WEDNESDAY, 12 FEBRUARY 2020
The Speaker took the Chair at 2 p.m.
Karakia.
VISITORS
Republic of Iceland—Steingrímur Sigfússon, Speaker of the Althingi
SPEAKER: Members, I'm sure that you will wish to welcome esteemed Steingrímur Sigfússon, Speaker of the Althingi of the Republic of Iceland and his delegation, who are present in the gallery, and the Speaker is to my left.
Steingrímur Sigfússon, accompanied by the Deputy Speaker, entered the Chamber and took a seat on the left of the Chair.
[Applause]





DEBATE ON PRIME MINISTER'S STATEMENT
Rt Hon JACINDA ARDERN (Prime Minister): I move that this House express—
SPEAKER: No. I think we've got the presentation to do first.
Rt Hon JACINDA ARDERN: Sorry. Excuse me. I present the Prime Minister's statement.
SPEAKER: That paper is published under the authority of the House. Copies are available on the Table.
Rt Hon JACINDA ARDERN: I move again, with much enthusiasm. I move, That this House express its confidence in the coalition Government and commend its programme for 2020, as set out in the Prime Minister's statement.
I want to start where I started in January, as it were, because today is not the first time that I have spoken of the aspiration that this Government has for New Zealand and for this Government's programme for the next year. The first time that I spoke of the aspirations of this Government in 2020 was on 31 January, and it was under somewhat more private circumstances. It was when I last visited Mike Moore. He asked, in a way that only Mike Moore can. After we'd exchanged very brief pleasantries, he said, "What are you doing next?" The answer to that is simple: more.
I want to share with this House what I shared with Mike Moore that day: that our agenda for 2020 is based both on where we started—the circumstances and context under which this Government took office—and on where we are now and the environment that we're operating in and the experience of New Zealanders, and it is focused on where we need to go.
So let's start at the very start. In the beginning, before there was light, there were nine years of darkness. It wasn't like a black darkness; more a dark shade of blue kind of darkness—the worst kind. Now, those words may be familiar, at least to members on this side of the House. They were written by a very great writer, "Kevin Davies".
After nine long years, there may not have been a blue smoke, but there was plenty of denial. There was denial that we had a housing crisis. There was denial that kids were doing their homework in cars. There was denial that children in this country—an affluent country—did not have all that they needed to thrive. There was denial that we had an infrastructure deficit and that we were all suffering as a nation as a result. There was denial that our hospitals were broken. I don't say that lightly. Simple things like pipes being replaced, that elevators could work, or, worse still, sewage down walls were the ultimate manifestation. There was denial.
That denial seemed to exist until, after those nine years, we entered into an election phase. When we entered into that election phase, National emerged from the smoke of denial with a weighty tome known as a press statement. In that press statement they promised much. They promised roads. They promised infrastructure. They even made promises about child poverty.
But, as a very wise man said on the paepae at Waitangi, know us by our deeds. Know us by what we do, not by a press statement at the eleventh hour before people go to the polls—know us by what we do. That is why I wish to reflect on where we are now, as well as projecting forward into where we must go. Those deeds tell you a story. The first thing that they tell to you strongly is that we are a Government of infrastructure—undeniably.
I have a visual aid. The Leader of the Opposition loves this one! The Leader of the Opposition is particularly fond of this graph! This graph tells a story better than anything, and this is of course based on Treasury's data. This shows capital investment, and it demonstrates helpfully in a colour-coded manner that in 2016 we saw no new dollars for health capital expenditure. In 2017, we saw just $150 million. No wonder we had sewage in the walls.
Within two years, of course, we have invested $2.5 billion into health. Now, that number, it doesn't tell you the story of the mental health wards that we are making safe again by rebuilding them in the central North Island in Waikato. It doesn't tell you about the investment we're putting into Tai Rāwhiti, which doesn't have beds for alcohol and drug rehabilitation. It doesn't tell you about the new maternity services and child health services at Starship that we are rebuilding and expanding. But that is what that $2.5 billion—and, of course, we can't forget Dunedin Hospital.
We have put $1.5 billion into schools. For the first time ever we have long-term planning to make sure that we can cater for over 100,000 students coming into our schooling system. Again, the message that you don't see in just a graph is that we are putting money into every single school—up to $400,000 for most State schools so that they can do simple things like repair the roof or put down new carpet. I'll for ever remember the story of Grant Robertson saying he visited a local school and couldn't find the principal—it was January, I believe. They were out and about walking around with a tradie, taking notes of all the work they could do because of what we delivered at the end of last year.
That is, of course, before you take into account just the huge extent of what we put in through the New Zealand upgrade package: $12 billion, which adds a significant amount to make sure that we get New Zealanders out of congestion, that we give them options for walking and cycling and rail, and that we continue to make sure that safety improvements also continue to be at the top of our agenda.
Infrastructure means going beyond just that rebuild and future planning. The Infrastructure Commission has been key. Financing has been key through the Infrastructure Funding and Financing Bill to support future housing and urban development. Ultimately, I stand proudly as the Prime Minister for the "Government of infrastructure", and it is undeniable—it is undeniable.
To be the Government of infrastructure, we have to be the Government of training and education. We simply cannot deliver this infrastructure without having that relentless focus on training and education. When we came in, we moved swiftly to implement fees-free. That not only has reduced the burden of debt for our young people for generations to come, it's meant that those moving into apprenticeships for those first two years pay nothing. That has made a difference. Since that time 3,900 Kiwis have taken up construction apprenticeships. That is exactly what this country needed. Not only that, we've boosted vocational education and training: 4,000 places for trades academy and gateway places.
Mana in Mahi: a programme I will, alongside our Minister, forever be proud of. We are just at the beginning of that programme, but I read the reports and I read the stories, for instance, of the young person who had been on a long-term benefit, who found, through Mana in Mahi, a subsidised role by an employer working in landscaping. The difference that it made to their mental health, in their own words, was "undeniable". I am so proud of that programme. It sits alongside He Poutama Rangatahi as well. We are placing thousands of young people through that programme into work. The result: a 20 percent increase in construction apprenticeships, more than 11,000 Kiwis in the construction sector in the last couple of years according to the Ministry of Business, Innovation and Employment. We are making a difference.
Of course, we need every single one of those young people and people in apprenticeships, because we are also proudly a Government of housing. And I say that firmly and proudly. I'm going to speak, Mr Speaker, if you will allow me, to review the last Government's record, because that side of the House has nothing but a foundation of shame when it comes to housing. Homelessness rates at the worst levels we've seen in the OECD and homeownership the worst since 1951. At a time when children were sleeping in cars, what did they do to State houses? They decreased—our net State housing stock decreased by 5,000. When we needed housing the most, that Government sold them. It is a disgrace. We've had to rebuild ever since, but we have.
We have now created more than 4,258 public housing places. Every single one of these is a home. Every single one of these is a home for someone that did not exist before. In the time that it has taken to rebuild what they've created, we have put people in homes, and it is making a difference. First-home buyers now make up 24 percent of the market. That has been through the changes we made to tax loopholes to make sure that we shut down overseas investment in our residential housing market and changes that we've made to income support for those buying houses. We have ensured that 1,100 households have been housed through Housing First. There's more to come, because we currently have 3,480—
Hon Dr Nick Smith: What about KiwiBuild?
Rt Hon JACINDA ARDERN: —houses under construction in the Government build programme, Minister Smith. I understand why you're a little defensive, because we're fixing what you broke, and you broke our housing market, and you stood idly by while people lived on the streets.
I am proud of what we have achieved. It was only over summer that—we, of course, continue to acknowledge that there is more work to do. We have houses under stress. Over the summer, I was speaking with some of the individuals who did see the City Mission over the Christmas period. One thing that stood out to me is that, yes, they were seeking that assistance at that time of year, but the number of those people I spoke to who had, in recent months, moved into new State houses was phenomenal. The message they gave me is "We are now warm and dry." Now, what a difference that that policy is making to New Zealanders everywhere. This week we've announced an extra $300 million into homelessness, with more details to come. We are proudly a Government of housing and the new builds prove it.
The reason that housing is so important to us, of course, is because family wellbeing and child wellbeing sit at the heart of everything that we do. Now, we've demonstrated that from the moment we came into this place, with the Families Package. I'm proud that this year we'll be celebrating another increase in paid parental leave. Of course, we've had that aspiration of lifting it to 26 weeks, and we will. That is an incredible milestone for us—couple that with the Best Start payment, which continues to roll out, increases to the Working for Families package, and, of course, the winter energy payment. You'll see from that State of the Nation Report today that the Salvation Army is acknowledging the difference that that investment is making to low-income families.
On top of that, we've had the indexation of benefits. Now, that means that when wages go up, not only do our superannuitants benefit, but those who are on those tight incomes who are on Government support, they will also see that increase to help them keep pace with the cost of living. It all makes a difference. We know from those changes that between 50,000 and 70,000 children will be lifted out of poverty, and what could be more important than that? Couple that alongside those increases to the minimum wage, and I acknowledge New Zealand First; it was part of their coalition agreement, so we'll see that go up once again in April this year. By the time that happens, those people on a minimum wage will be $126 a week better off from the changes that we as a Government have made.
I am happy to talk about the cost of living. We know that there are too many New Zealand families who feel the strain. Dropping things like NCEA fees, increasing support for schools so that they don't ask for school donations, reducing the cost of going to the doctor, making sure that we are driving more housing supply to try and bring down those housing costs in the private sector as well, and, overall, of course, making sure that when there's a market failure and a problem in the market like fuel, we do something about it, and we will keep doing something about it.
We are also proudly a Government of health and mental health, and, again, I let the numbers tell the entire story. First of all, we have grown the health workforce: 3,000 new medical professionals. We've had 1,699 nurses—and they are paid more, of course, with the important settlement that we were a part of—and 736 doctors. We've seen an increase in Pharmac, and, of course, that's meant that a flow-on effect is more funding for important drugs like those that have benefited those who are, sadly, experiencing battles with cancer. Many of us will have stories of people stopping and telling us on the street what a difference that has made, and I am one of them.
And, very proudly, the largest funding boost to mental health this country has ever seen. Just yesterday, I was looking at some of the numbers around people who are already benefiting from those front-line mental health services, and they are at their GPs' offices, they are in Mana Ake in schools for kids, they are in our schools for our young people. We're making sure that wherever someone is, help is not far away, whether it's picking up telehealth services or visiting their local doctor, because the need is so great. There is more work to do. The Suicide Prevention Office will be key. We're currently going out with requests for proposals for our youth services, our Pasifika and Māori services, and this year will keep seeing the expansion of those front-line services that we are so proud of.
No matter where we turn, though, in health, mental health, every part of the system, we have found need, and I find it somewhat ironic to hear the member that services the area where we've seen such desperate need, in Counties Manukau, so vocal on this issue. The Simpson review will be pointing to some of the extra work that we need to do, because wherever we have turned, there have been problems that we need to address.
Next, of course, is dealing with the structural issues, because, of course, it's not enough for us just to say that we deal with these things down track. We need to make sure we have an economy that is supporting everyone, that is delivering prosperity for everyone, and it's been a mantra you will have heard from the Minister of Finance consistently. I'm happy to let the numbers speak for themselves. We're a Government that has delivered GDP growth of 2.7 percent. When you look around us, others are falling on hard times, and there's no denying it's had an impact for us, but when you take into account the net average that we had under the National Government—the average GDP growth was 2.1 percent—I feel confident that we are doing well.
Unemployment: of course, the Reserve Bank would tell you we're at full employment, at 4 percent. It is a tight labour market, and, again, relative to what we inherited—4.7 percent when we came to office. The average hourly wage sitting at 3.6 percent—in that Government's first term, it was roughly 2.1 percent we were seeing: those increases in hourly wages. Net debt: 21 percent versus 22.9 percent under the last Government. We've seen $13 billion in surpluses in our first two years and $11 billion in surpluses in our next five.
I am proud of this Government's record when it comes to the management of the economy, but more than just the numbers, I am proud that we've seen unemployment go down in Northland, Bay of Plenty, Gisborne, Hawke's Bay, Manawatū, Whanganui, Otago, and Southland, and that is because of deliberate investment: 530 Provincial Growth Fund projects across the country, making a huge difference. Again, the words tell a story: in Gisborne and Hawke's Bay, we're seeing unemployment rates that were as high as 8 percent to 4.1 percent. That is a huge difference. Again, regional growth sits alongside our plan for trade diversification. It sits alongside our investment in research and development, and it is about driving not just any job but decent high-wage jobs for our New Zealanders, and we are delivering on that.
Of course, underpinning all of this is the environment. None of this matters if we don't have a planet we can sustain ourselves on. When we came into office, there was no plan for climate action—there was no plan. We had 4,000 native species at risk of extinction or threatened. We've had a record boost into conservation over a small space of time. We've had a list on climate change that is almost too long for me to read in one minute and 23 seconds—how about I have a quick go? Zero carbon Act; we've ended offshore oil and gas exploration; we've reformed the emissions trading scheme; we've worked with farmers on a world record - breaking new agreement on dealing with farm-based emissions; new wind farms have been built; the new energy research centre in Taranaki; of course, switching our public buildings to clean energy; and, of course, the upgrades alone in public transport are worth $5.73 billion, for rail, walking, cycling, and transport options. Next is waste, and next is fresh water. We have more to do.
Finally—and the Leader of the Opposition will hate this—1,800 new police officers, and 500 fog cannons to support our small-business owners. It is all about prevention and supporting the safety of New Zealanders, finally. We are the Government of infrastructure. We are the Government of housing, we're the Government of family and child wellbeing, of health and mental health, and the Government for the environment. We are a Government of progress. There is more to do. After nine years in blue smoke and darkness, there is plenty more to do, but this year is the chance for New Zealanders to have their say in making sure we as a Government continue to get the job done.





Hon SIMON BRIDGES (Leader of the Opposition): I move, That all the words after "That" be deleted and replaced with "this House has no confidence in the Labour-led Government because, in just two short years, it has plunged New Zealand into deficit and failed to deliver on any of its promises."
I can see the relief on Jacinda Ardern's face that that is going to be her last Prime Minister's statement. And, actually, I'm not sure where the relief is more palpable: on her face or her caucus's. But, to be fair—
Hon Kelvin Davis: Tell us how Waitangi went!
Hon SIMON BRIDGES: —after almost three years—well, we'll see in a TV poll rather soon, actually, Kelvin Davis. I'd say rather well. After almost three years of dithering and experimenting and mismanaging the economy and failing to deliver on her promises, New Zealanders can finally see light at the end of the tunnel. Actually, they can't, because Labour cancelled it! But don't worry, because National gets things done, and we'll build it.
We won't have to hear any more next year hollow statements from the Prime Minister. She's not going to have to stand up and make empty promises about building 100,000 KiwiBuild houses in 10 years and just hope for the best. And, by the way, did she mention KiwiBuild?
Hon Members: No.
Hon SIMON BRIDGES: Is it in this document?
Hon Members: No.
Hon SIMON BRIDGES: I find that staggering. The Prime Minister says, "Know us by our deeds." How many KiwiBuild houses have they built?
Hon Paul Goldsmith: 250.
Hon SIMON BRIDGES: Two hundred, three hundred. They have cancelled more houses at Ihumātao than they have built in this term of Government, and she has the audacity to say she's running a facts-based campaign this year where they are the party of infrastructure. I don't think so.
She won't have to make ridiculous comments like they'll get light rail down Dominion Road before 2021 and just hope for the best. Where is that light rail? Michael Wood gets out from his house in Mount Roskill every single morning and he looks for it. He'll be looking a heck of a long time. It hasn't been built, it hasn't been planned, it hasn't been funded, it hasn't been consented—nothing whatsoever has happened. And she won't have to talk about ending poverty in her first winter and hoping for that, because we know her by her deeds, and we know that it's getting worse. A Salvation Army report makes that very clear today.
Jacinda Ardern's Government will go down in history as a story of lost opportunities for New Zealanders, whether it will be no infrastructure projects starting anywhere in New Zealand—and that's the story; that's right. Well, I hear you say, "Shane Jones' roundabout." Actually, even that hasn't started, as I understand it—not even that. Not a single infrastructure project in her three years in Government—not light rail, not KiwiBuild, not roads, not nothing, and almost 30,000 people on the dole and seven out of nine child poverty indicators getting worse under this Government. And she has the temerity to start and say she's starting at the beginning because things were so bad. These things are getting worse under this Government. That is what is happening in New Zealand right now, and these aren't just statistics.
Hon Kelvin Davis: Quote real numbers, Simon. Quote real numbers.
Hon SIMON BRIDGES: These are real people on the ground—in your electorate, actually, Kelvin Davis—who are getting poorer, who are finding it harder, who don't have houses, who don't have food, and who have to go for food parcels because your Government is failing to deliver on its promises.
What's even worse about the speech we've just heard in this long diatribe here of hollowness, where nothing is happening here, is not only have they achieved nothing in three years, there's nothing new. There is a sense of being bereft of anything new for New Zealand, a sense of aspiration and delivery for this country in the years to come. We've had 300 KiwiBuild houses, and Phil Twyford looks down because he knows the record and how bad it is. We were supposed to be at 6,000, at 10,000 a year, at 100,000 over the next decade and counting, and they've cancelled more than they've started. Not a single kilometre of track of light rail down Dominion Road, when it was meant to be built by 2021. They pumped up fuel prices. They raised a regional fuel tax that is really hurting those people Kelvin Davis—
Hon Paul Goldsmith: Fleecing
Hon SIMON BRIDGES: Fleecing? Well, we know who the "Fleecer in Chief" is, Paul Goldsmith, and it isn't you. They've done all these things and, instead of getting new roads, instead of doing new infrastructure in this country, we have less happening than before in a very, very long time.
The amazing thing about this document is—I think it's on page 3—they start by saying, because they're obsessed with the National-led Government, how terrible it was we overinvested in roads. Six paragraphs down, what does she say? We're going to build lots of roads. She spends more time in this speech talking about roads than she does about light rail—the one thing they did promise—because, actually, New Zealanders know they can't deliver on their promises.
They have cancelled more in Kelvin Davis' electorate than they've started anywhere around New Zealand—Whangārei to Te Hana, the East-West Link, Cambridge to Piarere, Pōkeno to Mangatarata, Piarere to Tauriko, Waihī to Ōmokoroa, the Tauranga Northern Link, Katikati, Tauriko West network connections, Ōtaki to Levin, Pētone to Grenada Link Road and, Chris Bishop, the Melling Interchange: all cancelled. None of it is happening. And now Phil Twyford, I hear, in speeches, is not sure what to say. Well, he's not allowed to talk but sometimes he gets out. Jacinda gets angry at him but he gets out and talks—
SPEAKER: Order!
Hon SIMON BRIDGES: Jacinda Ardern. True to their form, what we know about this Government is they are first class at announcements. I don't even think they're third rate at delivery; they are hopeless at it, and New Zealanders deserve much better than 2½ years in, coming back and saying, "Yeah, we will do some of these projects.", and the best they can offer is that one or two of them are going to have a cycleway. Well, Julie Anne Genter might be happy with that but New Zealanders aren't. They are mightily brassed off at the lack of delivery when the cost of living, another important issue, is going through the roof. Actually, if only they were building roofs—they're not, but the cost of living is going through the roof.
We hear the stories every single day around New Zealand. We hear the stories of New Zealanders who feel they are working harder. They are trying harder. They are doing more. They are spending more time at work, but the tax, the cost, the regulation—whether they are working for someone or they're their own employer—is making things harder, and taxes are going on others and not on them, as money is wasted by this Government like it's a drunken sailor. 
The cost of living, I repeat, is going through the roof: whether it's $2,600 that median rent has gone up a year under this Government—$55 a week—and this Prime Minister over here talks about eighty-something dollars a week more. Well, most of it's gone in rent. Petrol is $200 more a year just in the additional tax that's been put on for a typical person. There are the cancelled tax cuts—that takes us to another thousand dollars a year that people could have had in their pockets, and that would have made a difference in terms of paying those bills, getting those school uniforms, doing the things that matter. 
Nevertheless, under this Government, with that cancelled, they are some $4,000 a year worse off, and there are 28,000 more people on the dole. What is that? Half of Whanganui? Half of Whangārei? A couple of Whakatānes? There are more people on the dole. When New Zealanders are working harder and are fed up with that because of the costs they're paying, there are more people who are on the dole right now. Job growth has flat-lined, because there are no expectations under this Government to get a job. [Interruption] And they laugh, but New Zealanders aren't laughing, because they see a situation where there's been lack of delivery, where there's no infrastructure, where the economy's getting worse, and where there's a situation where people are facing more costs. There are 7,000 more children in poverty today than there were a couple of years ago, I say to Ron Mark—7,000 more children. Actually, there are tens of thousands sitting there, and the Christchurch City Mission says that things were better under us and that things have got much, much worse.
Hardship grants have doubled. Emergency housing grants have increased by 500 percent, and the social housing waiting list has more than doubled to over 13,000 families. They've been better at filling motels than they have at building houses. Hundreds of millions of dollars are going on people—and you'd think the Prime Minister would finish on a strong point, actually. She finished on 1,800 new police officers. I say again: I thought, Jacinda Ardern, that we were going to have a facts-based campaign this year. If you don't like what you promised, just change the target and pretend nothing happened. Say black is white and white is black and hold up a graph that's blank and red and supposedly means something.
They said they'd deliver. While we're on promises, they said they'd deliver 100 percent qualified early childhood teachers. Where are they? Today we hear we're waiting longer and longer and longer for children with special needs who need special attention in our schools.
One billion trees, Shane Jones. Where are they? The best he's given us is a small dying shrub. And someone probably paid a donation for it, but that's the way it goes. They have been so incompetent. They haven't delivered, and they are not managing the economy at all. In fact, we see things going backwards—a situation where we had decades of surpluses, actually, as far as they eye could see, according to Treasury. The legacy of John Key and Bill English is a situation where from the global financial crisis we went to prosperity, and now this Government has got us back in deficit.
If Grant Robertson were here—
SPEAKER: Order! The member knows he's out of order—or he should.
Hon SIMON BRIDGES: Grant Robertson will tell us—about that situation, that deficit—that we will be back in surplus soon. One thing I know about Labour parties is that once they're in deficit, you never go back. They have a taste for wasteful spending. And that's the situation. And we'll see, Jacinda Ardern, at this Budget. You've been bequeathed, Jacinda Ardern, a fantastic legacy, and you have failed to deliver. You have squandered it in just three short years.
Three years ago, our economy was growing at nearly 4 percent per annum, and we're now at almost half of that—from tax and cost and regulation.
Hon Kelvin Davis: How many more of your MPs are leaving?
Hon SIMON BRIDGES: You want to talk about taxes? 
Hon Kelvin Davis: How many more MPs are leaving?
Hon SIMON BRIDGES: Oh, you want talk about why one of your MPs is being challenged, Mr Davis. Why is the guy over here who's only been in Parliament about five minutes going on the list because he can't hack it? I thought he was one of the tough guys, one of the good guys. This is a guy who wants to run these things when we know the situation.
We have slipped down the GDP per capita table—behind Chile, Hungary, Poland, Latvia, Estonia, Lithuania, Spain and even Greece. [Interruption] Well, was it Winston Peters who talked about a Polish shipyard? Actually, I think it was his mentor, but that's where we're going under this Government. We are slipping behind.
I say again to Ron Mark that he may be laughing but New Zealanders aren't. On this side of the House, we have a plan to fix that. That involves getting more money in people's pockets, making a stronger economy, actually building the infrastructure. Let's actually do this, Stuart Nash—and making communities safer. I see Stuart Nash over there, in a situation where right now around New Zealand—in his electorate there's open gang warfare. What was it? Fifty gang members brawling a few weeks ago, Stuart Nash—50. AK-47s—guns. How many were arrested? Four, I'm told. Under Stuart Nash we have a tag and release policy that isn't going to work.
New Zealanders deserve better than this Government. They deserve a strong economy, to build the roads, to do first-class infrastructure, to build the world-class schools. They deserve financial security so that they can look after their families in good and bad times. They deserve the ability to fill up their petrol tank and to have a better cost of living in this country. They deserve the environment that Jacinda Ardern and James Shaw talk so much about—that's seen emissions go from going down under us to going up under them. [Interruption] 
Kelvin Davis keeps interjecting, and he obviously didn't get the memo they sent around before about not doing that and sitting there with their head in the—he never was the smart one in the class; let's be honest about that. But here's the thing. Some say—[Interruption]
SPEAKER: Order! I'm going to now ask both sides to settle down, and when I'm on my feet, the member will sit. That mightn't have been in the best taste, but it does set the tone for the debate, and I'm going to ask the member to continue. But some of those interjections are to stop as well. Not that member—the ones in reaction to what the member said.
Hon SIMON BRIDGES: Some say that none of this is the Prime Minister's fault: the fact, actually, that Phil Twyford can't do any infrastructure; that Carmel Sepuloni had boasted about getting things under control, but we have 28,000 more people languishing on the dole; the fact that David Clark sends out the chief executive of health to front on coronavirus and he's missing in action. Somehow these aren't her problems. I say let's stop making excuses for Jacinda Ardern. Leaders lead. Actually, leaders get things done, and New Zealanders know—
Rt Hon Jacinda Ardern: Ha, ha!
Hon SIMON BRIDGES: And she laughs about that. Where has her Minister been on coronavirus? Where has Phil Twyford been? Where has the Minister of Housing—the new one, the next one—been on these issues? They have been out for the count.
The National Party has a plan. We take a very clear plan.
Hon Members: What is it?
Hon SIMON BRIDGES: Well, it's not a—unlike hers, it's not a complicated plan. It doesn't involve fake news and graphs that are "based on Treasury", but, actually, she's added to.
Hon Members: Ha, ha!
Hon SIMON BRIDGES: They laugh and they laugh, because right at the start of this year Jacinda Ardern went out with a transparency tool. She said she was going to be the most transparent—all of these things. Well, right now they're peddling paid targeted advertisements all over Facebook, begging New Zealanders for money for the Labour Party. And have they signed up to the transparency tool? No. Has Jacinda Ardern signed up to it for her personal page? Has the Labour Party? Has the Government? No, they haven't. That was the big song and dance, and they haven't.
You see, on this side of the House, New Zealanders know—like John Key did, like Bill English did, like I will—that we will deliver a stronger economy. We know, in uncertain times, what to do. We'll provide the tax relief that's required, and we've already started laying out that plan. We'll make sure there's less regulation for small businesses and we'll do the infrastructure that's required. That's the second part of this plan. We'll build some roads. We'll actually do this—
Kieran McAnulty: What plan?
Hon SIMON BRIDGES: —Kelvin McAnulty, or whatever your name is; I don't know what your name is. We will do this by building the roads around New Zealand, and New Zealanders know that we will actually deliver. 
Stuart Nash and Andrew Little, we will make sure that New Zealanders have the safety and the security that they deserve. We understand that behind the statistics, where there are tens of thousands more victims of crime right now, where burglaries are going up, where sexual violence is going up, where robberies are going up, where gang members are up 30 percent exponentially in his own electorate—we're not going to do tag and release. We're going to resource those police. Whether it's 1,400 or whatever the number is in reality, we are going to make sure that New Zealanders are safer.
There's a contrast in this Parliament between big talk, a lack of delivery, zero substance behind that party over three years, failing to deliver for New Zealand, and on this side a party that, when it says it will do something, delivers for New Zealanders, that is going to deliver that money in their pockets, that is going to deliver the infrastructure that's required, and that's going to deliver a safer New Zealand for all families.





SPEAKER: No, I can't call the member yet. I'm waiting for the Leader of the Opposition to comply with Standing Order 124. It's an issue I dealt with last year with him. [Leader of the Opposition tables amendment]
Hon Member: What an amateur.
Hon Simon Bridges: He's such a clever guy!
SPEAKER: No, sit down. The member will stand, withdraw, and apologise.
Hon Simon Bridges: I withdraw and apologise.
SPEAKER: I want to indicate to the member that the Standing Orders are not petty. They're very definite. They're very clear. He had one chance last year and he made a mess of it, and he's done it again, and calling me petty for insisting that he comply with the Standing Orders is, as far as I'm concerned, outrageous. The Rt Hon Winston Peters.
Hon SIMON BRIDGES (Leader of the Opposition): I raise a point of order, Mr Speaker. I have not said that you are petty and I'd ask, if you're going to make that sort of quite serious statement in this House, you back it up, because it is not true. The second point I'd make is there may well be Standing Orders on these matters, but for the 12 years I have been in this Parliament, when things are tabled, when motions like that are put, there is customarily a period of time in which to put that before—I had just finished my speech and if I wanted to take a little time and actually let Mr Peters start speaking and hand it over to the Clerk, I think that's incredibly reasonable.
SPEAKER: Right. OK, well, the member might believe that, but he might believe a whole pile of other things. Any competent member knows—any competent member knows—
Hon Dr Nick Smith: Starting off the year biased.
SPEAKER: Nick Smith will stand, withdraw, and apologise.
Hon Dr Nick Smith: I withdraw and apologise.
SPEAKER: Any member with a knowledge of the Standing Orders—and anyone who has observed this House—knows that it is the practice to give to the whips a copy of an amendment which is given to the Clerk during the speech, because it has to be put by the Speaker at the end of the speech. The question is now that Mr Bridges' amendment be agreed to.





