māori decision-making, because Māori decision-making makes this Government uncomfortable. Well, guess what, 7 November is coming. Māori mā, get on the roll, register to vote, and vote them out.
CELIA WADE-BROWN (Green) (21:32): Thank you, Madam Speaker. I rise on the third reading of the “Local Government (Suppressing Localism) Amendment Bill”—oh no, that wasn’t quite the right name, was it?
The bill has forgotten Te Tiriti. I’d like to acknowledge previous speakers Oriini Kaipara, Tangi Utikere, and our own Mike Davidson for pointing that out in great detail. I am going to focus on some different matters.
The removal of the four wellbeings is, really, performative nonsense, because, as the Minister of Local Government said during the committee of the whole House, councils are still allowed to do everything. So it hasn’t really achieved the purpose that was put forward. I do agree from time to time with my colleague who is just about to depart from the Chamber, Andy Foster—
DEPUTY SPEAKER: You’re not allowed to refer to someone being in or out of the Chamber, but you are able to refer to your colleague.
CELIA WADE-BROWN: —my colleague Andy Foster—who did point out that we’ve had core services, we’ve had the four wellbeings in and out, and, actually, I’m not sure anyone in the public would have noticed any difference as to what the councils did.
Let’s look at why the costs, why the rates, have had to go up. Let’s look at some very basic costs—not a little bit of paint for a rainbow crossing, which seems to enrage some people. Let’s look at diesel. Prices rose 71 percent in the year to the June 2026 quarter. Diesel is a huge cost for councils. New Plymouth District Council’s fuel bill was $111,000, compared to $77,000 for the same month the year before, which is a 42.5 percent increase. How are we going to keep that to CPI? Electricity has gone up year on year. Whanganui District Council had budgeted a $600,000 electricity increase for 2026-27—that’s not just the base; that’s the increase—and was told that the re-priced contract was a further $1 million. And insurance has been the most persistent pressure. Let’s not point to little individual items; let’s look at the systemic drivers of rates increases. What has this Government done? They’ve blamed local government but they haven’t done the investment in electrifying New Zealand, in distributed energy generation, and in improving the fleet, which actually would have made a real difference.
This Government doesn’t seem to care about consultation, and perhaps it’s because, when we have the Budget, it’s all super-secret till it’s suddenly released. Well, that’s not how it’s done in local government; you put out a draft, you listen, you go round the community, and you make some changes. I think, really, there’s a lot more to be learnt than blaming them. I also want to point out that, as a percentage of GDP, that top line is taxes. I think that taxes are a good way for paying for collective benefit. The bottom line almost disappears in comparison. That’s the rates line since the 19th century, which we seem to be going back to, in some ways. Who is going benefit from cutting services? People who won’t care about higher entry fees for public swimming pools have probably got their own. Who’s going to benefit from the rates cap? The people with a multimillion-dollar mansion or an expensive second home. It’s not going to be the entry-level homeowners.
I just want to say one thing: if you look at the Taituarā and the Local Government New Zealand awards, you will see the fantastic things that councils around the country are doing as well as keeping the streetlights on, the footpaths safe, the building inspectors making sure the Green Parrot food is safe to eat and doing all of the other food inspections that they do. I think it’s time that we gave three cheers for local government.
TIM COSTLEY (National—Ōtaki) (21:37): Here we are, we’ve heard from a former mayor in the Opposition, a former councillor—a current community board member. How is no one talking about that? He’s getting paid to be a community board member and an MP.
DEPUTY SPEAKER: I think you should stick to the bill.
TIM COSTLEY: Well, I am sticking to the bill, because he’s standing there defending them, talking about voting rights. He’s got two votes. The dirty little secret over that side, the reason they don’t like this, is because it forces councils to prioritise. It forces them to live within their means, to stick to the essentials.
We know what Labour and the Greens would do in Government. They would spend, spend, spend. They can’t live within a budget. They want to tax more, they want higher rates, because they are not willing to make the tough decisions that this bill delivers for our community and makes them prioritise on the basics like roads, like essential infrastructure and essential services. That’s why I support this bill and commend it to the House.
Hon RACHEL BROOKING (Labour—Dunedin) (21:38): Thank you, Madam Chair—Madam Speaker, sorry. We’re out of the committee stage.
DEPUTY SPEAKER: That’s all right. We’ve been in the Chair a little bit today!
Hon RACHEL BROOKING: We’re into the third reading speeches, and almost at the end of those.
When I popped out briefly before, just at the end of the committee stage, when there was some voting happening, I bumped into a guest of one of the valedictory speakers. She had been sitting in the Chamber when we were in the committee stage, and she said to me, “I didn’t quite understand what you were talking about. What were you asking about?” I said, “Well, we were doing detailed questions in the committee stage.” I suggested to her that perhaps she would want to come into the House for the third reading stage. Just in case she has, I am going to go through the history of this bill and where we are today, because the bill today is quite different from the bill that we had on Monday—and it’s only Wednesday today—so there is a bit of history there.
DEPUTY SPEAKER: It’s still Tuesday in here.
Hon RACHEL BROOKING: It’s still Tuesday in here; indeed, Madam Speaker. I was, at the turn of the millennium, lucky to work for the Parliamentary Commissioner for the Environment when the select committee—the Environment and Local Government Committee, as it was then—was working on the Local Government Act 2002, as it came to be known.
Of course, that is where the wellbeings came from. There was this general power that was included, and also wellbeings, but not only the wellbeings; a whole lot of requirements for how councils, all sorts of councils, if they’re unitary or territorial or regional, have to plan for their finances, how they have to justify their spending, how they have to plan for long-term things, how they can get development contributions, all the different constraints around rates—although that’s in the rates Act, some of it comes into the Local Government Act. So to say what that member who just sat down, Tim Costley, said, “Oh, without these changes, those councils, they just won’t live within their means.”, that is an affront to the legislation that has been in place for a long time.
This bill, as far as I can tell from the very few questions that were answered from the Minister of Local Government to me, doesn’t make that much difference in terms of the actual requirements. Yes, it’s getting rid of the wellbeings. National Governments seem to like getting rid of wellbeings; it’s happened before. There’s a little graph here in the regulatory impact statement that shows when there weren’t wellbeings and when there were wellbeings. Ministers wanted to say that there was a causal relationship between the inclusion of wellbeings or not, and it does not seem to be there. Of course, when those wellbeings came out last time, what did happen was a flurry of legal advice, because, of course, then not only did councils have to justify all of their spending through all the different processes that already exist but they also had to say, “Oh, well, with this change to wellbeings and with core services, does that change what we’re doing or not?” So, you know, who knows if this is going to make any tangible change other than putting up the legal fees? That’s not good for ratepayers.
So we’ve got rid of the wellbeings. That’s what this bill does, as it went through the Governance and Administration Committee. It also talks about core services and the purpose of local government being restricted to infrastructure, public services, and performance of regulatory functions. None of those terms are defined, so they could be very wide, and they are different words—but, like, slightly different—from the core service words. Again, most of the differences between what a core service is—and those terms are defined with reference to other legislation—and what the purpose provisions are were not expanded on by the Minister.
We also have in this bill, as it went to select committee, some other changes around codes of conduct and when the Minister can make regulations, and interfere, really. Some centralisation was also happening in the bill as it went to select committee. Now, people did make submissions on that, and thank you to those people who did. At some point, I’m not quite sure when it happened, the Minister put in a large Amendment Paper in the form of a rewrite of the bill. The bill itself is not very big, and I should say, of course, this is amending that Act that we’ve had since 2002 that I watched the select committee work on when I was working for the Parliamentary Commissioner for the Environment. Now, we had those big changes, and most of them didn’t seem hugely consequential in terms of policy changes, but then what happened yesterday in real time was that the Minister dropped two substantive Amendment Papers with very big policy changes.
One of those Amendment Papers was about fixing a problem, a problem that we’ve known about since 2024 when the Fast-track Approvals Bill, as it was, was before the Environment Committee, and we at that select committee had local government people come and tell us, “There seems to be a gap with the development contributions.” Let me explain the gap to you, because what councils do is when they are having a development contributions policy—so this is a policy that exists because of the rationale of growth paying for growth. If you are a new development, then you should pay for your fair share of the infrastructure that’s required to enable that new development. So councils do this through development contributions policies. They’re very technical and complicated, and I have to say they were the least fun thing to work on when I was in practice, but that’s what they are. Now, councils will go, “Well, we know we’ve got our resource management plans that say where development can go; it’s zoned residential or it’s zoned so that it will in the future be residential.”—something like that. But areas that are zoned rural, where we’re not ever expecting any residential development, we won’t have development contributions policies applying to those areas of land. Why would we go through this process when there’s not going to be development there?
However, what’s happened with the fast track is that the fast track just ignores all those planning instruments and comes in over the top of it all. So we’re left with a situation where we have huge now consented developments at both Delmore and at Sunfield—so 3,000 houses here; 1,000 houses there—and my understanding is, for some of those projects, that there’s not an ability for those councils to impose development contributions because those policies do not exist, for the reasons outlined. So that amendment, Amendment Paper 803, is trying to deal with that problem.
However, it only deals with fast-track applications that have not yet had some sort of determination. So those big projects where we know the developers are donors to the Government parties, they will not be affected by this change. So the Government says, “Oh, we’re going to fix something and we’re going to do it in urgency, and it’s OK to use urgency because we’re going to fix something, and oh, oh, oh—even though we should’ve known about it and listened to those submitters in 2004. Oh, but it’s not going to cost those developers who are our donors any money—no, no, no.” So who is it going to cost? It’s going to cost the ratepayers. So I put up an amendment; it would’ve fixed it, and this Government voted it down. That is shameful, and consistent with everything else that they do.
But then—and I know the next Labour speaker will speak about this as well—there was another Amendment Paper, and this Amendment Paper says, on the one hand, we’re trying to do a constitutional change to local government so that only elected members can ever have a vote on any sort of decision, even though there’s all sorts of abilities for delegation and everything else. That was just dropped on Tuesday as well. I know in Auckland, with the Auckland long piece of statute in terms of the amalgamation that went in there, that they have this independent Māori statutory board, and that appears to be working, but it is finely balanced. Everything is finely balanced, and this Government is recklessly coming in and changing it all in urgency with a committee right at the last minute with no ability to talk to anyone. This is not how you make legislation.
Hon Dr SHANE RETI (National—Whangārei) (21:48): Thank you, Madam Speaker. I rise to support this bill. I stand as a Māori MP with an electoral mandate from 20,843 Whangārei people. I also stand with electoral accountability to every single one of them. In my view, this is how it is, this is how it should be, and I commend this bill to the House.
DEPUTY SPEAKER: This is a split call.
Hon WILLIE JACKSON (Labour) (21:49): That was a sad speech from a very good member—not as good as his valedictory speech, but—
DEPUTY SPEAKER: Well, I’m hoping yours isn’t going to be a sad speech.
Hon WILLIE JACKSON: Oh, mine will be much better—much better. I want to wish that member all the very best in his retirement, but that was a sad way to go out, because tonight that member and this National Party are in breach of the Auckland Deal—they’re in breach of the Auckland Deal. I’ll read the Auckland Deal to you—I’ll read you one clause: “The parties agree to work together in a manner that promotes openness, respect, and [an] alignment of priorities, and to maintain regular engagement at political and official levels to support the objectives of this Deal.”
Mayor Wayne Brown—you would have read today—said, “Stuff this lot.” He said that you’re in breach of the deal—that’s what he said. You’re in breach of the deal—they broke the deal. This is a good mayor, who said that the partnership and the relationship with Māori is meaningful, and that’s why he needs good people like Shane Reti to change his view, because Shane Reti’s predecessor, John Key, was a supporter of the relationship and partnership with Māori, which this Government is breaching tonight. It’s a disgrace what’s happening. As Tangi Utikere said over here, do you just want Māoris to do the mihis and do the karakias, and you want to shut them up?
I have messages from Tau Henare, a former National Party MP—shame on him for that, but never mind. Tau Henare and David Taipari, the chair of Auckland Council’s Independent Māori Statutory Board, who’ve all said things work—they work because Māori have input in Auckland. They’re not just your mihi men; they’re not just your karakia men. They’re there because the stupid ACT Party set the Auckland Māori Statutory Board up. This member over here knows that. Rodney Hide reluctantly set the Māori Statutory Board up in 2009-10. Why did he do that? Well, because he didn’t want to go along with the very good recommendation from the royal commission that Māori seats should have been installed—Māori seats should have been installed—in Auckland. No, Rodney thought, “Oh, no, I just can’t have too many Māoris on this board.
Rather than take the legal recommendation, he goes and sets up the Māori statutory board, where our people get an opportunity in terms of running Auckland and are able to talk and able to make recommendations. This is such a sad night. I was looking to my mates up there on the Statutory Board, and I’ve given them a hard time. Actually, I took them to court, for a little while, but that’s another story. They didn’t get everything right, but the principle of looking after iwi has been brilliant in terms of what David Taipari and Tau Henare are doing. The partnership is strong.
We led hīkoi for Māori representation in Auckland. I led the South Auckland hīkoi in 2009; John Tamihere led the West Auckland hīkoi. We marched into Auckland City—tens of thousands of us—for Māori representation. That’s what this Statutory Board represents. It represents Māori hopes and aspirations. They don’t just want to be karakia and mihi people. The Government are cutting this out tonight. It is a shocking state of affairs that they would cut the relationship and partnership without any consultation. The Māori Statutory Board asked to meet with this lot, but they’re too busy. They’re too busy—it’s shameful—shutting down community rights, Māori rights, women’s rights, and looking after their rich mates. That’s what they’re doing—that’s what you’re doing every week. They’re too busy—too busy—to meet with people who are hurting.
What we’ve got tonight—and we’ve got a few more of these things coming. They’re out to breach the people’s rights in this country, and the effect of that is what’s happening with the Statutory Board in Auckland. I’m really disappointed, because the board has done some really good work. I want to mihi to David Taupari and Tau Henare and all of them, and maybe they’ll get it fully right and give urban people the opportunity to choose their representatives when we get this up and rolling again after we kick this lot out on 7 November. I think you’re supporting me, Madam Speaker. I see you nodding your head there—thank you very much for the support.
The reality is that this is another attack on community rights, Māori rights, and proper democratic rights, which the ACT Party doesn’t understand. Kia ora.
DEPUTY SPEAKER: Just for clarity, don’t bring the Speaker into the debate, but I was nodding just to let you know that I was understanding what you were saying.
SAM UFFINDELL (National—Tauranga) (21:54): It’s good to rise on this, and it’s good to support a bill which refocuses the purpose of local government. It needs to be cost-effective and it needs to deliver on the key services that the ratepayers need. We know a lot of people out there—we hear it in Tauranga—have concerns about the continued increase in their rates and probably not getting the services that they want. This Government is focused on recalibrating that. We want value for ratepayers. We want to uphold the basic, fundamental democratic principles of one person, one vote, and that is what we are doing despite the crocodile tears we’ve heard from across the other side of the House. This is an excellent bill; I commend it to the House.
LEMAUGA LYDIA SOSENE (Labour—Māngere) (21:55): Thank you, Madam Speaker. I’m really privileged to be the last speaker on this side of the House for Labour. It’s a real privilege to be able to stand up and say that that Government has got it completely wrong. It is a despicable bill, and it takes out localism from our local people.
It’s a really important bill to be able to put across our views on, and we’ve heard from all of the Labour speakers on this side of the House, and our colleagues over here, as to why localism is important. I’ve sat in here since this morning and listened to all the various arguments in terms of the Minister of Local Government’s decisions that he has made. I’ve asked for explanation on a couple of provisions and listened quite intently to the Minister’s explanations as to why he is driving these changes.
He’s talked about reducing the cost of rates—and that’s really important, because we face real cost of living pressures. I’ve heard also different arguments across the House as to what, when you leave out the four wellbeings, that means to local communities. I’ve listened to arguments about the Independent Māori Statutory Board (IMSB) and the importance of having Māori in terms of their decision making. I asked the Minister a question, and the Minister explained that the IMSB members in Auckland Council will still be able to provide a viewpoint or to provide some considerations, but they will not get a vote. That is completely wrong. It is not right that they are being left out of a democratic process.
The fundamental changes that have been introduced today in this bill, in the third reading, are completely, completely wrong. That side doesn’t understand community outcomes, doesn’t understand community wellbeing, doesn’t understand why we need community voices in a process that is supposed to be including the voices of our community in terms of wellbeing. It cannot be controlled from Wellington; Wellington only knows half of the story. Wellington does not understand the importance of wellbeing. It is really important for this House to understand that all the members that oppose the bill have got it right. We understand our communities. Yes, cost of living pressures and the increase in rates is on everybody’s mind. We understand that. However, when you make fundamental changes for a local community—and in particular the voices of those who are supposed to vote—that is a grab from where? That is a grab from Wellington, and it’s not correct.
In my time, I wanted to focus on a few things that this bill brings across and that are not correct. I want it recorded that, on this side of the House, we continue to argue for New Zealanders who need to have the four wellbeings included. The voices of our community—they understand the outcomes. Of course, elected members need to have consultation—proper consultation—with their communities, because those communities understand what it’s like to elect members in a council setting. They understand that there’s legislation and policy, but they also understand the costs that come with extras, or the nice-to-haves, in a local community.
I would have to say that libraries and parks and community assets in the library are needed for families across Aotearoa, because that is the essence of local councils—to hear local voices, local elected members. How is it right that a Minister can stand in this House and say that he has made a decision that affects the legislation that people abide by in local communities, and when you have a democratic right taken away—taken away from our Māori, our iwi, our hapū—that is not right. The bill shrinks the role of local government to things such as pipes and roads and rubbish and ignores the wider needs of our communities. It sets up too much power from central government over local priorities through new regulatory powers. It’s centralised control from Wellington, which does not understand the essence of localism And the reason why I say localism is because all of us were elected from our local communities. We’ve got to go back to our local communities and explain that this Government made the decision to leave them out of that decision-making process by the changes that have been introduced in this bill. That is not correct. From a viewpoint of a person that works in our community—I’m from the community; I represent the views of our community—but also agree with what our members on this side of the House have put forward, it is an absolute travesty that centralism is now roughshodding over localism.
The core services that the Minister spoke about today in the House, that is important in local communities. Local councils have to make those decisions. We’ve heard members from this side of the House specifically talk about our mayor and the Independent Māori Statutory Board members, and just the contact from our local people who are absolutely aghast at the changes that this will effect on our local communities. It paves the way for introduction of rates capping, which is encouraging councils to balance their books to make sure that they go back to core business. We don’t disagree with that, but it’s the methodology and what is now in legislation that local councils have to abide by, because if they don’t, they will hear from central government.
So it is important, but I want to remind members of this House that we go back to our communities, and if we haven’t interpreted localism, and if we haven’t supported localism, then why are we here and how are we going to effect those relationships—a continued, enduring relationship—with local councils?
It is really important, in removing the wellbeings in what has been proposed in those provisions today—it’s really important that our local communities, you know, they’re going to the ballot box and they’re hearing what we’re talking about and what we’re debating over in this House. It is important that you as a member of Parliament are able to say, “Well, in the House tonight, the Government of the day chose to support provisions and a new amendment bill”, which then is going to be input in the Local Government Act 2002.
We stand here, we debate hand on heart what we believe in terms of our caucuses and then we stand to state what our communities are telling us. I want to emphasise why the four wellbeings are so important: the social, the cultural, the economic wellbeings, and there is a fourth one which has just escaped my mind at the moment. But it is important for us to be able to go back and explain to our communities that those four wellbeings have been taken aside, that the Government of the day has focused on the core business services of councils. We are very concerned at the increase in rates and what communities want in their discussions with their locally elected members. But it is not where central government really pushes its agenda, without hearing and understanding the considerations tonight in terms of speaking with our communities.
It’s really important because when we go back, when we return to our communities next week, we have to then explain what happened with these local government systems improvements—it is not an improvement, it’s the opposite. And so when we go back to our communities—and I’ve heard colleagues from across the House talking about why this legislation is important: it’s important for us as members of Parliament, hand on heart, to explain that these changes are back to basics, it’s back to not including the community outcomes, community aspiration, and that is not a good thing. That is not a good thing for any Government and the relationship it has with councils.
My colleagues have elaborated on many of the provisions, but also our reasons why we oppose this amendment bill. We oppose it because we want to support our local councils in their decision making and their opportunities to be in those councils, to talk about the wellbeing of their communities, because that is really important. That is why we’re down here arguing that central government cannot control the councils, the local councils, because why? We don’t have time and we don’t fully understand what our local communities go through, and they have a very good relationship. I do not commend this bill to the House.
Hon MELISSA LEE (National) (22:05): Thank you, Madam Speaker. I won’t take too much time on this. As the last speaker, I just want to say a couple of things. Refocusing the purpose of local government is a good thing. When I listen to the debates on that side of the House, they seem to think that status quo is something that they support. And status quo actually means that councils are not focused on their core business. Rates have been going up and we’ve had the largest increase in 20 years, and it’s actually set for a 15 percent increase. That is something that that member and all of the Opposition will have to explain to their constituents. All of the things that they’re talking about increases rates and expenditure for councils, and they are not focusing on their core business. This is what we support. And that actually means it’s like extra taxes for those communities that you pretend that you represent. I commend this great bill to the House.
A party vote was called for on the question, That the Local Government (System Improvements) Amendment Bill be now read a third time.
Ayes 67
New Zealand National 48; ACT New Zealand 11; New Zealand First 8.
Noes 55
New Zealand Labour 34; Green Party of Aotearoa New Zealand 15; Te Pāti Māori 4; Ferris; Kapa-Kingi.
Motion agreed to.
Bill read a third time.
DEPUTY SPEAKER: I declare the House in committee for further consideration of the Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill.
Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill
Committee of the whole House
Debate resumed from 1 September.
