Willis NicolaNICOLA WILLIS (National): I stand in opposition to the COVID-19 Response (Management Measures) Legislation Bill. Now in this Parliament we often have debates on bills where the matters at stake are practical. They are about mechanisms and details were our work is almost workmanlike in the sense that we are making small corrections to improve the way that things happen. It was that expectation that National brought to this bill at first reading where we believed that it would contain a series of measures that would practically address some of the issues that arise during the heightened public health response in a pandemic. So we took to that role in good faith but what we found in this bill was not a small mechanical issue. It's not just a small practical matter that we have an issue of disagreement on. It is a fundamental breach of the very principle of contract law and the way in which the State enters a private contract and it is for that reason—that matter of very important principle—that National must oppose this legislation. Let me tell you what it actually does. What it does is it sets an implied clause in commercial leases retrospectively. So for commercial leases that exist between a landlord and their tenant in a private contract which the landlord and the tenant the two parties in the contract have agreed to have studied and have signed up to this bill allows the hand of the State to reach into that contract retrospectively and alter the terms of that contract. Now we on this side of the House find this a very serious matter because actually commerce in this country and commerce throughout the world operates on the basis that people can settle on private contracts between parties that they can do so within the legislative framework and that they can conduct business accordingly. It is a very serious step for the Government to decide that it will retrospectively go back in time and enter the hand of the State to alter the terms of a contract agreed between two parties. We on this side of the House take issue with that not only in this specific instance—to which I will come—but we take issue with it because of the precedent it sets and the chilling effect we think it has on business on endeavour and on enterprise and the chilling effect it has in terms of people's certainty under contract law when the Government shows a willingness to retrospectively go and alter the terms of contract. We stand proudly in defence of the sanctity of private contract. So what does it actually do? The hand of the State enters to set this implied clause in commercial leases to require a rent adjustment where a tenant can't gain access to their premises to do business. It then requires that where this is the case a rent adjustment is required for a fair proportion of the rent". Of course the bill creates a whole new box of uncertainty because "fair proportion of the rent" is not defined and as anyone will appreciate what that is is as long as a piece of string. It depends utterly on the circumstances of the parties who are affected. So there is no end to dispute promised by this bill but simply the opening of doors into more dispute and the bill specifically provides that any dispute must then be referred for arbitration unless parties can agree to mediation or contract. It makes a grand assumption that the State is better placed to decide how the parties to a contract resolve their difficulties than those parties are themselves and we take issue with that. Given the matters of principle at stake it was very fair for the House to have asked—and this did occur during the select committee process and it did occur during the readings of this bill—well what's been the analysis of why this change should be required and why is this the option that the Government has landed on. Various speakers have raised this Act and it is well-known in the public realm that the Government did consider a change of this sort last year during lockdown. It considered it it looked at it and there was a very strong response at that time by another governing party and by members of the New Zealand public who warned the Government that taking such a step would be chilling and wrong. So now we ask ourselves what has changed this year. Has there been new analysis brought to bear? Has there been a more detailed cost-benefit assessment? Has there been a better understanding of the regulatory nuance of this? Has there been new information brought to bear upon this decision? I regret to inform this House that that is absolutely not the case. This decision has been made in a vacuum in which the Minister has essentially put his finger in the air and said "I think it feels like a good idea.' and I give you proof of that. The first thing is this: there has been no regulatory impact analysis of this provision in the bill and it is an absolutely standard procedure that where a matter like this happens in a bill we give the good officials of our Government the opportunity to analyse the regulatory impact it will have. We had none on the Table for this change and I would venture that if we were to have such analysis on the Table it would say "Minister Minister Minister think not just of the impacts this will have for those in current lease arrangements but think of the impact this will have across broader society in terms of people's willingness to enter these contracts in the future and the terms on which they do them." But the second thing we know is that there has been no cost-benefit analysis of this change. Well why is that? The Ministry of Justice have been very candid about why that analysis has not occurred and they have said that it couldn't actually occur because the size and the scale of the problem this change seeks to remedy is not known. No one actually knows the size and the scale of the problem that the Minister has decided is so significant that he is prepared to enter the hand of the State into a private contract retrospectively but the Ministry of Justice can't even assess the size nor the scale of the problem. It is based on media reports they say. The third piece of information we have about the context in which this decision has been made is that we've had a very small mention of the fact that the Ministry of Foreign Affairs and Trade had been asked for their input in order to consider New Zealand's international obligations as they relate to this change. I do ask that members of the House and particularly those of the governing party reflect upon that—that we are in this House debating a change to our law that is so significant in terms of the precedent it sets and in terms of the message it sends that the Ministry of Foreign Affairs and Trade has had to be asked how it affects our international obligations. I put it to you that the reason they have been asked in my opinion is because it is well understood that when we trade with other countries and when we do business with other countries they look to us to see whether we have good rule of law they look to us to see whether we uphold private contract and they look to us to see whether the State appropriately separates itself out from commercial endeavours. Would it be any wonder if someone wanting to do business with New Zealand in the future would look twice now if they knew of this provision because what it shows is a willingness by this Government to insert itself into the private contractual affairs of independent businesses and that is very concerning indeed. It shows a willingness to do things that are undermining a very significant principle which we take significant issue with. Yes there are absolutely landlords and tenants in very difficult situations in New Zealand right now and that is why National has put forward a constructive policy which would allow them to get rent relief without undermining the sanctity of private contract. We oppose this bill."