Rt Hon WINSTON PETERS (Deputy Prime Minister): Can I say that it's very difficult to make a silk purse out of a sow's ear. All the elocution lessons; all the lessons on how to stand, pull your chin in, speak deeply; all the lessons on how to look like a statesman have all been wasted. He took 17 minutes of a 20-minute speech to say that the National Party has a plan—17 minutes.
Now, can I say to the backbenchers—I just saw a poll this morning. It's about the leaders of political parties in this country. One of those polls has the leader on the positive-negative equilibrium. I'll say it slowly for the big chap, because even he could do better than that. The woodwork teacher, I mean. The woodwork teacher could do better than that.
Hon Gerry Brownlee: Have a go at the tradies.
Rt Hon WINSTON PETERS: Oh, the tradies. He wouldn't know a hard day's work physically if he saw it, and it shows—look at his soft hands. He doesn't know what work smells, tastes, and feels like, and it's demonstrable. Have a look in the mirror.
Now, back to my point. There was a poll and I saw it this morning of the leaders of political parties in this country. One party has a leader whose positive-negative rating is minus 32 percent. I don't care what the Australian Liberal Party told you, for the backbencher over there. You cannot make it from that percentage. It's all over, Rover. I have got great news, therefore, for Judith. Judith can do better than that; I've seen that poll as well. They're in serious, serious trouble.
But I want to begin by saying that the New Zealand First Party is a party where the differences in what you just heard are so obvious. Optimism versus pessimism. More progress versus back to the future. Investment versus divestment. Unity versus division. And what happened to the Christian upbringing? That was pretty nasty, wasn't it? I mean, I've got to wonder which part of the sermon did he miss, because that was not nice. It was pretty basic.
We begin the year in good heart, in good standing, positioned as the centre party of this country, ensuring that balanced common sense and good policy prevail over rampant ideology and bad ideas. Let me tell you, the barometric measure of that when it comes to politics is the latest attack on you-know-who. Has it got a familiar ring about it?
I don't want to sound like this because it might sound arrogant, but it's not my words. But when a true genius arrives in this world, you'll know him by this mark: all the dunces are a random confederacy against them. And I'm looking at them right now, at this point of time.
We're constructive, and throughout this term we've looked at restoring capacity in our central social services, addressing the massive disparity between country and town, city and the provinces, laying foundations for a more just society and creating a comparatively robust economy for all to share in, not just for the few and the very few. Since then, growth is up; immigration is down. The minimum wage is up; unemployment is down. Infrastructure investment is up; business pessimism is down. A billion trees are growing up; the National Party support is crashing down.
The Prime Minister just shared another poll that she's heard about with me. I can't tell you, of course, because it's confidential. But if I was over there, I'd know the feeling. Three more years, possibly three more years, of going nowhere fast. That's why they're deserting in their droves. That's why they're retiring from safe seats. They're saying, "I don't want to be here under this sort of leadership."
We're ambitious to do more and achieve more. After all, we've only just got started. New Zealand First stands for, in this election—the best place to outline that is to tell you what we're not going to stand for. We're a party that will not tolerate letting this country fall into a pattern of decline and drift. The previous National Government was complacent, unconcerned, and unable to address growing inequality and obvious signs of social stress.
The Prime Minister laid them out, one after the other, and there they are in massive denial, with incompetent, hopeless people like Nick Smith shouting at the top of his breath, looking like he might have a vein go in his neck. That's how angry he was. He's sort of the kind of guy born with a sense of noblesse oblige but without class. He thinks he's born to rule. Do they look like they're born to rule? Have a good, hard look. They haven't been in business themselves. The leader and deputy leader wouldn't know how to run the university tuck shop, have never ever run a business, and nor has their finance spokesman, Goldsmith. No—he's spent his whole life writing about businessmen, but he's never been a businessman himself. And you know, you cannot learn on the job. Either you've done it or you ain't, son—and you ain't. 
SPEAKER: Order! "Son". 
Rt Hon WINSTON PETERS: Oh, sorry—sorry. Well, you know, some people would be proud of that, but never mind. 
Now, one forgets how distorted National on the economy was and how rundown the social services were, and they had one plan and one plan alone: open the floodgates of immigration—and that's a fact. Between the 1990s and the 2000s, immigration was around 12,000 per annum, and then, under National after 2014, it massively exploded to 38,300. In the year after—2015—it was 58,300. In the year after that, it was 69,100, and by 2017, it was 72,300. They only had one part of the economic plan: just explode the population. 
Now, everybody in Auckland knows what that meant, and everybody around the country knows what that meant: house prices going through the roof, a lack of housing, and a massive demand for schools, hospitals, and infrastructure. The stress was minus, and immigration explains the housing market distortion and crippling infrastructure deficit. Health, education, social services were run down. Evidence of neglect was everywhere, from people sleeping in cars to rotten walls in hospitals. 
The other day, I picked up the Whangārei Advocate, and there was an advertisement from Mr Reti on the highway to Marsden Point. 
Hon Nathan Guy: Dr Reti. 
Rt Hon WINSTON PETERS: Dr Reti had an advertisement saying that it had been reinstated. Dr Reti, please tell us how many dollars were set aside by the National Party with respect to Marsden Point? Mr Reti, put your hand up if $1 was assigned to Marsden Point to Whangārei—please put your hand up. You see what I mean? He can't tell a lie—I admire him. He's an honest man. But don't have your party put that crap out and think you're going to get away with it. 
The same thing when it comes to, for example, north of Tauranga. There's the member for Tauranga talking about Ōmokoroa being promised, and all the way to Katikati—not "Catty-catty", as he said; Katikati—and Mr—
Hon Simon Bridges: The Te Reo renaissance man, now—are you? 
Rt Hon WINSTON PETERS: OK, Mr Bridges, put your hand up if $1 was assigned by you as a transport Minister for that road. He can't tell a lie, either. I hope some people in the media are watching, because now we're having a confessional. We're having an admission. We're getting it out of him, but, boy, how hard it's been, and why do I have to do the job that they should be doing? 
Where was the money? Well, it was never there, but he got up and said it. He read a list out today of what they had promised, excepting—as Grant Robertson will tell you, and as Mr Twyford will tell you—there was no money assigned to it. 
When it comes to defence, they had a $20 billion plan with not $1 assigned to it. Along comes Ron Mark and, in very difficult and trying circumstances with the Minister of Finance, he starts getting the funding that defence desperately needs. All over the country and all over the Pacific, our troops are helping this country's image in essential humanitarian work. It's multifaceted, but it's this Government that's doing it, much to the surprise of the Defence Force. They have always believed that National was for them, excepting they never were when it came to finding the money that really mattered. 
Hon Simon Bridges: Why is she not listening? 
Rt Hon WINSTON PETERS: Oh, the Prime Minister's listening, all right, because I shared this speech with her before I started it. We're a Government of cooperation—in fact, she could have written it herself. Ha!
When I was the Acting Prime Minister, I can tell you what happened one day. I'll never forget it because I was absolutely shocked, because in the room came a group of civil servants to tell me that the Deep-ocean Assessment and Reporting of Tsunamis (DART) buoy programme—which for decades we've been financing to warn us if a tsunami was coming our way, and our Pacific neighbours as well—had all been allowed to run down, and the last of them was on the blink. This previous Government—if you want to look at any evidence of how shocking and neglectful they were, they were prepared to see the tsunami come down, sweep through the Pacific islands, and take the top of the North Island out, with no way of warning ourselves. 
I stood there and I could not believe it, and my colleagues know what happened. They are sitting here now. We said, "We're going to get on to this. We're not going to lose one day. We're going to rebuild these DART buoys.", and last year, before Christmas, five were sent to the Pacific, and at the end of the year, 15 will be in place. That's the difference. 
There is nobody on that backbench who was told that—that we could have had circumstances where, when the media asked, "What happened here?", we would have found that the so-called Government of Gerry Brownlee and Mr Bridges had allowed the whole warning system for the Pacific and ourselves to lapse and rot and decay. You don't need to know any more about Government or policies but to know that. 
More importantly, the Australians were shocked and said, "We'll help out." I spoke to the United States. They said, "We'll help, as well." But they could not believe that the very people who had put that in place—
Hon Gerry Brownlee: No, that part's not true. 
Rt Hon WINSTON PETERS: —under former, responsible Governments had allowed it to happen. Mr Brownlee is still fully unaware of what happened. But, you know, if you're not spending all your time focusing on politics and other things, then you can possibly—possibly—lose the plot. 
Can I just say one thing: the National Party today—and its image is very clear—is a party with a small "n". It's not a centre party any more. It is still in the throes of "Ruthanomics", even though that was a disaster that took the National Party, in the space of three years, from the biggest majority ever to a hung Parliament—in three years flat. They still hanker for that. They've still got control of the National Party, and, as for the rest of the backbenchers, they've got no influence whatsoever. 
Here we've got Mr Goldsmith. You know what his experience is: he's looking to cut anything and everything. He's spent every time on massive, essential investments in provincial New Zealand scoffing at every idea—parked up in Epsom. He's notorious, of course, because he's the only politician in the whole Western World that is remembered for pulling his hoardings down—not for putting his hoardings up; pulling them down. We have never seen that—
David Seymour: How's Northland going? 
Rt Hon WINSTON PETERS: —anywhere in the Western World, and now here's the political cuckold from Epsom shouting out now. You know who that is, don't you? The one who's looking for a second tango partner. 
In fact, I saw the other night on TV him dancing, again—it was on the weekend show—and I had a good, hard look at myself and I thought, "You know, this cannot surely be—that we in New Zealand have a Parliament where people are so desperate for publicity they're prepared to do that." They pick these special moments on national TV to humiliate themselves. 
But, you know, can you remember the ACT Party's leadership? I do. Remember who the first one was? Douglas, and then Prebble, then Hide, then White—was it? And who else—somebody in between? 
Hon Members: Brash. 
Rt Hon WINSTON PETERS: Oh, Don Brash—sorry. Oh, Don Brash, yes. Don Brash, and now Seymour. Now look, this is a case of serious, mortal mental deficiency—it shows. Seven leaders—seven—and the present one's only there now because there's not a second vote. That's what he's doing there. 
By the way, when you say something like you said the other day, if I thought he had a cent, I'd sue him. But he said on TV something that's defamatory. If I thought he had any money or he had a sense of being able to pay me, I'd sue him, but I'm not going to waste all my money to get—
Hon Simon Bridges: Talk's cheap, sweetheart.
Rt Hon WINSTON PETERS: No, no. Talk's not cheap—that member's going to find out how expensive it is. This is a member that's all over a tape recording of illicit funding of the National Party. The tape recording's going to be disclosed in this Parliament shortly.
Hon Simon Bridges: Run us through the defamation.
Rt Hon WINSTON PETERS: And he's shouting out that he's innocent. Is it somebody else's voice? Is it somebody else's voice? Mr Bridges, when the voice is played, will it be Mr Bridges' voice or someone else's? Because if it's his voice, then he's deeply implicated. He gave the directions. No wonder he said he wanted to move on—he wanted to move on.
Can I just say that recently the Fitch Ratings agency said that New Zealand had sound fiscal management, low and declining debt in relation to GDP, and they said that this would enhance the country's resilience to economic and financial shocks. The reality is that we face difficult times that I have forecast in the past. I'm not trying to be wise before the event, but if you look at the level of bank indebtedness around the world and the amount of money that's been given to cheap interest, then you've got to ask yourself: when does the ferryman have to be paid? When will the day of reckoning be? So for this Government to be positioning itself in preparation for these sorts of potential financial difficulties is a very, very sound measure.
For all those who will say otherwise, bear this in mind: when this shock happens, we will be affected; just like we are with coronavirus as we speak, where it will have a 2 percent effect—it looks like—on the Chinese economy. There are going to be international ramifications. The issue is: have we done all that we can to ensure that we've protected and shielded our people from those consequences? And I believe we have.
We're looking at ways to support small and medium businesses, and in that regard, the following principles are guiding our policy development: the ease of understanding and compliance, tax efficiency, practical tax relief that will have a real impact on economic growth, innovation, and productivity. We're going, compared to other similar economies, very, very, well. But we could do and can do a whole lot better.
Now, do you remember the National Party and its rail privatisation programme? Well, I do. In 1993, they flogged it off to their friends. Then they recapitalised it and the shares went up to $9.34, and after they'd recapitalised it and gouged it, the shares went down to 28c. That's their record on rail. So then the Labour Party bought it back, having realised that this wasn't a very wise thing to do, and put it back together again. National gets back in and deliberately set out to run it into the ground again—again.
Chris Bishop: Rubbish!
Rt Hon WINSTON PETERS: I know it's rubbish, and that's your specialty. Unbelievable. What a sucker, eh? Ha, ha! What a sucker. I want to focus on my speech; otherwise I'd have a field day. It's like having a duel of wits with an unarmed opponent, mate. And I don't like being unfair to people, I'm a nice guy.
Back to my point. Can I just say that the big thing that's going to happen this year—it's important for New Zealanders to recognise this—is that we need a dialogue with the New Zealand people about our future population policy because the forecast of New Zealand's population by 2050 has got us there already. All the forecasts said that where New Zealand would be in 2050 is today's population, and no one has had a discussion with any New Zealanders at all and the consequences are huge. We can see the straining and suffering out there, where we've got Third World problems that we have allowed to be created, because we haven't had a focused, smart policy. 
Where are they all going to? Mainly to Auckland. All around the provinces we need workers. So we need a focused immigration policy that looks at making sure the provinces get their fair share of overseas expertise as well. Meanwhile out in the provinces, there's a different dichotomy of ageing, where they are older than in the big cities with so much immigration. What that means in the long run is that they'll be gouged out, as well, until the services all go. We need to look after New Zealand from Invercargill to Kaitāia, and to understand this more than anything else: that it's the riches of the provinces that keep this country going, that you can burn down our cities but the provinces will build them up, but you burn down the provinces and you're gone. One party understands that.
I want to tell people out in provincial New Zealand that they've got all these members of Parliament from the National Party from the provinces—they're lions in the electorate and lambs in the caucus. They have never defended the interests of the provinces when it comes to exporters and farmers.
Look, let me say—because I was a member of the National Party once—if your choice as a young person is to join the National Party because you're trying to find a wife or husband, there are better places to go—there are better places to go for real company. The problem is that once they get here, the big banks get to them and they stop speaking for the provinces. For example, when was the last time Sarah Dowie made a speech about Invercargill? When was the last time that Mr McKelvie made a speech about the provinces? When was the last time anybody in the countryside from the National Party got up and told the world what the country needed? Now, you know, it's deafening—they can't tell me one example. Well, who was the last one that made a speech?
And please don't tell me the guy from the prosecution office from Tauranga, even though he didn't have a warrant. Please don't say he speaks for the country. Oh yes, it sounds good on the CV; he used to be a prosecutor, he says—he used to be a Crown prosecutor. Mr Bridges, did you have a warrant? No, again exposed. It's like taking candy off a baby, isn't it? Just answer the question. Oh, Judith knows, because Judith has a real background in law; I do respect that. But when it comes to the man with all the teeth in Tauranga: no go, no show. Thank you very much. 





Hon JAMES SHAW (Co-Leader—Green): E Te Māngai o Te Whare, tēnā koe. Before I turn my attention to the Prime Minister's statement, I just want to take a moment to draw this House's attention, and our memory, to the catastrophic fires that occurred in Australia over the summer, many of which are still burning now. I think it's pretty easy amongst all the hurly-burly of our election year to forget the crises that have occurred to our nearest neighbour. There was, and has been, extraordinary loss of wildlife, of human life, of forestry, and of property. The areas that were burned by the fires, if that had occurred here in New Zealand, would have stretched from Cape Reinga in the North to Rotorua and burned everything in between. I just think if we could take a moment to just acknowledge the scale of what has happened in Australia, because this House has not yet had an opportunity to reflect or acknowledge the catastrophe that has befallen Australia, and so I just wanted to take this moment to do so before we begin. 
Sitting and listening to the Prime Minister's statement, I felt enormously proud of everything that this Government has done, is doing, and is going to do to make this country even better and to ensure that it is a great place to live for all of us, and not just all of us now, but for generations to come. So it is with great pleasure that I do stand on behalf of the Green Party to support the Prime Minister's motion and her statement that this House has confidence in this Government. 
I do hope that the politics of this place—and we have seen that amplified already by the proximity of the election, even though it is still something like eight months away—won't distract us from the fact that we still have some big decisions to make that will have a profound effect on the lives of New Zealanders. Whether it is to ensure that people have warm and safe houses, or whether it's ending child poverty, or supporting young people who are going through a rough time, it is within these four walls that we can make and do make a huge difference to people's lives. Some of us have got different ideas about how to do that than others, but either way, I think all of us in this House should remember—and with humility—that it is a responsibility that we walk into every time we walk into this Chamber, for this place, it doesn't belong to us, to the 120 members of this Parliament; it belongs to the people of Aotearoa New Zealand. It belongs to people who tonight will be sitting around the dinner table worrying about how to pay the bills. It'll be the people who are working tirelessly to improve our communities; people up and down the country who are starting and running businesses. 
In the next eight months, we will be asking those people, the people who put us here, to hold us to account for what we have done. We too in the Greens will ask them to support the ideas that we have about where to go next. Most of these New Zealanders, I'm sure, want a Government that will not just confront the challenges that we face at the urgency and the scale that that requires, but actually solve those challenges; not just acknowledge that there is a problem, but actually deal with it—creating a better future for their kids and for their grandkids; a thriving natural world; a cleaner, greener, and safer community in every part of the country; a zero-carbon economy; and a world where every New Zealander can earn not just enough to meet their basic living costs but to enjoy those things that many of us, and certainly all of us in this Chamber, take for granted, like time away with the whānau or a treat at the weekends.
Now, one term of Government was never going to be enough to fix everything that needed to be fixed, but we have made an incredible start, and New Zealanders know it. Nine years of a National-led Government demanded it. Look back at that nine-year period, and what most people will see is the familiar pattern of neglect that accompanies every National Government—not just this last one, but the one before that and the one before that. Look back on that nine-year period that most people will see as that familiar pattern of neglect. They'll see families that are struggling to make ends meet, forced to make impossible choices between heating their home or putting food on the table. They'll see polluted rivers and a nearly cataclysmic absence of the native creatures that we know should inhabit our forests and our land; a complete absence of meaningful action to tackle the climate crisis. That's what they will look back on on those last nine years. 
On that last point, Mr Speaker, you well know that there are kids growing up today who are deeply worried about the future that they will inherit as climate change impacts their lives. It's hardly surprising, when you consider that every year that they have been alive has been the hottest on record—every year for teenagers growing up today has been the hottest on record. As they think about their future, they're looking at us and wondering whether we have the courage to step up. They want to know if we will take the action to create that better and cleaner world for them and their families, or what they will inherit from us for their children. I know what I want to be able to say to them. Climate change, it is not just another subject; it is a prism through which young people see the world.
Yet, in their term of Government, National squandered nearly a decade of opportunity to do something about it, to create a better future. They gave us no reason to hope. They eroded any promise of change. They became a risk to our shared future. That is not just negligent; that is unforgivable. So here, two years into what we will hope will be a very long period of Opposition for them, instead of using that time to think up ideas about how to undo the damage that they did, the only thing that they have managed to prioritise is an ugly politics of fear and misinformation and resentment. As we get closer to the election—we're eight months out, and you've got to remember what you just saw from the Leader of the Opposition; that's going to get worse—the National Party will pit country against town. They will promise simple fixes to complex solutions. In fact, Mr Bridges even said in his speech, "It's simple. Just build more roads."—the answer to every single question, every single challenge. "More roads" is the answer to every question that they have. Worst of all, they deny their responsibility for creating the very problems that they say that they want to solve. We will not adopt those tactics. We will not say just whatever comes into our heads because we think it might work. We will not make up stuff about the overwhelming scientific consensus on climate change, and we will not exploit people's genuine concerns for political gain.
We will win by talking to New Zealanders about the type of future that they want and the ideas that we have about how to get there. And we will win because of our track record in Government, regardless of anything that they say. More than two years ago, the Green Party members of Parliament elected to take seats in this place helped to create a Government that is committed to reversing the negligence of nine years of the previous National administration. We made a promise to Aotearoa that we would not shy away from the future that demanded us but work to shape it. And we here today have a track record of huge progress.
In our first two years, we have taken more action on climate change than the last 30 years of Governments combined: the zero carbon Act, the Climate Change Commission, the emissions trading scheme reforms, the first set of emissions budgets, the billions of dollars that we are investing in rail and light rail and buses and walking and cycling infrastructure, the billion trees programme, the end of offshore oil and gas exploration, electrifying the public service car fleet, companies reporting to their shareholders and State services organisations reporting to their Ministers on their climate-related risks. 
I know—I know that there will be people out there who say we've not gone far enough. But no one should ever think—no one should ever think—that the hard work is not worth it because we haven't got everything that we want. You try telling that to Marama Davidson, who has worked so hard to ensure that our loved ones, our friends and our whānau have warm, safe, and dry houses in which to live. Or tell that to Eugenie Sage, who has delivered the largest boost to conservation funding since the Department of Conservation was founded in the 1980s. Barely a week goes by when there isn't some more good news about our native wildlife, and, thanks in no small part to her efforts, most people are shopping with their own bags rather than suffocating single-use plastic that we came to rely on. Or tell that to Julie Anne Genter, who has led a massive reprioritisation of transport spending to give people better, cleaner, and safer options for getting around. 
And let me say this about the Advertising Standards Authority finding on the National Party, who found yesterday that the National Party thinks that they cannot hold this Government to account without lying about what it is that we're doing—
SPEAKER: Order! Order!
Hon JAMES SHAW: Beg your pardon, Mr Speaker. Try telling Jan Logie that the work to reform the way that we manage and reduce sexual and domestic violence has not been worth it. Or tell Gareth Hughes, who has changed the future direction of this country by working successfully to end offshore oil and gas permits that that hasn't been worth it. Or Chlöe Swarbrick, who has done so much to ensure that young people have the support that they need when they need it to live fulfilling lives.
It's work that serves to remind us that we are stronger when we have each other's backs, when we're looking out for one another, when we're giving support that makes sense to the people who are needing it. Tell that to Golriz Ghahraman, who has championed changes to our democracy that build trust and make us more accountable to the people who put us here.
We have done all of this. We have done all of this and so much more with just eight members of Parliament. Imagine what we could do with just a few more. There will never be a moment that we can say that we are done or that we have won. Lasting change demands that we keep working every single day further and faster towards a future where all New Zealanders have everything that they need to lead fulfilling and meaningful and prosperous lives, where everything from our morning coffee, to travelling to and from work, to warming our homes is powered by clean, renewable energy; where our precious plants and our animals are protected and our wild places are looked after for future generations. 
This Government of three parties has shown how we can work through our differences and find common ground that benefits all New Zealanders. Who will be around the table for those discussions after the election is a matter for New Zealanders to decide. But for those who say they want us to do more, I say, get involved. Get involved—get involved in the issues that are affecting your communities and our nation, whether that's online or at a neighbourhood meeting, whether that's conversations with your friends and your family, talk about your ideas for solving the issues that matter to you. Demand more of us. Knock on some doors. You never know, that small action that you take might change somebody's mind. That might change the political environment in which the next Government has no option but to move further and faster towards that future that we need.
With two years at the heart of Government, the Green Party's first-ever time in Government, we have done a huge amount to create a better future for our kids and our grandchildren. But what we do next—what we do next—is where you will find our better future: an Aotearoa defined by its leadership on climate change, by fairness and equality, and a thriving natural environment. Making this happen is the only way that we can keep our promise to future generations that we will leave behind a world that is better off for what we did. Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa. 





DAVID SEYMOUR (Leader—ACT): Thank you, Mr Speaker. I rise on behalf of the ACT Party in opposition to the Prime Minister's motion and with some support for the National leader's amendments that you've finally received on the Table and with a few additional comments. 
This year, New Zealand faces a choice between the politics of gesture and the best political marketer in the world, who is also the world's worst policy deliverer. A choice between a speech which delivered no substance whatsoever—there were lots of intentions. You have to hand it to the Prime Minister for outlining the intentions—everyone wants a better world—but not once did she describe how it would be delivered. And as for the Deputy Prime Minister—for now—well, let me give a bit of an education in some of the basic shapes. [Holds up pictures] This is a pentagon. This is a hexagon. This is an octagon. And this is a "should-be-gone". And there's so many reasons why he should be gone.
He says, "Oh, I'd sue, but you don't have any money." Here's the truth: the truth is that it's all gone wrong. The facts are out there. People know what's been going on. He can bluff and he can bluster, and he can huff and puff and threaten to blow our house down, but the truth is going to come out, and it's going to finish a career. The tragedy of that career being finished is this: people are going to sit down and try and write the legacy of Winston Peters. They'll try and compare it to the legacy of, perhaps, Mike Moore, who changed this country for the better for ever. As they sit and they try to describe what Winston Peters has achieved in 40 years, they will find they have nothing to write. What a shame—what a shame. But, sadly, it is still true that he is taking the shape of a "should-be-gone".
This Government is so filled with good intentions, and yet none of them work. Most of them, it turns out, actually, are a failure. The Prime Minister, as has been noted, didn't talk about KiwiBuild. I think she talked about the Child Poverty Reduction Act. What has it done? It's seen child poverty go up—as if passing a law to measure child poverty was actually going to reduce it.
We've seen intrusive market studies into whole sectors, such as petrol retailing, and get this: the Minister of Commerce and Consumer Affairs says that they're going to bring down the price of petrol 32c by attacking the cut that petrol companies take. Well, the petrol companies only take 25c a litre, so can the Minister of commerce—you know, I've done geometry for the Deputy Prime Minister; maybe the Minister of commerce needs to learn basic arithmetic. You can't cut the price of petrol 32c by reducing the petrol company's cut when the petrol company only takes 25c. That's the problem in a nutshell with this Government.
Then they banned plastic bags to reduce the amount of plastic in the ocean. Well, there're two problems with that. I actually asked the Government how much of the plastic from the ocean comes from plastic bags in New Zealand. Do you know how much it was? No? Neither do they. The Government can't tell you how big the problem is they were trying to solve. So they've got us all walking out of the supermarket like this [Mimes holding groceries] or buying even thicker bags with more plastic to solve a problem they don't even know exists.
I could go on and on talking about ineffectual policies that this Government has put in place. Here's one: we have a real problem in this country with our firearm laws. We know this because an Australian weirdo—and, frankly, as it turns out, one of the most evil people to set foot on our shores—is able to get off the plane. He's a single male. He lives alone. He's just got here. He gets a licence. He gets an AR-15. The police sign off on 3,000 rounds of ammunition. No alarm bells were rung. No one thought, "Gee, this is a bit of a problem." What's the Government done? They haven't solved any of those problems. What they have done is they've gone and isolated and undignified and collectively punished a quarter of a million New Zealanders who did nothing wrong. How's that for a Government of inclusion and kindness? It's another damaging policy that is ineffectual. 
And then the Prime Minister had the temerity to say—and I guess if you're 100 percent marketing-led you can say these things regardless of their veracity—that this is a Government of infrastructure. I mean, how does a Government of infrastructure spend two years trying to work out which projects they're ideologically opposed to and then try to take the credit for building infrastructure that could have been started two years ago? If that's a Government of infrastructure, then I'd hate to see one that actually does things on time.
Not only are their policies ineffective at making New Zealand a better place; they're actually damaging. This Government sees every aspect of public policy through the lens of class warfare. Employers are people who save up, invest capital, have ideas, and attract customers so they can give someone a job. I think that's pretty cool. I think that's admirable. Not this Government. At every step of the way—minimum wage increases, national awards under the new name of fair pay agreements, new regulations on every aspect of employment—they actually make it harder for people to employ. They actually make it harder for people to get jobs. That's why you've got record terms of trade and the welfare roll is going up. Only this Government could manage those two things simultaneously.
Take landlords. Landlords are people who save up, invest, manage property, and, for a weekly fee—which is often less than the mortgage on the property—provide accommodation. I think it's a wonderful service. I think they're great people. Not this Government. Constantly, such people find themselves under attack, with more and more rules and regulations that make it harder to do their job. The irony of ironies is that not only is it bad for the landlords but, because landlords and tenants have a symbiotic relationship, this Government manages to hurt the exact people it's trying to help. Almost everything they do harms the people they're trying to help and defeats the purpose they're trying to achieve, because they just don't get basic economics, basic logic, and the basic ways that this society works.
This country deserves better. This country deserves a society that works because it gets better policies that actually deliver the intentions, not just serve as background to an unending marketing campaign by the Prime Minister, who—I'll give it to her—is the best marketer in world politics but the worst public policy deliverer.
Let me say finally, in relation to our Parliament, if there's one thing we can all be proud of and agree on, it's that we have been enormously fortunate to inherit parliamentary democracy. There is a long history where, gradually, power shifted from the monarch to the people, who send representatives to the capital city to speak for them.
It's because of the importance of that job—holding the Crown to account—that we have such great privileges. Traditionally, Mr Speaker, it has been the person in your role who is the prime defender of that tradition. Early Speakers literally lost their heads for speaking up for and defending the rights of parliamentarians versus the Crown. Mr Speaker, I watched your ruling on the Leader of the Opposition, and I observed the way that you treated me through question time towards the end of last year. I'd put it to you that, as the person with the privilege of upholding the parliamentary tradition, you, for now, have all the power except for one, which is to choose how others will judge you as you leave this place in future. Thank you, Mr Speaker.
SPEAKER: Following agreement at the Business Committee, the debate on the Prime Minister's statement will now be adjourned and oral questions held. The debate is adjourned and set down for resumption next sitting day.