Part 1 Substantive amendments to principal Act (continued)
CHAIRPERSON (Teanau Tuiono): Members, the House is in committee for further consideration of the Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill. When we last considered the bill, we were debating Part 1. Part 1 is the debate on clauses 4 to 40, “Substantive amendments to principal Act”. For members’ information, there has been about two hours and 45 minutes’ worth of debate on this part so far, focusing on Subpart 1. There’s still scope for members to debate that subpart, particularly around new sections 320R to 320RB, inserted by clause 4. However, I’ll advise members that other provisions inserted by clause 4, namely new sections 320A to 320Q, have been reasonably well traversed and we are close to moving on to the remaining subparts of this part. Once again, the question is that Part 1 stand part.
Hon WILLOW-JEAN PRIME (Labour) (22:08): Tēnā koe e te Heamana. Thank you, Mr Chair. I do just want to ask the Minister to answer the questions that I had asked her when we were last debating this committee stage, and that was particularly around the situation where we have seen in the military-style academy pilot 2.0 that two rangatahi voluntarily withdrew from the in-residence component of the programme. Now, my understanding and my reading of the legislation, and I may not be understanding it correctly, is I understand that rangatahi will no longer be able to voluntarily withdraw from the military-style academy. Now, I understand in the situation regarding these two rangatahi that assaults had occurred.
I had questions for the Minister about that particular situation that gave rise to young people seeking to withdraw from the in-residence component of the military-style academy 2.0. I want the Minister to point me to where in this proposed legislation there is the ability for young people who may have experienced assaults in the in-residence component of a military-style academy to be able to withdraw themselves from the military-style academy, to withdraw themselves from a space of abuse, whether that is rangatahi on rangatahi or whether that is rangatahi and kaimahi—staff members. In those sorts of situations, can the Minister point me to where in the legislation a young person is going to be able to withdraw from a military-style academy, or is it the fact that there is no ability for them to seek to remove themselves from the residence in which they are experiencing abuse, like assaults, like those that I have described, which I understand did occur in this latest 2.0 military-style academy?
I would just like to get answers from the Minister on those questions that I have asked previously, and then, once I have those, I might have further questions from her answers. Then I will move on to the next letter in new section 320, as you have directed.
Hon KAREN CHHOUR (Minister for Children) (22:11): The answer to the question of whether a young person can withdraw: these young people are actually on custodial sentences, so it’s not up to us to make the decision around custodial sentences. They won’t be able to opt out. Only a Youth Court can cancel the military-style academy order.
Hon WILLOW-JEAN PRIME (Labour) (22:12): Thank you, Mr Chair. Can the Minister for Children please point out to me where in the legislation a young person is able to initiate that and get that before a court to make a decision on their circumstances, in situations where they may have been subjected to abuse and assault, as we have seen with two participants in the current military-style academy?
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (22:12): Thank you, Mr Chair, and obviously my colleague Willow-Jean Prime’s comments are pretty apposite, given recent news that there has been abuse in military-style academies, including walking the line, where young people have been abused by their peers under the observation of kaimahi, which is a hugely troubling factor.
I want to return, though, if I may, to the tabled amendments we have. They’ve been very carefully gone through, and the last amendment we considered was one that was noted as lodged on 5 August at 7.05.33; so I’ll return to the next one, which is time-stamped 7.05.34. As is my wont, I’m a bit more focused on some of the technical aspects than my colleague Willow-Jean Prime. This paper suggests that subsection (6) of new section 320O will be removed. One of the concerns I have is that I think it’s really easy to make these sweeping reforms and have a whole lot of rules which are convenient without paying too much attention to exactly how they work in terms of human rights. The former Chief Children’s Commissioner would be a huge advocate for making sure that the rights of children in situations like with these youth offender orders also comply with basic human rights.
The difficulty I have is that we’ve got a young serious offender declaration which has expired under new section 320O, but it can be extended on the basis that there are other matters which are pending. Now, this actually cuts across a presumption—essentially, a presumption of innocence—because, putting bail aside and so on, you wouldn’t keep someone incarcerated or you wouldn’t keep someone under orders simply because they have charges pending, and neither should you keep a young person under a particular framework of supervision, and what have you, simply because there are other matters which are pending that have not been proven.
In the amendment that has been proposed by Willow-Jean Prime, it suggests there that that clause should simply be deleted and that there’s no real argument for a young serious offender order to remain in force after its expiry, before the necessary essential proofs or admissions have occurred to show that it is warranted to stay in force. It’s important, of course, because you’ve got a young serious offender order which has run its course. They are, as they should be—I mean, we don’t agree with them in principle—time limited; they are time bound. So it’s run its course, it’s come to its end, and then there is an allegation that the young person has engaged in troubling conduct again, but it hasn’t been proved, and yet there are these quite serious orders which are significant constraints on the liberties of the young person, and, essentially, they’re being extended not on the basis of admitted conduct or proven conduct but on charged conduct. Therefore, it’s quite right that the amendment suggests that new section 320O(6) be deleted.
Minister, we’ve spent some time debating various amendments, and I hope that you will have a reasoned and rational thing to say rather than standing up and simply saying, “I’ve looked at this. The Act says this. We’re not going to do it.”, because the whole idea of the committee stage is that we have an interchange, an argument as a committee, where we have a discussion rather than me seeking to persuade you and you simply standing up and saying no. I’m very hopeful that, in the last part of this committee stage, you’ll be able to give some really good arguments as to the position you’ll take on that tabled amendment.
Hon KAREN CHHOUR (Minister for Children) (22:17): I do not support your amendment. The bill already provides, in new section 320O(6), that a young person is not treated as a serious offender if the declaration has expired while awaiting the hearing for an extension. In addition, all specific young serious offender orders will be suspended for this period. Therefore, the amendment is not necessary.
Hon WILLOW-JEAN PRIME (Labour) (22:18): Mr Chair, thank you. Would the Minister for Children like to answer my questions, as well? No? Hmm, interesting. I do expect the Minister to give me the answer for the situation where young people have been abused or are being assaulted in the military-style academy. I want her to point to where in the legislation a young person is able to get out of that situation. Can they apply for it? Can the chief executive apply for it? Who is looking out for this young person, or are they just stuck in this place of abuse?
We have seen reports in the media recently about yet more instances of harm occurring in youth justice facilities. A concern that many have is that these facilities are the very places that this type of harm occurred in the past. The Minister has said that it isn’t occurring now, and yet it is occurring now and could occur again in the future. My concern is about how a young person takes themselves out of that situation. In the royal commission of inquiry into abuse in State care, many of those people said that they would run away from the harm and abuse that was occurring in boys’ homes and care and protection homes and military boot camps, simply to be returned back to where that abuse was occurring.
Minister, this is not a hypothetical situation that I’m putting to you; it is a real situation. It has occurred historically, and there are very real concerns that it will occur again. It has also occurred in this latest military-style academy 2.0. I do want an answer to that section of those questions. I do not want the Minister to continue ignoring that.
Hon KAREN CHHOUR (Minister for Children) (22:20): Maybe if that member showed a little bit of respect, she’d get a respectful answer.
Hon Willow-Jean Prime: Is that your answer?
CHAIRPERSON (Teanau Tuiono): No, no, wait—I want people to have those discussions, but they will go through the Chair. I don’t want interchanges between members in the Chamber, or even between the Minister and members. So if questions are going to be asked, you’re going to do them through me.
Hon WILLOW-JEAN PRIME (Labour) (22:20): Thank you, Mr Chair. I don’t understand what was disrespectful at all about the very reasonable questions that I have been asking the Minister. So could the Minister please answer those questions?
TAMATHA PAUL (Green—Wellington Central) (22:21): Thank you, Mr Chair. My questions are related to new section 320P, “Term of YSO declaration may be reduced”, in clause 4.
CHAIRPERSON (Teanau Tuiono): What was that section again, sorry?
TAMATHA PAUL: New section 320P, which we haven’t canvassed yet. My questions are specifically around when that application can be made, and this new section talks about being able to make an application to reduce that. However, one of the questions I have for the Minister is about how she and her officials determine that only one occasion would be permitted to reduce that declaration. Is that something that’s consistent across other pieces of legislation or other declarations that might exist within the criminal justice system, and did she or her officials consider extending that one occasion beyond that?
I just think that one occasion is quite restrictive. If something goes wrong during that application, if information has not been able to be sought in a timely manner or if changes happen with that young person’s lawyer or legal team or support team around them and something leads to them making mistakes on that application, it just concerns me quite a bit that they’ve only got that one occasion to get that right. I’m really keen to understand what the rationale of the Minister and her officials is to be providing for only that one occasion. Also, I’d like to know why there are potentially those discrepancies between one occasion after the young serious offender (YSO) declaration has been in force for 12 months, then 18 months, and then 12 months on one further occasion. I’m keen to understand that rationale a little bit more.
Staying on new section 320P, I want to go down to subsection (4), which talks about an application being made and needing to be served on all of the people specified in subsection (1), as well as the Commissioner of Police. I’m just interested to understand it. That feels a little bit heavy-handed, and I’m keen to understand whether that is something that the police have capacity to oversee and be able to respond to those requests for reducing that time.
The other question I have is related to subsection (6) of that new section, which states that “The court may grant an application and make an order reducing the term of a YSO declaration if the court is satisfied that—”, and it goes on. I’m really interested in this point around there being a low risk that the offender will reoffend, and I’m interested in the criteria and what kinds of examples might be provided to show that a young person may not reoffend. What kind of criteria could the court take into account as an indication that there is a low risk that the young person will reoffend?
The other part of it is just below that, at subsection (6)(b), which says, “the YSO declaration is not required to promote the offender’s compliance with orders made by the court.” I’m interested to know how in the first place the YSO declaration promotes compliance with orders made by the court, because when we were hearing submissions on this bill, quite a few of the law groups—whether that’s the Law Society or the law associations—made the point that the YSO declaration in and of itself doesn’t provide any kind of effective legal or administrative advantages within the legal system. So I’m keen to understand how it is that that declaration would promote compliance with those orders, and also what could be the hypothetical situation in which a YSO declaration isn’t required to promote compliance with those orders made by the court?
Hon KAREN CHHOUR (Minister for Children) (22:25): I will just wait for some information to come my way to answer, because there’s quite a bit in those questions. But in regard to whether a young person can apply to cancel the military-style academy (MSA) order, a young person is able to apply to the Youth Court for the MSA order to be cancelled on compassionate grounds only, and this is clearly provided for in new section 320ZC in clause 40 of the bill.
Hon WILLOW-JEAN PRIME (Labour) (22:25): Thank you, Mr Chair. Can the Minister please give us an example of what those compassionate grounds are, and would that extend to situations like what we have seen in the military-style academy 2.0?
HELEN WHITE (Labour—Mt Albert) (22:25): Thank you, Mr Chair. I just want to ask about the decision to allow an application to be made by a lawyer. This is in new section 320P in clause 4, and the repeated use—this is an alternative to others making application.
I can understand a young serious offender having that right and I can understand a parent and a guardian having that right because they have a different interest but they have a caregiving role, and they’d be doing upon their own behalf, and I can even understand it being the chief executive. But a lawyer has a special role in our system of representing the position of their client, and in this situation they seem to be acting independently of that client. There’s no wording to suggest that they’re doing that on instruction from the young serious offender. It doesn’t look like it follows a model from the Family Court of a best-interest type of arrangement where you’ve got something like the counsel for the children who are actually acting in a role that is a hybrid and does take into account wishes and interests, and it is a more paternalistic role. This looks like it’s a straight-out criminal representative, and that doesn’t look the same to me.
Now, I appreciate that in the Youth Court we have developed roles for lawyers that are quite different, but I think it’s really, really important that we understand what that role is here and where the safeguards are around that position of a lawyer being in that role and how that is developed. Does this relate to other safeguards that are built into the law? Is it assuming a role for the lawyer which might not actually be safeguarded in that way and should be by way of an amendment to the law?
I’m very interested in this because it does put the young offender into an unusual position with regard to their lawyer in terms of the type of vulnerability they’ve got to the lawyer themselves. Thank you.
Dr LAWRENCE XU-NAN (Green) (22:28): Thank you, Mr Chair. Just on the subject of compassionate grounds, which the Minister mentioned before, I wanted to ask a couple of questions around new section 320Q, “Discharge of YSO declaration”, in clause 4. I note that in subsection (2) of this particular section, it says that the only grounds are compassionate grounds, including those in that particular list, which means that, potentially, I’m guessing that a Youth Court is able to exercise a level of discretion to include other potential ones. But can I just check that in terms of those kinds of cases —let’s say, with subsection (2)(b), where “the offender is seriously ill and unlikely to recover:”—would a serious illness potentially include both physical illness as well as mental illness? Would that be a likely possibility? That is my first question.
I want to ask the Minister for, I guess, clarifications around new subsections (3) and (4) of this, because the wording is a little bit unusual. You have an application, which the four listed groups in new subsection (1) are able to make. That application then must be served on the chief executive—like as in served to the chief executive—who is receiving the application. Is that how to interpret “on the chief executive”? Then, in new subsection (4), it says that “any person who is specified in subsection (1)(b), (c), or (d)”—so, essentially, anyone who is not the YSO themselves—“must be served by the person on—(a) all the other persons specified in subsection (1);”. Does that mean that the application must be then distributed to the other four, I guess, groups or possible people that are listed in section 320Q(1) and also the Commissioner of Police? I just want to get some clarification of what exactly the process pathway is for that in terms of who needs to be given that application.
Hon KAREN CHHOUR (Minister for Children) (22:31): We’ve still got further information coming for Tamatha Paul. Just in regards to when a new section 320P application can be made, the application can be made twice after 12 months and then after 18 months.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (22:31): Thank you, Mr Chair. Now, I don’t want to delay unduly the debate on this. I just want to note that there are some tabled amendments that the Minister hasn’t addressed, and I’m pretty sure she’ll have some notes on it. One was in respect of—7.05.35 was when it was time stamped—new section 320O(8). It’s a suggestion that—
CHAIRPERSON (Teanau Tuiono): Can you repeat the timestamp again?
Hon Dr DUNCAN WEBB: It’s 7.05.35 in the bundle of I think it’s Labour Party lodged tabled amendments. The amendment suggests that there should be a requirement that it be established that there is no less restrictive or less intrusive orders of steps that are sufficient when an extension of a young serious offender order is required.
The other one, which was for new section 320P(6), and that relates to reducing the term of a young serious offender order. The suggestion there is that a new subsection be inserted, which, essentially, says that where the grounds for the young serious offender order evaporate, then the young serious offender order should be discharged or limited. For example, it could be that the young serious offender order was put in place because they didn’t have enough whānau support or didn’t have good accommodation. If we can sort that out, then perhaps we should discharge that young serious offender order.
I did want I observe that the Minister still hasn’t answered the Hon Willow-Jean Prime’s questions. She stood up and said, “Well if you give me respectful questions, I’ll give you respectful answers.” The suggestion is that we should be in some way timid or cowering when we are asking question of the Minister. I’ve got to say that when we are seeking to protect the rights of children in respect of young serious offender orders and boot camps, we will not be timid. We will not sit and politely ask questions of the Minister when we’re seeking to protect the rights of children. I would have expected a Minister of the Crown to be able to stand up to challenging questions from MPs who are seeking to test the authenticity, the validity, and the workability of something like young serious offender orders and boot camps. I would suggest to the Minister that she might want to kind of buckle in and be prepared for some hard questions that are put to her in challenging ways, because we will be fierce advocates for children in this House. I’m surprised and disappointed that a Minister of the Crown wants questions to be put to her in some kind of respectful and timid manner, because we simply won’t do it.
This brings me to my next tabled amendment—not my tabled amendment, the excellent Willow-Jean Prime’s tabled amendment—which is actually about the grounds on which an order may be made discharging. It’s actually quite problematic discharging young—
CHAIRPERSON (Teanau Tuiono): Which number is it?
Hon Dr DUNCAN WEBB: It’s 7.05—I think it might be a 37, but someone’s handwriting is a bit dodgy. It’s about new section 320Q. If I might get the indulgence of the Chair just to finish this tabled amendment, the current rules are really restrictive. For example, you can get it discharged if you’re unlikely to recover from a serious illness, but, basically, you have to be terminally ill. But, obviously, if you’ve got, say, glandular fever or a curable cancer—leukaemia—that might take two years to treat and recover from, that doesn’t fit within the current rules. Or, as Lawrence Xu-Nan pointed out, you might have a serious mental health issue, anxiety, or depression that requires careful treatment but that is clearly recoverable. Now, under the current framework, this doesn’t seem to be addressed.
Mr Chair, my time has run out. Can I have another—
CHAIRPERSON (Teanau Tuiono): Yeah, yeah.
Hon Dr DUNCAN WEBB: This is actually quite an important point that the current framework narrows the compassionate—and this is quite important, because the court can only do what the statute permits it to do. The other thing that doesn’t exist, and my proposal is that it should exist, is any other reason that the court considers is appropriate. Now, you might want to temper that with any other extraordinary reason or some other kind of word that makes it clear that it can’t be just some everyday occurrence, but we can’t imagine the series of events that might lead to a young serious offender order being entirely inappropriate in all the circumstances.
The danger is that we make a young serious offender order and that there is no appropriate discretion in the hands of the court to say, “Well, no one would have dreamt that this could have happened, and, therefore, we will discharge the order so that you can deal with some pretty horrible stuff that’s going on in your family—you know, your mum dying; you know, you having leukaemia.” The list of things that could happen that aren’t accounted for is endless. I’d be interested in the Minister’s comments, particularly on that point.
Hon KAREN CHHOUR (Minister for Children) (22:38): In regards to tabled amendment 7.05.37 date stamped 5 August, in regard to new section 320Q, I have previously already responded to this amendment and have given my reasons why I don’t support that amendment—
Hon Willow-Jean Prime: Can you tell us those again?
Hon KAREN CHHOUR:—and I’m not going to go into all that detail all over again, because I’ve already responded to that amendment.
Hon Willow-Jean Prime: Mr Chair.
CHAIRPERSON (Teanau Tuiono): The Minister’s still taking a call.
Hon KAREN CHHOUR: When it comes to 7.05.35 in regards to new section 320O(8), I don’t support this amendment. The Oranga Tamariki Act already requires the Youth Court to be guided by the youth justice principles when exercising its powers under the Act. This expressly includes that sanctions imposed on a young person should take the least restrictive form appropriate in the circumstances. Therefore, the amendment is unnecessary.
In regards to Tamatha Paul—what is low-risk offending for new section 320P?—this is actually for the court to determine based on the range of factors specific to the individual and based on reports provided to the court to support that application.
Dr LAWRENCE XU-NAN (Green) (22:39): Thank you, Mr Chair. I’m going move on just a little bit to new section 320Q(6), but I will keep this quite short because I know others have questions as well.
When the court may grant an application and discharge the young serious offender (YSO) declaration, I know that that’s satisfied in terms of the grounds, but what happens if the court determines there is a sufficient alternative to what we see under new subsection (6)(b)? Will the YSO need to make a separate application or will the Youth Court simply determine that “Look, we’re not going to discharge this, but we’re going to use one of the alternatives—for example, reducing the term of the order, because we think that is the most appropriate.” Or if we look at what is stated here in subclause (8), the court will then discharge a particular YSO declaration but then make alternative conditions as a result of that.
I guess I just wanted to check: I’m seeking some clarifications from the Minister for Children on whether, if the Youth Court found that an alternative is appropriate, would a separate application need to be made?
Hon KAREN CHHOUR (Minister for Children) (22:41): My understanding is that if the court discharges the young serious offender order and feels that there’s a considerable appropriate change to that order, the court will be able to do that.
Hon WILLOW-JEAN PRIME (Labour) (22:41): Thank you, Mr Chair. I found that answer to that Amendment Paper with the question from the Hon Dr Duncan Webb quite unhelpful. This has been quite a disjointed committee stage. I know you as chairs are all aware that it has gone across many weeks of half an hour here, 15 minutes here, and so on. I think the Minister for Children could have been a bit more helpful in sharing with us her reasons for not supporting that Amendment Paper, because that might have also helped us get the clarification that we need as we are going through the particular sections here and trying to get clearer understanding about what this actually means in practice. Maybe the Minister might reconsider whether she could be a bit more helpful to the committee, given the circumstances that I just outlined. This has been going on now for almost a month of disjointed committee stage, so she could have been a bit more cooperative and maybe respectful towards us.
I have questions about new section 320Q(2), inserted by clause 4, under which the Minister, in response to one of my earlier questions, said that they could make an application on compassionate grounds. The clarification I need from the Minister, or the assurance that I’m seeking from the Minister, is that this section and the grounds upon which the courts can consider compassionate grounds—they can consider the discharge of a declaration—isn’t just those in (a), (b), and (c), because it says here: “The only grounds on which an application may be made under subsection (1) are compassionate grounds, including that (a) the offender has given birth, or is expected to soon give birth, to a child: (b) the offender is seriously ill and unlikely to recover: (c) any parent or guardian of the offender is seriously ill and unlikely to recover.”
My question to the Minister is: are those the only compassionate grounds upon which a court can discharge a young serious offender declaration? Further to that, I want to know, if it isn’t the case—and I’m just going to put these out and she can deal with it—then why are the words “but not limited to” included? I think when it comes to statutory interpretation, we all know that the courts and lawyers will look to what the intent of Parliament was when they introduced this legislation. They will actually look at this Hansard, as we debated these sections, because, as the Hon Dr Duncan Webb said, the courts have to follow the law.
I do want to point out that we are actually now rushing this through urgency to have it completed in the final days of Parliament. There are only a few sitting days left, and if we don’t get this right—and the Minister has already dismissed an Amendment Paper in here which would give the court any other reasons the court considers an appropriate level of discretion—we potentially have here a section where, in theory, a young person can apply on compassionate grounds to leave, but it wouldn’t cover the situation like I described where two young people subject to assault have applied to leave the in-residence phase of the military-style academy because they’re not pregnant and about to give birth, they’re not seriously ill and unlikely to recover, and it’s not to do with a parent who is seriously ill or unlikely to recover.
Can the Minister please give me an assurance that the court has wider grounds to consider compassionate reasons for the discharge of their YSO order, and can she please introduce an Amendment Paper that puts that in there?