MINISTERIAL STATEMENTS
COVID-19 Outbreak—New Zealand Response
Hon Dr DAVID CLARK (Minister of Health): I wish to make a ministerial statement in accordance with Standing Order 355 about the novel coronavirus. The novel coronavirus, recently named as COVID-19, was first reported to the World Health Organization on 31 December. As members will be aware, since that time there have been more than 43,000 cases and over 1,000 deaths—the vast majority within China. In New Zealand, we have not yet had a confirmed case but we are taking the threat very seriously and we are well prepared. Our comprehensive health response began on 6 January when the Ministry of Health first sent out advice to DHBs and primary care about the virus. Arrangements were quickly made to ensure that health advice was being provided at the border in a range of languages, including traditional and simplified Chinese.
I'm advised that providing clear health advice remains our best protection against the spread of the coronavirus, and that remains a key part of our ongoing response to this issue. An incident control team was set up within the ministry in the week of 20 January. That same week, on 24 January, the Government's interagency pandemic group met as a precaution. At all times our response to the coronavirus has been informed by the best available public health advice from doctors and clinical experts. That advice and our response are under constant review to ensure we continue to follow best practice and work closely with our international partners.
Based on expert public health advice, on 27 January we deployed public health nurses at Christchurch and Auckland international airports to meet all flights from mainland China, to provide advice and check anyone displaying symptoms. Those measures are ongoing. On 28 January, Cabinet met for the first time this year and made the novel coronavirus a notifiable disease under the Health Act—that means we have all the appropriate public health powers in place to deal with the COVID-19 if and when it arrives in New Zealand.
That same day the Ministry of Health activated the National Health Coordination Centre, which is operating seven days a week to monitor the situation and which provides updated advice on a daily basis. Our response to the coronavirus has been measured and responsive. As the number of cases has increased and disease has spread, we have been constantly reviewing our position to ensure we are doing what is required to keep New Zealanders safe.
On Monday, 3 February the Government introduced travel restrictions that prevent anyone other than New Zealand citizens or permanent residents who have been in China in the last 14 days from entering New Zealand. This step was not taken lightly but followed updated health advice and was in step with Australia, the US, and several other countries—more have since followed suit. I would note that our border restrictions complement the actions taken by the Chinese Government to contain this virus within its borders. No country has taken stricter measures at their border than China itself.
All New Zealanders who have been in China in the last 14 days and have returned home since the travel restrictions were introduced have been asked to go into self-isolation for 14 days, which is believed to be longer than the incubation period of this virus. Previous experience suggests that self-isolation compliance rates will be high, as people are conscious of the risks that infectious diseases pose to their family, whānau, and community. For example, during the 2009 influenza pandemic there were high rates of compliance in the initial weeks of the event and the ministry did not need to use any powers to ensure self-isolation. So far more than 1,800 people have self-registered with Healthline about their isolation. Healthline staff are keeping in regular contact with those people to provide them advice and support and to check on their welfare. Customs and the Ministry of Health are also sharing data to enable Healthline to proactively contact anyone who has returned from China but has yet to register with Healthline.
Members will also be aware that the Government arranged an evacuation flight for New Zealanders and Pacific Island citizens in the city of Wuhan: 157 people remain in isolation at the military facility at Whangaparāoa. They are receiving regular health checks, and if anyone displays any symptoms, no matter how mild, they are being tested for coronavirus. To date, no one has tested positive.
New Zealand is well placed to respond to emerging infectious diseases, we have a strong public health service and a longstanding—
SPEAKER: Order! The member's time has expired.





Hon SIMON BRIDGES (Leader of the Opposition): I rise to speak on this matter, given its significance for New Zealand and globally, and also given the significant uncertainty there is in relation to this matter. I want to say from the outset, on the coronavirus, that the Opposition stand ready to collaborate and to work with the Government on this matter of great importance, in every facet of it. I myself have been thinking about it from very early on, when I heard about it in China, and making sure every single day I understand what is happening on it. Indeed, that's partly why my health spokesperson was very quick to call for actions in this area, and there's been some criticism of that, but I make no apology on an issue of this significance for the Opposition and National Party to hold the Government to account on it.
I regret that at every single step of the way, my clear view is that the Government has done too little, too late. We've had comprehensive analysis conducted on where the United Kingdom, Australia, and the United States have been, and at every step, as they have done things, we have been several days behind them. I could run through that in some detail, but I simply want to touch on screening, and the many examples I've been told about from members of my caucus, from members of the public who've spoken to me about this issue. In theory, there is screening happening now in New Zealand from affected flights coming to New Zealand. This weekend, for example—and it is the only one I will give—I talked to a constituent of mine on the telephone who in fact lives very close to where I live. His clear view, bringing his family back from a neighbouring province and with great concerns about the effect of this on them, was that there was nothing that happened as they came through New Zealand—no screening, no checks, no nothing. What is also true is that as I rang him, because he'd contacted my office and I think I've met him before, he was out in self-isolation in a public space where many other people were, and he'd made quite clear that no one has contacted him. He has had nothing happen in relation to that "self-isolation".
I suggest that, actually, if we don't see harm in New Zealand, it will be much more by good luck than by good management and good practice by the Government. I regret to say I don't believe the Minister of Health is leading on this issue in any way, shape, or form. He waited for the first Cabinet to make preliminary decisions on this matter when a week earlier than that, decisions should have been made on this incredibly significant issue. I believe we must be more proactive, more precautionary, in the way we handle this issue of coronavirus. The Minister said that the Government, the Ministry of Health, has been measured. I regret to say I think what he really means is "laid-back". Kiwis are laid-back, but on an issue like this, that is not good enough.
I want to record the Chinese community's very clear outpouring of views and concerns in relation to this throughout New Zealand. They've been strong, they have been forthright, and, as I say, they have been concerned—deeply concerned—about the lack of measures, the lateness of the measures, in relation to these matters. I record as well my view, and, I'm sure, a view that the House agrees with, that there is absolutely no room for racism in this country on this issue in relation to our Chinese community, who are valued members of our society.
I also want to make this final point that is wider than health when it comes to coronavirus: it is quite clear on the reports that are out in international media about a very significant shutdown throughout China of manufacturing and industry. There is undoubtedly an economic effect that will hit and is hitting this country. Even today, were this issue to resolve itself, it will not be insignificant. I look forward to hearing very clearly from the Government what their economic strategy in relation to this issue—that is a health issue but is also much wider and affects our economy—is and will be.





Hon Dr DAVID CLARK (Minister of Health): Just to respond to a few of the member Simon Bridges' points, first of all, I would stress that all decisions that have been taken in response to the coronavirus have been taken with the public health of New Zealanders and the public safety of New Zealanders as our primary concern. All decisions taken have been informed by the science. The advice that we have received from doctors and clinical experts has informed every step that we have taken, and you will see that we have moved very quickly after Australia to close our borders upon reviewing the evidence and receiving the advice from the experts. To date, I stress in this House—and members will know this—that we have not had a single case of the coronavirus in New Zealand and we have indeed only had one case that could even have been suspected to have met the test of the virus, and that proved to be negative.
We make no apology, though, for taking a precautionary approach and making sure that, for example, we had full Cabinet consideration of the categorising of the disease. We have the health pathways in place. The doctors were ready to refer. The powers that we now have in place can be invoked at any time, but historically, in situations like this, they have not been required, because New Zealanders understand the importance of taking care of their friends and family and those that are around them.
In closing, I would say that we will continue to review the situation. The member at one point says we should move faster and more stringently; at the other, he acknowledges that there are economic effects of this virus around the world. We are reviewing the situation because we do not want this situation to be in place any longer than is necessary for the public health and safety of New Zealanders. We are a trading nation, and we are concerned to ensure that we are doing the right thing for the health of our people, and we will also look to the economy.





ORAL QUESTIONS
QUESTIONS TO MINISTERSQuestion No. 1—Finance
1. MARAMA DAVIDSON (Co-Leader—Green) to the Minister of Finance: Does he agree with the Salvation Army's State of the Nation Report, which said that "despite some significant progress, much more needs to be done to ensure the growing prosperity of our economy is shared more fairly"
Hon GRANT ROBERTSON (Minister of Finance): I agree with the Salvation Army report when it says—and I quote—"This report points to significant progress, including an increase in average incomes, a much needed extra spend on welfare and hardship support for beneficiaries, a decline in offending and imprisonment rates, an increase in the number of social houses, [and] new house builds at a 45-year high." I do acknowledge that there is more that we can do, and this Government remains committed to ensuring that all New Zealanders get their fair share of the benefits of economic growth.
Marama Davidson: Does he agree with the Salvation Army report that this Government has taken "the first steps towards the society-wide change that is needed", and, if so, what are the next steps to share Aotearoa's prosperity more fairly?
Hon GRANT ROBERTSON: Yes. The Government is committed to improving the living standards and wellbeing of all New Zealanders. In this year's Wellbeing Budget, we saw significant investments to make sure that New Zealanders see their fair share of prosperity, and I point to just a couple of those, including the indexation of main benefits to wages and lifts in the abatement rate. In this year's Budget, there will be five priorities, all of which will support that, including the Just Transition future of work work, particularly around lifting Māori and Pacific incomes, skills, and opportunities, and reducing child poverty, and child wellbeing. We are making significant investments in all these areas, and we must continue to do so.
Marama Davidson: Can people struggling in our communities be confident that this Government recognises the need to urgently increase incomes and that he's listening to the evidence presented by experts like the Welfare Expert Advisory Group (WEAG) and the Salvation Army report about ways to achieve this?
Hon GRANT ROBERTSON: In answer to the second part of that question, absolutely, and I have a great deal of respect for both the Salvation Army for their work in this area and, indeed, the WEAG report. We are at a time where incomes are growing. We see wage growth at its highest level. We see the minimum wage rising. We see settlements across the public sector, the State sector, that are supporting those on middle and low incomes as well. So we are committed to seeing wages rise in New Zealand and incomes across the board rise, and I believe we are seeing evidence of that.
Marama Davidson: As finance Minister, will he be looking to use Budget 2020 to deliver on the Welfare Expert Advisory Group's recommendation to raise core benefit levels?
Hon GRANT ROBERTSON: As the member knows, we don't comment on the Budget outcomes until they are completed, but it does give me the opportunity to say to the House today that the Budget will be delivered on Thursday, 14 May.
Marama Davidson: Does the Minister understand that some people had hoped to see more action from the Government to reduce income inequality, given unemployment is at a record low and the Crown's accounts are in good shape yet too many families are still doing it tough?
Hon GRANT ROBERTSON: It's always my expectation that the public will have high expectations of the Government, but I am extremely proud of the record of this Government in delivering to low- and middle-income New Zealanders, and I can't think of anything better to evidence that than the Families Package, where we turned around a set of tax cuts that would have disproportionately benefited the highest income earners in New Zealand to ensure that we delivered to low- and middle-income earners.




Question No. 2—Prime Minister
2. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government's statements and actions?
Rt Hon JACINDA ARDERN (Prime Minister): Yes, particularly the Government's $12 billion New Zealand Upgrade Programme, which will see road, rail, schools, and hospitals built or upgraded throughout New Zealand. Even though we only recently made the announcement, for schools in particular I'm hearing about projects that are already under way.
Hon Simon Bridges: Can she name one project that's already under way from that $12 billion spend up?
Rt Hon JACINDA ARDERN: As I just mentioned, the $400 million that has gone into schools. We're already seeing individual schooling projects I mentioned. Grant Robertson's electorate is one. I've heard from Chris Hipkins in his area. In fact, if the member cares to ask members on his side, every single school in their areas will have a project that they will be delivering with that funding.
Hon Simon Bridges: What advice has she received on the economic effect of coronavirus on New Zealand?
Rt Hon JACINDA ARDERN: The advice that I've seen thus far has said it is too early to make any assumptions, because much of what we're seeing could well be temporary. In tourism, the question is whether or not the 13 percent of tourism we see come in from the Chinese market will postpone their visits or whether or not they will indeed turn into cancellations. Regardless, we're not waiting. We are looking at, within tourism for instance, packages that may help redirect some of those tourist dollars into other parts of the market, even our domestic market. We are asking tourism to work with IRD, for instance, on provisional tax relief as a way of easing the burden on the some 100 small to medium sized enterprises that rely directly on tourism that comes in from the Chinese market, predominantly into Auckland, Rotorua, and Queenstown. We've also, as the member, if he's listened to my post-Cab, will have heard, taken a sweep across forestry, the Ministry for Primary Industries (MPI), particularly the rock lobster industry. Those that are seeing direct effects now we're working closely with, and in the education sector we've already worked with education to extend visas for students that may be affected by the border controls.
Hon Simon Bridges: How significant does she believe the effect of coronavirus will be on our economy both now and in the future?
Rt Hon JACINDA ARDERN: As I have said, actually, whilst it is difficult for us to quantify it now, it is almost inevitable. In fact, I've already said that, in June when we receive the GDP results that cover this period, I absolutely expect for us to see that reflected in our GDP numbers. As you can imagine, as a trading nation, one that receives a lot of tourism from China, one that has an education sector that has a lot of students coming in from that market, and given China themselves have already reflected in their forecasts for GDP a downgrade, inevitably we will see impacts in New Zealand, but we're working to mitigate that to the best of our ability.
Hon Simon Bridges: What does she believe the Government's response to the economic effects of coronavirus should be, not just in tourism but in education and primary exports?
Rt Hon JACINDA ARDERN: As I have said, at the moment the most direct impact we're seeing for exports is in the live export industry. MPI have worked closely with the rock lobster industry to allow them, for instance, where pots are in the sea, where they've been collected, they're able to be released and in alternative situations MPI are working in conjunction with the industry to give permissions where appropriate for release. At the moment, the Minister of Fisheries is consulting on whether or not their take should be carried over into the new year. So that's something that's been consulted on. When it comes to wider exports, at the moment logging is probably the area where the next biggest impact is. That's not just coronavirus; there's a beetle incursion in Europe which is causing a large amount to logs to be exported into China. The supply chain there has a backlog because people are not necessarily unloading at the port. We're working in the areas most affected, particularly Tai Rāwhiti, on ensuring that the Ministry of Social Development is catering for needs that we might see from contractors who are in harvesting but also on whether or not we can marry up those who might be feeling those impacts with others parts of our forestry industry. Te Uru Rākau are working on that as we speak. We are seeking to be as proactive as we can. 
Hon Simon Bridges: Given the consensus reports of about a half a percent off GDP at the moment, that being about $1.5 billion and half a billion less in revenue, what will that lower revenue have in terms of effect on this year and the budgetary process?
Rt Hon JACINDA ARDERN: Again, those are just some of the estimated and assumed impacts. As I've said, at this point in time it is just too early to say. For instance, we have really until through to April for some parts of the education sector to see whether or not that will have a long-term impact. Roughly, 59 percent of the overseas education market have their students already in New Zealand. Of course, we expect for the university sector that, even if delayed, students are most likely to still come in if border restrictions lift in appropriate time, and so really it's just too early to say at this point what those wider impacts will be.




Question No. 3—Prime Minister
3. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government's statements and actions?
Rt Hon JACINDA ARDERN (Prime Minister): Absolutely, particularly the 18-page comprehensive statement that I released today, which includes a long list of significant achievements I'm incredibly proud of and couldn't possibly pack into a mere 20 minutes.
Hon Simon Bridges: How much of that Prime Minister's statement has been done, then?
Rt Hon JACINDA ARDERN: If the member had actually read the report, he would have seen that it is a reflection of all the things that we've delivered, and includes, for instance, a snapshot of our economic record: 2.7 percent growth, unemployment at 4 percent. Of course, we're also debt-down 21 percent, lower than what we inherited, and that's even when you take into account, of course, going out with the Upgrade Programme of $12 billion, that we still have debt at lower rates than what we inherited. There is a long list in there of achievements, all of which I'm very proud of.
Hon Simon Bridges: What is her Government currently doing in relation to the dispute at Ihumātao?
Rt Hon JACINDA ARDERN: I've reported on this many times in this House. The member will remember that in July there was a dispute on that land. Essentially, what happened was agreement between Fletcher's and mana whenua that nothing would happen there until a solution was found. We've simply played a role in assisting to try and broker that solution. I would like to think that that's what leadership is.
Hon Simon Bridges: When she said last year she hoped it would be resolved by Christmas—has that come to pass?
Rt Hon JACINDA ARDERN: It's currently 12 February. The member will well be aware we have passed Christmas, but it's obvious that it's been our aspiration to see a dispute like that resolved as soon as possible. That's in everyone's interest, and I would include in that New Zealand's interest, and if the member had an eye to the kind of relations that we want to foster in this country, then that member might look for a solution as well, rather than stoking cheap politics.
Hon Simon Bridges: Did she resolve it by Waitangi, like she said she would?
Rt Hon JACINDA ARDERN: That member, unfortunately, has a poor understanding of the situation if he believes that there is only one party involved in this. There is mana whenua. There is the private company, in Fletcher's. And, of course, the role we're trying to play: to broker a solution.
Hon Simon Bridges: Will taxpayers' or ratepayers' money be spent on the Ihumātao dispute?
Rt Hon JACINDA ARDERN: Again, as I've said many times in this House, a solution is still yet to be announced or a resolution announced. What has been key in all of this was keeping in mind that there is a proposed heritage order over the land. That puts Fletcher's in a very difficult position, and I ask the member, who I would imagine would have an interest in that, what would he do in this situation for a company, after the bumbling decision of a housing Minister had left them in this situation by calling it a special housing area? What would that member do in this situation?
Hon Simon Bridges: In light of the lack of legal significance around the heritage status, why is she considering spending taxpayers' or ratepayers' money on the Ihumātao dispute?
Rt Hon JACINDA ARDERN: The member's reflection of the heritage status and its effect is inaccurate.
Hon Simon Bridges: Does she believe resolution of this dispute with taxpayers' money will encourage more protests around New Zealand?
Rt Hon JACINDA ARDERN: That's a hypothetical.
Hon Simon Bridges: Does she mean that the dispute is not going to be resolved?
Rt Hon JACINDA ARDERN: As I've said many times in this House, once there is a resolution, I would happily debate it with that member. But I'd like to see what his proposals would be and if he believes the solution for New Zealand is to see protest, violence, and a dispute continue after that side of the House declared this a special housing area, without any plan on properly managing that—if that chaos, protest, and violence is their response to that situation and if that's their version of leadership, they are welcome to it.
Hon Simon Bridges: So when will this be resolved by the Prime Minister?
Rt Hon JACINDA ARDERN: Again, I don't take such an arrogant view of my role in this situation.




Question No. 4—Finance
4. Dr DEBORAH RUSSELL (Labour—New Lynn) to the Minister of Finance: What reports has he seen on the economic impact of the New Zealand Upgrade Programme?
Hon GRANT ROBERTSON (Minister of Finance): I've seen a range of reports from business leaders emphasising the significant impact that the Government's $12 billion New Zealand Upgrade Programme will have for the economy and for businesses. Business New Zealand chief executive Kirk Hope said the additional spending on roading infrastructure will be positive for business, while money for commuter rail services in Auckland and the Wellington region will also help build efficiency and productivity. Fletcher Building CEO Ross Taylor said, "This isn't just planning. It's targeted projects that are real. Often there's quite a lot of plans and options for projects with price tags that might be years away. I can see this is the infrastructure which is needed and it will happen." I'm pleased to be part of a Government that is getting on with the job of addressing years of under-investment in New Zealand's infrastructure.
Dr Deborah Russell: What reports has he seen on the economic impact of the New Zealand Upgrade Programme from the infrastructure sector?
Hon GRANT ROBERTSON: Infrastructure New Zealand CEO Paul Blair said that the Government's $12 million infrastructure programme is a fantastic start towards building the infrastructure New Zealand needs to realise its potential. The additional spending and multi-year nature of the package should provide the sector with the confidence to ramp up recruitment, training, and capital investment, with more yet to come. Along the same lines, the New Zealand arm of global engineering and design consultancy WSP has said it will dramatically increase its recruitment staff, hiring hundreds of planners, designers, and engineers to support its role in projects within the New Zealand Upgrade Programme. It is great to see the sector getting behind this package.
Dr Deborah Russell: What reports has he seen on the impact of the Government's increased investment in the economy on the Crown's finances?
Hon GRANT ROBERTSON: According to forecasts in the Treasury's Half Year Economic and Fiscal Update, net core Crown debt is expected to peak at 21.5 percent of GDP in 2021-22 as a result of the investments made in the Upgrade Programme. This is well below the 22.9 percent we inherited from the previous Government. In the last few weeks, following our announcement of higher investment levels, Fitch Ratings revised its rating for New Zealand to AA+, reflecting the New Zealand Government's sound fiscal management and low Government debt, which, to quote them, "enhances the country's resilience to economic and financial shocks".
Hon Paul Goldsmith: What reports has he seen on the economic impact of his Government cancelling or postponing National's road projects two years ago?
Hon GRANT ROBERTSON: The premise of the member's question is utterly wrong, because it's not possible to cancel ghost roads.




Question No. 5—Finance
5. Hon PAUL GOLDSMITH (National) to the Minister of Finance: What steps, if any, has he taken to ensure the integrity of ministerial decisions in the major spending programmes announced in the previous two Budgets?
Hon GRANT ROBERTSON (Minister of Finance): With regard to ministerial decisions that I am responsible for, in terms of the major spending programmes announced in the previous two Budgets, I took steps to ensure the integrity of them in line with the regular Budget decision-making process, similar to the previous Ministers of Finance, like Bill English or Steven Joyce. That process—and I hope not to make the answer too long, but I'll go through it—is that Budget initiatives are submitted by Ministers, in most cases, prior to Christmas. Individual initiatives are assessed by the Treasury in some instances and by secretariats of officials from other agencies in other instances. Budget initiatives are assessed according to a range of factors, including their alignment with Budget priorities, their wellbeing impacts, the robustness of their costings, their implementation readiness, and their value for money. These assessments are pulled together to give advice to Ministers on a package of initiatives that could be funded through the Budget. Ministers meet and take decisions on a package to be considered by Cabinet. Cabinet then considers it and makes final decisions on a final Budget package, and Parliament passes the Budget. After that point, there are parliamentary and other processes in place to further ensure the integrity of any spending.
Hon Paul Goldsmith: Has anything he has seen in the past three days caused him to question or doubt the integrity of ministerial decision-making about major spending projects has been maintained?
Hon GRANT ROBERTSON: No.
Hon Paul Goldsmith: Has he been following the news since Monday?
Hon GRANT ROBERTSON: I absolutely have been and, once again, the Government has been making announcements that benefit the New Zealand economy across the board. We've got a situation just today where we've seen our interest rates held and the Reserve Bank Governor or the monetary policy committee reflecting on the importance of the role that the Government's fiscal investment is playing in making sure that the economy is going well. In the matters for which I am responsible, I keep a close eye on the news.
Hon Paul Goldsmith: Has he considered reviewing major spending decisions involving New Zealand First Ministers while matters raised by the Electoral Commission and referred to the Serious Fraud Office are resolved?
Hon GRANT ROBERTSON: Well, I'd have to bow to the member's superior knowledge of the Serious Fraud Office in its inquiry work. But, from my perspective, I will await the outcomes of that inquiry like every other member. Otherwise, the Government gets on with its normal order of business.
Rt Hon Winston Peters: With respect to four matters which are sub judice, but nevertheless may have a connection with respect to Government spending, has there been any connection between those four sub judice cases put before the Serious Fraud Office to trial already or any Government Minister?
Hon GRANT ROBERTSON: There is no connection in those. I mean, obviously, various political parties at times will have matters that are referred to the Serious Fraud Office. There are avenues available to parliamentarians if they have concerns about Government spending. We've seen that in the past. I think of the Saudi sheep deal as being an excellent example of where parliamentarians, if they have concerns about matters, know what to do.
Hon Paul Goldsmith: Have you spoken directly to the Deputy Prime Minister in the past three days about ways to reassure New Zealanders about the integrity of ministerial decision-making?
Hon GRANT ROBERTSON: I've spoken directly to the Deputy Prime Minister on a number of occasions over the last three days, but I certainly haven't felt the need to do it on that particular topic.
Hon Paul Goldsmith: So is he telling the House that, notwithstanding the Electoral Commission's statement, it's just business as usual for ministerial decision-making around large scale investments?
Hon GRANT ROBERTSON: I think the member's making a huge logical leap in his question there. We are getting on with the business of Government. We are positive about the future of New Zealand and we're focused on the issues that matter to New Zealanders.




Question No. 6—Health
6. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: Is he satisfied that the response to the 2019 novel coronavirus outbreak was timely and appropriate?
Hon Dr DAVID CLARK (Minister of Health): Yes, and it continues to be so. All the decisions we have taken have been informed by science.
Hon Michael Woodhouse: Why is there no screening of passengers arriving from China who transit through another country?
Hon Dr DAVID CLARK: All passengers who come through from another country are being checked as they come through to New Zealand. We track who has been in China in the last 14 days, and if they are permanent residents or New Zealand citizens, then of course they are allowed into New Zealand and they are given advice on where to seek help if they have any symptoms. They are also given advice on health measures. Basic hand hygiene, of course, is one of the critical things in preventing the spread of the virus, as well as making sure that they are in self-isolation for that 14-day period. So those who are not New Zealand citizens, permanent residents, or their immediate family are turned back.
Hon Michael Woodhouse: Is the Minister telling the House that a passenger arriving from China who transits through, say, Seoul or Sydney and arrives at Dunedin or Queenstown international airport is given the information that he just described?
Hon Dr DAVID CLARK: As people come into New Zealand, they are being given the public health information in simplified Chinese, traditional Chinese, and in English. Public health staff are at the border. We are looking to make sure that anyone who has been in China in the last 14 days is in receipt of that information.
Hon Michael Woodhouse: Are passengers arriving from affected areas via cruise ships being screened for the virus?
Hon Dr DAVID CLARK: Any passengers arriving on cruise ships are being given the same information as those who arrive at airports.
Hon Michael Woodhouse: Who is correct: the Minister who advises that the screening processes are diligently followed, or the New Zealander who came back from Wuhan and said, "Coming into New Zealand there was nothing. For me it was … like we got off [the] plane and walked through and no one really seemed that concerned."
Hon Dr DAVID CLARK: The provision of information at the airports is the thing that we are advised by the medical experts, the science, is the best and most effective thing we can do, because it makes sure that when people have the symptoms—if they have any symptoms—they know where to get help, to call Healthline; they know how to self-isolate effectively; they know how to do hand hygiene, cough hygiene, and other things that prevent the spread of this virus. So we have taken those measures that the clinical experts, the doctors, have recommended. At every point, we have made sure that our decisions have been informed by science.




Question No. 7—Transport
7. PAUL EAGLE (Labour—Rongotai) to the Minister of Transport: In what ways, if any, will the New Zealand Upgrade Programme help futureproof the economy and get our cities moving?
Hon PHIL TWYFORD (Minister of Transport): Thank you, Mr Speaker. The New Zealand Upgrade Programme will help futureproof the economy by providing a fully funded pipeline of transport projects over the next decade on top of the ones already funded and being delivered through the National Land Transport Programme. It will help get our cities moving by investing $6.8 billion for roads, rail, public transport, and walking and cycling in our six major growth areas. It's proof positive that we are the Government of infrastructure.
Paul Eagle: What reactions has he seen from the industry to the New Zealand Upgrade Programme?
Hon PHIL TWYFORD: Civil Contractors New Zealand chief executive Peter Silcock said that the announcements showed the Government was looking at a wide range of projects, including roads, and that this announcement was a welcome one for the country's road builders and civil construction companies. Kirk Hope of Business New Zealand said that this announcement was positive for business. It's fair to say the New Zealand Upgrade has had glowing reviews from industry across the board.
Paul Eagle: What job opportunities will be created because of the package?
Hon PHIL TWYFORD: The Transport Agency estimates that the package could initially create 800 to 1,000 new jobs directly in our construction industry as the first five projects get under way in the next 12 months—that is, State Highway 1 Papakura to Drury, electrification of the rail line between Papakura and Pukekohe, the third main rail line, Tauranga Northern Link, and the Wellington rail package—and that it's designed to create 7,000 to 9,000 jobs in the wider supply chain. This is based on what happened with similar projects recently, and from NZTA's discussions with the industry. It will also provide opportunities to upskill our workforce. Importantly, the package gives industry the certainty that they've been asking for: a pipeline of work for the next decade, enabling them to invest in their people.
Chris Bishop: Has he received any advocacy from the member of Parliament for Rongotai about the necessity of bringing forward a second Mount Victoria tunnel as part of the New Zealand Upgrade?
Hon PHIL TWYFORD: Well, the member for Rongotai is a very active advocate on behalf of his constituents, and what he tells me is that the people who live in his electorate are overwhelmingly happy that they have a Government that's committed $6.5 billion of multimodal transport investments to Wellington after nine years when the former Government—the only thing that they did was fail to impose a giant concrete flyover at the Basin Reserve.
Chris Bishop: I raise a point of order, Mr Speaker.
SPEAKER: I don't think I need a point of order. I think the member will now address the question.
Hon PHIL TWYFORD: The member for Rongotai is a very active advocate on behalf of his constituents, and he wants to see all of the components of the Let's Get Wellington Moving package moved forward as fast as possible, and they will be.
David Seymour: If the New Zealand Upgrade Programme is so meritorious, why didn't the Government announce it two years ago when it took power?
Hon PHIL TWYFORD: Because we have rebalanced the transport policy by spending. We've made a $4 billion investment in rail, we are doing 70 percent more maintenance of the State highway network, we're investing $1.4 billion in safety upgrades on 3,300 kilometres of State highways and local roads, and after the New Zealand Upgrade Programme, we are spending more than $7 billion more on transport infrastructure than the former Government did—$7 billion more.
David Seymour: Sorry, could the Minister explain how doing any of that prevented him from announcing the New Zealand Upgrade Programme two years ago?
Hon PHIL TWYFORD: Because it was necessary, after nine years of neglect, to address the deficit of transport infrastructure that we inherited. We had to rebalance the transport policy. We have, and, thanks to Grant Robertson's careful financial management, we're now in a position to bring forward and fund projects that that party promised in a press release but never funded.