Hon KAREN CHHOUR (Minister for Children) (22:46): New section 320Q(2), inserted by clause 4, states, “The only grounds on which an application may be made under subsection (1) are compassionate grounds,”. Then it says “including that” and lists a few. These just illustrate some of the types and the seriousness that would be included, but I do note that the Youth Court currently has the ability to vary or discharge any order such as supervision with residence orders or any condition such as a curfew that a young person is subjected to.
Hon WILLOW-JEAN PRIME (Labour) (22:46): Thank you. Further to that, I have huge concerns with the way in which this legislation is drafted, because it doesn’t say “including that but not limited to”. Why did it only give three examples of compassionate grounds and not others like mental health, for example, like “has been subject to harm and physical abuse”? I think it is hugely problematic that this legislation talks about young serious offender (YSO) declarations, not the other orders that you talk about, but these ones, the YSO declaration, and they have to follow the law and the law does not say “including that but not limited to”. Will the Minister correct that section to give effect to what she just said, that actually they could have wider compassionate grounds, but where does it say that in that subsection?
Hon KAREN CHHOUR (Minister for Children) (22:48): “But not limited to” is not required. This has been confirmed to me with legal advice and the Parliamentary Counsel Office.
Hon WILLOW-JEAN PRIME (Labour) (22:48): When was that confirmed to the Minister for Children? We are in the committee of the whole House stage and we do not have that advice from them. Are we just to take the Minister’s answer and word in terms of that? I would like to see that advice so that I can be confident, because we do check Parliamentary Counsel Office drafting. We do check legal advice. There’s a number of us who are lawyers here in the committee. I would like to see that and understand that. I am uncomfortable with leaving it as it is, because it doesn’t say that it could actually be other compassionate grounds. I have a tabled amendment that you could easily adopt that would give the courts that discretion, or you could quickly draft your own to give us that clarification and that absolute certainty.
CHAIRPERSON (Barbara Kuriger): Yeah, I’m going to take a call from the Hon Dr Duncan Webb, but I was just going to say that the Minister for Children has stated that she is comfortable that she has been given that advice. The members of the House don’t have it, but it’s on the Hansard, so there’s some assurance there that the Minister has said she has been given the advice and she’s comfortable, so she has answered the question in terms of the fact that she’s comfortable with that space.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (22:49): Thank you, Madam Chair. You might want to have that—
CHAIRPERSON (Barbara Kuriger): Sorry, I didn’t hear that—what?
Hon Dr DUNCAN WEBB: Thank you—the time button.
CHAIRPERSON (Barbara Kuriger): Oh, no, we’ve fixed it.
Hon Dr DUNCAN WEBB: But it’s all right; your worthy Clerk has managed that there—
CHAIRPERSON (Barbara Kuriger): Yeah, the Clerk fixed it for us. Thank you.
Hon Dr DUNCAN WEBB: —and so that’s fantastic.
The Hon Willow-Jean Prime has raised some real issues around whether the language appropriately captures it. There’s always that risk that by saying that it is including these things, it means, essentially, things like this, and I think our overarching concern is that the threshold is so high that if you’re sick and you’re unlikely to recover, your parents are sick and are unlikely to recover, or you’re about to give birth but you might not be about to—and you might just have a difficult pregnancy.
But, anyway. I want to move on a little bit because I appreciate that in the committee of the whole House, we’ve got to step through these sections, and I want to start talking about new section 320R in clause 4. There are two amendments, one in my name and one in Arena Williams’ name, both of which deal with this, and these deal with a situation where the young serious offender order might be set aside.
CHAIRPERSON (Barbara Kuriger): Sorry, what—
Hon Dr DUNCAN WEBB: These are two amendments lodged on 5 August, at 7.05.38 and 7.05.39. My concern is that the drafters of the legislation have not properly apprised themselves of the situation in which a charged or—I know that “conviction” is not the right language to use in this framework, but an adverse finding in the Youth Court might fall away.
There are a number of situations where this might happen, and one, for example—which we see quite often in the ordinary courts, and it might sound strange, but it happens quite a lot—is where someone actually pleads guilty, and then changes their mind. It’s really common with a technical offence, an offence like fraud or even theft, where someone is like “Yeah, I did take that.”, they plead guilty, and then their lawyer says, “Well, you did take it, but you had an excuse.”, or where someone doesn’t realise that they had a self-defence defence to an assault charge—you know, they did punch that guy, but the person didn’t realise the legal context in which that happened. Courts will contemplate that. Even though someone has said, “Yes, I’m guilty.”, the court will take it into account that they haven’t had good legal advice and they haven’t fully understood the factual and legal context of their actions, and the court will allow them to withdraw their guilty plea and, essentially, start again.
Of course, if you’ve got a young serious offender order on the basis that a charge has been proven or admitted, and all of a sudden that admission falls away because it kind of rests on a faulty foundation, then we need to be able to say that the young serious offender order also needs to fall away. That’s what the first amendment in my name suggests. You can have—yes—a successful appeal, but the court also allows the withdrawal of an admission upon which the basis of the charge is found proven.
Then the second amendment is that the charge or the admission, or the fact that it is proven, simply falls away for any other reason, and you might think that that’s a bit loose, but there can be all kinds of other reasons why a charge will fall away. For example, there might be a discovery that there has been misconduct by the prosecuting authority, or—unlikely, but possible—a pardon. If you look at the three-strikes legislation, there is a comprehensive section dealing with someone who is under the three-strikes regime, but a pardon has occurred. It’s entirely possible that a young person could get pardoned in respect of an offence which in this framework has been proven. My real concern is that we’ve got a policy framework which is part child protection and part criminal law, and they’ve focused too much on the child protection and they haven’t actually got the criminal law stuff right.
So those are two amendments that are actually quite important and need the Minister for Children’s attention. I’d be interested in her fulsome responses to those.
Hon KAREN CHHOUR (Minister for Children) (22:54): In regard to the amendment lodged at 7.05.38 on 5 August around new section 320R in clause 4 that is proposing to amend the basis on which a young serious offender declaration is set aside to include the situation where an admission is withdrawn, this amendment does not take into account how the youth jurisdiction currently operates. An appeal is required to revisit the charges. If the appeal is successful, then the young serious offender declaration will be discharged, and the bill provides for that now.
In regard to the amendment lodged at 7.05.39 on 5 August, the current drafting preserves the important role of the court in setting aside a conviction. Given the exceptional rarity of that and the process requirements of other mechanisms such as pardons, I’ve been assured that the approach in this bill is appropriate.
Hon WILLOW-JEAN PRIME (Labour) (22:55): Thank you, Madam Chair. I am seeking just one final assurance from the Minister for Children on new section 320Q in clause 4, and then I will move right forward to new section 320RA in clause 4. I just want to know, in the Minister’s legal advice and Parliamentary Counsel Office advice and in her opinion, would a rangatahi experiencing assault and harm in the military-style academy meet the grounds for compassionate leave to have their young serious offender declaration discharged?
Hon KAREN CHHOUR (Minister for Children) (22:56): It’s not my place to rule on a hypothetical and give legal advice.
Hon WILLOW-JEAN PRIME (Labour) (22:56): This is not actually a hypothetical situation—we have two young people. I have an Official Information Act request that confirms that two assaults occurred in the in-residence phase of the military-style academy 2.0. It’s a very real situation, and that’s why I have been asking questions about how a young person in that situation could take themselves out of that programme. So it’s not a hypothetical, Minister, but a real.
Hon KAREN CHHOUR (Minister for Children) (22:57): I have stated many times that it would be a court decision.
CHAIRPERSON (Barbara Kuriger): I’ll take a call from the Hon Willow-Jean Prime, but the Minister has made it very clear that it is not her role to make that decision. You’ve just indicated that you’re moving on to the next piece—thank you.
Hon WILLOW-JEAN PRIME (Labour) (22:57): Yes. I will move on, but I just want to note on the record—
Hon Dr Duncan Webb: No, the move-on orders are next!
Hon WILLOW-JEAN PRIME: —move-on orders are next—that I am extremely uncomfortable with the lack of guidance and clarity in the law, and that an assurance given captured by the Hansard is now going to have to be attached to the bill when it passes, or gets the authority from the Governor-General to say that it might also include some of these other situations that we didn’t feel we needed to outline in the legislation, including real, live examples of what has happened in the Government’s pilot programme.
Moving on, reluctantly, to new section 320RA in clause 4, this section is about further offending by a young person subject to a young serious offender declaration. We know that in the first military-style academy, in the in-community phase, eight out of the nine young people who remained in the programme reoffended. I want to know how this section applies to real-life examples—not hypotheticals, because we know and we’ve had that confirmed, even though it took a long time to get that confirmation, that that reoffending happened. So how does new section 320RA apply to these young people who are in the in-community phase of the military-style academy? That was a pilot; this is going to be a law, and so what does it now mean?
I would also note that it’s going to be in-residence for longer, and the length of the term of this military-style academy in law is going to be longer. It is potentially up to, I think, something like almost three years in total, which is what could happen here. Given that we know that eight out of nine of the young people from the first military-style academy reoffended, what does that mean in terms of this section?
Can the Minister also talk to the second military-style academy, where, I understand, a young person who is now in-community has been involved in two aggravated robberies, potentially? How does this section apply to these young people—and, in this case, in the 2.0 military-style academy—when where further offending is occurring? What happens if those charges are upheld and they are convicted; how does this section apply to them? Will they go back into residence? Will they get some other type of order? If it’s serious in nature, if it’s before the District Court, what happens? Can you please give us the interactions with real-life examples.
Hon KAREN CHHOUR (Minister for Children) (23:00): It would all depend on the scenario and what crime was committed, and it would be up to a court to decide what they were going to ever convict that person of. You can’t just have a scenario and make me decide what’s going to happen to them. It would be up to a court, it would be up to the evidence that’s produced to the court, and then it would be up to the courts to decide whether either they get discharged from that and end up in Corrections, depending on the crime, or whether they end up back in youth justice. It’s all up to the courts to decide.
TAMATHA PAUL (Green—Wellington Central) (23:01): Thank you, Madam Chair. I know we jumped from new section 320Q forward to 320R, but I just wanted to go back briefly to 320R because that is a really important part and I did hear Dr Duncan Webb covering this really well. So I just had a really simple question on this part, around what happens to that young person if their declaration ends up being quashed via an appeal, and all the material around pardons. My question is, and please do let me know if this is out of scope to belong in a bill, but could that young person—if they were wrongfully declared a young serious offender (YSO) and their convictions are later taken away, for whatever reason—could they be eligible for any forms of compensation, or would that potentially sit in another piece of legislation?
Did the Minister consider that, just given, you know, we’ve talked a lot about how weighty the YSO declaration is and how that’s a label that people will carry for a really long time, and it comes with probably a lot of stigma as well? They might miss out on opportunities for employment or education or other opportunities that they might not get because they carried a wrongful YSO declaration. So, yeah, just a simple question before we move past new section 320R altogether, as to whether that could be considered within this bill or whether that might fall elsewhere.
CHAIRPERSON (Barbara Kuriger): I’ll take a question from Dr Lawrence Xu-Nan. The Minister’s just taking some advice on your question, Ms Paul.
Dr LAWRENCE XU-NAN (Green) (23:03): Cool. Just checking if the Minister has the response? OK—
CHAIRPERSON (Barbara Kuriger): No, the Minister has just indicated that she will respond.
Hon KAREN CHHOUR (Minister for Children) (23:03): So in practice, yes, they would have the ability to apply for compensation, but it would be outside of this bill. It would be done in a different process. But what I would also say is that whilst I appreciate what you’re saying around the stigma of a young serious offender (YSO), and that that could take away their ability to be taken more seriously in jobs and opportunities—that’s the whole point of the YSO. We’re actually putting opportunities in front of them; wrapping around care and services around their whānau, their siblings, and those around them, and putting mentors in front of them so that we can give them better opportunities when they transition back out into the community. Whilst I understand that a serious youth offender declaration may have that stigma, some of the crimes they’ve committed have already given them their stigma. But going through the YSO, with that support around them, may actually give them better opportunities going out into the community.
Dr LAWRENCE XU-NAN (Green) (23:04): Thank you, Madam Chair. Can I just get a clarification from the Minister? Thank you, Minister, for that response, but I think the question is in the circumstance of wrongful conviction, if there are any records around that.
I want to check, in terms of new section 320RA, but I want to focus on the Minister’s Amendment Paper 662. There are two questions I have when it comes to 320RA, and I guess the first question is in terms of Amendment Paper 662, both in terms of 320RA and 320RB, because the changes are the same. In the newly introduced (2A) of 320RA and (2A) of 320RB, it gives an exemption against section 285(5)(a) of the Oranga Tamariki Act. My understanding is that that is where they put a certain level of restrictions around some of the cumulative effect when it comes to having a non-YSO response immediately following a YSO response. So I just wanted to check: because of how that (2A) is now being phrased, does that mean that now you can have that cumulative effect in the sense that you have a YSO, and then afterwards followed immediately by a non-YSO response for 320RA, if my reading is correct in terms of the Amendment Paper.
My second question is around 320RA(6), the replaced paragraph(c) in Amendment Paper 662. The current paragraph (c) says that the response, particularly with the non-YSO response that is correct—ah, just checking in terms of lines 12 to 15; ah, yeah, the YSO response. So in the—sorry, I just got to the right section, because there are two provisions with “c” in that section and I just found the right line number. So it is the replacement to page 21, lines 12 to 15, in terms of the definition of a YSO response in the Amendment Paper 662.
Can I just clarify that the only change, then, is to include the supervision order under section 311(5)? I think, because I was looking at the non-YSO response, it may not actually be applicable in this sense, because I thought that that extended that period to 18 months, but it doesn’t. So can I just confirm with the Minister: is there anything else that’s changed from the Amendment Paper other than the inclusion of section 311(5)?
Hon KAREN CHHOUR (Minister for Children) (23:07): Just in regards to the Amendment Paper that you were speaking to in the very beginning of your question, that Amendment Paper was just to ensure that the changes that were made in select committee could work as intended. The change was important because it ensures that the Youth Court has access to consistent sentencing lengths for all young people, regardless of when their declaration expires. So it was basically to make sure that the changes made in select committee work.
Dr Lawrence Xu-Nan: Are consistent.
Hon KAREN CHHOUR: Yeah.
CHAIRPERSON (Barbara Kuriger): I’m going to take a call from the Hon Dr Duncan Webb, and I’m going to signal that there’s still more to go in Part 1. This is the substantive part of the bill. But I also noticed that, with the calls we’ve had so far, we’re getting pretty close to moving on to Subpart 2. So are there just any final clarifications—
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (23:08): No, no—well, thank you. Can I firstly say, if I may, Madam Chair, thank you for that guidance. But one of the most important parts of this bill, that we haven’t touched on yet, is actually the young—
CHAIRPERSON (Barbara Kuriger): So I think if the member had let me finish, I was just going to say: are there any important issues just prior to Subpart 2 before we move on to Subpart 2?
Hon Dr DUNCAN WEBB: We haven’t really stepped through the military-style academies.
CHAIRPERSON (Barbara Kuriger): Yep. So if that’s important, let’s move there now.
Hon Dr DUNCAN WEBB: Yes. So I propose, now, for my colleagues and I to look at military-style academies and to ask some questions around that, which is at the second-half of Part 1. In fact, the first amendment touched on military-style academies—date-stamped 7.05.50. The Minister, in an earlier response to the Hon Willow-Jean Prime’s question about whether someone who’s been subject to assault can choose to leave, pointed out that “No, they can’t. They are stuck there by order of the court.” That brings me to this point, because one of the concerns I have with Oranga Tamariki, which has its own framework, is it sits outside of what’s essentially the Corrections framework—and don’t get me wrong, I don’t think they should all be lumped in together, but—
Hon Willow-Jean Prime: No, but ACT do.
Hon Dr DUNCAN WEBB: Ha, ha! But the corrections framework has minimum standards under the Mandela rules, which are in terms of exercise, phone calls, cell size, and all things like that. The first amendment that I want to refer to, which is the amendment of Willow-Jean Prime, sets out that a military-style academy programme—which is incarceration, and I think that’s the first thing. Let’s front up: these young people are being incarcerated in military-style academies, and so the first thing is that it should be treated as a place of detention for the Oversight of Oranga Tamariki System Act 2022, which is a reporting framework.
That’s not immediately clear on the legislation as I see it, and so the first thing is to say, OK, this is like any other place of detention under the Oranga Tamariki Act but also that it’s subject to inspections by the Chief Ombudsman, consistent with New Zealand’s obligations under the Optional Protocol to the Convention Against Torture. This is the ability of the Ombudsman to inspect any place of detention. This is not in a technical sense and not in some kind of tick-box sense, but to come in and say that “This place of detention is inhumane and amounts to unreasonable detention, or is in breach of the torture protocol for the following reasons.”
I do have concerns that where you’ve got a young serious offender military academy which requires them to engage in military-style exercises, which is a kind of forced activity, this crosses the line. I would like to see this come under the oversight of the Ombudsman so that they can say—I mean, I don’t even know what the Minister expects, and further amendments explore this. But if they’re doing 15-mile forced marches, I want to know: is that OK? Who’s the right person to ask that question? It’s the Ombudsman. Are they doing combat training, or are they doing karate or combat—is that appropriate? I want to know.
I’m not an expert in this area, but the Ombudsman and the Ombudsman team are. As a member of the Justice Committee, I’ve had reports from the Ombudsman on various places of detention, and he has taken a very careful approach to this.
We absolutely need a supervisor, particularly when this is now a place of detention. It is involuntary—they can’t walk out if they don’t like it—and so we need someone to say, “Is it OK what’s going on there?”, particularly because it’s young people. That’s my amendment that was time-stamped at 7.05.50, and if the Minister says that we don’t need that amendment for whatever reason, I’d like to know, in particular, what the protections are for this compulsory detention to make sure that young people aren’t subject to harm and aren’t subject to conditions which are inhumane and which, were they in a prison, would be illegal under the Corrections Act.
Hon KAREN CHHOUR (Minister for Children) (23:13): The military-style academy is currently run within a youth justice facility, and so it is subject to the same oversight under the Oversight of Oranga Tamariki System Act 2022, which means we have grievance panels, Ombudsmen, the Independent Children’s Monitor, the Children’s Commissioner, and VOYCE - Whakarongo Mai who are able to go in and advocate for these young people. They have the same oversight because it is run within the youth justice facility and it is an in-residence programme. The bill also provides for offsite components delivered by qualifying providers, which will be subject to individual monitoring and oversight through consequential amendments to the Oversight of Oranga Tamariki System Act.
CHAIRPERSON (Barbara Kuriger): I’ve made it clear I’m not taking closures at this stage, but I just want to make it clear. When I talked about moving on to to Subpart 2, the member Duncan Webb has moved on to Subpart 4 and the Greens have indicated that they still have some queries around Subparts 2 and 3. However, I’m happy to take any questions on Subpart 4 now, and then do Subparts 2 and 3, rather than going backwards.
Hon Dr Duncan Webb: That’s right, you like to do everything in order.
CHAIRPERSON (Barbara Kuriger): Yeah, I do—otherwise it plays with my mind. I just think if we clear up the section on military-style academies, and then I’m quite happy to indulge the Greens by actually going back to where they thought we were up to, right? That’s where you thought we were up to, and so are there any further questions on the military-style academies in Subpart 4?
Hon Willow-Jean Prime: Yes, there’s heaps, but I think that they span over the ones they want to cover and the ones that we were in, and so I don’t think we’ll get mixed up.
CHAIRPERSON (Barbara Kuriger): OK, so let’s go to the Greens and we’ll do Subparts 2 and 3 and your questions, and then we can come back.
TAMATHA PAUL (Green—Wellington Central) (23:16): Awesome! Thank you, Madam Chair. Moving to clause 6, we’re super-interested in the “Arrest of young serious offender in breach of bail condition”. My question is specifically about a tabled amendment that I have tabled, and that one is from 6 August 2026 at 11.50.08, and that amendment is, basically, about inserting a new part that says, “This section does not apply if a young serious offender is under the age of 17 and is arrested without a parent or guardian present.” In clause 6, it lays out the provisions by which that young person can be arrested, but the important part, we think, in that new section is the bit around being able to arrest without a warrant. We’re quite keen to interrogate the process of arresting that young person, but particularly this bit around “without a warrant”.
To speak to the tabled amendment and how it applies to that clause, basically there were concerns raised by submitters throughout the select committee process around young people essentially interacting with police without an appropriate parent or guardian present. This was something that was noted by VOYCE - Whakarongo Mai, which is quite important. They’re the advocacy group for care experienced young people and they have a lot of experience when it comes to young people interacting with the criminal justice system in any type of way. I’m really keen to know if the Minister might consider that, and also wanted to clarify where that comes from, as well.
One of the places where that comes from is particularly from the joint inquiry between the Independent Police Conduct Authority and the Privacy Commissioner when they found that there were tens of thousands of photos of young Māori kids being taken by police officers. The reason that that is relevant to this bill is because what it exposed was not only a lack of operational understanding along the front line of what privacy principles exist for all civilians including children, but also it highlighted that so many of those kids that were apprehended by police—and these, by the way, were kids who were not committing any crime. Some of those kids were simply walking down the street, and some of the police officers even commented that those kids looked out of place.
What I’m trying to highlight here is that there is a track record of police interacting with young people and there not always being very good oversight of what powers those police have and, actually—probably more importantly—what powers those young people have. In the situations where those young people were apprehended, they didn’t know that they could actually not consent to their photograph being taken and for them having to interact with that police officer.
That is the intention behind the amendment that I’ve brought, which was time-stamped at 11.50.08 on 6 August. It’s just trying to require the presence of a parent or guardian in a situation where the police are involved, just to make sure that whatever is being communicated to that young person is heard by somebody else who might be able to—because if that young person is being arrested without a warrant, tension will be high. They’re not necessarily going to understand everything that the police officer is saying to them. Again, they might not know their rights, and the police officers might not know their obligations. That’s why we’re recommending that there be an adult present, just to add a third person who can make sure that what happens is observed and that, if there are any discrepancies between rights and laws and obligations, those can be clarified later on.