Question No. 8—Social Development
SPEAKER: Question No. 8, the Hon Louise Upston. Question No. 9, Chris Bishop. 
Hon Louise Upston: I didn't hear you, sorry. 
SPEAKER: Well, I will go back to the member, but it's up to her to listen. 
8. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development: Does she stand by her statement that "the Government's plan to get people off the benefit and into work is starting to pay off"? 
Hon CARMEL SEPULONI (Minister for Social Development): Yes. I stand by the 42,834 cancellations into work that have occurred since July, following our investment into 170 extra front-line case managers to support people into work. There have been 6,703 cancellations into work in the last month alone—an increase of 27.9 percent from this time last year—and the highest number of exits into work for the month of January in the last five years. We have more New Zealanders in work than ever before, and the weekly average wage is up $80 since we took office. Sixteen thousand Ministry of Social Development (MSD) clients have been supported towards employment through upskilling and training in 2019. This Government is committed to supporting people into sustainable work, and these figures show that we are making real progress. 
Hon Louise Upston: Does she accept that Labour has overseen the three lowest ever quarters for the number of people moving off benefit and into work? 
Hon CARMEL SEPULONI: As I've already stated, what we've seen is actually an increase in the number of people exiting benefit for work. Quite often in this House, the member likes to refer to the raw figures, but even if we look at the proportion of working-age New Zealanders on benefit, at the moment it's 10.5 percent, compared to December 2014, where it was 11.2 percent. 
Hon Louise Upston: Does she believe that the Government's plan is paying off for the 27,000 more New Zealanders on job seeker support since Labour took office? 
Hon CARMEL SEPULONI: Do I think that we've got more to do? Absolutely, but, as I said, this Government is focused on supporting New Zealanders into upskilling and training and into employment. That is why we have invested in programmes like Mana in Mahi. We recognise, and particularly I, when I go across the country, that many of the jobs that are advertised within our MSD office require a level of skill—skill that wasn't invested in by the previous Government—so many of the people that come through our offices aren't necessarily equipped with the qualifications, skills, or experience to take up the roles. We're committed to making sure that they have those skills, that they have those qualifications, and that they're supported into the jobs that are available. 
Hon Louise Upston: If your plan is paying off, why has the proportion of people who go back on to benefit 16 weeks after completing an intervention increased every year under your Government? 
Hon CARMEL SEPULONI: That's an interesting question, because under the previous Government I was highly critical of the fact that they were not actually measuring whether or not the employment that they were putting people into was sustainable or not, and under them, we saw a large number of people who did exit benefit for work back on benefit within the next 18 months. Just recently, actually, I was given advice—because we are starting to look at sustainable employment—that just over the last three months, sustainable employment places have gone up month on month. So I'm really glad that as a Government we are actually measuring things that count, unlike the previous Government. 
Hon Louise Upston: How many more people will go on to the dole before you admit that your welfare—
SPEAKER: Order! Order! Order! The member is going to start the question again. I've let her run twice with out-of-order questions. This time, she's not going to bring me into it. 
Hon Louise Upston: How many more people will go on to the dole before the Minister admits that her welfare plans aren't paying off and considers taking some advice from National about how to give people opportunities to get ahead? 
Hon CARMEL SEPULONI: I'm very confident with the plan that we have in place on this side of the House. We recognise that it is about the welfare system but also about the investment that we put into education and other areas as well. Also, I would like to say on the record that if that member ever asks me a question again in this House about a thing called the dole—which does not exist—I will refuse to answer the question. 




Question No. 9—Transport
9. CHRIS BISHOP (National—Hutt South) to the Minister of Transport: Does he stand by his reported comment on 10 July 2019 in relation to 12 roading projects that "If we were to do what the Business Advisory Council was saying, it would mean spending a great deal of money, more than $12 billion, on projects that have very low economic value," and what role did he play in the selection of the transport projects in the Government's New Zealand Upgrade Programme?
Hon PHIL TWYFORD (Minister of Transport): Yes, in the context it was made. As the member knows, I think, these projects have been re-evaluated to align with our Government policy statement on land transport, which includes value for money as a priority. Our State highway projects have been futureproofed to include dedicated walking and cycling paths, and with the New Zealand Transport Agency (NZTA) looking to managed lanes dedicated to freight, high-occupancy vehicles, and public transport. To the second part of the question, I worked closely with the Minister of Finance, relying on NZTA's advice on the selection of multimodal transport projects for the Upgrade Programme, which will speed up travel times, ease congestion, make our roads safer, and give people real transport choices. 
Chris Bishop: Does he still think New Zealand has over-invested in roads and motorways for decades? 
Hon PHIL TWYFORD: I stand by the full quotation, not the one that has been so selectively misrepresented by the National Party. What I said was that New Zealand has in the past under-invested in roads at the expense of other parts of the transport system, particularly public transport. I stand by that, and our Government is dedicated to a balanced, modern transport policy that serves the whole country and all transport modes. 
SPEAKER: Sorry, I am just going to interrupt. I think the member might have misspoken right at the beginning of his quotation, and it might be good to tidy it up now. 
Hon PHIL TWYFORD: Thank you, Mr Speaker. The full quote was that New Zealand has in the past over-invested in roads at the expense of other parts of the transport system. 
Chris Bishop: Why did the Canterbury region receive only 2.3 percent of the $6.8 billion transport component of the Upgrade Programme? 
Hon PHIL TWYFORD: So I would note that there has been substantial transport investment in Canterbury in the last few years. An entire new motorway network has been constructed. I would also say that, under this Government, the South Island is getting $3.4 billion of transport spending—another $249 million—because of the Upgrade Programme. This Government is spending more on transport than the former Government did in the South Island. 
Chris Bishop: Has he received any correspondence from Julie Anne Genter in her capacity as transport spokesperson for the Green Party or, indeed, the Associate Minister of Transport in relation to the transport component of the Upgrade Programme? 
Hon PHIL TWYFORD: I have received correspondence from the Associate Minister, and I'm pleased to say that both our coalition and confidence and supply partners have been fully involved in the design and development of the New Zealand Upgrade Programme and they fully support it. 
Hon Chris Hipkins: How many of the 12 roading projects mentioned in the primary question were fully planned, consented, and fully funded when he became the Minister?
Hon PHIL TWYFORD: Well, it's a very short answer: there were none that were fully planned, designated, consented, or funded—zero. 
Hon Shane Jones: Can he confirm that the four-lane stretch of highway from Whangārei to Marsden Point reflects the very strong collaborative relationship he has with his associate transport Minister?
Hon PHIL TWYFORD: I can confirm that. The associate transport Minister made very strong and clear representations on behalf of the people of Northland. That particular stretch of road—neglected for years under the former Government—is one of the most dangerous and busy stretches of that highway, of State Highway 1, and the response from the people of the North has been very, very positive.
Chlöe Swarbrick: Is he aware if any funding was allocated to progress SkyPath on Auckland's Harbour Bridge after Auckland Central MP, Nikki Kaye, said in 2016 she really wants the project to happen?
Simon O'Connor: Four years ago you weren't born.
Hon PHIL TWYFORD: In spite of the enthusiasm—
SPEAKER: Order! Order! Who was that? Who made the interjection then as to the date of my birth—the totally inaccurate one?
Simon O'Connor: Oh yes.
SPEAKER: Well, Mr O'Connor will stand, withdraw, and apologise.
Simon O'Connor: I withdraw and apologise.
SPEAKER: Thank you. Where were we with that? I think we've had the question; we'll now have the reply.
Hon PHIL TWYFORD: In spite of the enthusiasm of the Auckland Central member of Parliament, the transport Minister at the time, Simon Bridges, did not put any funding towards SkyPath at all. But luckily for Ms Kaye, this Government has guaranteed funding not only for SkyPath but for the 3-kilometre shared path connecting the SkyPath to Northcote and Takapuna.
Hon Julie Anne Genter: How much funding in the New Zealand Upgrade package is earmarked for clean transport like rail, public transport, walking, and cycling, and did the previous Government fund any of it?
Hon Gerry Brownlee: That's from a Minister who's a close personal associate.
SPEAKER: Order! Order! I'm going to remind members for the last time—including the member sitting next to the shadow Leader of the House—that they do not interject during the asking of questions.
Hon PHIL TWYFORD: The New Zealand Upgrade will deliver approximately $1.6 billion of funding for new clean transport projects; none of which had funding set aside under the previous Government. This includes $370 million for extending rail electrification to Pukekohe; $315 million to build the third southern rail line in Auckland; and more than $100 million to deliver faster, more frequent bus services in Christchurch and Queenstown.
Hon James Shaw: Is it true that the New Zealand Upgrade will deliver as many kilometres of safe separated cycleways as new State highways?
Hon PHIL TWYFORD: Yes. The New Zealand Upgrade will see 99 kilometres of safe separated walking and cycling facilities rolled out across the country so that people feel safe walking and cycling with their kids.




Question No. 10—Health
10. ANGIE WARREN-CLARK (Labour) to the Minister of Health: What recent announcements has he made about child and maternal health facilities?
Hon Dr DAVID CLARK (Minister of Health): The Prime Minister's ambition is to make New Zealand the best place in the world to be a child. To support that, as part of the New Zealand Upgrade Programme announced two weeks ago, $83 million has been set aside for child and maternal health facilities. We're investing in neonatal and paediatric intensive care units in Counties Manukau, Auckland, Hutt Valley, and Capital and Coast. We're investing in better maternal facilities in Hutt Valley and South Canterbury, as well as new and upgraded dental vans in Hawke's Bay, Lakes, and Wairarapa DHBs. These projects will make a real difference to families up and down New Zealand.
Angie Warren-Clark: How will patients at Starship hospital benefit from the New Zealand Upgrade?
Hon Dr DAVID CLARK: Starship is home to New Zealand's only specialist paediatric intensive care service. They do amazing work there. They look after the most unwell children from all over the country, including those who need cardiac surgery and transplantation. So I'm particularly pleased that we are investing $25 million into the expansion of the paediatric intensive care unit—or PICU—at Starship. This will take capacity at the unit from 22 beds currently to more than 30 beds, as well as provide for improved whānau spaces.
Angie Warren-Clark: Why is this investment needed at Starship?
Hon Dr DAVID CLARK: Starship's PICU currently treats around 1,100 to 1,200 children each year. Demand has grown by 30 percent over the past three years and is expected to continue to grow. We need to act now to ensure that we have enough beds to care for these most vulnerable of patients. Construction work is planned to begin in early 2021.




Question No. 11—Broadcasting, Communications and Digital Media
11. MELISSA LEE (National) to the Minister of Broadcasting, Communications and Digital Media: Does he stand by all his actions and policies?
Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media): In the context in which they were given, yes. In particular, I stand by my statement that New Zealanders must have access to a strong and independent public media service for the decades to come. This will ensure that New Zealand audiences will have access to content which reflects the language and experiences of New Zealanders, including those currently underserved audiences. In Budget 2018, we increased public media funding by $15 million. In Budget 2019, we increased Radio New Zealand's (RNZ) baseline by a further $7.25 million. This was in direct contrast to the previous Government's nine years of funding freezing for public media.
Melissa Lee: When was he first made aware of RNZ's plan for the axing of RNZ Concert and the removal of its broadcasting from the FM frequency in favour of a youth radio station?
SPEAKER: Order! I'm going to let this question go but warn members that in future, when they're asking about actions and policies, the supplementary question has to relate to that.
Hon KRIS FAAFOI: I was briefed by Radio New Zealand that they were working on a youth strategy in August and October of 2019. They brought their final proposal around the youth strategy and the impacts of that to me on 29 January of this year. As has been said publicly, I raised a number of concerns with them; most substantively was the issue of moving Radio New Zealand Concert off its current frequency of 93.5 FM. I said I would go and work on making sure that their youth strategy could have another alternative frequency to operate on, and that's what I did.
Melissa Lee: Why did he say, and I quote, "It's not for the Government to decide what it's utilised for." in regards to the youth radio spectrum, when the Prime Minister has said, "[The new frequency] was always intended for youth radio and youth programming,"?
Hon KRIS FAAFOI: Because that question that the member herself asked me at the select committee in June of last year pertained to frequency for both Māori and youth. In my reading of the transcript, I was saying that it wasn't for Government alone to decide how the spectrum should be used. Both of those 103 and 102 frequencies are assigned for Māori purposes, or the 102 for a youth network strategy, and in one of those, it's not for Government alone to dictate exactly how that spectrum is allocated or used.
Melissa Lee: Does he agree with the statement by former Prime Minister the Rt Hon Helen Clark that the Concert FM issue has been, and I quote, "handled disastrously"; if so, does he accept responsibility for this disastrous handling?
Hon KRIS FAAFOI: It's very important that Governments keep away from operational decisions that public broadcasters make, and the decision to run a consultation with their staff around a youth network strategy was theirs. They have subsequently taken action to keep Concert FM where it is. The former Prime Minister is entitled to her opinion.




Question No. 12—Research, Science and Innovation
12. Dr PARMJEET PARMAR (National) to the Minister of Research, Science and Innovation: Is the Government delivering improved outcomes in research and innovation?
Hon Dr MEGAN WOODS (Minister of Research, Science and Innovation): Yes. In the two years we've been in office, we've delivered across a wide range of areas in research and innovation, but there is always more to do. An edited list of our highlights of things that we have done: we have invested $1.1 billion in a 15 percent tax incentive, which we've yet to see the impact from; we've funded Callaghan Innovation's campus redevelopment and established a National New Energy Development Centre to ensure we have world-class innovation infrastructure; we've signed international agreements to foster greater collaboration on research and innovation with Governments and the private sector; we've made significant investments into important areas of research, such as renewable energy, agricultural and climate science; and can continue to develop our space research capability, including hosting mission control for New Zealand's first space mission. This Government has set out to lift—
SPEAKER: Order! Order! You know, that is enough. The member gets a 10-minute speech later.
Dr Parmjeet Parmar: How can she say her Government is delivering improved outcomes in innovation when New Zealand's ranking on the Bloomberg Innovation Index fell by five places this year to 29 in the world?
Hon Dr MEGAN WOODS: The Bloomberg innovation survey to which the member refers is measured across seven domains out of 100, all of which are weighted equally across that. It is important to note that this is a composite survey that doesn't only take into account innovation. The seven domains are R & D intensity, manufacturing value-added, productivity, high-tech density, tertiary education, researcher concentration, and product activity. In fact, the area where New Zealand did drop the most was in the manufacturing value-added rather than the innovation measures that are captured in that survey. In fact, in some of the innovation domains that are measured in that, we actually performed ahead of every country except for three or four that are ahead of us. What the member also should note is that the New Zealand score, the raw score on the index, has been in decline from 2015 to 2018. That decline was reversed in 2018 and stabilised only in 2019. We as a Government believe that, actually, what sits behind that is our drive to lift our very low percentage of GDP that we spend, which we as a Government have seen movement of. I seek leave to table this graph, which shows the fact that New Zealand's score on the Bloomberg weighted average has been in decline for a number of years but has indeed stabilised over the years 2018 to 2019.
SPEAKER: Is there any objection to that? There appears to be none.
Document, by leave, laid on the Table of the House.
Dr Parmjeet Parmar: Why is she blaming the last National Government, because when she came into Government, New Zealand was 18 on the Bloomberg Innovation Index ranking, and now we are on 29 under her watch?
Hon Dr MEGAN WOODS: I think I gave quite a thorough answer to the initial question—that, in fact, what I'm saying is there are a range of domains that that is measured across. So I am going to go through some of those raw numbers in terms of that. So in 2013, the year in which Callaghan Innovation was established, 57.73 was our weighted number. That did jump slightly in 2014 to 75.09 but then did decline all the way through to the beginning of 2018 to 67.4. What we have seen over the years 2019 to 2020 is 68.12 and 68.08. I think what all members of this House, regardless of what side they sit on, should be dedicated to is the fact that New Zealand has a woeful percentage of GDP expenditure, and that is something that this Government has seen real movement on, unlike the previous Government.
Dr Parmjeet Parmar: Is she at all concerned that New Zealand had the largest fall of any single country, making New Zealand the biggest loser in the latest Bloomberg Innovation Index?
Hon Dr MEGAN WOODS: I am always concerned about where New Zealand ranks in the world, but I will reiterate again that that is a composite index the member has referred to. In fact, the area where it had its biggest fall was not one related to innovation, but that doesn't stop me being concerned. What I would also point out to the member is that these are proportionate to GDP, and I will remind the member that New Zealand had higher GDP percentage growth than other advanced economies that it has been compared to in that table. So while we maintain our growth in GDP—
SPEAKER: Order! That concludes oral questions.
 





FINANCIAL MARKET INFRASTRUCTURES BILL
First Reading
Hon GRANT ROBERTSON (Minister of Finance): I move, That the Financial Market Infrastructures Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill.
This is the moment that the House has been waiting for. The Financial Market Infrastructures Bill establishes a new framework for the regulation and supervision of financial market infrastructures—or FMIs. FMIs are sometimes described as the plumbing of the financial system. They include payment systems which are used to effect payments in the financial sector and real economy, and other types of infrastructures like securities settlement systems and central counterparties, which support the buying and selling of financial products in various ways.
FMIs play an essential role in the sound and efficient functioning of the financial system and in the operation of the real economy. Many transactions in the financial system and all electronic payments ultimately rely on the operation of one or more FMIs. As a consequence, it is not uncommon for large FMIs to handle transactions worth billions of dollars on a daily basis. FMIs also play a key role in supporting the efficient operation of the financial system by reducing transaction costs; reducing counterparty, custodial, and other risks; and fostering transparency.
The operation of FMIs is often taken for granted, Mr Tabuteau, and unless the services they provide are disrupted, there can be extremely serious consequences if an important FMI fails. Failure to complete payments or other transactions or even a failure to complete these on time can subject the financial system or individual market participants to severe solvency or liquidity stresses. In extreme cases, this can result in contagion risks and a cascading series of defaults across the financial system. The disruption of key payment systems will often disrupt the real economy, preventing businesses and consumers from being able to buy and sell goods and services. 
The existing regulation of FMIs is limited. Parts 5B and 5C of the Reserve Bank of New Zealand Act establish information-gathering powers in respect of payment systems and the designation regime for settlement systems. However, the regime in Parts 5B and 5C is no longer fit for purpose. For example, in most respects it's a voluntary opt-in regime. It lacks a full suite of supervisory enforcement and crisis management powers. More generally, it's seriously out of step with international standards. The systemic importance of many FMIs and the deficiencies in the existing regulatory regime were recognised by the International Monetary Fund (IMF) when it carried out its Financial Sector Assessment Programme of New Zealand in 2016-17. In the context of that review, the IMF assessed and specifically recommended the adoption of the framework that is reflected in this bill as one of its more high-profile conclusions. 
The regime in the bill is administered jointly by the Reserve Bank and the Financial Markets Authority, except in relation to payment systems where the Reserve Bank will be the sole regulator. It also provides different treatment for the regulation of designated and non-designated FMIs. Designated FMIs are those that are identified as systemically important and brought into the regime or have opted into the regime to access the current legal protections around settlement, finality, netting, and the enforceability of rules which are being carried across into this FMI bill. 
The new regime is tailored to the needs and systemic importance of individual FMIs. Designated FMIs are subject to a range of regulatory powers, whereas non-designated FMIs will be subject only to certain information-gathering and investigative powers. This approach focuses regulation on the most important FMIs while minimising the barriers to entry and compliance costs which might otherwise hinder new entrants and the development of new products—for example, around retail payments.
Under the bill, regulatory requirements for designated FMIs will be set—their standards made by the regulators. The power to set standards is designed, among other things, to allow standards to cover the matters in the global guidelines for FMI regulation, the Committee on Payment and Settlement Systems and the International Organisation of Securities Commission's Principles for Financial Market Infrastructures. For example, the bill permits standards to be made for matters such as FMIs' governance, risk management, and financial resources.
For the purposes of day-to-day supervision of designated FMIs, the bill provides the regulators with information-gathering powers and powers to oversee the rules of those FMIs. For example, changes to the rules of a designated FMI must be approved by the regulators, and the regulators must also require that the rules of the designated FMI be changed. Furthermore, the bill requires designated FMIs to have credible contingency plans for how they will manage risks and continue to provide or promptly restore essential services in the face of operational or financial distress. Detailed requirements for contingency plans can also be set in the standards made by regulators. Under the bill standards, oversight of FMI rules, contingency plans, and supervisory powers will all help lower the risk of a designated FMI failing and ensuring that failures that do occur can be managed with the least amount of disruption.
As a backstop to these measures, the bill also provides crisis management powers, specifically direction powers and a tailored statutory management regime for the operators of designated FMIs. Directions may require a designated FMI to take a range of actions to address problems. For example, under a contingency plan, participants in a FMI may also be directed to comply with the FMI's rules in certain situations—for example, to facilitate orderly resolution of a designated FMI. 
The statutory management regime in the bill is the crisis management power of last resort and provides an alternative to normal insolvency processes such as liquidation, which are not suitable for managing the failure of a designated FMI, because this will disrupt the provision of essential services that they provide. The crisis management powers are likely to be some of the most important—if rarely used—powers in the bill. The lack of crisis management powers is one of the most significant gaps in the existing regulation of FMIs. Not having these powers available makes it much harder to deal with an FMI failure and avoid disruption to the provision of essential services, with potentially very serious impacts on the financial system due to the stresses that will be placed on market participants. 
As noted, the bill provides the regulators with a much more limited set of powers in respect of non-designated FMIs, and this reflects that these will not be systemic nor have access to the legal protections around settlement, finality, netting, and the enforceability of rules that are afforded to designated FMIs. The more limited information-gathering and investigative powers that will apply to non-designated FMIs will be used mainly for the purpose of monitoring the broader sector and identifying whether an FMI has become systemic and should be further regulated under the regime.
For clarity, it is worth noting the connections between the FMI bill and phase two of the Reserve Bank of New Zealand Act review. While they are separate matters on different timelines, there are connections in certain areas in particular crisis management. At a later point, after this bill is enacted, we may look to review some aspects of the regulatory regime of FMIs to take into account the detailed conclusions of phase two. In the meantime, there are two or three years anticipated before all of that legislation comes into effect, and this bill is an important step in its own right and should advance ahead of the phase two legislation. 
Finally, the bill contains a graduated set of remedies for breaches. These include criminal and civil penalties, enforceable undertakings, and remedial notices, which will require an FMI operator to take action to remedy a breach. While the operation of FMIs is often taken for granted on a day-to-day basis, they are vital to the operation of the financial system and to all consumers and citizens, and ensuring that they operate in a sound and efficient manner is important for people to go about their daily lives. Because most transactions in the financial system are, and all electronic payments ultimately rely on FMIs, their disruption or failure can have a serious adverse impact on the operation of the financial system and in the real economy and the day-to-day ability of businesses and consumers to buy and sell their products. 
As noted, the IMF has expressed support for the approach reflected in this bill, and the bill closes an important regulatory gap in New Zealand by ensuring that these vital but often little noticed infrastructures are subject to effective supervision and oversight. In doing so, it marks an important step in supporting financial stability and the effective operation of financial markets, aligning with international standards in a reasonable and proportionate manner, and supporting confidence in the New Zealand financial system and the operation of the real economy. I commend the Financial Market Infrastructures Bill to the House.





Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. It's my pleasure to speak on this, the first reading of the Financial Market Infrastructures Bill and to signal that the National Party will be supporting this legislation through—certainly at the first reading. We do want to—I mean, this was a piece of legislation which relates to improving the regulatory framework for financial instruments, market infrastructures, that relate to, as the Minister of Finance said, to the plumbing of the financial system, which we don't think about very often, we just assume that it works. And, for the most part, it does work. It works effectively and New Zealanders are very well-served by the system that we have in place right now. 
That is a fairly light regulatory framework. We've had many visits from international institutions, such as the IMF over the years, which say we should regulate more in this area. And they said that again in 2016, and the previous National Government, of which I was a part, agreed with recommendations from the Reserve Bank that we should move in this direction. And that's why we support the overall thrust of the bill, which, in essence, is establishing a regime whereby the Reserve Bank and the Financial Markets Authority (FMA), as joint regulators, would have information-gathering powers for all financial market infrastructures (FMIs) in order to monitor the broader sector and identify potential systemic risks. 
Then, secondly, an FMI which is identified as being significant could be required to be designated under a revised designation regime. And then, thirdly, the joint regulators would have enhanced regulatory oversight powers for designated FMIs, including the powers to set regulatory requirements, oversee their rules, investigative and enforcement powers, and crisis management powers. And finally, where relevant, designated FMIs would be able to access the legal protection around settlement finality—that is, some final clarity around where they sit and netting that currently exists under Part 5C of the Reserve Bank of New Zealand Act. 
Now, of course, the critical question is: in all these fine arrangements, have we got the details right? And this bill's been actually well signalled and well consulted over a number of years with the industry and so we have a reasonable confidence that the balance will be right. But we're interested, particularly, in when to test whether the broad powers of intervention given to the Reserve Bank and the FMA are justified, and, in particular, when bodies consider the market or specific institutions are in a state of distress—the limit, where they make that decision, and whether that's set appropriately.
I suppose the point that worries me slightly is that when we look at the regulatory impact statement from the Reserve Bank, they make the point that the nature of the analysis of the regulatory impact statement—which is where the officials sit down and work out whether the costs of a proposed new set of regulations are justified by the benefits, or that the costs are less than the benefits gained, which is what you need to do—they're not particularly reassuring, to be honest.
It says, "The Reserve Bank requested cost estimates from [the] industry during … consultations but only one organisation provided such figures. … A full cost-benefit analysis would normally provide more certainty that the proposals … have a net benefit for New Zealand. However, given the lack of cost estimates, alongside the low probability high impact nature of [an] FMI failure, [etc., etc.,] … [that any] full cost-benefit analysis is unlikely to be robust enough to provide meaningful additional information and could be misleading."
So the upshot of that seems to be that they're really just having a guess as to whether the whole regime is justified, and so we will certainly be taking a great deal of interest in the select committee process, hearing directly from market participants to reassure us that this step towards greater regulation in this space is justified, that the appropriate levels are laid down, and that New Zealanders—who, ultimately, pay for any costs imposed by regulation through fees in the banking system—are getting something for that extra cost.
We need to actually see some numbers around that and have some real effort, because what often happens is that Government departments write a regulatory impact statement early on, at the start of a bill, and say, "Well, we haven't actually got the detail. We don't really know, but we'll come back and come up with something more detailed later on in the process in the future.", and they never do. So once we've started the process, it just rumbles on and we never actually get to the bottom of it. So we just want to signal right here, right now, that we'll be paying very close attention to that.
But, in the broader sense of the word, we're very supportive of the instinct behind the bill, and we're going to work constructively and collaboratively with the Government in the development of this legislation. Thank you, Mr Speaker.





Dr DEBORAH RUSSELL (Labour—New Lynn): Thank you, Mr Speaker. I thank the previous speaker, Mr Goldsmith, for the support for this bill to work on it at the select committee stage. I will, I think, look forward to working on it. It is quite a technical bill, and I just want to speak about a couple of things in connection with it today. What the bill does is it regulates financial market infrastructures.
My guess is that the people listening at home—because, of course, there are lots of people listening at home to highly technical bills like this—may not know what those financial market infrastructures are. It is a technical term. Let me give an example of one of the types of infrastructures—one of the types of entities—that will be regulated by this bill.
One type of financial market infrastructure is a payment system. It's a payment system that needs to operate smoothly and effectively, and it's a payment system that everyone needs to have a degree of trust in, to ensure that all transactions happen smoothly on an ongoing basis. For people watching at home, the payment system that you're most likely to be familiar with is EFTPOS—the EFTPOS system, a system that most of us use every day. It is probable that under this bill the EFTPOS system will be regulated as a financial market infrastructure. So payment systems are financial market infrastructures.
Settlement systems are financial market infrastructures. That's systems or arrangements for making settlement or for processing settlement instructions. So that's quite important. There's a large one, NZClear, which needs to be regulated. It turns out that the average daily value of transactions that go through NZClear is about $7 billion. That's a lot of money, and we need to make sure that, again, it's being processed effectively and efficiently and that the people using it, and the entities using it, are sure that their transactions are going to be processed properly and that they can engage with that system with a fair degree of trust. 
There are central counterparties (CCPs), which are entities which help to settle as a counterparty. So they become the buyer to every seller and the seller to every buyer. They, in effect, sit in between buyers and sellers, and it eliminates the credit risk to both parties. Again, that sounds like quite a complicated system. Everyone who's using it needs to be sure that it's going to be operating effectively and efficiently and that they can trust the system. We have just the one CCP in New Zealand, the New Zealand Clearing and Depository Corporation, NZCDC, and that operates as the central counterparty in markets operated by NZX—by the New Zealand stock exchange. Again, there's several hundred million dollars of transactions going through that every day, so it's very important to us.
There are also trade repositories and central securities depositories—again, financial market infrastructures. 
So these are all quite technical entities, and, for most of us, the way that we come into contact with them is through the very basic one of a payment system, the EFTPOS system. But they are important to the functioning of our trading systems, to the functioning of our markets, and to the functioning of our economy.
It was very clear that the IMF thought we really did need to review our rules around them and to improve them. The process of consultation on this started back in 2013. It carried on through into 2015. So this bill has been a long time in gestation in terms of the consultation that has gone on around it to make sure that it was doing what it is supposed to do.
So it started under the previous Government. It is being progressed under this Government. I think it likely that we will reach agreement on it, particularly if we do attend to the issues that are raised in select committee.
There is one issue I wish to raise, and it's something that is puzzling me, and I think it's going to irritate me right the way through this bill: "financial market infrastructures". That plural word is somehow just tweaking something on my grammar wonk soul. I guess I'll just have to deal with it, because it looks like a technical term that's sitting in the bill.
Hon Judith Collins: No, I'm with you.
Dr DEBORAH RUSSELL: I'm pleased to hear that my colleague the Hon Judith Collins agrees with me. Ms Collins, I'm sure that we will enjoy discussing it at length in the select committee process. I recommend this bill to the House.





Hon JUDITH COLLINS (National—Papakura): It only seemed right that I should take the call on this matter, since peace has broken out across the House on it. Like the member who's just resumed her seat, the thought of "infrastructures"—it's a bit like everything now is apparently a "learning". It just drives me nuts. Whatever happened to a lesson? But there we go.
These are the big issues that Dr Deborah Russell and I will no doubt consider at length during the—[Interruption] Oh, and the Hon Ron Mark wants to say so too. He agrees with me and Dr Russell.
Hon Ron Mark: I was just saying "Hi." and "Welcome back."
Hon JUDITH COLLINS: Oh—hi, and great to see you too, the Hon Ron Mark.
This bill has been around for a wee while coming through the process. You know, it's really not the sexiest bill this House is ever going to see. But Dr Russell and I will be very excited about it all, won't we? We'll talk about the grammar in it.
One of the things I think is interesting is that this bill has been around since 2015-16, after policy statements and work done by the Reserve Bank and the previous Government, of which I was part. Why is it that we're even doing it when everything seems to work quite well, one could well ask oneself? I guess the answer is probably because everything works pretty well and we haven't had any major issues but we really don't want to have any major issues in the future. So it's really about creating, as I see it, a bit of a safety net in relation to these payment systems.
Re-reading certainly this bill's digest, I was thinking a little bit about the anti - money laundering and countering financing of terrorism legislation, for which I have to say I confess to having been the poor Minister who had to bring that through the House. That, again, was all about international markets and international payments and how we could do things and how we were going to stop New Zealand being used for money laundering. But, actually, I'm not sure that it's made quite the big difference that people thought it was going to make. Why did we sign up to it? Because internationally we had to because, if we didn't, we were under some threat that, particularly, the European Union was going to take some measures against our banks and payment systems. So these are the sorts of things that we tend to sign ourselves up to.
In this particular case, it's worthwhile to note that even though we are a small country—smaller in population than Melbourne, although greater in size than the United Kingdom—around NZ$35 billion flows through our financing, retail, and wholesale payment system each day, and I have to confess to having been responsible for quite a lot of that payment system and money flowing through, because I like to shop and help the local economy. And then we have—it's just good to remember that on an annual basis that is around NZ$8 trillion flowing through the system. And yet, amazingly, it all seems to work quite well. So perhaps it's because of the light-handed touch that we already have had.
So we will be supporting this bill, certainly at first reading. We're not indicating anything else, but I think there's not a lot of politics in this, so hopefully the select committee will be able to look at this bill and consider all of the measures in it as a team, working cross-party, to see whether or not all of it is necessary, whether it will, in fact, achieve the purposes, which are to promote the maintenance of a sound and efficient financial system, which, strangely, has worked quite well to date, and to avoid any significant damage to that system at some stage in the future. So, on the basis that we shouldn't have regulation unless it's going to actually add value to the people of New Zealand, we will support this bill. We will be looking at it and, I think, working very constructively in the select committee to make sure that we produce a bill that comes back to the House that is even better than the one that we currently have.





FLETCHER TABUTEAU (NZ First): Thanks, Madam Speaker. It's a pleasure to speak, on behalf of New Zealand First, to this bill, and just to address some of the concerns that were, I think, fairly addressed from the Opposition speakers. Firstly, in response to the Hon Judith Collins, yeah, a very constructive contribution, and I do love the terminology of working as a team in the select committee. Sometimes it can be very contentious, as you well know, Madam Speaker, but in this I think both the Opposition speakers' contributions have hit the nail on the head in that this is a fairly non-contentious piece of legislation that is technical in nature, and I think we can get on with working towards a select committee recommendation to the House quite effectively.
Having said that and to put that in perspective, as both previous speakers in the Opposition noted, this bill comes to us over the length of several years. In fact, it was the IMA—the international monetary authority?
Dr Deborah Russell: IMF.
FLETCHER TABUTEAU: IMF—fund, sorry—who came to New Zealand in 2016 and had a conversation about the operations of these systems, the mechanics—"the plumbing", as it has been colloquially called in the House this afternoon. It was a fair observation from the IMF that there is a high degree of risk, which the previous speaker has touched on. Actually, in New Zealand, the operations of the systems have been quite sound and we haven't had the worry that other nations around the world have unfortunately been exposed to, but that does not preclude the fact that we are operating under that risk.
So I'll just touch on what it is we're technically talking about and what the bill sets out to achieve in the first reading. So the infrastructure legislation here, the financial market infrastructures (FMIs), refer to multilateral systems that provide trading, clearing, settlement, and reporting services in relation to payments, securities, derivatives, and other financial transactions. So that pretty much runs the whole gambit of financial interactions in markets in New Zealand. As, also, the previous speaker noted—although I think that she implied that it was this year—in 2016, in the retail and wholesale markets of those financial transaction markets, there is $35 billion of payments moving through those wholesale and retail markets every single day. That was a 2016 figure but it puts it in perspective. From memory, you're talking four times New Zealand's GDP in total over a year—it's quite a significant sum of money. It gives you an indication of just that financial system mechanism's importance to the New Zealand economy and our sound operation.
However, in New Zealand the regulation of FMIs is limited. I think that's why we agree we've come to the House today. So what, I think, members will support is, fundamentally, this bill is about implementing new and more complete oversight regimes. Fundamentally, this is about accountability. So this has been a continuation of a long conversation, which is why I think the select committee process will be a productive one.
I just want to end on what it is we're trying to achieve in terms of—we've heard about designated and non-designated FMIs. Actually, no, I'll just touch on the bill in terms of general monitoring of FMIs by giving regulators certain powers, and I just want to touch on those powers: the power to require operators or participants to provide information, the power to require an operator to obtain a report from an independent export on aspects of the FMI's business or operations, the power to appoint an investigator to examine the financial position or operation of the FMI, and the power to seek a warrant to enter premises to obtain evidence relevant to an investigation. So those powers are about accountability, as I said.
So I, too, look forward to the conversations and, actually, the submissions, because this was well notified to the public in a draft form several years ago. There has been a lot of public consultation on this and contribution to the drafting of this legislation that we see before us now. So, I think, what we will see going forward is about refinement, and I'm all for that. So I look forward to that. Thank you, Madam Speaker.





ANDREW BAYLY (National—Hunua): Thank you, Madam Speaker, and lovely to see you back in the chair this year. It's my first opportunity to speak and I just wish everyone well and hope they had a great Christmas break and back for an exciting year, of course.
Now, we've already heard that National is supporting this Financial Market Infrastructures Bill. I think, to some extent, there's been a lot of canvassing of what it means. I thought, for many people listening in, there are a lot of acronyms, there's a lot of terminology being used in this bill. I thought it might be useful to just spend a couple of minutes trying to put into layman's terms what this bill is actually trying to achieve. Essentially, we have—and have for quite some time—had alternative mechanisms, financial instruments, called derivatives, and the like, which financiers have used to buttress and to help with their trading of different financial instruments in the market. The derivatives act in a way that they disaggregate the risk and returns and actually help manage it.
So, for instance, if you wanted to take on a fixed loan at a certain rate in a certain currency, and you were forced to do that—let's say borrowing in New Zealand dollars—you may at one point want to swap that out for Australian dollars and use a different interest rate. You can use derivatives to design the instrument that you actually, ultimately, want. Banks are the prime users of derivatives, but not exclusively so. A lot of our large financial institutions, ACC, all use these types of products to manage their risk and to, in a way, enhance their returns.
So people have been talking about trade repositories and swap data—this is the system by which all those derivatives are captured and actually collated so, actually, people can start to understand where the risk lies. You will recall, during the major meltdown in the world financial crisis, a lot of it was driven out of derivative trading and where people didn't actually understand the full amount of derivative risk that they had. So, as a result of the G20 coming together in September 2009, there were rules that were put together to try and make sure that from a worldwide perspective, there was enough understanding of where these liabilities lay and who was holding them, so that if ever there was a situation, it was clear where the liability actually lay.
There are two types of derivative tradings. One is over the counter, and one is exchange trading. Now, exchange trading is basically—the analogy is if you were selling and buying shares, you would be selling those shares over the New Zealand stock exchange, and, therefore, that's a very transparent transaction. There's no problem with those, and they're all accounted for, even if you're doing a derivative equivalent on an exchange. Where we have an issue is what's called over-the-counter trading, and that is where you have a direct trade between two parties that is not exposed to the transparency of an exchange. What this bill is, essentially, trying to do is put in place a better framework for dealing with those over-the-counter derivative trades.
Originally, it was this sort of opt-in arrangement where, if you're a financial institution—and I just use ACC as an example. If it was trading over the counter, possibly some of those trades would be recorded, and, obviously, they would be, because they're a very reputable institution. But what this situation allows is for the regulator to say, basically, well, we want to capture those trades, and making sure that they come into this arrangement, which is what this bill is all about. So the powers for the regulator are quite significant. It moves, basically, from voluntary to a system where, at the behest of the regulator, they can make sure that for people who are obviously trading a lot or may be perceived as a higher risk, there is greater transparency around their trades.
There's a whole lot of other stuff in the bill that we'll be going through in select committee, but, essentially, that is the purpose of this bill. Of course, it was a bill first proposed by National, and we're getting through to the stage where it's finally come back into the House. We need to move this bill through, but we will be making sure that it is appropriate and doesn't end up being inappropriate for a very significant level of financial trading that is done in New Zealand, but at the same time making sure we meet our international obligations. Thank you very much.





JAN LOGIE (Green): Thank you, Madam Speaker. Boy, did I get lucky today to get to speak on this bill, which, obviously, so many people have been fighting to get to speak on, and to offer the Green Party's support for the Financial Market Infrastructures Bill. This is, basically, setting up regulation of financial market infrastructures (FMIs), and I must put on record that I share the view of Dr Russell and the Hon Judith Collins, of my concern and discomfort with pluralising "infrastructure". I hope the committee does debate that quite thoroughly, because it's jarring, and I think we want our legislation, the titles particularly, not to be quite so jarring.
I would recommend anyone who's following this debate or looking at this speech randomly to go to the speeches of Dr Russell and the previous speaker, Mr Bayly, for, actually, a fuller understanding of what financial market infrastructures are. It was described by a previous speaker as the plumbing of our financial system, but I don't think I'm going to be the best person to represent the detail of it, and I would commend people to those speeches. I don't think that the phrase "[these infrastructures are] systems that provide trading, clearing, settlement, and reporting services [for] payments, securities, derivatives, and other financial transactions." will mean anything to most New Zealanders. But I am encouraged that we have James Shaw on behalf of the Green Party who will be engaging with the detail of this, along with others in this House who are more familiar with this context and language.
I have heard in some of the previous speeches an issue or concern raised that there doesn't seem to be a problem in the system, so just a questioning about the need for this legislation. I would note that the need or the value of this was raised by the International Monetary Fund in looking at this as our position within a global system, and that the Cabinet paper also recognises market failure in this area, in four particular areas. So, one, that there are currently coordination difficulties across the financial market infrastructure, high concentration of market power, which means if there's failure—and the example that was given previously of one financial market infrastructure being EFTPOS—in that system, that would have massive impact on our entire economy. So we have an interest as a country and a responsibility, I would argue, as this House of ensuring that we have appropriate oversight and can do whatever's possible to prevent any failure in that area. And imperfect information—that many people who are participating and using, say, derivatives or engaging in other aspects of the financial system; historically, we've seen the consequences of when people are not aware of the risks that they may be exposed to because of the complexity of many of these arrangements. So this legislation helps us create a system to give assurance to people and to reduce that risk or ensure people are aware of it where it exists.
The fourth point of market failure that was identified in the Cabinet paper was negative network externalities where a financial market infrastructure operator may not fully consider the wider social cost of their conduct. So I think that really is raising, in more simple language, I guess, that it can be very easy for businesses to consider their work in a very narrow frame without looking at the impact on the entire society. There is a responsibility for us, when we're looking at our financial system, to make sure that it is fitting with the rest of our social context.
So it will address this market failure by establishing information-gathering powers that allow for ongoing regulatory oversight and monitoring, will create a designation scheme to enable the creation of regulatory standards for FMI operators, and provide for different types of penalties for breaches, which will include civil penalties for technical breaches and criminal for high-level moral culpability. We do need to acknowledge the potential and the historical international experience of that. It also creates significant crisis management powers for regulators, including establishing statutory power to issue directions to financial market infrastructure operators or institute a statutory management plan when specific grounds are met. So they're the key parts of what this legislation does, and we are happy to support it. Thank you.





Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Speaker. I hesitated to get to my feet because I was reading some quite interesting background to this bill in the debate pack. First of all, I have to confirm that National does support the Financial Market Infrastructures Bill at its first reading. The information I was reading as I was preparing related to retail and other payment systems in New Zealand, which up until now have performed relatively well but have been only lightly regulated. Issues around particularly retail payment systems have been highlighted for a number of years in New Zealand, and successive Ministers have been working progressively to address some of the more light-handed regulatory settings around matters to do with financial market infrastructures.
So the background to this bill—and I congratulate Minister Grant Robertson for picking up this work and then bringing it to the House—really started to form in 2015 and 2016 when the Reserve Bank placed forward some policy proposals to update the regulatory regime for financial market infrastructures. The National Government of the day endorsed those proposals and, several years later, we now have the bill giving effect to them.
The bill, effectively, replaces the existing regulatory regime for financial market infrastructures, and they are contained within the Reserve Bank of New Zealand Act. The purpose of the new regime is, overall, to promote the maintenance of a sound and efficient financial system. That has got to be the prime purpose of this bill and its Act, but also importantly as a safety net to avoid significant damage to the financial system that could result from problems with a financial market infrastructure—promote participation in businesses, investors, and consumers in financial markets. One of the features of the New Zealand sharemarket—the NZX—is that the market is finding it hard to find companies to register, and also investors, and often people in financial circles talk about the lack of depth in the New Zealand financial markets. So one of the prime reasons that New Zealand supports this bill is the very fact that this bill seeks and intends to strengthen that confidence in financial markets.
One more point—because I know there are other speakers to follow—the new regime will apply to more entities than the current one. So the scope of the Financial Markets Authority will widen and capture more financial markets institutions. We do support this bill. I do have a question—regrettably, I don't sit in the committee, but I will follow this—on just how the new regime will capture over-the-counter trades. It was an issue that was raised by Andrew Bayly just before. I will be interested to see the mechanism by which that comes about. That is the work of the select committee. So I commend the bill to the House.





TAMATI COFFEY (Labour—Waiariki): Thank you, Madam Speaker. I'm so pleased to actually join the chorus of support for this bill, the—let's get it right—Financial Market Infrastructures Bill. I've stood here and I've listened to all of the speeches that have gone before me and, as my colleague Dr Deborah Russell said, it is a very, very technical bill. In fact, I'd be very surprised if people are still watching Parliament TV right now and actually following what is going on, because a certain few people actually understand what goes on inside our financial market infrastructures.
I guess, to cut a long story short, we've obviously, as a Government, as a Parliament, had some learnings off the back of the global financial crisis. If this bill is going to help us to be able to better navigate ourselves whenever there is a financial market failure, then obviously it should be supported. I'm not going to go into the detail of it. I know that, when it comes to our Finance and Expenditure Committee, we will go through it with a fine-toothed comb. Everybody around the House seems to support it; so I do too. I commend it to the House.





DAN BIDOIS (National—Northcote): It's a pleasure to rise today and to give my first speech in the House in 2020, and can I say I'm looking forward to the year ahead. No matter which side of the House you sit on, welcome back to Parliament. It's a pleasure.
We're here today discussing the Financial Market Infrastructures Bill. We've certainly learned a lot today in the House, whether it's from Andrew Bayly about derivatives, whether it's about the definition of learnings or lessons from the Hon Judith Collins, or whether it's the technicalities of FMIs—or financial market infrastructures—from Deborah Russell. But I just want to recap, for the readers at home, the purpose of this bill, because it is a very important bill and important to the ongoing sustainability of our financial system here in New Zealand.
The purpose is, really, to introduce a new regime to designate some financial market infrastructures as systemically important. For those of you at home, you may remember back in 2008—and I remember very clearly—learning this terminology called "systemically important". It was in relation to Lehman Brothers, which, of course, is not covered by this bill. It's a bank; it's not an infrastructure. But the purpose of this bill is to extend the definition of "systemically important" to financial market infrastructures. That includes everything from payment systems, reconciliation systems, and IT systems that go with our financial infrastructure.
I want to be clear to those at home who might be thinking, "Well, The National Party is about minimal regulation. What are they doing supporting this bill?" I want to be clear about why we're supporting this. Firstly, the payment system every day—have a guess at how much goes through our payment systems here in New Zealand. Thirty-five billion dollars goes through our payment systems here in New Zealand every day, or annually $8 trillion, which is around a third of the US gross domestic product. So it's a really important part of our financial system, and we want to make sure that for those businesses and organisations that underpin that system, in terms of infrastructure, if these organisations are systemically important, there is heightened awareness and regulations over those systemically important infrastructures.
But what does that mean? It means, in effect, it's not going to be over-regulation. What we're really talking about is a tiered approach to regulation. Some financial infrastructures will be designated as "Tier 1, systemically important"; "Tier 2"; or "Tier 3". For those who are Tier 1, systemically important, we're really just talking about contingency plans. These financial market infrastructure companies need to have contingency plans in place in case, can I say, the shit hits the fan. The second tier, Tier 2, is where the regulatory bodies can, in fact, give directions to financial market infrastructures, which is a little bit more involved. The highest tier is Tier 3, which is where we appoint a statutory manager.
So that is, at the moment, the extent of the regulatory powers. I think it's the right level of regulation. The National Party will support this to select committee, and we support this bill in the House.





JAMIE STRANGE (Labour): Madam Speaker, thank you for the opportunity to take my first call of the year in the House and follow the member from Northcote, Dan Bidois, with his rather colourful language, but I certainly appreciate the contribution. Thank you, sir.
We've heard from various speakers around the importance of sound and efficient financial systems. Generally speaking, we do have sound and efficient financial systems, but we have heard for a number of years from agencies like the International Monetary Fund, and particularly work done by the Reserve Bank, that we do need a bit more regulation. Hence this bill has come to the House. I acknowledge the Minister Grant Robertson for bringing it to the House, and I acknowledge the previous Government for the work they did on this bill as well. It's good to see that there is cross-party support.
We heard from Dr Deborah Russell around the aspect of EFTPOS transactions, just using one example of what this bill might cover. Now, if we look at society and we go back many years—I'm not sure anyone in this House remembers—there was a period of bartering as a society, when we didn't have any cash.
Then we moved to cash, and for many years people used cash to fulfil transactions. However, we're quite quickly moving to a cashless society. In fact, for me personally, I very rarely carry cash, which gets rather embarrassing when raffles are put in front of my face. I'm sure many members of this House and many people at home do not carry cash. So we're particularly reliant on financial systems, financial transactions, and we've heard that there is $35 billion a day worth of transactions going through. Now, it's absolutely vital that this system is robust, that it is sound, and that it is efficient. So as a Government, and, in fact, as a Parliament, we're doing the right thing by putting some regulation in place.
I mentioned before that the Reserve Bank has done a little bit of work in this area. The Reserve Bank oversees New Zealand's financial market infrastructures—the FMIs—such as payment and settlement systems for the purpose of promoting the maintenance of a sound and efficient financial system. FMIs are a critical element of the financial system and are highly relevant for the Reserve Bank's core responsibilities that stem from its financial stability objective. The Reserve Bank, in March 2015, following consultation, published a policy statement on its oversight of FMIs to reflect the recently updated Principles for Financial Market Infrastructures issued by the Committee on Payment and Market Infrastructures and the Technical Committee of the International Organization of Securities Commissions. So the Reserve Bank has effectively been leading a piece of work, which has now come to Parliament and is about to be, I expect, passed into law.
There's a second point that I'd like to highlight, and that is the fact that this bill provides a framework that would bring the regulation of FMIs in New Zealand broadly into line with international standards. We heard from the speaker Judith Collins around the IMF and other international agencies who have been talking with New Zealand about needing a bit more regulation. So in a way we have been a little bit of an outlier compared to many other OECD countries. So it's good to see that we are coming into line with international standards in a sensible and proportionate manner that avoids unnecessary costs. And we heard from the speaker before that we do have to be careful around regulation, and I absolutely agree with that. But carefully placed, sound regulation certainly will help to ensure the robustness of our financial systems, which is absolutely important. We all rely on these financial systems.
The new regime is tailored to the needs and systemic importance of individual FMIs. This approach focuses regulation on the most important FMIs while minimising barriers to entry and compliance costs, which might otherwise hinder new entrants and the development of new products.
We've heard, I think, a range of views and a range of information. I've just added in a little bit there just to highlight a few extra points. Without further ado, I commend this bill to the House. Thank you.





Rt Hon DAVID CARTER (National): Thank you, Madam Speaker. As I listen to this debate on the Financial Market Infrastructures Bill, it strikes me that we all take our banking system absolutely for granted. We think it's safe. Our salaries, our wages; for everyday New Zealanders, it goes into their bank accounts and over the next week or fortnight they withdraw it out with a number of transactions—and, as Mr Strange says, probably more by EFTPOS these days than by cash—little credit or little doubt is given to the fact that that system could actually fail. I recall quite vividly, it was the National Government that came in in 2008 as the world entered the global financial crisis, and suddenly we realised that those financial institutions we deal with may not be as safe as we thought they were. Whilst New Zealand was relatively immune from the collapse of our own financial institutions, the same certainly could not be said for the likes of America. 
So this piece of legislation is largely the result of work carried out by the IMF—the International Monetary Fund—following the global financial crisis, which is now 12 years ago, which shows how long it takes for countries right around the world to accept that financial institutions need to be regulated. And, of course, now we have the work done by the Reserve Bank of New Zealand, finally culminating in this legislation presented to the House today, which National will support to the Finance and Expenditure Committee. 
As I've listened to the contributions from many of the speakers, most of them—in fact, I think all of them—have remarked on how complex this issue is. We have words like "securities" and "derivatives" and "depositories" and "trade repositories", all of which come together in the settlement of funds on a daily basis to ensure that we have a banking system that works, and that is safe for all depositors wherever they live—but, particularly, the ones that we're concerned about are New Zealand depositors—to know that their money deposited in a bank is safe, and that they can get their money out when they want. That's the essence of this legislation today. 
So we'll support it to select committee. The two things I want to particularly watch before the select committee are: what are the benefits—and if it results in a safer banking system, which is required in this day and age, then I'm all for it—but I'll equally be watching for the costs, because this reform may well come at a cost. If it comes at a cost, I suspect already that cost will then not be picked up by the banks; it will be a cost that's passed on to those people who are the customers of the bank, particularly the borrowers. So I think as we analyse the work through the select committee—and the Finance and Expenditure Committee will do the job thoroughly—they're the two things we need to watch: identify the benefits and be very, very aware of the costs that, ultimately, will be imposed on to the depositors. 
But, having said that, as I said at the start of my contribution: above all else, we all require a banking system in this country that we have faith in and that we know will not fail. As we move from those dim, dark days of 2008—12 years ago—of the global financial crisis, it's important that we move with the time, modernise our banking system, and make sure it's securer, and safe to deliver that security to New Zealanders. 





GREG O'CONNOR (Labour—Ōhāriu): I think the previous speaker has alluded to what happened in 2008. I think what really happened in 2008 is that New Zealanders, and, indeed, many around the world, suddenly understood how vulnerable they were to what happened on the world markets, particularly Wall Street. 
No one had heard of derivatives outside the financial markets at that stage. I do recall reading some literature about the lead-up to 2008—there was a meeting in Davos, Switzerland, where one of the leading regulators in the world stood up and some of the biggest, greatest financial brains and investors were at that meeting. He explained derivatives to the crowd, and, at the end of it, he asked: "How many of you really have any idea what I've just said?", and there were very few hands that went up. Yet there was hardly a financial institution, especially the major banks in the United States, that didn't have extreme exposure to those derivatives. What they were was a gathering up of very poor quality loans, mortgages into multimillion-dollar packages—the theory being that the good ones would offset the bad ones if anything went wrong. The problem being: they were all bad ones. These whole derivative packages would be made up of loans that had been made to what were called NINJAs—no income, no job, and no prospects. Bringing that forward then, what it did is it made us all understand just how vulnerable we all were to this. 
So bring us forward to this piece of legislation: the Financial Market Infrastructures Bill. What we need to assure and reassure those who are in managed funds, those who may even have their money in the bank, is that there is a playing field which is being regulated so that those who were rendered vulnerable, those who lost money—and you can think of any number of organisations in New Zealand. Blue Chip investments was one that, again—so many of those who'd worked hard all their lives and had their savings, and had those savings decimated through a number of these activities.
So it's incredibly important that we, those who have money that is moving through the financial systems, have some confidence that there is some regulation. Just to give an example of what happens if there is no regulation—of course, we've got the block chain, bitcoin, which is actually happening, which is completely unregulated. We are continually hearing of problems in that industry, if you will call it that, which are a net result of absolutely no regulation; the jungle rules. That is why it is only the courageous who are putting their money into that area. 
So I have no hesitation in commending this bill as the last speaker on this, the first reading of this bill today. And I think that those who are watching, those who've survived this long through the debate, should feel some satisfaction that there is now some work across the House being done to inure them against future financial shocks. I commend this bill to the House, Madam Speaker.
Bill read a first time. 
Bill referred to the Finance and Expenditure Committee.