We really just want to diminish the risk that comes with taking action against the young person without a warrant, which is required. The reason we have warrants is to make sure that people’s rights are upheld and they’re not subject to any breaches of the New Zealand Bill of Rights Act, which we’ll go into next. I’m keen to know if the Minister might entertain that tabled amendment.
Hon KAREN CHHOUR (Minister for Children) (23:20): Thank you. Look, it’s essential, in my opinion, that police are able to respond quickly to breaches of bail. The presence of a parent or guardian does not change the fact that bail conditions have been breached and need to be responded to. I absolutely understand the need for support for young people, and the expectation is that support will be contacted straight away and that support will be brought to that young person.
Dr LAWRENCE XU-NAN (Green) (23:21): Thank you, Madam Chair, and thank you for that response, Minister. I just want to follow from my colleague Tamatha Paul around clause 6. One of the things we’re seeing here is around this idea of “reasonable grounds”. I also had a look at section 35 of the Bail Act, and I know we had that long discussion previously around compassionate grounds, and there were some examples that were given. I can’t see any examples in this piece of legislation or the Bail Act. Can I check with the Minister for Children on what are some of the examples for reasonable grounds, or whether this is simply also an understood term that the police—or a constable, in this case—have been using?
We do have a tabled amendment in my colleague Tamatha Paul’s name, at 16.40.02, around the deletion of clause 6(1)(a)— the new section 214AAA(1)(a). The main aspect of this particular part is around the warrantless arrest. Previously, in other circumstances, when we’ve been engaging with the Minister and the Associate Minister of Justice, we’ve been told that warrants are actually really easy to obtain. That’s what we’ve been told. I want to check with the Minister, more broadly, what is the rationale behind arrest without a warrant? Then, following on from what my colleague said, when you are arresting someone, you are also supposed to be able to read out their rights and obligations. Is that the same thing when we’re looking at arrest without a warrant as well? I’ll ask those questions for clause 6, but I’m going to move on to a subsequent section.
Hon KAREN CHHOUR (Minister for Children) (23:23): In response to that tabled amendment on clause 6, in regards to the amendment to remove warrantless arrest powers for breach of bail conditions, as I said before, it’s essential that police are able to respond quickly to breaches of bail conditions. Having to wait for three breaches, as is now the case, is unreasonable. These are some of the most serious offences and persistent offenders. As I’ve said, the bill, including the powers referred to here, underwent the vetting process for compliance with the New Zealand Bill of Rights Act and was found to be consistent.
TAMATHA PAUL (Green—Wellington Central) (23:24): Thank you, Madam Chair. Those were our question on clause 6, so we’re going to move to clause 15 now, which is about family group conferences (FGCs). Clause 15 obviously talks about how a young person who is declared as a young serious offender (YSO) and who is charged with an assault while they are subject to a YSO declaration does not require another family group conference.
My questions are mainly around the family group conference and whether the Minister for Children considered the detrimental impact on family group conferences and the FGCs’ place within the youth criminal justice system when removing that requirement. The reason for that—and this was a point really well made, again, in the submissions by the Royal Australian and New Zealand College of Psychiatrists and also by the Paediatric Society of New Zealand. These are people who, obviously, understand the way that young people’s brains develop, and all that. The reason for this is: why would you remove the ability to access an FGC when family group conferences are potentially the most innovative part of our youth criminal justice system?
Throughout those submissions, there were some really great ones. The Law Society talked about how a family group conference is one of the biggest cornerstones of our youth justice system. Also, Kick Back, a group who deal with and support young people, particularly homeless young people on Karangahape Road in Auckland, talked about how family group conferences are a world-leading mechanism within our justice system as well. Around the world, family group conferences are held up as this really important mechanism to reduce recidivism, and also to avoid a criminal pathway altogether in a situation where a young person is being part of an FGC for the first time.
In this situation, that young person has already got the YSO declaration, and they’ve committed another offence, and this bit, clause 15, takes out the requirement for an FGC. Why are we taking out a family group conference when there is plenty of evidence that a family group conference does reduce recidivism and does present a pathway forward that isn’t criminal, but that same evidence does not exist for military-style boot camps—not in New Zealand, not anywhere in the world? Did the Minister consider the detrimental impact that would have on that mechanism, which is so important and key to our youth justice system?
Hon KAREN CHHOUR (Minister for Children) (23:27): I see that the member has tabled an amendment in regards to this—it’s 11.50.09 on 6 August. I had read that amendment, and I’m aware of that amendment; as soon as you started speaking to this, I kind of went and had a look at what my thoughts were in this space. Look, all young people who are declared a young serious offender (YSO) would have had at least one family group conference (FGC)—so that does happen—and they would have had FGCs in the past for previous court appearance, because, for each court appearance, another FGC is required.
The issue with that, in regards to the serious youth offender legislation, is that there is a safety plan put in place specifically around the YSO and what supports are going to be in place for this young person. We want to get those supports in place as quickly as possible. If there’s a hiccup and reoffending, we don’t want to have to sit on our hands and not respond because we’re waiting for another FGC to redo the plan all over again. Removing the requirement for another FGC in limited circumstances where there’s reoffending allows us to respond more quickly and put those support networks back in place a lot more quickly.
I would note that the Youth Court still retains the discretion, if they feel that another FGC is necessary or desirable, under amended section 281B of the Act. They still have that discretion, and that will not be affected.
Dr LAWRENCE XU-NAN (Green) (23:29): Thank you, Madam Chair. I know that my colleague may have a question on another clause, but I do want to touch on a couple of things in clause 19. This is mainly to do with sentencing, noting that my colleague Tamatha Paul may have additional questions around family group conferences. I specifically want to focus on clause 19, amending section 284(2), and new subsection (1AB).
My colleague Tamatha Paul has an amendment for 18 August 2026, time stamped 16.40.06, and this is the deletion of new subsection (1AB), inserted by clause 19. Now, I understand the rationale around new subsection (1AB)(e) around livestreaming or posting on social media, etc., but I want to check one of the framings, and I want to test something with the Minister for Children.
Part of this says, “with no justification in the public interest,”. This is something that we have heard previously in submissions on other things from, for example, the Council for Civil Liberties. Would something like this be captured if it’s for the purpose of a protest or for a strike action, etc.? We’re looking at a school strike for the climate; would that be captured, and would that be considered in the public interest? That, again, does tie into when we’re looking at the New Zealand Bill of Rights Act and the freedom of expression and the freedom of movement.
Again, like I said, I understand where the rationale for some of these is coming from. That’s the first thing I want to test, even though the tabled amendment by my colleague Tamatha Paul is, I think, is an important one. This whole section is responding to a particular context that probably, in the current situation, isn’t as prevalent as it once was, so do we need to specify that as a particular factor to consider when sentencing?
Further on from this, I want to check with the Minister: what if the young persons themselves were not the ones who livestreamed or posted but they were featured in that and it was livestreamed by someone else who may not have committed particular offending? How would that be considered in the sentencing part? Those are my two questions on new subsection (1AB)(e). I do have additional questions as well around this part, which is, if we’re looking at the sentencing—oh, actually, if it’s OK, I’ll get the Minister’s response and I’ll come back.
Hon KAREN CHHOUR (Minister for Children) (23:32): Thank you. I appreciate it. When it comes to the tabled amendment 16.40.06, 18 August, that’s a proposal to delete a section which requires the court to take into account, at sentencing, where a young person has livestreamed or posted offending online. I think, whilst I appreciate you speaking about things like protests and other areas, this is livestreaming offending which they have been charged for which would reach the criminal level of a 10-year sentence, because that’s what a young serious offender (YSO) is. It’s when a young person has committed two crimes that would have got a sentence of 10 years or more. What they are livestreaming is actually pretty serious offending, so it wouldn’t be a protest or anything like that.
Dr LAWRENCE XU-NAN (Green) (23:33): That’s really helpful. I’m just signalling to you, Madam Chair, if I’m able to have this back and forth with the Minister for Children, I’ve got two things.
CHAIRPERSON (Barbara Kuriger): Yes.
Dr LAWRENCE XU-NAN: Thank you, Minister. That’s really helpful. The next block of questions I’ve got is around, if we compare it to the Sentencing Act, some of the mitigating factors. What I’m not seeing here, but it potentially would be taken into consideration, would be things like what happens if a young person pleaded guilty. It’s not captured in this particular section. What happens if a young person has limited involvement in the offence on the young person’s part, and also things around remorse shown by the young person? I’m kind of paraphrasing some of the other things we do see in the mitigating factors. I want to check with the Minister if any of those would also be considered as a part of this. If that’s OK, I now have one more.
Hon KAREN CHHOUR (Minister for Children) (23:34): I was just double checking I was correct, but normal court processes apply when it comes to those things.
Dr LAWRENCE XU-NAN (Green) (23:34): Thank you for that. This is great. The third and final group of questions I’ve got is around the tabled amendments by my colleague Tamatha Paul, and these are date stamped to, I believe, 1 September2026—11.20.01 and 11.20.02. Again, this is to do with other things that are considered, and these are potentially not part of a normal court order of mitigating factors by the Sentencing Act.
I do want to check if the Minister for Children would consider adding additional, I guess, mitigating factors and requirements around the disabilities of a young person, which also, I would hope in this case, not just simply be physical disabilities but also look at fetal alcohol syndrome disorder, etc.; as well as the tabled amendment 11.20.02, which is around the relevant national and international evidence relating to, or responding to, youth offending, as to what is the best way to ensure that a young person is able to have the best possibilities at rehabilitation.
Hon KAREN CHHOUR (Minister for Children) (23:35): Yes, and I do appreciate that question. I think that’s a really important question. Section 5 of the Oranga Tamariki Act always applies when it comes to anything that the courts are taking into account. Section 5 reaffirms child wellbeing as central to decision-making, including any disabilities the young person may have. Section 284 already requires the court to take that into account, and the personal characteristics of a young person, so far as those matters are relevant to the offence and any response by the court.
TAMATHA PAUL (Green—Wellington Central) (23:36): This clause 19 is quite important, because this is ultimately about serving the sentence to that young person—so this is really important. We know it’s important, too, because there have been so many changes throughout this term of Parliament to what judges can and can’t take into account in terms of aggravating and mitigating factors. I’m quite keen to have a deep dive into this. I have some quite basic questions on this.
In terms of the seriousness of the offending, could the Minister for Children or her officials let us know what determines that seriousness and how we can identify where that sits? I wanted to ask about new subsection (1AB)(c), inserted by clause 19, which is about the interests of the victim. Sorry, did that not make sense, Minister? Do you want me to repeat that or to slow down?
Hon Karen Chhour: No, just the seriousness of the offending—in what regards? To the YSO?
TAMATHA PAUL: This is when a young person is being sentenced, so looking at clause 19, “Factors to be taken into account on sentencing”, at new subsection (1AB)(a). That was the first point, just around the seriousness of the offending—so just asking the Minister how you consider that seriousness and what the kinds of parameters are for that. I think that might be probably quite a simple answer.
On new subsection (1AB)(c)—that’s about the interests of the victim—I’m really keen to understand what those interests could be. I have some ideas of what it might be, but I’m just quite keen to draw that out for our understanding. I guess the part of these factors that really stood out to myself and to submitters is, again, the livestream part, and I’m really interested in the submission by Cooper Legal, where they actually said that it was disproportionately punitive to add that livestreaming element as an aggravating factor and that it might not be consistent, perhaps, across the adult criminal system. If the Minister could respond in terms of what rationalises or justifies having a disproportionately punitive factor within these sentencing factors. As some other submitters made clear, livestreaming on the internet and social media, as the Minister knows, is that young people and others film everything these days.
I think the more important point, actually, is around the myth of deterrence and the fact that these young people, and even grown adults, have no idea what the law is. Most people, unless you’re a lawyer or are involved in some way, have no idea what might aggravate or mitigate when it comes to sentencing or when it comes that crime and what factors might be taken into account. I just think there’s no way that a young person would know that livestreaming a crime would aggravate their sentence or bump up that sentence or make it more intense, so I’m keen to understand.
Some of the submitters who talked about this particular clause did question whether these factors were consistent with the United Nations Convention on the Rights of the Child, which requires children, as I know the Minister knows, to be treated in a manner consistent with their age. I’m really thinking about young offenders who will be captured as part of this piece of legislation.
We’ll leave it there, but clause 19 is quite meaty and could have some quite big impacts on those young people.
Hon KAREN CHHOUR (Minister for Children) (23:40): Thank you, Madam Chair. In regards to the amendment around livestreaming, I do understand where you’re coming from, but where I’m coming from is that when you are sharing offending online, including livestreaming it, often it can glorify it, it can lead to copycat offending, and it can act as a perverse incentive for further offending. Not only that but also what are the rights of the victims that often are being recorded? Often, the victims of the crime that’s happening to them—that is recorded. What about their right not to be livestreamed? What about their privacy? What about the harm and hurt that’s been caused to them also? I’m pretty sure most young people would understand when they are committing a serious crime that, actually, livestreaming it is not the right thing to be doing.
CHAIRPERSON (Barbara Kuriger): I’ll take a question from Dr Lawrence Xu-Nan. I’m quite keen, because it has had a select committee, to start winding up as much as possible Subparts 2 and 3 so we can come back to Subpart 4 on the military-style academies. I’m just looking for some last-minute, quick-fire questions of the Minister.
Dr Lawrence Xu-Nan: On Subpart 2, or Subparts 2 and 3?
CHAIRPERSON (Barbara Kuriger): Subparts 2 and 3.
Hon KAREN CHHOUR (Minister for Children) (23:42): I’ve just got one more answer to one of the questions if you would like it. Sorry—my apologies. In regards to determining the seriousness, the advice I got was that the sentence length is what’s taken into account for determining the seriousness.
Dr LAWRENCE XU-NAN (Green) (23:42): Thank you, Madam Chair. I do want to move on to clauses 21 and 22, which are around electronic monitoring, now. Just a quick couple of questions for the Minister for Children—two on clause 21—the first one being I note that when imposing a curfew condition, it says “the curfew duration” but it doesn’t actually state the length of that duration. I do want to endorse our support for the Hon Willow-Jean Prime’s amendment, and this is 5 August, 7.04.45, which does include a particular—oh, no, hold on, am I looking at the right one? Sorry, I meant 7.05.44, which does require them to remain at the curfew address for a total period exceeding 12 hours in a 24-hour period, so just putting a limit on that—unless there is a built-in curfew period already, or a maximum curfew period already. We just want to support that particular amendment, which is 5 August 2026, 7.05.44. Those are my first two questions on clause 21.
I do want to move on to clause 22, because I think when it comes to electronic monitoring—and I’m looking specifically at section 296K(5), which is around how the information is being kept, which is “no longer than is required for the purposes”. Now, my colleague Tamatha Paul has already spoken around how the police may potentially capture certain information as well, and where certain information can be held indefinitely for future use. I do want to know what is meant by no “longer than is required” in this case. I want to just also endorse the Hon Willow-Jean Prime’s amendment at 7.05.46, which does give a specific time frame of how long that is going to be able to capture—so the 21 days being the limit or threshold around that. I want to check with the Minister on how the Minister feels about that amendment or limit.
Hon KAREN CHHOUR (Minister for Children) (23:45): In response to the amendments from 7.05.44, 5 August—we were asking around the time limits and maximums—the minimum is 2 hours per day; maximum is 84 hours per week. In regards to the amendment, the bill is consistent with existing provisions in the Oranga Tamariki Act that place a weekly limit of 84 hours on daily curfew periods. Further, young people are able to seek or engage in employment and attend educational training and other rehabilitative or reintegrative activities or programmes with the approval of the chief executive during the daily curfew period.
TAMATHA PAUL (Green—Wellington Central) (23:46): I know you want to move on to the next—
Hon Karen Chhour: Sorry, there was just one more—
CHAIRPERSON (Barbara Kuriger): Oh, sorry, there’s another thing from the Minister.
Hon KAREN CHHOUR (Minister for Children) (23:46): There was just one more amendment. It was 7.05.46, 5 August. It proposes to insert a time limit on the period for which electronically collected information can be held. Any information collected under this section must be securely deleted after 21 days—that’s the amendment. Yep. The provisions make it very clear that electronically collected information can only be used for specific lawful purposes and must not be kept any longer than necessary already.
TAMATHA PAUL (Green—Wellington Central) (23:46): I think we’ve only got a couple of things left in this subpart. But just to close off the electronic monitoring part on our side, I wanted to ask the Minister whether she might consider my amendment, which is dated 1 September 2026, 11.20.03 a.m., which is related to clause 25, which is all the electronic monitoring provisions.
The reason I was keen to hear about the Minister’s thoughts on this is because we’re keen to delete the word “urgent”, because we kind of still want these young people to have some level of agency. Obviously, you can give them a curfew and the courts can set their own conditions, but what I guess we’re trying to encapsulate in this amendment is that when you’re dealing with young people, there is a real risk of lifetime institutionalisation, where these young people’s brains—and perhaps the Minister has met people like this, where they have spent their time growing up in State care or a lot of time in a youth justice residence and they go on to prison, and it does lead to a kind of mental institutionalisation where every single thing in that person’s life needs to be compartmentalised and ordered and they get really used to living a really strict, regimented lifestyle. I don’t know if that’s the outcome that we want for our young people, particularly if we believe that they can turn their lives around and not offend, and if we accept that these are kids and they do have the potential to change.
The last question on that clause 25 in terms of the electronic monitoring is whether she might consider deleting the word “urgent” so they have a little bit more agency with still some restrictions.
Hon KAREN CHHOUR (Minister for Children) (23:49): Look, if it was any other circumstance apart from a young serious offender, I would absolutely agree with the member, but where the court has required compliance with a curfew to be electronically monitored, it’s not taken lightly. It is because the risk of non-compliance or reoffending by that young person is high. As such, I consider that requiring the young person to seek approval for attending non-urgent medical appointments during curfew period is highly appropriate.
CHAIRPERSON (Barbara Kuriger): I’m just going to take a call from Lawrence Xu-Nan, because we are finishing Subparts 2 and 3. As I explained before, my brain is compartmentalised.
Dr LAWRENCE XU-NAN (Green) (23:49): This is why I’m kind of, like, moving quite a bit further along in Subparts 2 and 3—so that way we can get the Hon Dr Duncan Webb to ask about Subpart 4, which I know he’s been itching to ask for a little while.
CHAIRPERSON (Barbara Kuriger): Yes, and I know you’re very good at asking very quick, concise questions.
Dr LAWRENCE XU-NAN: Yes, so moving on to clause 34, which is towards the end of Subpart 2, I want to check with the Minister, when we’re looking at the placement of young serious offenders (YSO) in the care of an approved person, whether in this case the Minister would consider—and again, I know I should also endorse the Hon Willow-Jean Prime, who has some excellent and really comprehensive tabled amendments. This is 5 August, time stamped 7.05.47, which is around how chief executive services and cultural services are able to make that application—having regards to certain criteria. I want to check with the Minister if that’s something the Minister would consider. I’m happy to move on unless the Minister has a response for that already.
CHAIRPERSON (Barbara Kuriger): Keep going, and then the Minister will respond to them at the end.
Dr LAWRENCE XU-NAN: Cool—great. I actually want to move on to Subpart 3, clause 37, but I want to specifically focus, at this stage, on new section 296FB(1). This is the top of page 42 of the bill. I just want to check with the Minister in terms of the wording. This is when a YSO, without reasonable excuse, fails to comply, and what a constable would be able to do. I want to check with the Minister how we should interpret, or how a constable should interpret, what “satisfactory” means in that context.
Also, it says a constable “may”. I’m guessing, in that case, even though a YSO may have failed to comply satisfactorily with a special specified condition, a constable may be able to have a conversation with the YSO without having to go immediately to Youth Court for an application. Would that be an accurate interpretation?
TAMATHA PAUL (Green—Wellington Central) (23:52): All right, I think this might be our last little bit for Subpart 3, but I can’t wait for Subpart 4. This is about clause 27, which is, basically, all around—
Dr Lawrence Xu-Nan: Clause 37?
TAMATHA PAUL: Oh no, you jumped to clause 37, but I was at clause 25. I’m now moving to clause 27, but then we can move to Subpart 4.
This is an important one because this is around the supervision with a residence order, and this clause is quite important because it removes the eligibility for early release from a supervision with a residence order. I wondered if the Minister for Children might consider my amendment, which is dated 1 September 2026, 11.20.04 a.m. This one basically recognises that the possibility of early release from that supervision with residence order could be a carrot that a person might want to use to incentivise good behaviour or the improvement of that young person. I just wanted to ask the Minister whether she might consider deleting that bit that is highlighted in the amendment, which I won’t read out because it’ll be very boring, and just whether the Minister understands that that can be used as a carrot for good behaviour, and whether it’s worth removing that eligibility altogether.
Hon KAREN CHHOUR (Minister for Children) (23:53): Speaking to that, many of these young people have been within youth justice residences many times and have been given that carrot and it didn’t work, and now they are back under serious youth offending and the Youth Court considers that they are likely to reoffend and that previous interventions have been unsuccessful. Changing behaviour takes time. This is us doing something different, and it means we need longer and stronger interventions to reduce the risk of reoffending, and stronger interventions hold them to account for their offending.
Just remember, once again, these are not small crimes; this is serious, persistent offending which, if found guilty, has a sentencing of 10 years or more. These are not light crimes; these are pretty major crimes, and this young serious offender programme is to give them a lifeline and a shot not to end up in Corrections. I note that being in the youth justice residence for a longer period will mean that they will receive that additional support, including rehabilitation support, all while they are residents. The more we can do, the better.
CHAIRPERSON (Barbara Kuriger): Members, the time has come for me to leave the chair. The committee is suspended and will resume at 9 a.m., when we will begin discussing Subpart 4.
Sitting suspended from 11.55 p.m. to 9 a.m. (Thursday)
Urgency
Thursday, 17 September 2026
Bills
Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill
Committee of the whole House
Debate resumed.
Part 1 Substantive amendments to principal Act (continued)
CHAIRPERSON (Teanau Tuiono): Mōrena e te Whare. Good morning, members. When we suspended last night, we were considering the Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill, and we were debating Part 1. This is the debate on clauses 4 to 40, “Substantive amendments to principal Act”.
For members’ information, there has been significant debate on this part so far, focusing on Subparts 1 to 3. I now invite members to take calls on Subpart 4, relating to military-style academy orders. Once again, the question is that Part 1 stand part.
Hon KAREN CHHOUR (Minister for Children) (09:01): Thank you, Mr Chair. Just before we start, I know that military-style academies is a topic that people want to hear about, and I want to be able to answer questions, but I just want to reiterate that I didn’t come to this place to do more harm to kids who have already been through enough. Instead, I am doing everything I can—
Hon Willow-Jean Prime: It’s not working.
Hon KAREN CHHOUR: Hold on. Can you just be respectful?
CHAIRPERSON (Teanau Tuiono): Just let the Minister make her contribution, please.
Hon KAREN CHHOUR: I’m doing everything I can to give them the opportunity to turn their lives around and to be the best versions of themselves. There are young people’s lives here—who have put themselves forward to be part of the pilot programmes. That took courage, to try to do something different to change their behaviours, but I just want to reiterate that we must protect these young people from the pressure of public scrutiny by maintaining their privacy. Therefore, I will not be commenting today on any individual circumstances. I’ve made this clear in the past, and I am just making it clear again.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (09:02): Thank you, Mr Chair. I think it’s important that we do now turn to the boot camps, or the military-style academies. I thank the Minister for Children for her opening comments. We can get the personal factors from Radio New Zealand, rather from her, it appears.
One of the overarching themes that comes out of this is that I don’t actually understand what “military-style academies” means. Whilst I’ve got a whole lot of tabled amendments that are prompts for debate, I would like to introduce this part by saying that we aren’t clear what the military aspect is. Oranga Tamariki already has the ability to detain young people in secure facilities and already has the ability to provide intensive social support, and the other supports that these young people need, so I am very keen to understand why legislation is needed to give additional powers and what the military aspect of it is. I’d be interested to see the Minister’s response to that. We do have concerns. Defence is an important part of the New Zealand Government, but it is an institution that is fundamentally based on the use of force. That is what defence and the military is. Why you would want to take that kaupapa and put it into a young person’s corrective training, we are yet to understand.
With that introduction, I will turn to the tabled amendments, and, basically, we’re just going through the Labour bundle consecutively. I am looking at the second one on this Subpart 4, in the name of Willow-Jean Prime. It’s about the—
CHAIRPERSON (Teanau Tuiono): Have you got the time stamp?
Hon Dr DUNCAN WEBB: It’s 7.05.53.
CHAIRPERSON (Teanau Tuiono): It’s just so that we can find it; that’s all.
Hon Dr DUNCAN WEBB: It’s really about the basis upon which people enter the military-style academies.
I accept that the Minister has said this is compulsory—you can’t choose to get in; you can’t choose to get out—but, in terms of dealing with young people, one of the underlying principles is that you should always take the views of that young person into account when making a decision in respect of that young person. That doesn’t mean you have to do what they ask, but it does strike me that it’s quite a gap, when the judicial officer is considering whether to make an order of this nature, that there is no obligation to check in with that young person and say, “There’s a whole lot of orders I can make. One that I am thinking of is a military-style academy, and I’m leaning in favour of it, because I think that it might have some real benefits for you, but I’d like to talk to you about that. What do you think?” The proposal in this tabled amendment is to say that the Youth Court must have regard to the views of the young person, including the young person’s willingness or unwillingness to take part in that programme.
Of course, if a young person just rails against it and, for whatever reason, says, “The military-style academy is not for me. I will not cooperate”, you could put them in there anyway, but the chances of it being effective are relatively low. It also opens the door for the court to—“negotiate” is probably the wrong word—be a bit more persuasive than coercive and say, “Look, this is an option. We’d like to engage you and explain to you what it might mean, so that you can indicate your preference or strength of feeling about it.” That’s the first amendment, and it’s a principled amendment because it engages with a fundamental principle of the rights of the child, which is that the views of the child should be taken into account, given the age of the child and their ability to engage, in questions concerning their own future.
Hon KAREN CHHOUR (Minister for Children) (09:07): In regards to tabled amendment 7.05.53, 5 August, I won’t be supporting this, because, like all custodial orders, they’re not dependent on a young person’s willingness to participate in them.
Hon WILLOW-JEAN PRIME (Labour) (09:07): It’s really interesting that that is the Minister for Children’s position when you look at the review that was done of the Government’s pilot and the point of the pilot was supposed to be about determining whether these work and whether this is something that the Government should be continuing with and putting into law.
One of the things we know about, say, the Limited Service Volunteer (LSV) programme—which I know the Government was keen on and which has influenced how they have come up with these military-style academies—one of the key factors of that, is the fact that the “V” in that is “voluntary”. This isn’t going to be voluntary. The Minister just talked about the pilots 1.0 and 2.0 being voluntary and these young people volunteering themselves into it, but, in the case of the second military-style academy, two of them voluntarily withdrew themselves from that programme, as well. Now the Minister is saying that she doesn’t believe there should be any ability for it to be voluntary, yet that is one of the key things that we learnt through all of this in the past.
The other thing that I think is important here, when we look at the military-style academy orders—and I am talking to new section 320S, which is around the duration of the military-style academy order—something else that came out of the review on the first pilot programme, and possibly one of the important lessons that the Government should be taking from it, was how important it is to have a stable cohort. I want to know from the Minister how this legislation provides for a stable cohort.
In fact, in the royal commission’s inquiry into abuse in State care, one of the things we learnt from that is, with new people constantly coming in and entering youth justice facilities and programmes like this, unfortunately, there is a thing that happens in terms of determining hierarchy and compliance amongst the young people, which led to all sorts of terrible abuse: initiations, those that are trying to assert themselves—terrible abuse occurred in that. That is one of the issues of having people coming and going at any time that the court may sentence them to it.
They also have an opportunity here around whether it’s for three months or not more than 12 months. We know in the pilot programme it was three months; we know in MSA 2.0 it was a longer in-residence phase. Given the findings of that review of the first pilot about the importance of a stable cohort, can the Minister talk to new section 320S and how that is going to work practically if there is any young person who qualifies for this order, the judge is considering it and makes that—will they be put on hold until there is enough of a cohort to run a programme, or will they be just coming and going according to different time frames and lengths of sentences and so on? What does that do to the stability of a cohort?
Hon KAREN CHHOUR (Minister for Children) (09:11): In answer to the Hon Duncan Webb’s questions around what is a military-style academy and what are military-style activities, the military-style activities make up one part of the academy programme. They’re not defined in the bill. In the design stage for the military-style academy pilot, Oranga Tamariki consulted with the New Zealand Defence Force and other Government agencies and community to inform itself on appropriate activities. The Limited Service Volunteer programme was used as an example of a youth orientated programme with military-style activities including marching, forming up, outdoor exercise such as confidence courses. The activities are defined by structure, routine, and overall physical and mental wellbeing.
In answer to Willow-Jean around stable cohorts, the bill provides sufficient flexibility operationally to manage different types and sizes of cohorts, and those would be operational decisions.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (09:13): Oh, thank you, Mr Chair. Look, thank you for the reply in respect of what is military about military-style academies. The interesting thing about that response in terms of structured routines and what have you is that there’s nothing military about it. It could’ve equally been an outdoor education centre or any other framing, and for that reason I want to skip ahead one amendment to an amendment which is stamped 7.05.55, because I think if you’re going to call something a military-style academy, it’s going to give it a military flavour, right, and I don’t just mean, you know, wearing camo pants. I want to suggest that we should be very clear that there are aspects of the military that are not part of this framework, and given the reports that there was recently an incident where a young person was beaten by walking the line when they left one of these pilots, that kind of violent overtone is something we want to avoid.
So in Dan Rosewarne’s amendment—a man who knows a lot about military style—his amendment sets out what exactly military-style activities are and what they aren’t, and I think it’s what they aren’t that’s really important. Structured military-style activities: the suggestion has been structured, non-combat activities designed to promote discipline, teamwork, physical fitness, and personal development and can include activities such as physical training, outdoor education, and structured routines. But this is the important point, right: if you go to a military-style academy, I would half expect them to be like one of these young military academies in the United States where they do, for example, weapons drills, right, or do the parade ground holding dummy weapons.
Subclause (3) says, “does not include the use of any weapon”, so we don’t have them training how to use swords or Japanese kendo sticks or anything like that. That is a military-style thing, but we don’t want it. It doesn’t include any form of combat training, including martial arts, weapons training, or simulated combat. We don’t want these kids learning karate or judo, because that’s actually teaching them how to fight, and we want to do the opposite: we want to teach them how to not fight. That’s another thing that really should be precluded, and we should preclude any activity that includes violence or the simulation of violence. I find it strange that you’re going to have a military-style academy that has no kind of defence-style training. Now, I don’t want to see that, but it’s not really military.
Let’s make it clear that when someone’s being asked to run one of these military-style academies, they don’t give dummy rifles and say, “OK, on to the parade ground. We’re going to teach you how to salute with your rifles.” or “Come on, get into the gym. I’m going to teach you how to do boxing.” or “I’m going to teach you how to do unarmed combat.”, which is a classic military-style thing you do. Now, if it’s “I want to take you on a hike and show you how to light a fire from scratch and be self-sufficient.”, I can see what you’re trying to achieve, but let’s be very clear that this has no aspect of the force and violence which necessarily underpins what our Defence Force does. That is the backstop of defence: force is actually what defence is about. Let’s make sure that teaching young people how to use force is not part of a military-style academy, and it’s in fact the opposite: it’s teaching them how to avoid the use of force, how to solve problems in a way that doesn’t include physical confrontation and violence. That’s a really deep and fundamental concern, and I think that that amendment’s one that’s well worthy of serious consideration by the Minister.
Hon KAREN CHHOUR (Minister for Children) (09:17): Just in response, there is absolutely no intention that young people are given access to weapons or combat training The purpose and requirements of the military-style academy programme are already clearly set out in new section 320S, and I note that there are already existing laws relating to access and use of firearms and weapons that would apply.
Dr LAWRENCE XU-NAN (Green) (09:18): Thank you, Mr Chair. I also have a series of questions for the Minister for new section 330S. I want to start by 330S(1)(b), and this is also similar to the kind of question I have for new section 320T, which is that the young serious—
CHAIRPERSON (Teanau Tuiono): Did you say 320S or 330S?
Dr LAWRENCE XU-NAN: 320S, yes—new section 320S(1)(b), so this is page 44, line 34 I’m looking at. I just want to check, with the “serious offender in the custody of the chief executive”—I do want to know the extent of what custody potentially means. Does it also mean, for example, taking over the legal guardianship? I’m seeing, for example, 320T talks about the day-to-day care, but, for example, let’s say, you know, in an event where a child needs to be going to the hospital, is the chief executive in that position considered the next of kin? You know, are they able to make certain life or death decisions around the child because the child is in the chief executive’s custody? I do want to kind of check whether custody—does custody have the same connotations as legal guardianship, that being my first question.
I think the question around the definition for military-style academy programme—so this is new subsection (5); paragraphs (b) and (c) are the two I want to check with the Minister for Children.
We talked a little bit about disability before. We also know that there are a lot of disabilities that are undiagnosed, etc., as young people are going through this—fetal alcohol spectrum disorder being a good example. I want to check: before they are undertaking military-style activities or following a tailored programme of learning, is there any requirement for them to also be assessed for neurodivergence or for them to be assessed for certain things to determine what is actually the most appropriate tailored programme for them? Maybe there is an underlying condition they have that means they may not be able to undertake certain forms of activities. I’m hoping that the framing of “to support their health, learning, and wellbeing” means that there would be some form of diagnosis happening as a part of this tailored programme.
Now, with subsection 5(c) of new section 320S, inserted by clause 40, “tailored programme of learning to further their education, vocational, and training needs”, I want to check who, then, is quality-assuring any sort of educational programme. Who is going to be doing that? Will they receive unit standards as a result? How is, for example, the Ministry of Education and the New Zealand Qualifications Authority involved in some of that training programme—or is it just simply work experience? For those who are doing better, would they potentially be doing anything with the current Curriculum, or is it mainly vocational? I just want to check a few questions with the Minister for Children, and then, depending on the Minister’s response, I may have a few follow-ups.
Hon KAREN CHHOUR (Minister for Children) (09:21): As far as the tailored programmes for learning and further educational, vocational, and training needs go, that’s standard. Some of them may be in school. Within residence, education is part of the programme. In some residences, we do have a contract with an actual school that comes into the residence, but the contracts for education are done where there are qualified teachers. It could be New Zealand Qualifications Authority level 1, 2, and 3, but it could also be things such as carpentry and things like that. It depends on the young person, and it’ll be tailored around the young person.
In regards to the support around health and learning, the member may not have been here the past few times that I’ve spoken to this bill, or also in the House at question time, around this. This has been a topic that I’ve answered quite a few times, but I’ll answer it again because I think it is important that you have an understanding. Part of the military-style academy (MSA) was done because this behaviour didn’t start when I became the Minister. These young persons’ behaviours haven’t just happened overnight; it’s happened over a very long time, where, obviously, the supports have not been put in place for these young people and things that we’ve tried in the past haven’t worked.
There are special clinical teams within the MSA that will be assessing the young person and their needs so that we can meet their needs and also make sure that we’re wrapping around them. They will not be asked to do anything that they are either not physically capable of or mentally capable of.
Hon WILLOW-JEAN PRIME (Labour) (09:23): Thank you, Mr Chair. I do worry that we do not have enough clarity around what the military-style activities actually are. I took the opportunity to go back to some information that was released under the Official Information Act when the programme was being designed, and the Government was looking particularly closely at the Limited Service Volunteer (LSV) programme.
One of the things that the defence force said in response is that young offenders’ military-style academies are not comparable with the LSV programme for the following reasons. The LSV personnel are adults, and, in this case, we are talking about children. As I said before, it’s a volunteer programme, whereas this will be a sentencing decision. In the LSV, and this is important to the conversation that we’re having, and the issue was raised by Dr Lawrence Xu-Nan, they were dealing with low numbers—that is less than 30 percent—in the cohort with complex needs. But, with the military-style academy, we are actually talking about a 100 percent complex cohort, meaning there are major differences in their needs and also security. The military-style activities that are undertaken in LSV are for a cohort where less than 30 percent have complex needs, but the MSA, in this legislation, is for children—not volunteers into the programme—in a 100 percent complex cohort. Also, the difference is that the LSV is eight weeks, and this is potentially up to 12 weeks of residential detention.
I have listened to the questions and the answers, but what I do not have clarity on is what exactly the military-style activities are, then, that young people will be doing when they are sentenced to a military-style academy order. Have those activities—we’ve had two pilots now—been assessed against the 100 percent complex needs of these cohorts? Now, we know the majority of them are Māori, the majority of them have suffered trauma, the majority of them have also had identified physical abuse in recent times, and there are significant mental health issues. That is the reason why the defence force basically said you are not comparing like programmes and cohorts here. Can the Minister please tell the House, so we can have in the Hansard, what exactly are the military-style activities that the young people are undertaking in the military-style academy?
Hon KAREN CHHOUR (Minister for Children) (09:27): I’ll read it again in case the member the Hon Willow-Jean Prime didn’t hear it just a few minutes ago. They include marching, forming up, outdoor exercise, such as an outdoor gym, and confidence courses.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (09:27): Thank you, Mr Chair. The title clauses are far away, but given the Minister for Children’s response then, I think we can just strike out “military-style” from the title, because there’s nothing military about this, if that’s the case. The fact that we have to call this “military-style” so that we can—
Hon Willow-Jean Prime: Sound tough.
Hon Dr DUNCAN WEBB: Yeah, so we can placate a portion of that Minister’s electorate is a little sad, given that it’s children we’re dealing with. On that point, I want to discuss the tabled amendment in the name of Helen White, which is time stamped 7.05.54.
As I see the legislation, there’s not a lot of guidance to the Youth Court, and I think it’s section 320S(4), inserted by clause 40, which simply says, “The Youth Court may make a military-style academy order”, without really giving a lot of guidance as to what it should take into account. My colleague Willow-Jean Prime has just pointed out that these young people are, by definition, complex cases and people with extremely high needs. My concern is that, if we don’t give a good amount of guidance to the Youth Court as to the kinds of things they should take into account, we’re going to find people in youth academies who are not well suited. We know that people who find themselves in these situations are often neurodiverse, have fetal alcohol spectrum disorder, are mentally unwell, and can have a whole raft of issues, which, because they haven’t been identified and appropriately addressed, manifest themselves in entirely inappropriate behaviours. That’s what we’re looking at.
This tabled amendment actually just gives what I think is really appropriate guidance to say, “OK, when you are contemplating making this, please take these things into account. Have regard to them.” Whilst the personal circumstances of the young person are kind of a global reference, there are some in there that are really important, such as whether that person has or is suspected of having fetal alcohol spectrum disorder, or whether there is any evidence of neurodiversity, cognitive impairment, or learning disabilities.
As I see it, there’s a good chance that if we get these people with cognitive impairment, this is not the place for them, unless the Minister can assure us otherwise. Perhaps even if that is the case, if it’s perfectly designed for a cohort of people who have this cognitive impairment, or fetal alcohol syndrome, then one cohort can be specifically designed to address that. But what we do need to have is more than just “Well, if a Youth Court judge thinks it’s a good idea, put them in this military-style academy.” We need to put some parameters around that.
And, of course, it’s the matching, right? Once the programme is developed, and it appears that at the moment it is still under development, we can then say, “OK, this is the programme that exists, these are the professionals who are on the ground there, these are the services they can deliver, these are the resources they have. Here is a young person, and if they will benefit from the resources available, all well and good. But if, in fact, given their personal circumstances, their health situation and so on, that’s not the best place, and the best place is over there in some other provision of services that Oranga Tamariki is doing, then let’s put them there.” But, at the moment, there’s just no requirement to do that matching exercise.
The tabled amendment in the name of Helen White does exactly that. It says, “OK, look at the nature of the child, look at what services can and will be provided. Is this a good thing?” In doing that, I think it will be a real step forward, so I’d appreciate the Minister giving serious attention to that Amendment Paper.
Hon KAREN CHHOUR (Minister for Children) (09:32): Just in response to Lawrence Xu-Nan’s question around what is custody, this is a custodial order, like a standard supervision with residence order. The broader powers, duties, and principles in the Oranga Tamariki Act apply, as they do to any custodial order. It is not legal guardianship.
In response to the Hon Duncan Webb around the amendment from 7.05.54, the Oranga Tamariki Act already provides for these matters to be put before the Youth Court through the section 334 social worker’s report and section 335 plan, which is provided to support the court’s decision making. The court can undertake further assessments under section 333, if it so chooses.
I’d just like to reiterate again, from what we had to what we’re trying to do. I could have continued as Minister for Children, sitting back and doing absolutely nothing, and allowing the system to be exactly how it was when I because children’s Minister. What that looked like was: these young people would commit a crime, they would be put into a youth justice facility, with no rehabilitation, no support, no thought about their welfare, which is why I wish those members standing up today cared as much when they were in Government as they do now about the safety and wellbeing of children.
What happened was, they’d then be released out into the same environment that they came from, with the previous Government, and Governments before, expecting a different result, until they ended up in Corrections. What this is is a circuit breaker, or a final opportunity for these young people to avoid going to a custodial sentence to Corrections.
I can’t force them to change, but I can put the opportunities in front of them that they’ve never had before, where they will have specialised services wrapped around them to meet their needs, and to try everything we possibly can to put the tools in their hands so that they don’t end up in Corrections. You know what? I have sat here, and I have listened to some of the questions, and some of the comments around the “walk the line” and issues like that. Does that member truly want the public and the people in this House to believe that that happened overnight, since I’ve become children’s Minister?
Seriously, we heard about green-lighting, we heard about fight clubs that were happening within these youth justice facilities, we had regular occurrences of fight clubs being overseen by staff members, we had regular rooftop incidents that weren’t dealt with, so just be careful that you are not trying to set the impression that these young people’s behaviour happened overnight. Their behaviour is a consequence of years and years and years of the youth justice system being ignored, and their needs not being met.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (09:35): Thank you, Mr Chair. Interesting tirade by the Minister there, and not particularly relevant to the bill in front of us, but nothing unusual there.
One of the comments that the Minister did make was that this is incarceration. One of the concerns I have, when you’re going to have this kind of academy that’s not really military-style but it’s an academy where they’re going to have activities, is that it falls below the standards of incarceration, not only that would be required under the UN Convention on the Rights of the Child, but also the United Nations convention on incarceration more generally, which is generally known as the Mandela Rules.
The amendment that I’m looking at now, in the name of Helen White, time-stamped at 7.05.56, touches on some of those things. In particular, it’s a very well-established principle that you cannot require an incarcerated person to undertake forced labour, and, in fact, any forced activity is problematic—a route march. If we think about it, it’s like looking at some 1950s movie. If you’ve got children who are required to go on some march, or to march around the parade ground, and they’re forcing them into these activities which are intended, presumably, to make them simply compliant—there’s a number of amendments here, but the one I’m looking at now is to clause 40, new sections 320T, and inserts “the chief executive must ensure that no activity required under a military-style”—
CHAIRPERSON (Teanau Tuiono): Have you got the time-stamp of the amendment?
Hon Dr DUNCAN WEBB: It’s 7.05.56. I did touch on that, but that’s all right. It proposes two amendments, one in new section 320S, which is the description of military-style academies, and it says that they mustn’t require the young person to undertake any form of forced or compulsory labour, or any work or service that is extracted from the young person under threat of penalty. Of course, that’s the point of forced labour. For example, if it’s roast dinner on Friday night for everyone, but not for you because you didn’t do this activity, that’s forced labour. So we’ve got to be really careful that it’s not just under threat of violence, or something like that. The removal of privileges that they would otherwise get is also forced labour.