FINANCIAL MARKETS (CONDUCT OF INSTITUTIONS) AMENDMENT BILL
First Reading
Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): I move, That the Financial Markets (Conduct of Institutions) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill and to report back by 23 June this year.
This bill will create a broad regime governing the conduct of financial institutions such as banks, insurers, and non-bank deposit takers. The ultimate aim of this new regime is to improve the conduct of financial institutions and to help rebuild trust and confidence in our financial sector. This will serve the needs and interests of everyday consumers and lift wellbeing across the board. This is particularly important and timely given the problems that have been occurring in the financial sector, and the various reviews that have taken place which led to the introduction of this bill. 
There have been several recent reviews into the conduct of financial institutions, including the 2018 royal commission into financial services and the reviews into banks and life insurers in New Zealand undertaken by the Financial Markets Authority (FMA) and the Reserve Bank. These reviews showed that there are extensive weaknesses in the conduct and culture of institutions in New Zealand's financial sectors, particularly in respect of governance and management of conduct risks and lack of focus on outcomes for customers. The reviews also highlighted a gap in New Zealand's regulatory settings, in that there is currently no explicit legislative mandate for the regulation of the general conduct of financial institutions. 
Some of the examples that were heard, either in the consultation that was held by the agency or the investigation by the Reserve Bank and the FMA, were numerous. In one example, a 25-year-old with no dependents was sold a life insurance policy by his bank when he signed up for KiwiSaver. The bank, essentially, led him to believe that buying the life insurance was required as part of joining KiwiSaver. I've also heard about a person with tetraplegia who was sold a life insurance with a clause excluding tetraplegia, which made the cover, essentially, meaningless.
Financial institutions and the products and services that they provide are an essential part of a well-functioning society. Financial products and services are a critical part of our everyday lives as well as our long-term wellbeing. They enable us to save for the things that we want, to borrow for a house, or to cover ourselves against an unexpected loss. Banking and insurance in particular play an integral role in people's lives. So we've moved swiftly to fast track measures in these areas to protect consumers and to maintain confidence. 
It is vital that New Zealanders can trust their banks and insurers and be treated fairly by them. Treating consumers fairly is essential to building trust in the finance sector. It will be a win-win for consumers and the financial sector if we can all have more confidence that banks and insurers are placing fair treatment of consumers at the heart of their businesses, that financial products are being designed and sold with a view to best meeting consumers' needs, and that consumers don't face unreasonable pressure to retain or to change products that may no longer be useful for their particular situation. 
The new conduct regime that this bill creates is seeking to help cement this trust. In order to address these problems and in turn build the necessary trust in the industry, the bill will implement a package of changes. The bill requires banks, insurers, and non-bank deposit takers to be licensed by the Financial Markets Authority in respect of their general conduct, and licensing gives consumers confidence that licensed entities have been checked and meet the appropriate standards of conduct. Moreover, it also establishes an ongoing supervisory relationship between an entity and the regulator. Licensing will provide the FMA with a full range of tools to monitor, supervise, and enforce the new regime. It's not about having an ambulance at the bottom of a cliff but more about enabling the FMA to work with entities to prevent harm in the first place. 
This bill also centres on an overarching fair treatment principle. Licensed institutions and their intermediaries must comply with this principle, which will require them to treat consumers fairly. Financial institutions will also be required to establish, to implement, and to maintain an effective fair conduct programme, and this requirement is a way for financial institutions to operationalise the fair conduct principle and turn the principle into concrete actions within the entities.
The conduct programme will require licensed entities to have policies, processes, systems, and controls in place to ensure they're considering consumers' interests and treating them fairly in all aspects of their business. This requirement reflects that fair treatment of consumers is a broad concept that touches on and goes to the heart of every aspect of business. 
Our financial institutions as well as their intermediaries will be required to comply with the fair conduct programme. Where more detailed obligations are required, regulations can provide more guidance, but at its core this is about ensuring institutions think about customers all of the time. This approach allows flexibility too. Rather than the Government or the regulator prescriptively laying out exactly what those concrete actions must be for every licensed institution, instead this approach enables each financial institution to determine what policy systems and controls make best sense for their business. 
Industry may have concerns about overlaps of regulatory requirements, such as with the consumer credit legislation and whether this new regime will require businesses to duplicate different compliance activities. The conduct programme requirement allows financial institutions to take a coordinated and a flexible approach to different regulatory requirements. 
The bill will also create the ability to prescribe regulations relating to incentives which financial institutions and their intermediaries will be required to comply with. These regulations will be the mechanism through which sales incentives based on volume and value targets will be prohibited, and this prohibition applies not just to licensed entities but also to all intermediaries throughout the supply chain. It's also about any and all incentives, whether monetary, such as commissions, bonuses, or other non-monetary rewards like leader boards or trips abroad. 
I've taken this approach because conflicted remuneration and incentives are one of the biggest issues driving poor outcomes for consumers in the financial sector. As the Australia royal commission found, in almost every case the conduct at issue was driven not only by the relevant entity's pursuit for profit but also an individual's pursuit for gain. This prohibition on target-based incentives will address the fact that targets create an increasingly strong incentive to sell and therefore can encourage the person making the sale to prioritise their own interests over those of the customer. This prohibition still allows people to be remunerated for sales, but removes the particularly problematic target-based remuneration. 
The regime also contains strong civil pecuniary penalties if a financial institution or intermediary contravenes an obligation within the law. Compensation for affected consumers can also be sought by any persons. Officials have recently consulted with financial institutions about how the bill will work in practice, and I have heard concerns that industry have raised around certain aspects of the bill; for instance, how the framework of the bill works in relation to intermediaries, the requirements related to conduct programmes, and the timing for implementation of the changes, and we will be watching the select committee process very closely. 
New Zealanders do need to be confident that the financial products and services that they are buying will be appropriate for their circumstances and meet their needs. By introducing this bill to improve conduct in the financial sector, we're putting the consumer at the centre and helping banks and insurers to ensure trust and confidence in their industry. We will all benefit from a well-functioning finance sector that's focused on the interests and needs of consumers. So I commend this bill to the House.





BRETT HUDSON (National): Thank you, Madam Speaker. As I rise to speak on this bill in its first reading, I just want to note that both the bill itself and some comments we've heard tonight—both on this bill but also in the one immediately preceding it—show that this is a Government that's always on the lookout for perceived problems and that's—
ASSISTANT SPEAKER (Hon Ruth Dyson): Sorry to interrupt—
BRETT HUDSON: You needed to do the thing, yes.
ASSISTANT SPEAKER (Hon Ruth Dyson): I forgot to say, "The question is that the motion be agreed to." My apologies. Carry on, Mr Hudson.
BRETT HUDSON: Thank you. Well, we'll get to whether we agree to the motion in a few minutes, I think. This is a Government that clearly is always on the lookout for perceived problems. Now, looking for problems itself is not necessarily a bad thing. The problem with them is that they see the solution to any problem, real or perceived, as more Government. More and more often, which is even worse, they see the solution for more Government as being regulation-making power, sidestepping the authority and role of this Parliament in the setting of rules, legislation, in this country. This bill is another example of precisely that.
I want to start by referring back to the work undertaken and the reports issued by the Reserve Bank of New Zealand (RBNZ) with respect to banks and by the RBNZ and the Financial Markets Authority together with respect to the insurance industry. Both of those reports make it very clear that they did not find many actual instances of bad behaviour. They didn't find evidence, in many cases, that bad things had taken place. What they say they found was a lack of process and documentation to satisfy them that the conduct—the way the banks and insurance companies go about managing their business, and particularly through those sales channels—did not satisfy them that it looked robust enough for their purposes or for their desires.
Now, business controls are a good thing in any business, particularly a larger business. They help to ensure that the business is run well and that instances such as this, where they interface with customers, are run appropriately. But having come from, at least, actually, more than one multinational business in my history, I can tell this Parliament that when business controls take over, and the controls become the outcome in themselves rather than the governance of the behaviour or the actual business outcome, then they are merely an anchor on a business, creating enormous amounts of work and compliance activities and cost, and often—mostly, in fact—yielding no tangible benefit for the end customer.
Ultimately, because they add cost and effort and time, they add no real benefit—true benefit—to the business either. But what they do and why they come about and why more and more of them get layered on is because a group of people feel more confident within the business that they can prove that something was done the right way—the way they see the right way as being. Now, we need to be focused, across the economy but even here in our financial institutions, on making sure the outcome is right, that our institutions are offering products that are fit for purpose and that they're fit for the customers that they are selling them to and that they behave appropriately in that process.
Now, arguably, that doesn't need a whole rule book of processes and documents to evidence that. The Minister himself in charge of this bill actually saw through to conclusion the Financial Services Legislation Amendment Bill, which the previous National Government introduced, which had a very simple way of dealing with—well, I would argue—the exact matters he wishes to address in this bill. It placed a duty, an obligation, on those financial advisers to act in the best interests of the customer.
Now, you could achieve the same thing here with what he's doing about what he calls his fair conduct programme simply by having a provision that the institution is responsible for ensuring that the actions of the institution and its employees and intermediaries are in the interests of the customer. There are already provisions to deal with transgressions such as under the Financial Markets Conduct Act, the provision for the company to be fined up to three times the gain made or loss avoided up to a maximum $5 million for such transgressions. They could do that. There you go. Don't need a big, long rule book. Don't need tons and tons of compliance, proof, and behaviour. Place the obligation on the institution. Make it clear that it applies to employees and how they want to do it with intermediaries. The tools are already there.
Because if an institution is going to suffer that sort of penalty for getting it wrong, they're going to make sure they don't get it wrong. If they're going to suffer that sort of potential penalty, if one or more of their employees or intermediaries takes actions for personal gain ahead of the interests of the customer, which I'd argue are also actually the long-term interests of the business, then they're going to make sure that they've got the management and process oversight to make sure it doesn't happen.
And that flows on to the point I also want to spend some time on, which is this regulation-making power, which the Minister's own words tells us pretty strongly is all about banning incentives. Well, first problem is it's simply a blanket regulation-making power, which means that if we agree to this, then the Minister and their officials will fundamentally be able to decide at their whim what incentives can be curtailed or banned, what roles they can apply to at any time—any time at all. So it's signing a very blank cheque for that sort of power-making to what, in effect, is officials, because this Government won't argue with their officials on these sorts of matters.
But first of all, even the fact that the regulation-making power they want is far too powerful. The first problem with it is that it actually shows a lack of understanding of business, certainly in the Government, but I worry also with officials. Because here's the reality—how are these businesses going to transact if they don't have people actually selling their wares to customers? It's how businesses operate. Whether they're a product business or a services-based business, someone's actually got to sell the offering to the client or customer. The reality is the people that put themselves in that position as salespeople tend to be people that value the risk and reward that comes with being successful. They tend to sacrifice some salary up front with the possibility of overachieving if they deliver against a set of sales targets—all of which should be, and normally are, managed by controls across the business, referring back to my earlier point about the obligation to act in the interests of the customer.
So this idea of regulating sales incentives to the extent that, one, the Government might ban some or potentially all of them simply cuts across a fundamental necessity of operating a business. Now, I met with a business in the industry. I won't name them. They had voluntarily taken sales incentives from their own sales staff. Guess what happened? Sales dropped. Well, that comes as no surprise to anyone who's worked in business. There are better and less onerous ways of ensuring an obligation to ensure the outcome that a customer is not going to be harmed simply because there is a person who may have some salary incentive to sell certain products.
Also, to that point, of course, which worries me deeply because I've heard this before—the Minister tonight said that the sales incentives they want to ban are the ones that are based on volume or value. Well, here's a challenge which backs up my immediate previous point. I challenge anyone to name me a sales incentive that is not either based on value of sale or sales or volume. It's fundamental. So if his intention is to ban sales incentives to do with volume or value, he's basically just said to us all his intention is to ban every sales incentive he possibly can. It's ludicrous.
There are better ways to deal with this. There are better ways to ensure that businesses are transacting and behaving appropriately with their customers. I fear that this is rooted in this belief on the other side that if you're doing something for profit, you're bad, and if you make profit, it only comes at the expense of doing over your customer. That is not the case in the real world, at least. It might seem so in some of the hallowed halls in this place, but it's not the case in the real world. The simple solution, as I have said, would be to place an obligation of the best interests of the customer certainly on the institution—it could be done down to an employee or someone with a sales incentive—and then let the mechanisms and the penalties which exist in our law today cover that. Get it right. Get the penalty right. Every incentive will be there for the business, its management, and the employees to act—
ASSISTANT SPEAKER (Hon Ruth Dyson): I'm very, very sorry to interrupt the member, but the time has come for the House to adjourn for the dinner break. 
Sitting suspended from 6 p.m. to 7.30 p.m.
BRETT HUDSON: Well, this bill is actually a lot like the Prime Minister's speech today: very, very long on promises and good intentions, but woefully let down in the execution. We'll be constructive on the select committee, but we will not support the bill in the form it's currently in. 





Dr DEBORAH RUSSELL (Labour—New Lynn): I'm delighted to hear that the Opposition will be constructive on the select committee. I know that the promise that Mr Hudson has made is a sincere one because in the recent firearms legislation bill that we've worked on together on that particular committee, that has indeed been a very constructive relationship. So I'm sure there will be a constructive relationship on this bill. 
This bill seeks to regulate the conduct of financial markets institutions, and Mr Hudson in his speech raised a couple of interesting points and they're related. He said, first of all, that on this side of the House we perhaps didn't understand the need for businesses to make a profit and that we felt that making a profit was a bad thing. I reject that view. What we want to be sure of is that businesses make a fair profit and that businesses make a profit in the service of their customers, not at the expense of their customers. We all know that trade benefits both or all partners, but unfair trade exploits one partner. 
What we want to make sure of is that there is fair trade between institutions and their customers, and Mr Hudson raised the point. He said, "Was there any evidence, really, that, in fact, there had been problems with financial institutions, and, in particular, the financial institutions of the sort that are being dealt with in this bill?", and the answer is yes, there have been problems. In particular, there's some really interesting evidence around so-called soft commissions. 
Now, a soft commission is when we're talking about individual consumers—retail consumers like you and me. They are commissions where the person, the employee—the member of the institution—is paid, not necessarily in hard dollars, but in a benefit. In particular, an overseas trip might be the reward for selling a particular number of financial instruments—a particular number of KiwiSaver memberships, a particular number of insurance policies, or a particular number of investment schemes. 
It turns out that in May 2018, the Financial Markets Authority looked at soft commissions in the life and health insurance industry, and these people are quite hard-nosed. They concluded that soft commissions were effective sales incentives for financial advisers. They found that a higher value of these soft commissions was related to higher sales incomes for insurers. They found that increased spending by insurers on soft commissions appeared to relate to increased sales—perhaps by only a small amount, but it was there. The qualification date for trips overseas appeared to coincide and to correspond with a peak in sales. When one insurer removed their overseas trips as a sales incentive, their sales dropped by about a third—so that's quite significant—but only 42 percent of commissions required the adviser to sell a particular number or a value, so there was a real incentive going on there. 
It's a tricky problem. Of course we want to motivate people to do their jobs and to do them well, and of course, in a sales-oriented industry, making sales is critical. But at what point does a commission provide an incentive, so that instead of selling the customer a product they genuinely need or a product that will genuinely serve them, the real service that is performed is the commission that is paid to the sales agent? That's a very tricky point to judge. 
Now, this bill does not set out to make that judgment in itself, but it does require institutions to set up rules for themselves as to how they will conduct themselves to set up understandings in institutions as to what is a reasonable way to remunerate sales staff and what is not. I think it is worth remembering that, in terms of these so-called sales staff, in some institutions these are bank tellers. They are financial advisers. Their objective is to help a customer or a client to structure their finances as best possible, but their advice is being skewed by the presence of a commission. So how do we get institutions to regulate that? Well, we invite them to think about them themselves, and this is what this bill does. 
Now, I agree there are some pretty complex issues in this bill, and I think it is worth spending our time discussing it at select committee as to whether or not this will be effective and as to whether or not the rules will actually work in the way in which they are intended. I know from my previous experience of working with people across the aisle, such as Mr Hudson and Mr Young, who are interested in these sorts of areas, that we will have a constructive and reasonable discussion about it. But it is a discussion worth having, and that is why I commend this bill to the House. 





JONATHAN YOUNG (National—New Plymouth): Thank you, Madam Speaker. I have so looked forward to speaking on this nonsense bill. It's obvious to me that the Government have a very low legislative programme and they have thought, "What can we do to fill the Order Paper?", and here we are. We have a bill that's addressing a problem that has been predominantly in Australia that the Reserve Bank and the Financial Markets Authority (FMA) looked at in New Zealand and could not find anywhere near the same problem. They saw some areas that could need some work on, but to bring a piece of legislation into the House to do that is, I think, essentially filibustering by this Government. 
Can I say, one of the goals of this bill is to protect the interests of the consumer, but it was probably less than two years ago that this House passed a bill called the Financial Services Legislation Amendment Bill. The purpose of that bill required all people who give regulated financial advice to comply with standards of ethical behaviour, conduct, and client care. So what we are doing today is Groundhog Day—we're doing the same thing two years later because this Government doesn't have a strong legislative programme. We are repeating what has already been achieved. 
It's quite interesting, because one particular firm who I respect—Chapman Tripp—analysed this bill, and they said this. They said that you have to be very careful regarding this bill because "The proposed legislation regulates the banks, insurers and non-bank deposit takers which are already subject to registration and licensing regimes under [the Reserve Bank of New Zealand]. Care will need to be taken to ensure that the further licensing obligations under the FMCA are streamlined, the licensors are co-ordinated and the obligations are consistent and not duplicated."
So this bill that was passed within the last couple of years, the Financial Services Legislation Amendment Bill, was to bring those elements of care to clients regarding commission payments—that if somebody was going to receive a remuneration from selling a financial product, they had to disclose it and they had a limitation to declare that there were other similar products out there in the market place. So somebody couldn't say, "You've got to have this; this is the only product that you need to have and I'm here to sell it to you."
So it's interesting that if you go to the FMA website—and they make this comment about the Financial Service Providers Register, which the bill established two years ago—they said, "All financial service providers in New Zealand must be registered on the Financial Service Providers Register to legally provide financial services. There is a requirement to also be licensed by the FMA or the Reserve Bank to provide some financial services. Financial service providers include financial advisers, brokers, building societies, credit providers, credit unions, money changers, finance companies, foreign currency exchange dealers, fund managers, insurers, investment portfolio managers, issuers, and registered banks." So there's already a regime in place put in by this Parliament to protect consumers, and, by law, registered banks need to register as a financial service provider. When we look through this bill, all it does is exactly the same thing. It's Groundhog Day.
Chapman Tripp went on to say, "However, significant costs are expected to fall on banks, insurers [and non-bank deposit takers] and their intermediaries selling products to retail customers. Compliance costs are expected to be moderate to high as noted by the Ministry for Business, Innovation and Employment in their Regulatory Impact Statement. Further, administrative and enforcement costs to the Government and the FMA will be significant."
Every head on the other side is looking down at their desk. Why? You should be embarrassed. Minister Faafoi, you should be embarrassed. What you are doing is already being done. You're wasting this House's time. You're putting further expenses upon customers in New Zealand for elements of protection that are already being put in place and that the FMA and the Reserve Bank already have oversight over.
I don't need to say anything else. I think I've said enough. I think that what we see here is a bill that is a duplication, and that's why we don't support this bill.





FLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you, Madam Speaker. It's a pleasure to stand in support of this fantastic piece of legislation despite the moans from the Opposition there. Just an observation of the argument made by the previous speaker, Jonathan Young: first of all, he said that National had already brought this legislation in, it's already done, there's no need to do it any more. And then he says, "And by doing this you're going to add extra costs and you're going to ruin the industry," after saying it's already been done. Then the speaker before him, in the Opposition, Brett Hudson, talked about incentive for sales. Now, I have sympathy for that. You do need good incentives in terms of sales. But I loved what Dr Russell said in terms of actually what we want to do is talk about sales that are consumer focused, that are fair, and that are not profit gouging from our New Zealand consumers.
What the Opposition speaker previously failed to realise in his argument, when he said there were no problems in the insurance or financial services industry, was kind of an asymmetric information breakdown between those parties of the contract. All that fundamentally means is that when a person sits down to sign an insurance contract, for example, or takes financial advice from an expert, they are at a disadvantage in terms of the information in front of them. Particularly with insurance contracts, it is not written in for the layman and it becomes incredibly confusing. And that's just in that moment. That's just that time and place where a normal person in a household is trying to figure out what insurance they need to look after their livelihood, their health, and protect their income. Never mind the lack of information that person may have on the history of that financial or insurance institution and whether or not they have a history of serving their customers well—to what degree have they let their customers down, to what degree have they sold insurance products to people with disabilities when those very products exclude the disability that that person has in the insurance contract? I mean, that's still what this House is trying to deal with today.
So, to the members opposite, I know that more needs to be done. They are an essential part of modern life. We're dealing with banks, we're dealing with financial advice, and we're dealing with insurance companies, but what we have seen recently—and we have seen it in New Zealand; in fact, the previous speaker himself said that it wasn't as bad as Australia. Well, Australia was diabolical and there were huge problems that needed to be rectified and the Government there put a heavy foot in to change those markets to make sure those organisations were looking after their consumers. I put it to the House tonight that to ask those institutions to put their consumers first—their customers at the forefront of their business model—is not unreasonable at all. In fact, as one of the previous speakers said, long-term benefit to that kind of organisation is good; that's good business practice. But then we come back to this conversation about asymmetric legislation.
So this is what this legislation is fundamentally about. We've had reviews of New Zealand banks, life insurers—in 2018, a joint one from the Reserve Bank of New Zealand and the Financial Markets Authority—that there is a gap in our regulatory settings and there is currently no explicit legislated mandate for the regulation of general conduct of financial institutions despite what the member previous claimed in the House in his contribution.
I've spoken for longer than I intended. This is a sensible piece of legislation. It is about protecting consumers and customers. It is about making sure that those undertakings that we would all expect are fair and reasonable and have the customer at the forefront of an organisation's thinking. So I very much support this legislation this evening. Thank you, Madam Speaker. 





MELISSA LEE (National): Thank you, Madam Speaker. It's a real pleasure to rise to speak for the first time in 2020. Although, I did actually have a question—this is the first time I'm actually speaking on a bill. I am, with my colleagues on this side of the House, opposing this bill. To give the reasons, I'll actually give a little bit of a background; I think other members have actually started to do that.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Australia actually found widespread abuses within the financial sector, which has actually led to a raft of legislative and regulatory changes in Australia. In New Zealand, following that royal commission, the Reserve Bank of New Zealand as well as the Financial Markets Authority launched its own review into the conduct of our own banking industry, the financial services sector, and the insurance sector. What they found was that there were some concerns, some small number of conduct issues related to poor conduct by bank staff, but it wasn't a widespread misconduct like the one that they actually found in Australia.
So, in terms of this particular bill, I am a little bit baffled as to what Fletcher Tabuteau was actually talking about in terms of why we need this bill when my colleague Jonathan Young had earlier said that in this very House we had passed legislation within the last two years that actually deals with some of these issues. When someone now deals with a financial institution, a bank, or an insurance company, what they do is that they now have to be registered. There are plenty of warnings but this bill doesn't actually sort of go into the issue. We already have that in place where bad behaviour and bad advice can be dealt with.
This bill doesn't actually deal with, I guess, something called caveat emptor or buyer beware. There is always this issue when someone is purchasing a financial product or an insurance that they should really read into it. Fair enough that there are some financial literacy issues that we have in this country; we need to improve some of this. But I'm not so sure if there's another piece of legislation or regulation that needs to be introduced to deal with something we've already dealt with, which is already in place. 
Earlier Dr Deborah Russell also gave an example of the sales incentives and the commissions that she was apparently particularly concerned about. I think when there is bad behaviour we all are concerned about it, but one of the examples that she actually gave was that there was an increase in sales which was correlated with the increase of overseas trips. I wonder if she actually really believes that that example that she gave was, in fact, proof of misconduct or the fact that there was harm created to consumers. I'm not so sure what that example was supposed to have been. It just goes to prove that this Government has no concept of business, that sometimes incentives for salespeople who actually—I mean people have to sell products. Salespeople are very good at selling products, and often they do not take a salary. Often they are on a very bare sort of contract that gives them some sort of an incentive payment for the amount of sales that they actually make. That does not equate or does not actually mean that these people are selling a bad product, or that their behaviour or the very fact that they are very good at sales does not mean that they're actually creating harm for the consumers, or that there is, in fact, misconduct actually happening.
Of course, all of us in this House are concerned if there is bad behaviour happening in the market place, or that banks or institutions like insurance companies are actually behaving badly, and we want to make sure that we protect consumers to make sure that they're getting a fair deal for the purchases that they actually make. However, often when businesses are wanting to make a profit, they need to make sales; salespeople also need incentives. This bill actually allows the Government to create regulations, which in fact, could lead to a ban on salespeople. I'm not so sure if that is, in fact, a good idea.
I think a long time ago someone said something about using a sledge hammer to hammer in a little nail. I think I don't know what that, you know—
Stuart Smith: Crack a nut.
MELISSA LEE: Cracking a nut. I think when you need a very small instrument to actually fix a problem—I think this Government is trying to introduce a massive ban on something that does not prove that they are, in fact, a bad thing for the market place. I stand with my colleagues on this side of the House and oppose this bill.





Hon EUGENIE SAGE (Minister of Conservation): Tēnā koe e Te Māngai o Te Whare. I am very pleased to speak on the Financial Markets (Conduct of Institutions) Amendment Bill and support it on behalf of the Green Party.
The members of the Opposition seem to have their eyes wide shut. They seem to be unaware of the need to have a much greater standard of fairness in the financial sector, as Deborah Russell alluded to. Yes, there is already a licensing regime, which the Financial Markets Authority can administer, but what this bill does is build on the results of the Australian reviews and the reviews which have been done in New Zealand, which highlighted that issues like incentives, which were based around targets to sell particular volumes or to sell to a particular value, which rewarded the adviser with trips overseas, soft rewards like that, ended up being to the detriment of the customer and focus more on benefiting the sales adviser rather than benefiting the customer. They resulted in, as one of the reviews showed, a tetraplegic being sold life insurance which excluded tetraplegia; so it was, essentially, meaningless.
This Government is about fairness. I find it extraordinary that members of the Opposition are siding with the big people, the banks, the big insurers, and not with the consumers. We all want financial markets which are fair. What this bill does, by providing a regulation-making power, is not using a sledgehammer to crack a nut but is ensuring that we have a fair market so that people can trust, and if people trust the markets they are involved in because it's got a good regulatory framework, they are more likely to buy those services rather than being vulnerable to exploitation. We know that these contracts are very complex, that there is not a high degree of financial literacy in New Zealand, and because of that people can be exploited. So this bill is about ensuring that we manage those risks, that we have greater accountability, and that we have an ability to enforce fair conduct and good conduct.
The National Opposition did pass some legislation, but like everything, it did not go far enough. This, through using the licensing system that already exists, through using the ability to pass more regulations, will ensure a much stronger standard of fairness throughout our financial markets. The Green Party is pleased to support it.





STUART SMITH (National—Kaikōura): Thank you very much, Madam Speaker. It's great to have my first speech in the House for 2020. Unfortunately, it's not on a particularly good bill, but that's been well covered by my colleagues.
Going back to the New Zealand First speaker earlier who spoke quite a bit about the lack of symmetry or an asymmetrical imbalance in terms of knowledge, there will always be, in a transaction, an asymmetry in knowledge. The seller always, almost always, will know more about what they're selling, about that product, than the buyer. That is just commerce every day. Now, to try and balance that up by putting in this overbearing regulatory regime is just nonsense.
We have caveat emptor as my colleague mentioned before—the buyer beware. People have buyer's remorse all the time. They buy something as little as a pair of jeans, perhaps, or as large as a house, a big transaction, they can then have buyer's remorse the next day or in the coming days and have all sorts of regrets about that purchase. It seems a lot of that thinking is rooted into this bill.
When we go back to the commission that looked at the banking in Australia and then the inquiry that was held here in New Zealand, yes, they found some issues in there. The main issue was there was a lack of documentation. It didn't satisfy the inquiry as to what the documentation around those transactions was, not necessarily anything further than that. This is such an overbearing reaction. It shows a lack of understanding of commerce, it shows a lack of understanding of business, and I certainly am very suspicious of anyone going down this path. I always think back to, you know, the devil makes work for idle bureaucrats. That seems to be what they've done here, try and find something to fill out their legislative programme because they didn't do the work when they were in Opposition to do some policy research. Fortunately, we aren't falling into that trap.
I just go back to the pursuit of profit. It is absolutely in a transaction. The seller is trying to maximise the price and the buyer is trying to minimise the price; that is how a transaction happens every time. This seems to be a surprise to people on the other side of the House. This legislation won't change that. In fact, what really worries me about it is the regulation-making powers, which as my colleague said, may even allow them to seek to ban sales altogether. It is just a nonsense. This bill deserves to go in the bin. I'll be voting that way.
DEPUTY SPEAKER: Right, so this is a split call.





JAMIE STRANGE (Labour): Madam Speaker, thank you for the opportunity to take a call on the Financial Markets (Conduct of Institutions) Amendment Bill—my second speech in the House this year. We've heard from the Opposition that they're not voting for this bill because it regulates companies to comply with ethical behaviour. Now, I think there's some confusion over there, because wouldn't we want companies to comply with ethical behaviour? And those were the exact words that came out of the mouth of one of the Opposition members. So I think the Opposition members do need to have a little bit more of a think about this.
Look, there is an imbalance of power between financial institutions and consumers—and, yes, in most cases, the seller does have more knowledge than the purchaser—but trust and confidence in our financial sector is a vital part of our economy, and even if the members opposite don't believe that we need balance or that we need fairness, surely they believe that our financial sector must be strong and stable. If there is no trust and confidence in these services that are provided, then we could have a whole lot of people not taking out life insurance, for example, and something like that, you know, could have a disastrous effect on our economy potential. So we need trust and confidence and, at times, the Government do need to provide some regulation to ensure that stability. 
This has stemmed out of recent reviews into banks and life insurers—and the Green Party member mentioned one of the reviews in Australia, which quite clearly showed up that we do need some regulation. Just to close, this is actually a win-win for banks and institutions and consumers, and the reason it's a win-win is because it creates confidence and trust in the financial sector, and that's what we need for our country. Thank you. 





ANDREW FALLOON (National—Rangitata): Thank you, Madam Speaker. It's my first opportunity to speak in the House this year as well; so can I just welcome everyone back. It's wonderful to be here. I will just be taking a reasonably short call this evening, though, for two reasons: first of all, because I think my colleagues over this side of the House have laid out very well the reasons that we won't be supporting the bill, and, secondly, because I'm conscious that Mr Ian McKelvie is due to speak after me, and I'm sure everyone will be looking forward to that. So I'll just take a very short call.
I am quite interested in this bill, though, and particularly the history of it, because prior to coming to Parliament, for a short time I did work in banking and so I am aware of some of the history behind the bill and certainly what happened in Australia. So what interests me is that obviously the Australians went off and did their royal commission, found a large number of systemic problems in the Australian banking system, and so following on from that New Zealand regulators and agencies went off and did their own review. And what they found actually was that there wasn't this level of problems—anywhere near the level of problems—that exists in Australia.
So it was quite interesting to hear from Minister Eugenie Sage earlier saying that this bill builds on the review that was done in Australia. This intrigues me because what they're, essentially, doing is saying there's a problem in Australia; therefore, we need to legislate in New Zealand. That to me really is suggesting that we're creating a solution to a problem that doesn't actually exist in New Zealand, because what they found was that they said there's a small number of conduct issues related to poor conduct by bank staff but not widespread misconduct or culture issues like in Australia. So, again, nowhere near the level of problems that they see in Australia.
We do support some of the aspects of this bill. There are some important issues in it, and we do support, of course, a strong banking conduct framework, but where I think they go too far is in relation to setting rules for sales incentives by regulation. There's two important parts to that, and the first one of those is that we said it's heavy and disproportionate to, essentially, hand a power to Government to say that there could be a blanket ban on any sort of sales incentives and, in particular, my colleague Melissa Lee has laid out the concerns that we have in relation to that. The second important point is actually that it's taking away the power of Parliament to do that and giving it to a Minister to set by regulation and so there'll be no scrutiny of that decision by Parliament, and that is pretty concerning to me.
I do want to just touch on what the effects of that will be, and actually that's laid out quite well in the regulatory impact statement, which talks about the fact that the bill could lead to more expensive financial products and services, for instance, if costs are passed through to customers. My concern around that—and to me it really sums up what this Government does actually—is they come in and they think, "Oh well, look, here's potentially a problem that we need to fix."—or in this case, probably not a problem at all—"So what we'll do is we'll put a whole bunch of new costs on to businesses or on to farmers or on to landlords, whoever it might be, whatever industry they decide to pick on. 
They think to themselves, "OK, well, this, of course, will have no effect. There'll be no effect of doing this." But of course, as we know, there is an effect because all of those costs just end up getting passed on to the end-user—in this case, the customer or the consumer. So when Eugenie Sage earlier today said that we are siding with the big guys, siding with the big guys by not voting for this bill, well, actually, Ms Sage, we're not siding with the big guys; we're siding with the customers. We are siding with the consumers who, ultimately, have to pay more as a result of this bill.





GREG O'CONNOR (Labour—Ōhāriu): I'd just like to correct that previous speaker, Andrew Falloon—that we've had an inquiry into New Zealand. What Australia had was a royal commission of inquiry with the ability to summons people to the inquiry, and anyone who has been subject to a commission of inquiry, particularly a royal commission of inquiry, will understand they leave no stone unturned. In New Zealand, what happened was the Financial Markets Authority and the Reserve Bank wrote to the banks and asked them if they were engaging in the sort of behaviour that the Australians had done. Funnily enough, they said they weren't. Well, that was our commission of inquiry—a good old Kiwi one.
I was once the chair of a mortgage company, and that was in the good old days when the margin between lending and borrowing was around 400 percentage points, or 4 percent. Now, when that existed, and that was the financial regime which existed, and no one really needed to do this sort of thing because everybody was making so much money, virtually overnight, the percentage went down to less than 1 percent. When we exited that particular product, we were actually getting less than 1 percent, or 100 basis points, between borrowing and lending, and the reason we exited was the only other way we were actually going to be able to continue to make money was on value-added products like insurance, etc. What quickly became clear was that we were going to have to incentivise a lot of people for us to make any money and the only people who were going to suffer were going to be our customers. So we exited. So I have a firsthand account or experience of that change in incentive. 
So this is a very essential piece of legislation. Nobody in banking is a particularly bad person. Nobody in there is out to rip anyone off. What they're doing is doing what humans do: they are out there to make a living the best way they can. Some people sell drugs because it's the only way they can make a living. The authorities—the State—stop them from doing that and so it is essential that just the ability, the desire to make money, the need to make money is not by itself a reason why the State, the regulator, should not become involved. The more incentive there is, the more there will be an incentive for those to actually act against the interests of everyone else in the industry, and that's exactly what happened in Australia and there's no reason to expect that largely it hasn't happened in New Zealand. This is to ensure it doesn't happen. This is to ensure we protect New Zealand customers. I commend this to the House, Madam Speaker.





IAN McKELVIE (National—Rangitīkei): Thank you, Madam Speaker, and I will be brief because most of the extremely valuable stuff I was going to introduce to this debate has been introduced already, but I can't resist but to comment on a couple or three comments from Government members who've already spoken. And I want to start with the last one, Greg O'Connor, who I think vastly or grossly underestimates the diligence of our Reserve Bank Governor. I wouldn't want to be on the end of one of his letters. I think that might be a bit testing. So that's the first thing I want to bring up.
The second thing I want to talk about was something that Fletcher Tabuteau raised with relation to this bill as well. He talked about the gaps in the legislation. Well, the unfortunate thing about legislation is every time we create a piece of legislation, we create another gap. So you can't plug gaps in legislation with more legislation. 
And the third thing I want to comment very briefly on is that I sort of didn't really like the comment that Jamie Strange made. I thought it was rather a strange comment, in fact, where he accused us of opposing a bill that encourages ethical behaviour. I think we're really opposing a bill that, in my view, is liable to lump costs on the very people that it's designed to protect, and I think that's the issue that I have personally with a lot of the legislation—not just this piece of legislation; the previous Government passed some pieces of legislation which have proved to be extremely expensive for those people that we're trying to protect as well. So we have a habit in this House of passing legislation without fully understanding the ramifications of it and making sure that what we do is going to in fact achieve what we want to achieve without imposing extra pain on the people that we deign to protect.
Now, there's a couple of other things I want to comment on, and it's very interesting, because I do think that some of our sales habits—or some of our incentivising of sales—over the years has been suspect. I myself have been involved in the motor industry for a long time, and we had some very odd and unfortunate sales incentives set in that industry at times, which actually cost the industry a lot of money. That's what almost always happens with poorly designed sales incentives. They almost always backfire on the industry in the end.
The other comment I wanted to make was around education. I think, rather than keeping passing bits of legislation to protect people from other people, we'd be much better to introduce a whole lot more education into our system around financials and how people should manage their lives. I don't think it would be that hard. I know education's a touchy subject and I shouldn't be talking about it in Deborah Russell's presence, but education, for mine, would overcome a whole lot of issues we have with these kind of rules that we're trying to put in place with legislation like this. 
Some of these transactions are quite complicated. We've seen a number of cases of very complicated banking arrangements that have ended up in court and ended up with people being repaid money and all sorts of things over the years, because they are complicated. Even very simple transactions are complicated. So I think it's important that we get more education for the system.
We aren't supporting this bill, not because we don't think those people that it purports to protect need protecting but because we think it's a completely inadequate piece of legislation and partly already covered. So thank you, Madam Speaker.





Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe e Te Mana Whakawā. Ngā mihi nui. It's good to be here in this new year. Look, this is a really important piece of legislation. Stuart Smith stood up before and talked about caveat emptor and then made a quite unusual comparison between buying financial services and buying a pair of jeans. I just want to pick up on that, because, when you buy a pair of jeans, you see exactly what you get—although, having seen his attire, perhaps he didn't look closely enough. When you're buying some insurance product, you're buying something which is entirely impossible to understand exactly. You're buying a promise—you're buying nothing more than a promise—that a faceless company will do good and indemnify you—will make up any losses that you suffer.
The document—and let's be honest: who's read cover to cover their insurance policy? I suggest—[Dr Deborah Russell raises hand] Perhaps Dr Deborah Russell, but no reasonable person. The fact is we take it on trust that the insurance company has written fair and reasonable terms. Then, when a claim comes along, all of the power is in the hands of the insurer—as Stuart Smith should know, given his electorate. So, in fact, we've got a situation where we're buying a product. We don't actually know what it's going to deliver. We don't know when it's going to deliver it or whether the insurer will stand behind it when the time comes and deal with this fairly. And what does this bill do? What's its central precept? That when selling these products—these complex products—the interests of the consumer should be taken into account.
We've heard that old term "caveat emptor" bandied about by the other side. There's a reason that it's Latin and hasn't been used for 100 years: it's because it's a pretty useless term. What it means is it's a licence to cheat, to manipulate, to misrepresent, and, basically, to rip the other side off if they're not as smart as you are. Frankly, the law has moved on, and I'm glad to see it. That is why we have a bill like this, which is here to protect consumers, to impose a duty on insurers and other financial service providers to take into account and take care of consumers. It's how it should be—a great bill. I commend it to the House.





A party vote was called for on the question, That the Financial Markets (Conduct of Institutions) Amendment Bill be now read a first time.
Ayes 63
New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.
Noes 57
New Zealand National 55; ACT New Zealand 1; Ross.
Bill read a first time.
Bill referred to the Finance and Expenditure Committee.





Hon Dr DAVID CLARK (Minister of Health) on behalf of the Minister of Commerce and Consumer Affairs: I move, That the Financial Markets (Conduct of Institutions) Amendment Bill be reported to the House by 23 June 2020.
Motion agreed to.





FAIR TRADING AMENDMENT BILL
First Reading
Hon Dr DAVID CLARK (Minister of Health) on behalf of the Minister of Commerce and Consumer Affairs: I move, That the Fair Trading Amendment Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider the bill.
The Fair Trading Amendment Bill amends the Fair Trading Act 1986 to introduce new protections for businesses and consumers against unfair commercial practices. Firstly, it introduces a prohibition against unconscionable conduct in trade. Secondly, it extends existing protections against unfair contract terms in non-negotiable consumer contracts, or "take it or leave it" consumer contracts, to also apply to business contracts with a value below $250,000 in a given year. Thirdly, it strengthens the ability of consumers to require uninvited sellers to leave or not enter their premises, including through the use of "do not knock" stickers. The bill also makes a number of technical changes to the Act to improve its functioning and to support consistency with other legislation enforced by the Commerce Commission.
This bill supports this Government's goal of building a more productive, sustainable, and inclusive economy. An important part of achieving this goal is ensuring that New Zealand has a trading environment where both businesses and consumers are treated fairly. At its core, a fair economy is one where businesses and consumers trust each other, where businesses compete on their merits, where businesses have a reasonable opportunity to grow and thrive, and where consumers are protected from high levels of detriment.
New Zealand already has a number of protections against unfair practices, including those contained in the Fair Trading Act. However, when consulted in 2018 on whether these protections went far enough, many submitters told us that they did not. We've heard about firms who are bullied by their larger suppliers or business customers. We've heard about cases where the larger business unilaterally buries the terms of the contract, including price, and we've heard about countless examples of businesses who have had to wait very long times to be paid, sometimes up to 90 days and beyond after the work has been done or products supplied.
This stuff matters because it makes it hard for New Zealand businesses to focus on what really matters: developing their products and services, innovating, and growing their businesses. Instead, businesses have to spend hours reviewing contracts to ensure there are no unfair terms. They have to work with their accountants to deal with cash-flow issues arising from late payments—which is no reflection on their accountants—and they have to deal with the stress that comes from being bullied or harassed by their suppliers or business customers. This has flow-on effects also for other parts of the economy, especially for the families and communities that these businesses support. We've also heard about real consumer harm as well. We've been told about businesses preying on vulnerable consumers in shopping malls, in their homes, and even in mental health units. We won't get to a more productive, sustainable, and inclusive economy with these sorts of practices in the market place.
I'd like to talk about some aspects of the bill in more detail: firstly, the bill's prohibition against unconscionable conduct. Unconscionable conduct is serious misconduct that goes beyond what is commercially necessary or appropriate. The bill does not define exactly what is unconscionable; however, the prohibition is based on provisions in the Australian Competition and Consumer Act 2010. The bill is designed to make clear that the prohibition goes beyond the narrow concept of unconscionability that currently exists in the New Zealand courts. In Australia, the courts have said that conduct is unconscionable if it goes against conscience by reference to the norms of society. The courts have stated that such norms include honesty and fairness. The bill provides a list of factors for determining whether the conduct is unconscionable, such as whether parties acted in good faith, whether a trader used any unfair pressure or tactics, and whether the person affected was in a position to protect their own interests.
Unconscionable conduct will be an offence subject to penalties of up to $200,000 for individuals and $600,000 for bodies corporate. This prohibition is necessary to deal with a very small minority of businesses that take advantage of the vulnerabilities and lack of bargaining power of consumers or other businesses. However, any business that acts fairly and reasonably should have no reason to be concerned that they are in danger of breaching this new prohibition.
Secondly, the bill extends the current protections against unfair contract terms in consumer contracts to also protect small trade contracts. Unfair contract terms are defined as terms that are imbalanced, unnecessary, and that would cause detriment. Small trade contracts are, broadly, non-negotiable contracts between businesses that form part of trading relationships that have an actual or expected total value of less than $250,000 in any 12-month period.
A standard form contract is a non-negotiable contract presented on a "take it or leave it" basis. For example, a standard franchise agreement used by a restaurant franchiser or a standard lease agreement offered by a large commercial property owner for office space. The bill provides that if the Commerce Commission seeks and receives a High Court declaration that a contract term is unfair then parties may not include or enforce such terms in their non-negotiable contracts. The extension of the unfair contract terms protection to businesses recognises that, like consumers, some businesses can face a complete lack of bargaining power when dealing with other businesses. This leaves them with no real choice but to accept unfair terms in contracts because the alternative might be for their main customer or supplier to walk away from them and leave their business and livelihood in jeopardy.
The unfair terms that we are seeking to address aren't ones that are necessary to conduct business. In some cases they are put into contracts simply because the dominant party knows it can get away with it. It is not reasonable to expect small businesses to be able to pick through routine contracts with a fine-tooth comb to try and detect any unfair contract terms, particularly when they may not have the bargaining power to have them removed in any case.
At the same time, the $250,000 limit on the protections recognises that when businesses enter into large strategic contracts, they do have an obligation to do their own due diligence, seek legal advice, and make their own decisions about whether the risks being placed on their businesses are acceptable or not. I'm already aware of feedback about this threshold, and I would encourage those submitters who wish to place their feedback to the select committee. These new protections will require businesses to review and potentially amend their contracts, but I am confident that the protections should not significantly inhibit businesses' ability to enter into fair and reasonable contracts with each other.
Thirdly, the bill provides that if an uninvited seller is on or approaching residential premises for the purpose of selling something, the seller must leave or not enter if directed by a consumer. A direction can be written or verbal and can be specific or general, such as a "do not knock" sticker on a letterbox, so if a mobile truck shop shows up and tries to knock on a consumer's door, despite seeing a "do not knock" sticker, the trader would be legally obliged to leave the premises or face penalties. The provision originates from a concern identified in our review of consumer credit law in 2018. It found that consumers are often preyed upon by mobile traders and that measures that they take to deter such traders at present—such as putting up "do not knock" stickers—do not have a legal effect currently. This is a result of the way the courts have interpreted the Trespass Act 1980. The courts have stated that broadly worded notices such as "do not knock" stickers are not legally enforceable under the Trespass Act.
Under this proposal, ignoring a direction to leave or not enter will be subject to penalties of up to $10,000 for individuals and $30,000 for businesses. This will be enforced by the Commerce Commission. I expect that the Commerce Commission will, generally, only take action in respect of systemic commercial offending by mobile traders. Any concerns relating to safety would be dealt with by police, as at present.
To conclude, this bill draws a line in the sand in respect of commercial conduct. It makes clear this Government's expectation that business in New Zealand will be conducted honestly and fairly. At the same time, the protections are designed to ensure that businesses can continue to compete effectively, negotiate firmly, and freely enter into contracts that reflect their wishes. I commend this bill to the House.





BRETT HUDSON (National): Thank you, Madam Speaker. Well, the Government is at least showing some consistency at last. The consistency is that for every problem that exists or they perceive, the only answer is more Government, and, within that, the only answer for more Government is more regulation-making power so the Minister can sidestep Parliament and do what he or she wants to their heart's content.
Certainly we don't have an issue with protecting consumers, in particular, and we acknowledge there are some issues of power imbalances that are extraordinarily serious for some small business owners, but we have a very big issue with the failure to seek to define what unconscionable terms will mean and what those terms will be. I mean the Minister, in introducing this bill, actually gave a potential definition, saying that "the courts in Australia have found that unconscionable is" and he read that piece. Why did they not put that into the bill then? Why not define this? Instead, they give some areas where the court may give consideration—it's not saying that they define unconscionable conduct at all—it's saying they can give consideration to certain matters.
We would say that it would be equally important, if this bill does pass, that the Ministry of Business, Innovation and Employment should publish some guidelines for traders, for businesses, to ensure that they can steer clear of it. No one wants to be at the wrong end of a court proceeding. You certainly don't want to be the first cab off the rank, which actually leads to some of the background behind this Fair Trading Act piece. In select committee work back in 2015 this very matter was looked at—unconscionable elements in contracts. It was determined at that time—and I believe it was a unanimous decision, and I could be corrected on that, but the committee found that, actually, the better option to undertake was to allow some case law to be determined in New Zealand so that it could be clearly understood what would be in, what would be out, just where the boundaries might lie. This Government has chosen not to allow that to go through its process but, instead, to put a provision in without defining what "unconscionable" would be. We think that is a glaring error.
On the particular business to business, small business unfair contract terms, a couple of issues there. The first one is—and we do acknowledge that there are some small businesses in incredibly invidious positions where their large business customer simply has so much power that they may feel they have no alternative but to agree to terms that they really, really wouldn't normally want to sign up to. But there are a couple of elements to that, not least that it's not the Government's role to intervene in commercial agreements between willing parties to ensure an outcome, which is what this will do. It'll do it in a couple of ways, not only because the unfair terms are understood, but because it gives the Minister power to change that at will. It's the greatest regulation-making power in this bill. They're giving the Minister of commerce the ability to determine what will be unfair for a small business contracting with what is likely to be a much larger company. It's not the Minister of commerce's role to determine the contracts between willing suppliers and customers in New Zealand. So we think there's a lot of work that would need to be done on that.
I'll get to the door-to-door stuff last. We're also a bit concerned about the proposed penalties, particularly if I return to the area around unconscionable conduct. Particularly for individuals, it's really quite high, at $200,000. I think you could probably argue the proposed penalty for a business at $600,000 may be far more reasonable, but the one for individuals—I mean, we really have to understand the problem and determine that the penalty proposed or the penalty regime proposed is proportionate, and I'm not sure that the Government, in putting this together, has made that case.
The very last part I'll talk just briefly on, because, actually, I think, you know—the point about helping consumers to be able to ward off predatory sellers is not a bad thing, but, again, it's about appropriateness to the situation. So the Minister said that in his view, the Commerce Commission would only act against mobile traders. Well, why not define that? Why not say that it applies to them? There may even be a couple of other types of door-to-door salespeople that these particular provisions could apply to, but the way it's written is they'll simply apply to anyone seeking to undertake some sort of trade at the doorstep. So I'm sure the Girl Guides are probably figuring they're quite happy that they've stopped selling biscuits, because, quite frankly, the way the legislation's written at the moment, they would be captured.
Hon Stuart Nash: That's not true.
BRETT HUDSON: Yes, they would, because they'd be knocking on doors seeking to sell something, and so by the law, they're captured. It's important, when we deal with this—it's what the law says, not how people want to administer it. It is how it is written that is important.
But, you know, we're not going to support this legislation. We think it's a bit rushed and not well defined as it should be, but we will work constructively in the Economic Development, Science and Innovation Committee. We will seek to actually improve it as best we can, and if it transpires that what comes out of select committee is appropriate and acceptable, we may well change that position, but what we're saying is it's not right now.
Actually, it's the Government's job around this policy to get it right before it introduces the bill into the House, not simply going, "Well, here's the thing we think's worth doing; you panel beat it out at select committee.", which, unfortunately, I have to say, we're seeing more and more of, and particularly more of regulation-making powers constantly put into Government bills to give them all the authority to do what they want after Parliament's given the first sanction, with no direct and immediate scrutiny from Parliament. Well, actually, it's Parliament's role to pass laws and make laws in this country, not the Government's. They propose, and Parliament decides whether or not it agrees. It is already quite egregious, quite frankly, just the extent to which this Government is inserting regulation-making powers in all sorts of legislation it brings to this House. Quite frankly, that alone would be enough to oppose this bill. As I said, we'll work constructively, we'll see if we can turn it into something worthy of our support, but right at the moment, it is not that.





Dr DEBORAH RUSSELL (Labour—New Lynn): Must be a cold night in hell, because tonight is the night that the National Party has opposed a bill that supports small business. That is an astonishing position for that party to take. This is a bill that small business asked for. This is the bill that was extensively canvassed in discussion and consultation with business. It is a bill that was asked for. Why? Because 45 percent of small businesses say they have been bullied, they have been pressured, they have been subject to conduct that could amount to being unconscionable conduct. This bill seeks to protect small business from the imbalance of power that can come when they are dealing with large business. This is a bill that should be supported by the National Party, and I do not understand why they will not support it.
On this side of the House, because we understand the stresses and strains of small business, because we understand what can happen from a power imbalance, because we understand why it matters when one party is so much bigger and stronger than the other party, we support this bill. Why? Because it seeks to give grounds for redress where a large business pressures a small business, where a small person is subject to extraordinary pressure. That is why we support it.
The previous speaker, Brett Hudson, was concerned that we had not defined what unconscionable conduct is in this bill, that we had not given an explicit definition, but he also complained that we hadn't allowed case law to provide a definition over time. Now, I cannot reconcile those two statements. In fact, this bill does find a way of drawing on the strengths of case law and drawing on the strengths of providing guidance in legislation. If the previous speaker would care to look at clause 6 of the bill, he would see that clause 6 inserts two new sections into the Act, sections 7 and 8. Those clauses give an understanding—it says that a person must not trade in or engage in unconscionable conduct, and then it sets out a series of criteria that the court may take into account when determining whether something amounts to unconscionable conduct. It doesn't define it exactly, but it sets out a series of criteria.
This is, I guess, because in some cases, what might amount to unconscionable conduct might change over time. Phishing, indeed, did not exist 20 years ago, but it might amount to unconscionable conduct. Some of the sales techniques that we see that have come about through the advent of the internet might not have been unconscionable conduct—couldn't have been defined that way—because they didn't exist 20 years ago. These series of criteria will enable us to update our understanding of what unconscionable conduct is as business practice changes.
So let's have a look at some of the criteria that are sitting there in the bill. It is to do with the relative bargaining power of the people engaging in the conduct—that's paragraph (a) of the proposed new section 8. It is to do with the extent to which a trader and an affected person acted in good faith. It is to do with taking into account the particular characteristics and circumstances of an affected person. It is to do with whether an affected person was able to understand any of the documents provided. It's to do with whether there was unfair pressure. It is to do with whether the trader unreasonably failed to disclose various intended conducts, and so on. In other words, there's a series of criteria set there as to what unconscionable conduct might be.
It is exactly those criteria that we might seek to elucidate, to refine, to make better in the select committee process, but not the basic premise of this bill, the basic premise that says that we must act to protect small business from unconscionable conduct. May I suggest that it is utterly absurd not to support this bill, this bill that works to protect the small person. I commend this bill to the House.
Jonathan Young: Madam Speaker. Madam Speaker—Jonathan Young.
DEPUTY SPEAKER: Oh, I call Jonathan Young. I got the "Young" bit; I was just struggling with the Audrey or the Jonathan.





JONATHAN YOUNG (National—New Plymouth): That's right. I'm not Jonathan Hunt or Jonathan Coleman, as I often get introduced as. Well, thank you very much for the opportunity to speak on this bill, and I am so pleased it's coming to the Economic Development, Science and Innovation Committee. It is about time that Government sent bills to the right place. We have had such a light workload this last 2½ years. It's going to be good to get into this, and I think that, as my colleague Brett Hudson has said and I have said to Minister Faafoi, even though that committee is led by an Opposition chair, he can have assurance that we will do the job unbiased. We will do it professionally. We will look at legislation that the Government promote, and we will look at it through the lens of what is good for New Zealand. That's my pledge as chair of that committee.
I'm pleased that this bill is coming to that committee because through the rigours of submissions, then we will get to the nub of what is the definition of unconscionable conduct. In fact, I believe I was chair of the Commerce Committee back in 2015 when we looked at this. We looked at the Australian legislation around this. We did have a good, wide-ranging debate, and we determined, as Brett Hudson said at that point in time, that because there was no clear definition of what it was, that we ought to wait and see the effects of the Fair Trading Act at that point in time to see whether we could get some clarity around this. With all due respect, I think that's what we will be doing again as the select committee looks at this: we will be looking for examples out there in consumer-land to find genuine examples of where people have felt that there has been contravention of what would be considered to be fair trading.
I do think that a very broad definition of unconscionable conduct is "a serious misconduct that goes far beyond what is commercially necessary or appropriate". It's too wide. It's too broad. It's very subjective. If somebody walks into a shop and comes under what they would consider to be intense pressure from a salesperson, is that because that salesperson is acting inappropriately or unethically, or is it because the person is feeling under pressure because they can't afford a product or whatever it might be? Whenever I go into a shop and somebody approaches me, I find that, by and large, they are very appropriately behaved and they understand that they, first of all, want to win the client before they can win the sale. I think that's important to see.
When it comes to small business, large businesses, and things like that, there's going to be a lot in this. We have traversed this space, I believe, twice in the last five years around supermarkets. We have looked at it a couple of times. The Commerce Commission has delved into this quite considerably to see whether there is unconscionable conduct taking place. Once again we will no doubt get submitters from that sector and from small businesses that supply to them. It's going to be quite a process for the select committee to go through and work to find the balance that's needed—the balance that's needed—in the robustness of trading that happens.
One thing that I can say to the Government parties: for goodness' sake, please do not try to homogenise how everything works. There are all sorts of different approaches, techniques, models of business, personalities of salespeople—all of this is part of what makes people succeed in their profession, if they're a salesperson, or if they're a small business or large business. We need to acknowledge the balance that's needed in all of these things.
So, look, thanks very much for sending it to the Economic Development, Science and Innovation Committee. We will look forward to doing good, solid work on this bill. We believe in fair trade. We believe that Kiwis need to have a fair go—obviously, we believe in that—but we want to make sure the balance is correct and that we don't put a wet blanket over everything but that we also give opportunity for entrepreneurship to flourish in our country as well. Thank you, Madam Speaker.





CLAYTON MITCHELL (NZ First): Thank you, Madam Speaker. Welcome back to everybody after a great festive break. I just want to commend the previous speaker, the honourable Jonathan Young, for his comments in relation to the thorough process that we'll be running this bill through, through our Economic Development, Science and Innovation Committee, which I sit on. You do a thorough job, and I enjoy it on that select committee with you.
I'd also like to congratulate the Hon Kris Faafoi for bringing this bill forward, because, as much as I've heard a couple of comments this evening to say that there's maybe not as big a problem as people think, I believe there is a big problem there, as Dr Deborah Russell has pointed out. Having been a small and medium sized business owner and operator for a large part of my life, and having a lot of my friends and contacts who still are small and medium sized business owners and operators, I see unconscionable trading regimes and sales techniques going on to this very day, albeit not everywhere, in every sector, in every corner, but it does happen. When you hear these stories, you think: how is that behaviour able to continue in a modern society like ours?
We've got laws around consumerism to protect businesses, to protect our consumers, but this is just a further tightening, ratcheting up, to ensure that we protect and bring back a balance to businesses, both small and medium sized, and create an equilibrium between those two sized entities, as well as creating an equilibrium between the businesses themselves and the consumers that sometimes get caught up with bad sales practices.
The word "unconscionable", as we heard from Brett Hudson, is one that seems to be raising some angst in their caucus. I am also very surprised that the party that stands by small and medium sized business, and businesses in general, is not supporting this bill through the House, because it is set up and designed specifically to protect those people. If the only word that seems to be causing some angst is the word "unconscionable", then surely the best thing to do is set up a law so that you can actually take that law and you can test it to make case law out of that law.
If we go back to the last Parliament, when we talked about health and safety and we had "persons conducting a business undertaking" (PCBUs) introduced as a terminology and "legal culpability", they didn't have a problem with bringing in terms such as those that needed to be tested in law. But I'll tell you what that did: the moment you put legal culpability out there for PCBUs, everybody lifts their game, and with that word "unconscionable" being introduced into this bill, instantly this bill is introduced people will need to think twice about their practices, the way they operate, the way they behave with other businesses, and the way they treat their consumers and customers. So we absolutely support this bill moving through. I'm excited to see that it is coming into the select committee that I sit on with Jonathan Young. We will pull this bill apart.
There are, I guess, times in our lives when we see things happening that we don't like the look of. In fact, I can tell you, if you want to put context to "unconscionable", where I know a farmer who was growing a crop who signed a contract with a large supplier who then invested into their farm to get plant and equipment to ensure that they could keep up with demand. They got more land to produce more product. The moment they were locked in, they changed the terms of the contract and there was nothing that that farmer could do but slowly but surely go backwards. That is unconscionable; it's not too difficult to work out. Or where you see salespeople preying on the vulnerable, whether it be door-to-door or by peddling wares that people don't need, signing them up to contracts that they don't want, that they can't afford—that behaviour is certainly unconscionable. Any fair-minded New Zealander, which the vast majority of us are, will be saying, "I can give you examples of unconscionable too." Let's test it, but first and foremost let's pass a bill that we can actually use to better off business, to better off consumers, and protect and create a balance between those two people and entities. Thank you very much. We will be supporting this bill through the House.