Also, in terms of the participation, obviously it doesn’t include going to your counselling session, or whatever that might be, and also tidying your room, and stuff that would be age-appropriate for that young person. I think we’ve got to be careful, because you wouldn’t necessarily expect a 14- or 15-year-old to peel potatoes for 40 people. In a prison you could, because that’s part of the normal prison framework of preparing food for the prison generally, but I think we’ve got to make sure it’s age-appropriate. I think we’ve got to be careful, so we don’t say, “OK, military-style academy means around here you pull your weight. Mop the floor of the gymnasium.”
I can see how it would be an easy step to go there, but that would be really troubling, because it would be requiring them to do work which is forced servitude. There’s actually a fine line, and perhaps this is the point about the military style, because it’s the whole idea that you can order people to do stuff. I get that you can order people to engage in their rehabilitative programmes, but as soon as you start ordering them to do stuff which is, essentially, a kind of labour, we’re getting into troubling territory, and that is kind of what I see as the military-style aspect of it being: “Go and mop out the bathrooms.”
I’d be interested to know where and how, even if you don’t accept this tabled amendment, operationally you will make sure that there is a clear division between engaging in appropriate activity and not requiring servitude from these young people.
Hon KAREN CHHOUR (Minister for Children) (09:40): Look, forced or compulsory labour is already unlawful under existing New Zealand law.
Hon WILLOW-JEAN PRIME (Labour) (09:40): Thank you, Mr Chair. Can I just ask the Minister for Children: the list that she read out, which she gave in an earlier answer—is that a particular section in the legislation that you read that out from?
Hon KAREN CHHOUR (Minister for Children) (09:40): I have spoken to this many times in this House and under questioning, and also on advice that has been given to me.
Hon Willow-Jean Prime: Sorry, Mr Chair?
Hon KAREN CHHOUR: It was upon advice that was given to me.
Hon WILLOW-JEAN PRIME (Labour) (09:40): Thank you. I just wanted that clarification—that that is not actually outlined in the law.
Once again, we have a situation, because we had this last night when I sought clarification and assurances from the Minister for Children about what sorts of compassionate grounds might apply for somebody wanting to leave the programme. I put some particular scenarios to the Minister, because the section has things that it includes, but it doesn’t say, “but is not limited to”. Now we are expected to attach—staple to this bill—the Hansard so that, when it is before a court, they can read the Hansard and read the bill, which doesn’t stipulate these things, to understand it. We have a similar situation here with what those activities actually are.
It was a genuine question to the Minister. In which section of the Act is that list provided, so that we can know, in the future, if we hear there are new military-style activities, where that was—we didn’t talk about the possibility of those things in the House. I’m not sure whether the Minister has received further advice on that.
CHAIRPERSON (Teanau Tuiono): I think the Minister is going to respond.
Hon KAREN CHHOUR (Minister for Children) (09:42): New section 320S(5) is where the elements of the military-style academies are listed.
Hon WILLOW-JEAN PRIME (Labour) (09:42): I am looking at that, and I can’t see the list that you outlined in there—
CHAIRPERSON (Teanau Tuiono): 320S(5).
Hon WILLOW-JEAN PRIME: Is that the list you read when you were responding to my question earlier?
Hon KAREN CHHOUR (Minister for Children) (09:42): The list that I read was from advice that was given to me. You asked where the elements of the military-style academies were listed. I just gave you the section.
Hon WILLOW-JEAN PRIME (Labour) (09:42): I’m still not clear, and I am not trifling with the Minister or with the Chair. Maybe you could read that list again and you could point me to subsection (5) so that I can compare that they are exactly worded like that in here, so that we are using the same things. Or is it that that is additional advice, and examples of it, and that it’s not in the legislation and we’re to staple the Hansard to the legislation? That is a genuine question. [Pause] I’m not sure whether the Minister just doesn’t want to answer that or whether she needs more time to get that advice.
CHAIRPERSON (Teanau Tuiono): We can give it more time. Maybe just move on to something else.
Hon WILLOW-JEAN PRIME: It is a genuine question. Thank you.
I am just wanting to pick up on the points that the Hon Dr Duncan Webb was making about our tabled amendments. He has spoken to the voluntary or involuntary labour aspect of it. I have a few concerns about that, because I have heard of situations where young people lose the benefits that they might have in youth justice facilities for behavioural reasons, for not complying with whatever the staff are expecting of them in order to receive those benefits. An example I have heard is that they were going to have their gym entitlements taken away from them. I just wonder if similar approaches and strategies will be used to achieve compliance in these military-style academies (MSA).
Actually, one of the concerning things I heard about the MSA pilot 1.0 was that when the young people went back into the community, some of the mentors had an understanding—perhaps a misunderstanding—of what the military-style academy and bootcamp was and were strictly trying to enforce wake-up times and coming to programmes, running it in a way that they were bootcamp-ing this thing, and that caused conflict and tension between young people and their mentors. I don’t think it’s clear enough for everybody, whether it’s in-residence or in-community, what “military-style” actually means. I know the Minister doesn’t like us using the term “bootcamp”, but for a lot of people, that’s what they think, and then they have these ideas of what it means we are asking young people to do.
There is a lot in that for the Minister. I am keen to get that clarification on the earlier point that I asked, and also in terms of these benefits that they get that may be taken away because they are not following orders.
Hon KAREN CHHOUR (Minister for Children) (09:46): That’s called life. As a child, if you behave well, sometimes you get nice things. As a parent, if your child misbehaves, sometimes you take things away from them when they misbehave. As a parent, you get your children to wake up in the morning and get out of bed in the morning and go to school and do the activities that are expected of them. That’s called life.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (09:46): Thank you. I want to return again to minimum standards of incarceration, and it’s something that, in the Justice Committee, we’ve been very focused on.
Whilst I haven’t had the opportunity to go through the facility that is being used, I am interested to understand whether these young people will be given the minimum rights that are expected—either by adoption of tabled amendment 7.05.58, which talks about minimum standards. For example, one of the standards that’s well recognised is that a room that’s given—in a prison, it’d be called a “cell”, but here it’s just a “room”—should be at least six square metres, and, also, that the rooms should not really be shared. I mean, one of my questions is: is there going to be double-bunking, or does each young person have their own private space?
The other thing is this: does the young person have minimum visiting hours? If you’re incarcerated in a prison, you have a weekly entitlement to visiting hours and you have a daily entitlement to exercise. Minister, these are things that you can’t get taken away because you don’t comply.
Hon Willow-Jean Prime: Oh, but that’s life!
Hon Dr DUNCAN WEBB: Exactly, Willow-Jean Prime. These are baseline entitlements, and whilst the Minister might say, “You’re not playing computer games tonight, because I’m going to switch the internet off”—that’s one thing—to say, “You can’t have exercise today, because you haven’t done what I have asked” is actually a breach of fundamental rights. The other one, of course, is telephone calls. In prison, you get a weekly allowance of telephone calls regardless, and they’re absolute minimum entitlements. Corrections, in fact, often talks about how they desperately try to give over the entitlement but always try to achieve the minimum.
I’m really interested in things like that, in terms of outdoor exercise, telephone calls, visiting rights, and also a room of an appropriate size that is used by only one person. They’re pretty well listed there on the tabled amendment in front of the Minister, so I’d be very interested to understand that. Of course, the appropriate standards are drawn straight out of the United Nations’ standard minimum rules for the treatment of prisoners. Now, these are not prisoners; these are children, so, in fact, you’d hope that the quality of these rights—visiting, telephone, exercise—would be higher than for adult prisoners. I’m asking: if we pick the lowest possible baseline, the treatment of prisoners under the Mandela rules, will these young people be treated at a minimum as well as incarcerated prisoners under those rules?
Hon KAREN CHHOUR (Minister for Children) (09:50): The residential care regulations and national care standards regulations apply to the young people on the military-style academy order. All young people within a youth justice residence have their own room and space. There is no double bunking. There is none of the issues that that member has just raised. They are not locked inside their room like in a Corrections environment, and they’re actually in an open-plan environment most of the day. They are entitled to support whenever they would like it. They have oversight of the Ombudsman, the Children’s Commissioner, the Independent Children’s Monitor, grievance panels, their lawyers, their parents, and their social worker, so, actually, they have a higher standard of care.
Hon WILLOW-JEAN PRIME (Labour) (09:50): Thank you, Mr Chair. Just in response to what the Minister said there in that big long list of things that are supposed to be there to ensure that, I have heard examples of where their ability to access the gym is being threatened to be taken away because they are not complying with whatever it is that the kaimahi are expecting of them in the youth justice facilities. Is that an entitlement or a reward system? The Minister said, “Well, this is life.” These children, the chief executive of Oranga Tamariki is their parent, and their homes are these youth justice facilities, and we have heard a number of cases of where there have been issues with kaimahi in these youth justice facilities.
Hon KAREN CHHOUR (Minister for Children) (09:51): As I’ve said, these issues with kaimahi within youth justice facilities haven’t happened overnight. There is a lot of work to do to change the culture, and lots of work has happened to professionalise that workforce—work that had never been done before within our youth justice residences. If that member wants to stand up and pretend like that has never happened in the past and that she’s going to come and save them all, I can assure members of the public that when that member was in Government, she didn’t care as much as she cares now. But what I would say is a gym is a privilege. The gym has been set up as an extra activity. It is a privilege to be using it. This is life. There are consequences for young people in every household in this country. If you want to use something that has been given to you as a privilege, then you behave.
Hon WILLOW-JEAN PRIME (Labour) (09:52): Well, that was an interesting response from the Minister. When these military-style academies were introduced in the pilot before now being passed into law, questions were put to the Minister about the safety of our youth justice facilities, and she is rightly pointing to issues that have happened in our youth justice facilities both under previous Governments and under this Government. What she said at the time was that she was satisfied and confident that they are now safe—safe to be able to set up a military-style academy, put it into law, and sentence children to these military-style academies.
What we have seen the entire time is a number of serious incidents in our youth justice facilities. I use Korowai Manaaki as an example where that walk-the-line incident happened that we’ve been talking about recently. But there have been other incidents that have also occurred, including rooftop incidents and other harm caused to young people. I put the questions to the Minister, in Estimates and annual reviews, about her confidence in the management of Korowai Manaaki and our youth justice facilities. Once again, the Minister said that she was absolutely confident in the management. That was before we then had this walk-the-line incident. I’ve asked the Minister about a recent incident I understand happened at Te Maioha, another youth justice facility, where a young person, I understand, had to be taken to hospital after an assault occurred.
The Minister is standing up in the House and saying all of these things, casting things on to me about this. It is my job to ask these questions of the Minister. She gave us assurances that there were no safety issues anymore, that they had been sorted, and that she had absolute confidence in Korowai Manaaki, and yet we have more incidents occurring. I’m not imagining this. This is not a hypothetical situation. We had assaults occurring in the military-style academy 2.0. Two young people have left. So would the Minister, please, speak to those issues?
Hon KAREN CHHOUR (Minister for Children) (09:55): I have never stood in this Chamber and guaranteed that no harm would come to young people. I have actually said on multiple occasions that I cannot guarantee that no harm will ever happen. But what I can guarantee is that we have worked really hard over the last three years since I’ve been in Government to put in place safety mechanisms to make those youth justice facilities the safest they’ve been in a really long time, where we’ve had the first drop in history of a 14 percent reduction in harm in our residences because we have put professionalisation of the workforce ahead of everything else. I cannot guarantee that nothing is ever going to happen within a youth justice facility. I have never stood in this Chamber and stated that nothing is ever going to happen. I’ve actually said the opposite.
But what I will say is that when harm does occur, we will do everything within the law, the power of the law, to hold those people to account and make sure that the culture changes within these spaces. That does not change the fact that these young people have committed serious offences, offences that would give them a sentence of 10 years or more, and we have to take into account the safety of the community and the safety of these young people and make sure we put something in place and try and help them to turn their lives around. Whether they take up their opportunity or not is up to them. I cannot force them to change their behaviours, and if they don’t, unfortunately, what will happen is they will end up in our correction system. But at least I can stand here and say I did everything I possibly could to put things in front of them to stop that from happening.
Hon Dr DUNCAN WEBB (Labour—Christchurch Central) (09:57): Look, I was really concerned to hear that the Minister thinks it’s OK to take exercise rights away from a young person who’s being detained, because exercise is a privilege. I don’t think it is.
Hon Karen Chhour: Point of order, Mr Chair.
Hon Dr DUNCAN WEBB: No, no, sorry, I’ve got the call.
Hon Karen Chhour: Point of order, Mr Chair. I have never said I’ll take the right of exercise away from young people. They may take the right of a gym away, but that’s not taking their right of exercise away.
CHAIRPERSON (Teanau Tuiono): Would the Minister sit down please. I don’t think that’s a point of order. I take the Minister’s point, but that’s not a point of order. I will ask the Hon Dr Duncan Webb to continue. However, before we do that, there is engagement happening here. The Minister is addressing issues that are being raised. I understand that the Opposition MPs don’t like the way that the Minister has been addressing those issues, but the point is: they are being addressed. I do want to be able to note that, and also I am taking note that once these issues are being addressed—clearly not to the satisfaction of all members—then we should move on to other issues that members might have that need to be addressed. Let’s continue, the Hon Dr Duncan Webb.
Hon Dr DUNCAN WEBB: Thank you, Mr Chair. Again, Minister, using a point of order to argue the point as to whether removing the right to a gym is removing the right to exercise, I think, is dancing on the head of a pin there, but I want to move on to the use of violence within these facilities, because—and I can’t understand why—the legislation enables the use of force on these young people.
The Minister has time and again pointed out that these young people have been engaged with very serious offending, and some of that will be violent offending and, therefore, there will be instances where it’s necessary to use force. If they’re being disruptive or posing risks to other people, it will be necessary to use force, and that’s touched on in the tabled amendment in the name of Dan Rosewarne at 7.05.59.
Oral Questions to Ministers
Justice
Question No. 1
Hon Kieran McAnulty: Point of order, sir.
Tākuta Ferris: Tēnā koe—
SPEAKER: Excuse me. Point of order, the Hon Kieran McAnuty.
Hon Kieran McAnulty: I apologise to the member. A few of our members are struggling to hear you, sir. I don’t know if the mics are working.
SPEAKER: Yeah. Look, I struggled to hear the Hon Louise Upston as well. Can our technical people, please, just have a bit of a look at that? I think we could hear Tākuta Ferris, who was fairly, easily audible.
TĀKUTA FERRIS (Te Tai Tonga) (14:02) to the Minister of Justice: Ā, e te Māngai, tēnā koe. Why has the Government introduced a package of three Treaty provisions bills that requires some public bodies to do “no more than” take Te Tiriti into account, and repeals other statutory Treaty provisions altogether?
Hon PAUL GOLDSMITH (Minister of Justice) (14:03): Because we have a commitment in our coalition agreement with New Zealand First, whose leader and deputy leader are leading Māori figures in this nation, to have a comprehensive review of all legislation that includes references to “the principles of the Treaty of Waitangi”, and this is the outcome of that review.
Tākuta Ferris: Does he agree with the late Moana Jackson, one of the country’s foremost constitutional lawyers, who said “treaties aren’t meant to be settled, they’re meant to be honoured.”; if not, why not?
Hon PAUL GOLDSMITH: Well, I agree with the suggestion that the Treaty is to be honoured, and that is what this Government does on behalf of New Zealanders every day. Naturally, there will be debate about how exactly that can be expressed in legislation. Naturally, there will be a debate about what a Treaty signed in 1840 means today, in 2026, in the context of a modern democracy—and those debates carry on. The good news is that we, generally, in this country, carry on those debates in a calm and dignified way.
Tākuta Ferris: Why does he consider “honouring Te Tiriti o Waitangi” to be too strong of an obligation on the Government?
Hon PAUL GOLDSMITH: Well, I think, as I answered before, we are determined to continue to honour the Treaty. What I think the member is referring to is the various formulations that have been used over the last few decades, in relation to the Treaty—sometimes referred to “the Treaty”, sometimes “Te Tiriti”; sometimes it’s “honour”, sometimes “have regard to”, sometimes “give effect to”, sometimes another formulation of words. So part of the exercise was to be clear about what we mean.
Tākuta Ferris: If clarity and consistency are truly the problem, why not make honouring Te Tiriti the consistent standard?
Hon PAUL GOLDSMITH: Well, because we’ve worked our way through a process that has led to where we’ve got to in terms of the recommendations: some seven bills where we’re going to repeal the provisions because they aren’t appropriate. There will be another one which amends the weighting “to take into account”, and then there’s another piece of legislation that standardises a drafting approach towards the Treaty provisions. This is part of a process that we set out in order to provide some greater clarity. Not all the pieces of legislation that refer to the principles were included in it, and some have been dealt with separately, such as the changes to the Resource Management Act; such as the changes to the Department of Conservation legislation as well. So we’ve gone about this in a careful and deliberative manner.
Tākuta Ferris: Does he believe a referendum on the Māori seats, ending the Waitangi Tribunal, or downgrading Te Tiriti o Waitangi in legislation to its lowest possible level are good policies to improve the future of Aotearoa, or are they just good for campaign season?
Hon PAUL GOLDSMITH: Well, none of those things are current policies of this Government. Our Government has been focused upon delivering better outcomes for Māori New Zealanders, like all New Zealanders. It’s why we’re not going to tax them to death like the Opposition will. It’s why we’re focused on restoring law and order in our communities—
SPEAKER: No, just stick to the answer. [Interruption] No, that’s enough—that’s enough.
Hon PAUL GOLDSMITH: Well, I’m just giving some context, Mr Speaker.
SPEAKER: No, no—
Hon PAUL GOLDSMITH: It’s why we’re very proud of our contributions over the last three years.
SPEAKER: The member barely escaped the prospect of leaving the House early yesterday. Making comments like that is not at all helpful, and I’d advise Ministers not to do it.
Finance
Question No. 2
CATHERINE WEDD (National—Tukituki) (14:07) to the Minister of Finance: What recent reports has she seen on the economy?
Hon NICOLA WILLIS (Minister of Finance) (14:07) This morning, Stats NZ released the latest GDP figures. These show the economy grew by 0.2 percent in the June quarter of this year, defying expectations. March quarter growth was also revised up to 0.9 percent. These figures demonstrate that over the first half of this year, households and businesses have shown remarkable resilience in the face of the Middle East conflict and the global fuel crisis.
Catherine Wedd: Which sectors of the economy performed well?
Hon NICOLA WILLIS: Well, as expected, high fuel prices had an impact on retail trade and transport, but nine of the 15 industries measured by Stats NZ grew in the quarter, with construction particularly strong—up 2.6 percent—and exports of goods and services in the quarter were up 3.3 percent. New Zealand households and businesses have been through a deep and protracted downturn, but GDP growth has now been positive for four quarters in a row. Over the last year, the economy has grown 2.6 percent—
Hon Dr Megan Woods: How does it compare to our trading partners?
Hon NICOLA WILLIS: —much faster than most of our trading partners.
Hon Dr Megan Woods: New Zealand’s doing worse than everywhere else.
Hon NICOLA WILLIS: Megan Woods would do well to know some facts: go to the Stats NZ website; compare our annual growth with Australia, the UK, the US; and see that New Zealand comes out trumps—or 1.9 percent in per capita terms. That compares well to other countries. Economic growth of 2.6 percent in the year to June is stronger, for example, Megan Woods, than growth over the same period in Australia, the UK, the US, Canada, and her friends the EU.
Catherine Wedd: What is the outlook for economic growth?
Hon NICOLA WILLIS: Well, this morning’s release was for the June—
Hon Dr Megan Woods: Better if there’s a change of Government.
Hon NICOLA WILLIS: —quarter of this year.
SPEAKER: No, hang on. Listen, excuse me.
Hon NICOLA WILLIS: There’s some verbal diarrhoea that’s broken out over there.
SPEAKER: Sorry, just stop for a minute. We’ll just—
Hon Chris Bishop: Kick her out.
SPEAKER: Well, no, because she’s asked to be kicked out, and I don’t want to do that. It’s not a gift—it’s not a gift—but I would ask the member just to calm down on the interjections.
Hon NICOLA WILLIS: It would be a gift to the rest of us—and possibly to her party, too, may I mention. This morning’s release was for the June quarter of this year. More recent data indicates that economic growth picked up in the September quarter, which we will soon come to the end of. Looking ahead, Treasury’s forecasts show growth averaging 2.7 percent a year over the next four years. A growing economy, of course, means better prospects for young New Zealanders, more opportunities, more jobs, higher wages. The Treasury forecasts show 220,000 more jobs by 2030 and wages rising faster than inflation. Kiwis will get ahead under this Government.
Catherine Wedd: How would an increase in taxes affect economic growth?
Hon NICOLA WILLIS: It would depend, of course, on what taxes were increased and by how much, but, in general, tax increases would be bad for the economy. A big increase in tax would have a particularly profound impact. I’m thinking, for example, of an increase in core Crown revenue to 33 percent of GDP—I don’t know why, but this example keeps popping into my head. It would mean $10 billion more of extra taxes every year, which is the equivalent, members, of over $100 more tax every week for every Kiwi household.
Hon Member: How desperate.
Hon NICOLA WILLIS: Such an increase in taxes, of course—
Hon Dr Megan Woods: Desperate.
Hon NICOLA WILLIS: —would have a crushing impact on the economy and on jobs, on wages. To the members opposite who yell out, “Desperate.”, you’re the desperate ones who are aiming for 33 percent revenue—
SPEAKER: That’s enough.
Hon NICOLA WILLIS: —in your own policy, on your own website—check it out.
SPEAKER: That’s enough. I don’t want to terminate the question, but it’s close. [Interruption] We’ll go to question No. 3, the Hon Carmel Sepuloni, and no one else speaks when the question’s being asked.
Finance
Question No. 3
Hon CARMEL SEPULONI (Deputy Leader—Labour) (14:11) to the Minister of Finance: Does she stand by all her statements and actions?
Hon NICOLA WILLIS (Minister of Finance) (14:11): Well, yes, in context. I particularly stand by my statement that there are policies being proposed by that member which would see tax rise to 33 percent—
SPEAKER: No.
Hon NICOLA WILLIS: —of GDP, the equivalent of $100 more in tax per Kiwi household.
SPEAKER: Sorry, excuse me—thank you. You can answer from a Government perspective, you can answer from opinion, but you can’t attack the Opposition. That’s one of the rules that’s been the rule for as long as the Parliament’s operated; we’ll keep sticking to that rule today.
Hon Carmel Sepuloni: Is New Zealand’s economy on a real per-capita basis larger or smaller than when she took office?
Hon NICOLA WILLIS: As the member well knows, the New Zealand economy went through a protracted downturn following a period of excessive spending, excessive inflation, and rapid interest rate rises. The good news is that in the past year, real GDP per capita has picked up considerably as a result of the basics that this Government has been fixing. So while over the three years that we’ve been fixing up the mess left to us by the last lot, real GDP growth has struggled, in the past year it has picked up considerably.
Hon Carmel Sepuloni: Does she stand by her commitment to grow the economy; and if so, why is real GDP per person lower by more than $1,200 since she took office?
Hon NICOLA WILLIS: Well, I addressed that in the previous answer, and I want to point the member again to the real data: in the past year, in per-person terms, the economy—
Hon Dr Megan Woods: Since you took office.
Hon NICOLA WILLIS: —has grown 1.9 percent.
SPEAKER: Yeah, just a minute, sorry—we just can’t keep going on with this absolute barrage. There’s no point in asking questions if you don’t want to hear the answers.
Hon NICOLA WILLIS: In the last year, we have seen a significant recovery in per-capita growth of 1.9 percent. That, members, reflects the good work of this Government to fix the wreckage left by the last Government and put in place the foundations for strong economic growth.
Hon Carmel Sepuloni: Is New Zealand’s GDP growth—[Interruption]
SPEAKER: Just a moment. Could you start again—just everyone needs to be quiet.
Hon Carmel Sepuloni: Is New Zealand’s GDP growth rate lower than almost every country we would compare ourselves to, including Australia, the US, and the UK at 0.4 percent; the EU at 0.5 percent; Canada at 0.8 percent; and China at 0.9 percent—all of which have been affected by the same international factors as New Zealand?
Hon NICOLA WILLIS: Well, despite the theatrical voice, she hasn’t listened to the answers I have given. I don’t like to be repetitious, but leave me repeat for that member, using numbers, that in the past year, economic growth in New Zealand, at 2.6 percent, is stronger than Australia, the UK, the US, Canada, and the European Union. I’ve said it once, I’ve said it twice—I’ll keep saying it if she keeps asking the question.
Hon Carmel Sepuloni: As the cost of living continues to rise, how many Kiwis have received the full $250 a fortnight she promised them?
Hon NICOLA WILLIS: It is likely that many have, because that number compromised two numbers. The first was delivering a tax package which would deliver up to $100 a week. That tax package was delivered in full—opposed by those members who didn’t want Kiwis to keep more of their own cash. The second half related to FamilyBoost, and I am advised that thousands of families have now received more than $150 a fortnight in relief as a result of that policy.
Hon Carmel Sepuloni: When she said yesterday that the Government is currently recruiting 2,300 additional nurses, on top of the current workforce, and that they would be in place by Christmas, was she promising a net increase of 2,300 additional nurses by Christmas 2026?
Hon NICOLA WILLIS: I do wish to clarify something there, which is that I am advised that Health New Zealand is working hard to fill those roles sooner than the end of the year—all 2,378.
Hon Carmel Sepuloni: Why should New Zealanders believe her promise of 2,300 additional new nurses by Christmas, when it has taken her two years to deliver 54?
Hon NICOLA WILLIS: Because, Mr Speaker, she’s gerrymandering the figures again, conveniently excluding the first few months of this Government in which many nurses were hired. Overall, we have grown the number of nurses by hundreds, but that member likes to pick the dates that suit her. That’s not how the real world works.
Hon Carmel Sepuloni: How can New Zealanders have trust and confidence in her when she promised to grow the economy and shrank it, promised to reduce the cost of living and made it worse, and promised to fund the health system and then hired only 54 new nurses across the country over the course of two years?
Hon NICOLA WILLIS: As a consequence of this Government’s responsible economic management, growth in this country has picked up considerably, including growing faster than many of the countries we normally compare ourselves too. Because, under our watch, inflation is much lower than the 7.3 percent it reached under the last Government. And because while New Zealanders have undoubtedly gone through a tough several years, we are now building the foundations in this economy which can give them confidence they can get ahead. And because we are not proposing extraordinary increases to taxation, which would put this economy and New Zealanders’ livelihoods at risk.
Hon Paul Goldsmith: Does she stand by her statement that the last thing this economy needs is nine new taxes?
Hon NICOLA WILLIS: I stand by that statement, and I wish to reassure New Zealanders that if they re-elect a National-led Government, they are guaranteed no new taxes. [Interruption]
SPEAKER: Yeah, that’s good, so everyone just calm down—calm down. [Interruption] We can just wait all afternoon if you like, I’m not too worried. But I think what I’ll now say is Question 4, Lan Pham.
RMA Reform
Question No. 4
LAN PHAM (Green) (14:18) to the Minister responsible for RMA Reform: Does he consider the Government has an obligation to future generations to protect the environment and maintain a livable climate under his proposed resource management reforms?
Hon CHRIS BISHOP (Minister responsible for RMA Reform) (14:19): Yes, within the scope of what the new planning system is designed to do. The Government’s intent is that the Climate Change Response Act is the primary vehicle for reducing emissions, not individual planning decisions. We need a planning system that protects the environment, not by resisting growth but by setting clear rules so growth occurs within limits—that’s what we’re doing. The system supports future generations by taking a long-term approach to growth, infrastructure, and environmental management.
Lan Pham: How does removing the consideration of the negative effects of emissions support his obligation to future generations to maintain a livable climate, when officials advised that such a change had “a high risk of unintended consequences and is generally not advisable”?
Hon CHRIS BISHOP: Well, I answered that in the primary answer, which is that the Government’s intent is that the Climate Change Response Act is the primary vehicle for reducing emissions, not individual planning decisions. We have allowed the positive impact of things like renewable energy, for example, in terms of carbon reduction to be taken into account, but not the negative ones, because we want individualised planning decisions not to consider those matters.
Lan Pham: How do changes to the Natural Environment Bill, that remove direction for development to occur within environmental limits and enables pollution to breach environmental limits, support his obligation to future generations to protect the environment?
Hon CHRIS BISHOP: That’s not actually what the bill does. The bill directs the Government to set environmental limits, which is a big step forward on the Resource Management Act (RMA), which doesn’t do that.
Lan Pham: Why did he say at the Resource Management Law Association Conference that he was “looking forward to limits starting to bite” in the early 2030s, when his own Amendment Paper made clear that even interim limits won’t bite until the 2040s, a decade of decline later?
Hon CHRIS BISHOP: That’s not accurate—to the second part of the answer, that’s not accurate. To the first part, the whole point of an environmental limits regime is that it does start to have an effect. I think the member would certainly agree with me that part of the problem with the planning system over the last 30 years since the RMA is that limits have not been effective, and we will be putting in place a limits-based regime. There will be quite a bit of debate around what that regime looks like, and the member, I’m sure, will have a view, as will everyone in the economy, and that’s why there’ll be extensive consultation around it. It will be a big step forward for the environment and, indeed, for growth.
Lan Pham: Why should New Zealanders trust that his Government is going to protect the health of their land and water, their drinking-water sources, their oceans, and all of the places they care about and rely on, when the Government appears to have enabled industries who pollute the most to dictate the rules?
Hon CHRIS BISHOP: People can trust this Government because under this Government, in the last year alone, 1,000 megawatts of renewable energy has been consented. They can trust us because we are the first Government ever to design and build a national flood map so that we can actually work out where our natural hazards are. They can trust this Government because we are the Government that has replaced the RMA, or is about to, with a new regime that puts in place an environmental limits regime, a natural hazards framework, and a national adaptation plan to start to transition our economy to a more renewable one that decarbonises over time. I appreciate that the transition is nowhere near as quick as the Green Party would like, but that’s because they don’t understand that people actually have to live in this economy as well.
Lan Pham: Has he seen the report by Professor Lisa Marriott and Max Rashbrooke that outlines the concerning influence of vested-interest lobbying in New Zealand, and if so, how does his experience compare with a former public servant who said, “The lobbying is intense, and the capture is rife.”?
SPEAKER: Yeah, it’s a bit hard to work out how that supplementary actually—
Hon CHRIS BISHOP: I’m happy to answer it.
SPEAKER: You may be, but I’m not necessarily happy to hear it. Do you want to reframe the question? You can’t just bring in something quietly new like that when you’ve got a very clear written question there.
Lan Pham: Does he agree with the public servant whose quote was outlined in a report by Professor Lisa Marriott and Max Rashbrooke in relationship to the development of legislation in Parliament, who said, “The lobbying is intense, and the capture is rife.”?
Hon CHRIS BISHOP: I haven’t seen the report, but lobbying is not illegal in this country. I have met with the Environmental Defence Society (EDS), who made strong protestations to the Government around our environment laws. I have met with Federated Farmers. I have met with Infrastructure New Zealand. I have met with a range of groups who are affected by our planning system. Lobbying is not illegal, and last time I looked, nor should it be, because guess what? This place makes really important decisions, and, unsurprisingly, people who those decisions impact on want to have a say in what that looks like. Greenpeace have been to see me, EDS have been to see me, Infrastructure New Zealand have been to see me, the Feds have been to see me. I even met with the member and her colleagues, and I look forward to future meetings. Guess what happened in that meeting? The member lobbied me—ooh!
SPEAKER: Look, I realise we’re a couple of days before the Parliament lifts, but the general excitement in here is much too high. You just need to keep the noise down. Do you have another question, Lan Pham?
Lan Pham: I don’t. Thank you, Mr Speaker.
Housing
Question No. 5
RIMA NAKHLE: Thank you, Mr Speaker. My question is to the Minister—
SPEAKER: Just a moment—we’ll just let your own team stop talking.
RIMA NAKHLE (National—Takanini) (14:25) to the Minister of Housing: Is the Government considering removing interest deductibility on residential property?
Hon CHRIS BISHOP (Minister of Housing) (14:25): For the eighth time in the last three weeks, no.
Rima Nakhle: Is the Government considering introducing a capital gains tax alongside removing interest deductibility on residential property?
Hon CHRIS BISHOP: No, we are not considering a capital gains tax, and we are not considering removing interest deductibility, and we’re not considering removing them together. That would be a double tax concoction. That is what it would do—a double tax. In 2021, IRD and Treasury warned the Government of the day about overtaxing and double taxation in relation to implementing the removal of interest deductibility when a property could also be taxed on sale—at that time, through the bright-line test.
Rima Nakhle: What reports has he seen on interest deductibility for residential property?
Hon CHRIS BISHOP: Well, my bedtime reading is very exciting. I’m trawling through what I’ve come to know as “ye olde faithful”, the 2021 regulatory impact statement entitled “Limiting interest deductibility on residential investment property”, which has a lot to say about double tax. In paragraph 52, IRD says that if interest is denied and the property is taxed on sale, then “the investment may be overtaxed”. But the real meat, members, is paragraph 107. Treasury notes that “Allowing a deduction for interest payments when the property is taxable on sale will avoid the double taxation of the economic income from residential investment property”, which is another way of saying a capital gains tax plus the removal of interest deductibility constitutes double taxation, because both taxes apply to the same income. It’s not just me who’s concerned about this—IRD and Treasury were worried about this five years ago.
Rima Nakhle: What else does the report say?
Hon CHRIS BISHOP: The regulatory impact statement provides a policy suggestion to tackle the risk of double taxation. It says to “allow interest deductions where the property is taxable on sale”, and that’s what the previous Government did. Let me repeat that: when the previous Government decided to remove interest deductibility on residential property in 2021, they had a carve-out to allow interest deductions where the property was taxable on sale at the time of sale. In a world with both a capital gains tax and denial of interest deductibility, you can either lock in double taxation and create unfairness, inefficiency, and disincentives, or do the right thing, avoid implementing a double tax burden, and keep the 2021 carve-out, which means every rental provider gets the interest deduction back at sale anyway. So which is it? Who knows.
Māori Crown Relations: Te Arawhiti
Question No. 6
Hon WILLIE JACKSON (Labour) (14:28) to the Minister for Māori Crown Relations: Te Arawhiti: Kei te ea ōna whakaaro i te āhua o te hononga i waenga i te Māori me te Karauna i tēnei Wiki o te Reo Māori; ki te kore, he aha te take?
[Is he satisfied with the state of the Māori-Crown relationship this te Wiki o te Reo Māori; if not, why not?]
Hon TAMA POTAKA (Minister for Māori Crown Relations: Te Arawhiti) (14:28): Āna. Tēnei mea, te hononga i a Māori mā me te Karauna he pēnei tonu me he mārena: He wā ka piki, he wā ka heke. Kāore e kore kei te mōhio te mema ki tēnei āhuatanga, me te mea nei ahakoa ko wai te kāwanatanga, e kore e taea te kī kua tika katoa ngā mahi a te Kāwanatanga i roto i tērā hononga.
Heoi anō i tēnei wā, tēnei Wiki o te Reo Māori, kua rewa, kua maunu mai te mahere hou a Te Maihi Karauna, kua tūturu hoki tata ki te rima tekau miriona tāra ki ngā mahi pāpāho reo Māori e kaingākautia ana e te mema, ā, kua tūturu hoki te tautoko i a Te Matatini.
[Yes. This phenomenon—the relationship between Māori and the Crown—is similar to a marriage: at times it’s up, at times it’s down. Without doubt, the member is familiar with this situation, and furthermore, regardless of who the Government is, it cannot be said that all actions of the Government are correct within that relationship.
However, at this time, this Māori Language Week, the new Maihi Karauna plan has launched, it has sailed, and almost $50 million dollars has been realised for Māori language broadcasting that the member enjoys, and the support for Te Matatini has also been realised.]
Hon Willie Jackson: If the Government can find $30 million to cut from teachers learning te reo Māori, why can’t it find support for the more than 48,000 Māori now out of work at a time when whānau are struggling to afford kai, rent, and power?
Hon TAMA POTAKA: Many New Zealanders, including many Māori, are doing it tough, and what they don’t want to see is another nine taxes added on to their weekly bill. But we are working very hard to ensure that there are very clear steps taken to support those who are facing serious deprivation—for example, for those who have been in emergency housing, making sure that we can help transition them to warm, dry, safe homes—and, indeed, the many, many responsibilities and activities that Minister Stanford has been undertaking to ensure a wide variety of improved delivery of reo Māori and also reo Ingarihi resources into rūmaki and other schools throughout the country.
Hon Erica Stanford: Supplementary question.
SPEAKER: We’ll go to three here. The Hon Willie Jackson.
Hon Willie Jackson: To the Minister: does he stand by his statement on Radio Waatea, “I encourage te reo Māori to be included in all books.”, and if so, why did he support the removal of Māori words in new ready to read books?
Hon TAMA POTAKA: As we are aware, there are Māori words that continue to be in all those ready to read books, and I’d encourage the member to read some of them.
Hon Willie Jackson: What message does introducing three bills to remove Treaty references from legislation in Te Wiki o te Reo Māori send to Māori?
Hon TAMA POTAKA: This matter is one that was curated via the coalition agreements, and we are continuing to carry out our agreements, and we stick by our agreements, unlike some other people in this House. What we can also say is this: the responsibility of Kawanatanga is to make sure that we have very clear, understandable, transparent legislation, and at times that needs a review and it will go to the select committee, where the members opposite may have the chance to respond to it.
Hon Erica Stanford: Can the member confirm that not a single Māori word was removed out of a single book under the Ministry of Education in our term, and can he confirm that the proper nouns and names that are used in the decodable te reo readers are exactly the same policy that the previous Labour Government had?
Hon TAMA POTAKA: I can absolutely confirm what Minister Stanford has announced, and I can also acknowledge her tremendous mahi to ensure structured literacy and structured numeracy is deployed across all schools, including those where reo Māori is the main language and medium of education. E mihi ana ki a , Minister Stanford.
Hon Willie Jackson: What is the Minister’s response to Tainui executive chair Tuku Morgan’s criticism of this Government at the Koroneihana, where he said that Māori are being killed by this Government and are being treated like second-class citizens?
Hon TAMA POTAKA: Minister Goldsmith and I attended the recent Koroneihana of Te Arikinui Kuīni Nga wai hono i te po, and we were there to acknowledge, honour, and respect the invitation that she sent to us to attend, and we were very fortunate and privileged to be in attendance that day. Yes, there are many comments made on the ātea, but the main kaupapa of that day was to speak to nationhood. Minister Goldsmith and I were very well welcomed and very appreciated for our presence throughout the Koroneihana.
Hon Willie Jackson: Looking back over the Minister’s term, what does he consider his Government’s greatest achievement for te reo Māori and Te Tiriti: was it introducing three bills on the first week of Te Wiki o te Reo; was it cutting $30 million from Te Ahu o te Reo Māori; was it disestablishing the Māori Health Authority; was it repealing section 7AA of the Oranga Tamariki—
Hon Paul Goldsmith: Point of order.
SPEAKER: Hang on, just a moment. We’ve got a point of order. You can start again in a minute.
Hon Paul Goldsmith: I thought the purpose was to ask a question, not ask a question and answer the question at the same time, which is what he appeared to be doing.
SPEAKER: Well, one thing you need to know, and I’m surprised after all your years here you don’t know, is that it’s—
Hon Kieran McAnulty: I’m not.
SPEAKER: OK, some people won’t be surprised, but it’s the Speaker who actually makes that determination. Thank you for your intervention; it’s not required. Start again.
Hon Willie Jackson: Thank you, Mr Speaker. Looking back over the Minister’s last term, what does he think his greatest achievement was for te reo Māori and Te Tiriti: is it introducing three bills on the first day of our celebration of Te Wiki o te Reo Māori, was it cutting $30 million from Te Ahu o te Reo Māori, was it disestablishing the Māori health board, was it repealing 7AA of the Oranga Tamariki Act, was it increasing the Māori unemployment rate, was it introducing the Regulatory Standards Bill, or was it introducing the most divisive bill in the last generation, the Treaty principles bill—what was the Minister’s greatest achievement?
SPEAKER: Well, if the Minister was to take as long as the question we’ve just covered, we’d be here all afternoon, so please make it brief.
Hon TAMA POTAKA: There are a range of initiatives but, more importantly, outcomes for whānau Māori, tamariki, rangatahi, kaumātua Māori that this Government is very, very proud of. Whether or not it’s improving the attendance at schools from 33 percent of Māori kids going to school regularly to over 45 percent, or ensuring that the immunisation rate of two-year-old Māori children has improved from under 65 percent to over 72 percent, or the record amount of investment in marae of any Government in history, or over half a billion dollars into Māori housing, or improving and increasing the amount of money that is being committed to te reo Māori broadcasting at the baseline, or the record investment into Te Matatini, or, indeed, improving the state of play for many kids—Māori kids and New Zealand kids—in emergency housing, I could go on. But what I would say is this: this has all been done without any new taxes on whānau Māori.
Hon Erica Stanford: Can the member confirm that this Government has invested $15 million into Te Ataarangi to train teachers to speak te reo Māori, which is half as much as what was invested before, reaching a very similar number of teachers and taking that extra $15 million and investing it into other te reo resources, like the pāngarau maths books?
Hon TAMA POTAKA: Yes, and I acknowledge Minister Stanford for her excellent mahi in this regard, and also people like Ruakere Hond, who continue to commit to the teaching of te reo Māori despite the speculative opinion of members opposite.
SPEAKER: I just feel I should just make a general statement, because there are people observing Parliament today and seeing it in a more fractious state than it is usually. It is because we are close to the end of the parliamentary term, but we’ll try and keep it as seemly as possible moving forward.
Children
Question No. 7
LAURA McCLURE (ACT) (14:37) to the Minister for Children: What is this Government doing to respond to serious and persistent youth offending?
Hon KAREN CHHOUR (Minister for Children) (14:37): Thank you, Mr Speaker. This Government has done a lot to address youth offending, from expanding the fast-track programme, investing in better help for young people with high support needs, to the great work that associate education Minister David Seymour has done to ensure kids are enrolled and actually attending school. The Government also intends to shortly pass the Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill. This legislation provides important tools to protect communities, support victims, and improve outcomes for young people. It will enable a stronger and more targeted response to a small group of young people who, despite multiple previous interventions, continue to offend.
Laura McClure: Why did the Government introduce the Oranga Tamariki—[Interruption]
SPEAKER: Just a minute. Sorry. We don’t speak, as you know, when a question is being asked, so we’ll start that question again.
Laura McClure: Thank you. Why did the Government introduce the Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill?
Tamatha Paul: Because they hate kids.
Hon KAREN CHHOUR: I hear that member shouting—well, heckling—across the room that it’s because I hate kids. I can guarantee you that if I hated kids, I wouldn’t have put my hand up to come into this House; I would have stayed home and voted for you. The situation I inherited when I became Minister for Children was not good. Under the previous Government, ram raids were averaging two a day, and too many young people were committing serious crimes and causing significant harm to victims and communities. We have already made huge improvements in youth offending by taking a tough but fair approach that ensures there are consequences for their actions, while, at the same time, making sure young people already in the justice system get the support they need to make better decisions, turn their lives around, and unlock their potential. This legislation is just one part of this Government’s commitment to restoring law and order, ensuring there are fewer victims of serious violent crime, and making our communities safer.
Laura McClure: What does the Oranga Tamariki (Responding to Serious Youth Offending) Amendment Bill do?
Hon KAREN CHHOUR: This legislation introduces the ability for a Youth Court judge to make a young serious offender declaration. The purpose of the young serious offender declaration is to create a faster, stronger, and more targeted response to serious and persistent offending by unlocking additional powers for police in the Youth Court, such as longer supervision with activity orders, strengthened sentencing and placement considerations, and strengthened monitoring. The legislation also creates a new sentencing response available to the Youth Court for a military-style academy order, which will see eligible young people take part in the programme. This programme will provide structure, address the reasons behind the young people’s offending, involves rehabilitation and therapeutic support, emphasises family and whānau engagement, and has a focus on transition planning to provide pathways these young people can choose to take and change their lives around.
Laura McClure: What impact will this legislation have on the rates of serious and persistent youth offending?
Hon KAREN CHHOUR: This Government has focused on reducing serious and persistent youth offending from the very beginning by making a Government target that is reported on quarterly. The latest update shows that this target, which was a 15 percent reduction by 2030, continues to be met and exceeded, with a 26 percent reduction in youth offending as at June 2026. I expect this legislation, with its stronger powers for the Youth Court and police, will contribute to and support this remarkable drop in offending rates we have already seen. Ultimately, this means less victims, safer communities, and better outcomes for young people.
Commerce and Consumer Affairs
Question No. 8
ARENA WILLIAMS (Labour—Manurewa) (14:41) to the Minister of Commerce and Consumer Affairs: Will he “advocate for those who are paying too high prices” by introducing law changes to prohibit big companies exploiting New Zealanders by charging excessively high prices?
Hon NICOLA WILLIS (Minister of Finance) (14:42): Of course, I will continue to advocate for those who are paying too high prices, and of course I think it is wrong for big companies to exploit New Zealanders by charging excessively high prices. However, while banning price gouging is a superficially appealing slogan, it simply wouldn’t work because it does not address the underlying issue driving higher prices: a lack of competition. In fact, if it did work, it would have been done a long time ago. The Australian experience is instructive in that it has no fixed threshold for what constitutes an excessive price. The regulator has to assess the cost of supply, what constitutes a reasonable margin, and the circumstances surrounding each individual product. That likely means hundreds and hundreds of regulatory and legal disputes over what constitutes a reasonable price for individual product, and millions being spent on lawyers and consultants with likely no benefit to consumers. That is a fatally flawed policy and highlights the difference in approach between the Government and the Opposition. We are focused on long-term, durable measures to increase competition and investment, while Labour’s slogans rely on things that will not work. They are not serious ideas. They are not serious people. [Interruption]
SPEAKER: One person asking a question.
Arena Williams: Are the four major Aussie banks that made a combined total profit of $7.22 billion in our market, with a persistent lack of competitive pressures, gouging their Kiwi customers in a way that they wouldn’t get away with in Australia?
Hon NICOLA WILLIS: There have been extensive market studies and investigations into the lack of competition between the Australian banks. And, in fact, this Government has picked up every single recommendation of how to address the root and underlying causes of those problems, including reducing many of the regulatory barriers from the Reserve Bank, introducing open banking to allow fintechs to compete more vigorously, and growing Kiwibank so that it can be a more robust competitor to those Aussie banks.
Arena Williams: Are the power companies who have increased their residential prices by 20 percent over the last two years under National gouging their customers?
Hon NICOLA WILLIS: It is absolutely the case that we want to see more electricity generation driving down prices for New Zealand electricity consumers. It is also the case that very heavy regulatory restrictions in the Resource Management Act have prevented many power firms from building the wind farms and the solar farms that they have wanted to build. They have instead spent years caught up in court. Our approach of accelerating and fast tracking those projects has led to an absolute flourishing in the building of new electricity generation, and that is already flowing through to lower wholesale prices.
Arena Williams: Why does he talk tough with statements like “New Zealanders pay too much for their groceries”, when he won’t take any tough decisions to help them pay less for groceries?
Hon NICOLA WILLIS: Because when I talk tough, I don’t offer lightweight solutions.
Arena Williams: Is—[Interruption]
SPEAKER: Everyone just calm it right down.
Arena Williams: Is all Kiwis can hope for on high food, energy, and petrol prices from this Government just another review, or should there be consequences if a company misuses its market power to gouge Kiwis?
Hon NICOLA WILLIS: It is the case that if companies misuse their market power and take anti-competitive action, under the Commerce Act, they can already be prosecuted by the Commerce Commission. That member should educate herself by going to the Commerce Commission website and observing the significant number of prosecutions that are progressing through the courts right now where the Commerce Commission is of the view that there have been breaches of the Commerce Act—and that includes cases against supermarkets.
Arena Williams: Has the Minister met with the senior National MP who is publicly describing the plan to split the supermarkets as “bonkers”, as reported in the media today?
Hon NICOLA WILLIS: Well, no, because that is an unfounded and anonymous allegation. However, I have found official advice that refers to an idea for a wholesale separation in grocery as a completely bad idea. This was official advice provided to the last Government, which said it would not reconsider wholesale separation because it would disrupt efficiency, risk increasing prices, result in an unstable market; incentives for the separated wholesaler and retailer to each expand vertically to gain efficiency of scale; it’s not clear that the wholesaler would be viable or that it could become a monopsony. We gazumped them this week. Next week they’re going to announce another slogan, and it will not deliver for New Zealanders.
Hon Kieran McAnulty: Point of order, Mr Speaker. They would have been the most coherent answers that Cameron Brewer has given, and I imagine he would want them attributed to him, so it should be put on the record that those were on his behalf.
SPEAKER: Well, that would be nice if it were the rules of the House. Whenever a Minister answers, they are responsible for the answer.
Hon Kieran McAnulty: Well, he’ll be delighted.
SPEAKER: No, no, no, you’re missing the point. It was the Hon Nicola Willis who was responsible for the answers given today. We established that last week when you asked—
Hon Kieran McAnulty: No, but he’s not here.
SPEAKER: Yes, we did. No, no, hang on—we went through this two weeks ago. Anyway, we’ll go through—
Hon Kieran McAnulty: Point of order, Mr Speaker. Speakers’ rulings do make it clear that if a Minister is answering on behalf of, then they need to indicate that. If a Minister is out of the country, then that Minister answering would be the acting Minister. Neither of those things occurred today, so there is a lack of clarity on this basis. Whether it was addressed last week or not, the fact remains that at no point did the Minister indicate that she was answering on behalf of the Minister who was asked the question.
SPEAKER: That’s true, but it’s the Government’s decision as to who answers a question, and so the Minister who was answering today is responsible for the answers that were given.
Hon Kieran McAnulty: Speaking to the point of order, sir. If the Government transferred the question, you would be absolutely right, but in an instance where a Minister is answering on behalf of, the question sheet does not say “Minister of Finance” or, indeed, any other portfolio held by the Hon Nicola Willis. It was addressed to Cameron Brewer. Nicola Willis answered on his behalf. At no point did she indicate that it was on behalf of. This would be a change to the rules, as is clearly outlined in Speakers’ rulings.
SPEAKER: No—I’m happy to take it offline with you, but if a Minister stands up and gives an answer in the House, whether they’re answering on behalf of another Minister or in their own right, they are responsible for what they say to the House. So that’s very clear.
Hon Kieran McAnulty: Speaking to that, sir, that is true in the case where those comments were then reflected on at a subsequent question time. But for the purpose of being clear as to how the question is being answered, then it needs to be indicated in the answer at the time that it is on behalf of. Otherwise, we have this unusual situation—and you referred to it earlier, if anyone was tuning in to question time that was unfamiliar with it. We have questions that are clearly indicated to the Minister. They were gender specific; it would be very confusing for the public as to what was going on. All that needed to happen, as is outlined clearly in Speakers’ rulings, is the Minister indicates that they are answering on behalf of the Minister.
SPEAKER: OK. Look, rather than going into the back and forwards as we are at the moment, I’d like to take advice on this and come back to you formally, perhaps, after question time. Can we go now to question No. 9—Mike Davidson.
Internal Affairs
Question No. 9
MIKE DAVIDSON (Green) (14:50) to the Minister of Internal Affairs: Does she stand by her statement, “I have conditional confidence in Fire and Emergency New Zealand’s Executive. I expect savings I have asked for to be made, and I will continue to monitor the organisation’s delivery against expectations”; if so, why does she retain confidence in Fire and Emergency New Zealand’s executive?
Hon BROOKE VAN VELDEN (Minister of Internal Affairs) (14:51): Yes. It reflected my position at the time the statement was made. However, since then, there has been a serious breach of the no-surprises convention by the chief executive. He withheld information I would expect to be alerted to for a full year. I have made it clear to both the board chair and the chief executive that this conduct is unacceptable. The information that the matter relates to has now been referred to the Serious Fraud Office. As a result, I have no confidence in the chief executive of Fire and Emergency New Zealand. I have communicated that I have no confidence in the chief executive directly to the chief executive and the board chair, and have set out my expectations regarding the board’s responsibility to address these concerns. I will continue to hold Fire and Emergency accountable for meeting the Government’s expectations and delivering the improvements required of the organisation.
Mike Davidson: What information was withheld from the Minister?
Hon BROOKE VAN VELDEN: Sorry, could you repeat that question.
Mike Davidson: What information has been withheld from the Minister?
Hon BROOKE VAN VELDEN: Look, I’m not at liberty to say because I don’t want to get in the way of any investigation that has been referred to the Serious Fraud Office.
Mike Davidson: Will the Minister accept responsibility for the continued decline in confidence in Fire and Emergency New Zealand due to the failure of leadership, fire trucks breaking down, fire stations being closed due to staff shortages, and fractured relationships between firefighters and the Fire and Emergency New Zealand leadership?
Hon BROOKE VAN VELDEN: No, it is my view that, of course, there have been issues within Fire and Emergency. A lot of these are historic, but there are also ones that have been happening to date. There have been issues across fleet; there have been issues across bargaining and collective arrangements; there have been issues with payroll and the human resources information system. Now I am aware of even more significant issues, which I believe are worse than any of the day-to-day management issues, but I have met with the board chair and I have made my expectations very clear that the board needs to restore my confidence within Fire and Emergency.
Mike Davidson: Do firefighters currently have safe working conditions?
Hon BROOKE VAN VELDEN: My understanding is yes. My understanding is that Fire and Emergency does do its best to ensure that firefighters, whether they are professional or volunteer, are supported in the very serious and important work that they do to go out there and help people in their time of need. However, if there are any specific individual concerns that the member would like to raise, I would ask for those to be raised to my office so that we can get correct answers.
Mike Davidson: Is she confident, given her lack of confidence in the chief executive, that communities are not at greater risk?
Hon BROOKE VAN VELDEN: I think there are a few things in that question. The communities are at greater risk when the firefighters are striking, that is true, and I would ask that the firefighters stop striking and return to the bargaining table so that there are no hours of any day where we do not have professional firefighters. However, I wouldn’t believe that in general firefighters are at risk.
Mike Davidson: Are communities in Hutt City at greater risk by having their fire station closed since 2021, meaning around 16,200 people who reside in the area are now outside Fire and Emergency New Zealand’s eight-minute response time?
Hon Chris Bishop: There are two others there, mate. Go and visit the Hutt.
Hon BROOKE VAN VELDEN: The Hon Chris Bishop says “Go and visit the Hutt.” I think that’s a great recommendation to the member. However, look, over the next 10 years, we are investing over $700 million into the property of Fire and Emergency. We expect 30 different areas around the country to have that investment in the next financial year. The Hutt itself has not been prioritised by Fire and Emergency in that respect. However, it is also the case that it would be a breach of the law to, as a Minister, expressly suggest where any particular station should go. That is a decision that is for the board and for the chief executive. However, as I’ve expressed, the board has work to do to ensure that they restore my confidence.
Mike Davidson: Point of order. I asked a very clear question, which is were the communities in Hutt City at greater risk by being outside of the eight-minute response window now that the fire station is close, and there are approximately 16,200 people that reside outside of that response time. The question was are they at greater risk? The Minister never addressed that question.
SPEAKER: Well, I think that possibly the problem is with the question when you said, “Are they at greater risk?”, and then went on to say that the station closed in 2021. It’s a risk that’s existed for, what, five years?
Mike Davidson: Yes, and that’s the question. She did not address that. I can repeat the question.
SPEAKER: No, we’ll just see if we’ve got another answer.
Hon BROOKE VAN VELDEN: Look, across the country, people are serviced by volunteer and professional stations, and where there are any particular gaps, those are filled by other stations in the area.
Justice
Question No. 10
TOM RUTHERFORD (National—Bay of Plenty) (14:57) to the Minister of Justice: What action is the Government taking to deal with disorderly behaviour in public places?
Hon PAUL GOLDSMITH (Minister of Justice) (14:57): The police will soon be able to issue move-on orders to people who are behaving in a disorderly manner in public places. The legislation is expected to pass its final reading in Parliament tonight or maybe tomorrow morning. The Summary Offences (Move-on Orders) Amendment Act will provide an additional tool for police to reclaim our town squares and our CBDs and our city streets for the benefit and enjoyment of the people who live there, who work there, and who visit there.
Tom Rutherford: Who will be subject to a move-on order?
Hon PAUL GOLDSMITH: Move-on orders will be issued by police to people who are breaching the peace; obstructing or impeding someone entering a business; displaying disorderly, disruptive, threatening, or intimidating behaviour; rough sleeping; or begging that unreasonably interferes with the use or enjoyment of a public place. Anybody that’s been visiting our town squares and CBDs in recent years has seen a level of disorder that is not acceptable. We, as a Government, are determined to restore law and order in this nation, and this is just one more step that we are taking.
Tom Rutherford: What consequences will people face if issued with a move-on order?
Hon PAUL GOLDSMITH: A move-on order is, of course, not a criminal sanction—we are not criminalising the behaviour here—but a refusal to follow that move-on order will lead to a fine of up to $1,000 or even imprisonment for up to three months. Of course, the easiest way to avoid that is to follow the instructions of the police officer.
Tom Rutherford: Why is the Government taking action to deal with disorderly behaviour in public places?
Hon PAUL GOLDSMITH: Because we believe that New Zealanders going about their business in our CBDs—in contrast to the Green Party, our view is that people should feel safe in our CBDs and in our town squares. We have in mind those people who put their life savings into a retail business, get up at 7 o’clock every morning, try to make a living for themselves and their families, and are confronted with somebody lined up outside the entrance to their store shouting at people, intimidating people, and making it difficult for them to make a living, and that is why we are bringing this change.
Question No. 8 to Minister
SPEAKER: I just want to respond to the point of order raised earlier by the Hon Kieran McAnulty. Speaker’s ruling 198/3, which I think he was referring to, does make it clear that where there is to be no change in portfolios and no transfer of a question, a Minister answering on behalf of another Minister needs to make clear to the House if they are answering on behalf of the Minister or as acting Minister. So I’d ask the Hon Nicola Willis just to clarify that.
Hon Nicola Willis: Mr Speaker—
SPEAKER: No, sorry—
Hon Nicola Willis: —acting—
SPEAKER: No, no. I think—
Hon Nicola Willis: Yes, I was acting on behalf.
SPEAKER: Thank you. The Hon Nicola Willis—oh sorry.
Ingrid Leary: I won’t say what I was going to say, Mr Speaker.
SPEAKER: That’s a good thing.
Seniors
Question No. 11
INGRID LEARY (Labour—Taieri) (15:00) to the Minister for Seniors: Does she stand by her statement, “those that are on fixed incomes, relying mostly or exclusively on superannuation, are doing it tough”?
Hon CASEY COSTELLO (Minister for Seniors) (15:01): Yes, I stand by that statement, and I also stand by my statement that older New Zealanders make an incredible contribution to our society. While there is a range of Government income support and assistance available, and our seniors are, generally, better-placed financially than other groups, individual circumstances mean people can, sometimes, need extra help. The reality is that someone on a fixed income is hurt by high inflation, especially at the levels that this Government inherited. I can also advise the member, and reassure superannuitants doing it tough, that, on this side of the House, we won’t be committing to reckless spending that fuels rampant inflation and drives up costs, and we won’t be introducing a raft of new taxes to take even more money out of the pockets of older New Zealanders.
Ingrid Leary: Why did she personally approve the removal from the Better Later Life seniors’ outcomes framework, indicators that measure housing affordability, material hardship, income adequacy, proportion of income spent on housing, and income after housing costs?
Hon CASEY COSTELLO: As I replied to the member in a written answer regarding this, in considering how best to monitor outcomes from the updated Better Later Life action plan, the Office for Seniors highlighted that the previous framework, of 60 measures, had limitations, including, previously, not adequately representing the outcomes being sought through the action plan. Given this is a shorter set of indicators that more clearly link to the strategy’s objectives, I think this is a better solution for monitoring delivery. As an example, the Better Later Life strategy focuses on housing choices and options. Measuring satisfaction with housing options more clearly links to the stated aims that come from the previous housing measures. Previous measures are still reported through other surveys in the Office for Seniors, who regularly monitors those.
Ingrid Leary: Why did she personally approve removing “material hardship” from the framework, when more than 76,000 special needs grants were issued to seniors last year just to meet their basic needs?
Hon CASEY COSTELLO: As I would highlight before, the Better Later Life action plan and the strategy delivery has been improved, modernised, and simplified to target practical delivery of outcomes that improve the lives of seniors. Therefore, the measures we’ve applied into this report are aligning to ensure we are delivering those outcomes.
Ingrid Leary: Why did she personally approve removing “income after housing costs” from the framework, when the Older Persons Poverty Monitor found 102,000 seniors were living in income poverty after housing costs?
Hon CASEY COSTELLO: Again, I will say that we are aligning measures to the Better Later Life action plan. All the measures will continue to be monitored. What we will refer to is that the Ministry of Social Development estimates only around 3 percent of older people are experiencing material hardship, and an additional 4 percent are near hardship. These are the measures that will continue to be monitored through the Office for Seniors. Again, this side of the House is ensuring that we are delivering practical outcomes: subsidiary dwellings for 70-square-metre dwellings to make it easier for older people to live; a rates rebates scheme, recipients of over 66,000 SuperGold card holders; delivering a formal ID for free for older New Zealanders to ensure that SuperGold card holders have a form of primary ID—practical delivery by a practical Government improving outcomes, driving down costs, reducing inflation, and improving the lot of everyday New Zealanders.
Ingrid Leary: How do her new framework indicators, like measuring KiwiSaver participation among adults or job satisfaction among people over 65, show where the seniors are becoming poorer?
Hon CASEY COSTELLO: They absolutely measure the successes of the Better Later Life Action Plan, because the Better Later Life Action Plan is ensuring that we are making sure older New Zealanders’ quality of life improves, that they are participating in their communities, and that they are enjoying a quality of life—in choosing if they want to work, that they are feeling rewarded. The other part that we will recognise is the fact that we’re trying to ensure that our older New Zealanders continue to be connected socially, and things like making our town centres safer to participate in and enjoying our community centres without feeling threated and afraid are a practical step to improve the life of seniors.
Ingrid Leary: Why did she replace genuine indicators of seniors’ hardship and poverty, from a framework that exists to measure seniors’ hardship and poverty?
Hon CASEY COSTELLO: I’m not sure how many ways I can say this; we have a Better Later Life Action Plan that ensures we deliver actions, and we will measure the best actions, the best measures to ensure we are delivering those actions. The other measures that the member is referring to will continue to be monitored by the Office for Seniors.
Trade and Investment
Question No. 12
SUZE REDMAYNE (National—Rangitīkei) (15:07) to the Minister for Trade and Investment: What progress has been made on the New Zealand - India Free Trade Agreement?
Hon TODD McCLAY (Minister for Trade and Investment) (15:07): Excellent progress. Yesterday, the New Zealand - India Free Trade Agreement (FTA) implementation legislation passed by 93 votes to 29, marking a major milestone for one of New Zealand most significant trade agreements for many decades. The FTA was concluded and negotiated in just nine months of intensive negotiation and was signed just a few months later. The agreement is expected to enter into force later this year. When it does, it will open a new chapter for Kiwi exporters, providing approved access to a market of 1.4 billion people.
Suze Redmayne: What benefits will the New Zealand - India Free Trade Agreement deliver for New Zealand exporters?
Hon TODD McCLAY: It will deliver immediate benefits for New Zealand exporters in the world’s fastest growing major economy. From day one, 57 percent of New Zealand exports to India will enter duty-free, rising to 82 percent once the agreement is fully enforced, with many other tariff rates having significant reductions. The agreement secures major gains for agriculture, horticulture, seafood, forestry, manufacturing, dairy, and services, and it delivers tariff-free access for many products, significant reductions for wine, mānuka honey, apples, and dairy products. The FTA creates new opportunities to earn higher export returns in a market of 1.4 billion people, delivering more jobs and better incomes for New Zealanders.
Suze Redmayne: Which sectors will benefit from this free-trade agreement, and how?
Hon TODD McCLAY: The benefits will be felt across New Zealand, from kiwifruit and apple growers to wine producers, foresters, coal exporters, and sheep farmers. The FTA delivers immediate tariff-free access for sheep meat, wool, coal, and more than 95 percent of forestry exports, while seafood, mānuka honey, wine, and dairy products receive significant tariff reductions over time. It also includes a most favoured nations protection for wine and services, ensuring New Zealand benefits from future improvements that India grants to other trade partners. Overall, the FTA boosts opportunities for exporters and our regional communities, and it will drive export-led growth in the economy.
Suze Redmayne: How will the New Zealand - India Free Trade Agreement support export growth?
Hon TODD McCLAY: The FTA will allow Kiwi exporters to grow in the world’s fastest-growing major economy. India is already our ninth-largest trading partner, with just under $4 billion of two-way trade, but it accounts for just 1 percent of our goods exports, highlighting the opportunities for growth. With access to that market of 1.4 billion people, the FTA will help farmers, growers, manufacturers, and service exporters. It will expand sales and it supports the goal committed to by Prime Ministers Luxon and Modi of doubling two-way trade by 2030. This is one of New Zealand’s most significant trade agreements in decades, and I thank every member of this House who voted in favour of it.
SPEAKER: That concludes oral questions. Those who have to leave, please leave quietly.
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