MELISSA LEE (National): Thank you very much, Madam Speaker. Before I actually get on to the purpose of the bill and, you know, some of the other explanations, I just want to take on what Clayton Mitchell has just spoken about. His definition—I just want to do this because I might forget. He just explained that his idea of what unconscionable behaviour was was that when a farmer signs a contract with another farmer—and the contract is signed—and the bigger entity decides to change the terms of the contract and the smaller entity is going to have to wear that—I thought that was a ridiculous example, because once a contract is signed, how can you change the terms of the contract? You can't. I think that is something that you could potentially take to court, and sue the person. I'm afraid that that is just not a very good example.
This bill would amend the Fair Trading Act to prohibit unconscionable conduct in trade—misconduct that goes beyond commercially necessary or appropriate conduct, the bill's explanatory note says—and extend the Act's protections against unfair contract terms so that they also apply to small trade contracts of less than $250,000 in a 12-month period.
We all know that when people are in business, there are costs to be met. When regulations are introduced in this House, often the cost goes to the business and they have to wear that. In reality, businesses often can't wear that because it costs them money. It will be passed on to the consumers, and, ultimately, the decisions that we make in this House end up costing consumers more. And that is one of the reasons why this side of the House oppose legislation that actually build on more regulations for businesses to deal with and which will end up costing consumers more. That is one of the reasons.
We are very proud of the improvements that the former National-led Government made to the Fair Trading Act in 2013. They actually benefit the consumers and we're very proud of it.
Earlier, Dr Deborah Russell explained that the select committee's role is to refine the definition of "unconscionable conduct" and that she was going to do this at select committee. The very basis of this bill, she says, must be to protect the small businesses from unconscionable conduct. What this speech that Deborah Russell gave and what that side of the House is actually saying is that this Government is a solution looking for a problem. It is a solution that is looking for a problem, because they're saying that the unconscionable conduct that they're trying to fix is not even defined, that they can actually try and define it at select committee. So what is the real problem? I think this is a bad bill. I stand on this side with my colleagues opposing this bill.





Hon EUGENIE SAGE (Minister of Conservation): Thank you, Madam Speaker. The Green Party is very pleased to support the Fair Trading Amendment Bill. I am puzzled by that last speech and that the party which purports to be the party of business is speaking so strongly against this bill. I am puzzled by the speech that Melissa Lee gave, because in the work that the Ministry of Business, Innovation and Employment has done in terms of its survey of businesses, 45 percent of businesses surveyed indicated that they had been offered one or more contract terms that they considered to be unfair in the past year, when this research was done in 2018. Fifty-nine percent had been offered unfair terms that limited the liability of their supplier or business customer. Forty-seven percent had been offered unfair terms that allowed their supply or business customer to unilaterally vary the terms of the contract. There is a problem. This bill aims to fix that problem, to ensure that the way in which business is conducted, particularly for small businesses, is fair.
The bill, as other speakers have noted, applies to contracts which have a value of less than $250,000. It is aiming to support small and medium businesses, which are the heart of our economy in New Zealand. So it beggars belief that National is opposing the bill. I can already see the misleading Facebook ad that they will put up about this bill, because an earlier speaker claimed that the provisions around uninvited direct sale might apply to people like Girl Guides. They had failed to read the bill. There is an explicit provision in it which specifically exempts any visits by charitable organisations—and also by political parties, for those of us who will be doing doorknocking this year to ensure that we get another term in Government, to continue promoting fairness and equity not just in the business sector but throughout our economy. So National is opposing it, typically, because they are negative. I would encourage them to read the bill.
There's been a lot of debate on the Opposition side about the absence of a definition of "unconscionable" in the bill. For those who weren't listening to Deborah Russell, she clearly went through that. If members go to the bill, look at clause 6, and look at the provisions that the bill puts in the new section 8 inserted by clause 6, which are the factors that the court has to consider in determining whether unconscionable conduct has occurred. There is a page of factors that enables the courts to build good case law around this. It ensures that we don't put in the legislation a limited definition. It allows it to be built through case law, but there has been a lot of thought on the factors that the court will take into account. I am heartened by the comments of the honourable Jonathan Young that the Economic Development, Science and Innovation Committee under his chairmanship is going to do a professional job. Look closely at those terms. I think they have been well drafted. They aim to ensure that "unconscionable" doesn't have an excessive extent and that it will be determined by the court.
The National Party has also failed to take account of the work that has been done in Australia, where there has been some thought to what constitutes "unconscionable": it is serious misconduct by reference to the norms of society.
This bill is about fairness. It is about ensuring that smaller businesses—recognising that they often have a limited power to negotiate in relation to larger companies. It is evening the scales. They don't often have the resources to engage in litigation, they don't have the bargaining power, and what this bill is doing is ensuring that there is a much better standard of conduct, by this unconscionable conduct test. It is protecting households against people like mobile traders who go and harass households and the vulnerable and persuade them to buy things that they don't want.
This Government is about fairness. National can claim that it's the party of business, but it's not interested in fair business. It's interested in laissez-faire capitalism and leaving people just to survive as they can.





STUART SMITH (National—Kaikōura): Thank you, Madam Speaker. Well, I'm on the Economic Development, Science and Innovation Committee, so I'm looking forward to having this bill there, albeit that we'll be voting against it. But Jonathan Young is a fine chair of that committee and I'm sure we will do our utmost to try and get this knocked into shape, albeit that it is the herculean task it is.
At last, I understand why Kris Faafoi is not standing in the Mana electorate and is going to go on the list. He fears the "do not knock" signs popping up on all the doors around in his electorate, and he doesn't want to be caught by being fined for not leaving the premises. It is a rather silly provision, really. Ultimately, if somebody is on your property and you don't want them to be there, that's called trespass. You ask them to leave. There's a legislative path there, a legal path, if you want to deal with that. To actually add in more legislation, more rules, which is totally unnecessary—it is really just a waste of Parliament's time and it really does heap costs back on to the consumers, the very people that it seeks to protect. Everything, as I said on the previous bill, which has lots of similarities to this one—there is a symmetry in negotiations, there is a symmetry in sales and transactions. That is a fact of life.
We would be better to help financial literacy through our education system rather than teaching our students to go out and get on the streets and protest about climate change. They'd be far better off being taught about financial literacy. The changing of the terms of a contract, which was mentioned by the New Zealand First member earlier and how unfair that is—and I agree. If the terms of a signed contract are changed, then that is absolutely unfair. But that's, effectively, what the Minister is asking Parliament to give him the power to do, to give the Minister the power under regulation-making powers, a job that should be done here in Parliament and in the legislation. That is shoddy, lazy Government and it shouldn't happen and yet it's increasingly happening in legislation because they haven't done the work beforehand. This is a terrible bill and I'm voting against it. Thank you.
ASSISTANT SPEAKER (Hon Ruth Dyson): This is a split call. I call Jamie Strange.





JAMIE STRANGE (Labour): Madam Speaker, thank you for the opportunity to take just a brief call on the Fair Trading Amendment Bill. I agree with the previous member around financial literacy. I guess it loosely relates to this bill, but I think it is something that we do have to have a good look at in our education system, and starting right from the primary school age. Financial skills are a key life skill and I think that they are underrated at times. 
We've heard a lot of arguments for and against this bill. What this bill comes down to is around fairness, around removing the potential for bullying. There was something that the Minister said, that those companies who engage in fair and reasonable contracts have nothing to fear from this bill; it actually doesn't relate to them. That is the majority of companies. The majority of companies do have fair and reasonable contracts, but there are some who don't and that's what this bill addresses. 
Look, I'd just like to touch specifically around the mobile traders. We've heard a little bit about this, around the "do not knock" stickers and that people working for a company who disregard the "do not knock" sticker will potentially be liable for a fine of up to $10,000 and their company up to $30,000. Now, that is a large amount of money. However, that is a very important issue. 
Consumer New Zealand have welcomed this proposal. This is something that they've been lobbying for for quite a while, because they've seen the vulnerabilities that people often feel when they open the door to someone and they're asked to leave and that person does not leave. There's often quite a strong power imbalance and often a fear there. 
So this is an excellent bill, an excellent piece of legislation. I'd like to congratulate the Minister, Kris Faafoi, and I commend this to the House. Thank you.





ANDREW FALLOON (National—Rangitata): Thank you, Madam Speaker. Like my colleagues Jonathan Young and Clayton Mitchell over the other side, I'm looking forward to this bill coming to the Economic Development, Science and Innovation Committee. When it does come to our committee, the thing I'll be looking at in particular is what I want to talk about tonight, which is this definition, or lack of definition, of "unconscionable conduct".
As we've heard tonight, this bill would amend the Fair Trading Act to prohibit unconscionable conduct in trade. The problem, of course, with the bill is it doesn't define what unconscionable conduct is; and, in fact, the Minister admitted as much in his contribution earlier tonight. Instead of defining it, he instead suggested that we look to Australia. So we have this extraordinary situation where not only will traders in New Zealand have to comply, of course, with all New Zealand laws, but they'll now have to, if this bill passes, look to Australia to see how the legislation there, or how unconscionable conduct there, is defined by the courts in Australia, before they can decide how they'll operate in New Zealand, which I find a pretty extraordinary situation. It's also a very, very poor way of making legislation. 
We will be voting against this bill tonight. I do look forward to it coming to the select committee, though, because there are some, I think, really important points that MPs on both sides of the House have actually raised about the Fair Trading Act, so we would like to get, I guess, a thorough thrashing out of some of those issues. But as the bill as currently drafted, where there is no definition of what unconscionable conduct is, despite prohibiting it, I can't support the bill and nor can my colleagues.





KIERAN McANULTY (Labour): Thank you much, Madam Speaker. I'm very pleased to be standing here speaking in support of this Fair Trading Amendment Bill. I mean, it seems pretty straightforward to me, really. You know, the other side of the House, they call themselves the party of markets. The question I pose to the House is: how is it right to have a market that is acting where deception and bully-boy tactics and intimidation is OK? It's wrong. That's not a fair market. It's not a fair market. That's not fair trading. How is it OK where somebody can be intimidated into signing a contract that they didn't understand the terms of? You know, there are provisions currently in law and what this Government is saying within this particular bill is that we want to strengthen those. 
We've heard tonight that there is a claim that we don't know what sort of activity this bill would capture. So let me provide some examples, if I may. Photographers, for example, being threatened, verbally abused, and blacklisted after asking for payments that were due. That sort of behaviour is unconscionable and it should be.
Hon Andrew Little: The Nats like it.
KIERAN McANULTY: Well, evidently, they do, Mr Little. Evidently they are comfortable with that sort of behaviour, because they've got an opportunity to support this bill and they're not. I'm surprised by that, because really there's no ideological position to take on this. You're either for fairness or not. And that side of the House just evidently aren't. I mean, they've got an opportunity to prove otherwise, but they're voting against this bill. They're trying to position themselves on the fence and say, "Look, we'll have a rigorous discussion and we've made some points and we'll look at improving it." Vote for the bill. They're not going to. 
Here's another example: supermarkets penalising suppliers for promotion runs with other retailers by demanding compensation for perceived losses caused by other retailers' promotions, and deducting it from the payments to suppliers. How should that be tolerated? It shouldn't, and this bill, the Fair Trading Amendment Bill, is going to address that. That's why I have absolutely no hesitation in supporting it tonight.





IAN McKELVIE (National—Rangitīkei): Thank you, Madam Speaker. I've got to stand up straight after McAnulty's spoken. Now, I want to address a couple of issues in this—
Kieran McAnulty: I don't even know what that means, McKelvie.
IAN McKELVIE: I didn't mean that at all, Kieran—ha, ha! There are a couple of issues in this bill. First of all, I'm not on the select committee that's going to have to deal with it, so the piece I say on it tonight will be the last say I have on it, I guess. But I just want to refer to an issue that Jamie Strange raised, which I think is quite important, but I don't think this bill, unfortunately, deals with it. 
If you think about the door-to-door salesman in my day, when I was young. They sold eggs, bacon, sausages, newspapers, and that was about it. We now have, as society evolves, a very different type of door-to-door salesman. And if you think about unconscionable—if I've pronounced that correctly—acts in the course of sales, I don't think this bill has got a show of capturing those people that we've designed it to capture. I assume that a lot of that has got to do with clause 9 also, which talks about entering premises against the will of the property owner or the person or the resident of that house. 
I don't think this bill will deal with those issues. And the reason I think that, and we've referred to Australia a lot already tonight, is that in 10 years and in an economy 10 times the size of ours, there have been two successful prosecutions under the Australian piece of law. So if you think that they've had two successful prosecutions in 10 years in Australia, it's highly unlikely we're going to get one in 10 years, given that we're going to adopt the same criteria they use. 
So I think the intent of this legislation—I think the intent of most legislation that comes to this House is good, but I don't think this bill is going to do what it sets out to do, and I don't think it's going to achieve it. Actually, if you read clause 9 quite carefully, I suspect it does cover politicians knocking on doors and we'll probably get a few notices shoved in front of us to send us on our way. 
I also think that I can't read it in any way where it doesn't cover the Girl Guide biscuits scenario, for example. So I think it's going to capture things we don't want it to capture and it's going to let the people that we really want to get through the loophole. That's my small contribution to the bill and we clearly aren't supporting it at first reading, and I hope the Economic Development, Science and Innovation Committee can make something of it. Thank you, Madam Speaker.





Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you. E Te Mana Whakawā, tēnā koe. Look, I just wanted to touch on one point really, and it is this scaremongering around the concept of unconscionability and the suggestion that it's in some way loose. This concept has a long tradition in the law, in equity, and it's also found, I must say, in the Credit Contracts and Consumer Finance Act. The provision in that Act says that financiers can't act in a way that's unconscionable or in contravention of the standards of reasonable commercial practice. So over that time, both in case law alone but also through kind of legislative interpretation, the concept is very well understood and very clearly applied. 
There's only a few elements to it. One is very obvious: that there's some advantage taking going on. Another element of it is the vulnerability of the person being taken advantage of and the kind of nexus between that is a knowledge or a wilful blindness of that weakness. And if you put those things together, we can see that we've got some real wrongdoing. Added into that, there's almost always an inequality of exchange that goes hand-in-hand with it, that the bargain simply isn't a fair one, and when you put all that together and stand back, we get the fact that this transaction overall, as a whole, is simply inequitable; that a person in good conscience could not enter into it and take advantage of it. 
So along with clauses 7 and 8 in the amendment bill, it was very clear that this will be a really useful tool. It's one that should have been there a long time ago. It doesn't just apply to entering into contracts; it also applies to the performance and enforcement of those contracts. It's a really useful addition to the tool kit that is found in the Fair Trading Act: protecting consumers from the abuses, the caveat emptor, the imbalance of power that often exists. A fantastic bill—I commend it to the House.





A party vote was called for on the question, That Fair Trading Amendment Bill be now read a first time.
Ayes 63
New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.
Noes 57
New Zealand National 55; ACT New Zealand 1; Ross.
Bill read a first time.
Bill referred to the Economic Development, Science and Innovation Committee.





OMBUDSMEN (PROTECTION OF NAME) AMENDMENT BILL
In Committee
Hon ANDREW LITTLE (Minister of Justice): I seek leave for all provisions to be taken as one debate.
CHAIRPERSON (Hon Ruth Dyson): Leave is sought for that purpose. Is there any objection? There is none.





Clauses 1 to 6 and Schedule
Hon ANDREW LITTLE (Minister of Justice): This is a very simple bill achieving to do a very simple thing: to prevent very simple people from abusing a very important office—that is the Office of the Ombudsman. We have a provision in the current legislation that allows the Chief Ombudsman to grant others the use of the term "ombudsman". Previous Ombudsmen have done that on at least two occasions to private organisations. So, for example, we have what used to be known as the Banking Ombudsman—I think it is now the Banking and Insurance Ombudsman—and there is at least one other, whose name and purpose eludes me for the moment. But there are others who have been queuing up to use the name.
The current Chief Ombudsman is concerned that the whole heritage of the role of the Office of the Ombudsman, which carries the important role of ensuring that the State and its agencies not only comply with the law but conduct themselves ethically and properly and in a way that best serves the interests of the citizens who those organisations are serving. It would be very easy for the gravitas of that office to be diluted were it not to be properly protected.
The motivation for this bill comes from a decision of the Court of Appeal in the last couple of years. The reasoning of the Court of Appeal appears to be that because previous Chief Ombudsmen have granted the use of the name of "ombudsman" to private organisations, then other organisations seeking to use the name should not be denied the market advantage that goes with it. It almost, sort of, requires the Chief Ombudsman to compulsorily or mandatorily give the name, grant the use of the name, that the legislation seeks to actually allow to be protected.
So this takes the power of the decision away from the Chief Ombudsman and puts it in the hands of the Minister, but is very, very clear that it is not expected that this name would be used for anything other than organisations or relevant agencies in the State sector. Therefore, we won't have this proliferation of various ombudsmen or offices of ombudsmen. The real Office of the Ombudsman will continue to have the importance and gravitas that it now has. On that basis, I think it will make a very important contribution to the pantheon of law change that this Parliament will have achieved.





Hon MARK MITCHELL (National—Rodney): If there was ever a bill that was a solution looking for a problem, it's got to be this bill. What a complete and utter waste of Parliament's time. That's why the Minister stood—he could only speak for 2½ minutes. What does the bill do?
Hon Iain Lees-Galloway: Sit down then.
Hon MARK MITCHELL: Don't worry, Mr Iain Lees-Galloway. Of course he wants me to sit down—of course he does. Every time I get up, he's in trouble; he's running for the hills. He's blowing raspberries now—classic response from the Minister.
This is a complete, total, utter waste of time. This is a waste of this Parliament's time. This bill affects absolutely no one. All the good legislation's been through Parliament. All our legislation's come through. This Government that was meant to be transformational, with a Minister that was going to be transformational to our justice sector, brings an ombudsman's bill.
Who does this actually affect? Do you want to know why it's here? The reason why it's here is because there is no proliferation of the use of the name, but there was an organisation that it passed the hurdles, passed the tests, should have been able to use the name quite legally. The Ombudsman and the Minister for some reason thought it wasn't appropriate. It went to court. They won it in court. So what do they do? They bring the legislation into the House to change it.
Bring some serious legislation to the House, Minister, that we can get up and speak to. The reason why this Government's in trouble is if you look at the Order Paper there's nothing on the Order Paper. There's one more bill. We won't be taking calls on this—waste of time. Watch the Government now start to filibuster it. Let's see. Let's see the Minister now continue to take calls on this fantastic ombudsman's bill. It's a complete and utter waste of time. It's a sham from a sham Government. Thank you, Madam Chair.





A party vote was called for on the question, That Clauses 1 to 6 and the Schedule be agreed to.
Ayes 63
New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.
Noes 57
New Zealand National 55; ACT New Zealand 1; Ross.
Clauses 1 to 6 and Schedule agreed to.
House resumed.
The Chairperson reported the Ombudsmen (Protection of Name) Amendment Bill without amendment.
Report adopted.





SMOKE-FREE ENVIRONMENTS (PROHIBITING SMOKING IN MOTOR VEHICLES CARRYING CHILDREN) AMENDMENT BILL
Second Reading
Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety) on behalf of the Associate Minister of Health: I move, That the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill be now read a second time. 
I'd like to thank the Health Committee for their work and consideration of this bill. I'm also extremely grateful to the people who submitted on this bill, especially whānau, tamariki, and rangatahi. Their voices were essential for the consideration of this bill, as it is primarily designed to protect our children and tamariki from the harmful effects of second-hand smoke. 
Too many of our whānau, tamariki, and rangatahi are exposed to second-hand smoke in vehicles they travel in. Other jurisdictions like Australia, most Canadian provinces, and the United Kingdom have already put in place legislation to prohibit smoking in vehicles with children, and now it's our turn to do the right thing for our children. We have a duty under the United Nations Convention on the Rights of the Child to enact legislation like this. 
This bill will amend the Smoke-free Environments Act 1990 to make it an offence to smoke in a motor vehicle carrying anyone under 18 years old. Compliance and enforcement efforts will first and foremost be focused on public education and changing social norms. While this bill does introduce a new offence and infringement fee, I'd like to emphasise that police will use their discretion over whether to issue a fee, give a warning, or provide information about stop-smoking cessation services available in our communities. 
The Health Committee received 147 written submissions and heard 19 oral submissions. The vast majority were overwhelmingly in support of the bill and its intent. Most submitters believe this bill will protect whānau, tamariki, and rangatahi from the dangers of second-hand smoke. During the process of consideration by the committee, submitters raised suggestions about how the bill could be improved. However, the committee was unable to recommend any amendments because of the relatively narrow focus of the bill, which, as I have said, is primarily about protecting our children from second-hand smoke in cars. 
I would briefly like to outline some of the suggestions made by the submitters. Firstly, submitters were concerned that vaping wasn't included in the scope of this bill, especially as we do not know the long-term effects of second-hand vaping. We share these concerns, which is why another bill will be introduced shortly that will prohibit both vaping and smokeless tobacco products—for example, heat-not-burn products—in all smoke-free areas, including vehicles. 
Secondly, submitters argued against the bill's exemptions for vehicles which are stationary or used as a dwelling. This exemption makes it permissible for an adult to smoke in a vehicle with a child if the vehicle is stationary or used as a dwelling. People were unhappy with the idea that whānau, tamariki, and rangatahi living in vehicles, including caravans and motorhomes, would not receive the same protection as those who were travelling in vehicles. The committee listened to those concerns and understood them, but they could not recommend any amendments to the bill as the Smoke-free Environments Act already treats public and private spaces like homes very differently. The bill does not take away a person's right to smoke in their own homes. We strongly urge anyone that is inclined to smoke in a car to step outside of the vehicle so that children are not forced to breathe in second-hand smoke. 
The Opposition signalled in the Health Committee report on the bill that they would be proposing an amendment to the bill in the committee of the whole House stage to remove this exemption, meaning that police would be able to fine people for smoking in their motorhomes and caravans. I find this suggestion by the Opposition to be uncharacteristic of a party which has repeatedly voted against extending smoke-free provisions. They voted against a ban on smoking in workplaces, they voted against banning tobacco advertising, and almost all of them voted against a ban on smoking in bars and restaurants, but now they want a wide ban that includes people who choose to live in a motorhome from smoking in their own private dwelling. While we might disagree on this matter, I think we can all agree that not one single member of this House is supportive of people being forced to live in vehicles. 
Finally, most submitters thought the 18-month lead-in period was too long, and some committee members agreed. The committee understands that submitters have been waiting a long time for this bill, and they want action as soon as possible. They have the best interests of children at heart, and so do we, but there needs to be an effective transition between Royal assent and when the offences come into force, and we need to bring everyone along with us. The Ministry of Health needs time to educate the public about the changes being made to the law and for the Health Promotion Agency to develop and deliver an education campaign that will run before the offences come into force. We also need to be practical. Police have told the committee they need a minimum of 12 months, or perhaps even longer, to make sure the new offence can be included in their training programmes and IT systems. The 18 months is needed to make sure everything works before the bill becomes enforceable. 
This Government is committed to making New Zealand the best place in the world to be a child. This bill is part of our duty of care for the most vulnerable—our children—and for that reason, I commend this bill to the House. 





Hon MICHAEL WOODHOUSE (National): The National Party supported this bill at first reading, and it did so primarily because of its intention to keep children safe, but despite misgivings that at least I had and expressed in the first reading about the degree to which the State becomes a player in the sovereign right of a family to determine decisions for itself, regardless of whether those decisions are good or bad. Now, the Minister introducing this bill at second reading was quick to remind the House that the National Party has opposed legislation around smoking in the past, which is a very interesting reflection on the fact that any decision the National Party has made in past years, decades, centuries is never forgotten, but decisions made by previous Labour Governments and Oppositions are never remembered, and I'm going to come back to that. 
We were looking forward to and I think we benefited from the submissions to the Health Committee by a number of submitters overwhelmingly, as the Minister has said, in favour of the bill's passage, but there were a number of areas that I think warranted serious consideration. While the committee may have done that, the Minister and, indeed, Cabinet were not prepared, and the officials could not recommend a single amendment to a bill that we thought had some flaws, and the National Party remains of that view. 
I'll start with the issue of smoking when the vehicle is used as a dwelling. The Minister, I believe, said that it was "stationary or used as a dwelling", and that's not what the bill says. The bill actually says that the vehicle needs to be stationary and used as a dwelling. Otherwise, anytime the car was stopped, the bill would not apply, and, indeed, I think that was probably just an error in the speech-writing. But it still strikes me as absolutely ludicrous and a reflection on the failure of the Government to fix what they saw as a problem of homelessness and people living in cars, to the point where they know that such dwellings are going to be used into the future and they are not prepared to extend this bill to exclude those situations. We think that's a mistake, and we will be introducing an amendment to this bill in the committee of the whole House deleting that provision. It is ridiculous, it is ludicrous, and it should not be in law. Indeed, what we are doing is proposing to Government that it removes its admission of failure—failure to fix the issue of homelessness and living in cars. 
Now, I want to also move to the issue that is beyond the scope of this bill, that, as the Minister said, was the subject of quite a bit of the submissions in the select committee, and that was the issue of extending this legislation to include what's, effectively, the modern ingestion of nicotine: vaping and heat-not-burn products. We heard some fantastic submissions from young people who shared their experience of the creeping prevalence of the use of vaping products by our young. Indeed, the anecdotes were disconcerting to the point where the committee became concerned at the failure of the Government to meet its own set timetable to introduce a regulatory framework for these products—not even in cars, but just as an amendment to the Smoke-free Environments Act. What we heard from those young people was that despite the research and the surveys that people are relying on that say the incidence and prevalence of the use of these products by our young is low, actually, the anecdotes don't stack up. But I think that makes sense, because I don't think, even in a survey that might be anonymous, that young people would admit to the fact that they are regularly using these devices. 
Now, I'm ambivalent about whether or not this bill be amended to include vaping, but I am much, much more concerned at the complete absence of any regulatory controls on these devices. We had a court case, which may now be three years old, that said, actually, that the Smoke-free Environments Act doesn't apply to these vaping products, and it should. It's not a difficult policy decision or conundrum to be solved. The Associate Minister of Health has been lead-footed on this. I implore the Government to get on and get that bill before this House. 
Now, I find it, also, incredibly ironic and another concern that we have with this bill, and that is the use of police resources to police this process. Isn't it outrageous that we have a Government that says, in respect of this, it becomes law and we rely on police to use their discretion about their position of the law and the upholding of the law, but in respect of the Misuse of Drugs Act, an amendment to that Act was passed that directed police not to prosecute for possession and ingestion of any illicit substance—from marijuana to heroin and all the bits in between—when it is not in the public interest. So they direct the police not to prosecute, but invite the police to exercise their discretion on smoking in cars, for goodness' sake! 
The Minister himself has said that the reason that the bill is not going to become effective sooner than 18 months after Royal assent is because the police need time to upgrade their systems to ensure that infringements and breaches of this law can be recorded in their police database. That is a completely incongruous situation if the police are able and prepared and willing to use their discretion—and I encourage them to do that—that the bill is going to be held up in its enactment while they change their IT systems so that they can do the opposite. It just underscores what a muddle this bill is and how inconsistent the Government is on the direction or discretion of the police. 
So I am disappointed that not a single change was made to this bill, and it does cause us some concern. But, on balance, we continue to remain of the view that this will, at the margins, benefit our young by encouraging people not to smoke in very close proximity to them. The evidence of the health harms is unequivocal; the evidence of the benefit of this amendment is actually quite equivocal. International studies have shown that there is some benefit but that those benefits can take several years to be apparent—certainly outside the framework of the Government's goal for this country to be smoke-free by 2025, and, frankly, that lead-footedness is going to ensure that we fail in that goal. 
So I look forward to the committee of the whole House because I think there are some technical aspects of this bill that we should debate, that the National Party will be putting amendments up to provide sensible, straightforward improvements to this bill in the interests of the health of our young. I encourage the Government to be open-minded about that because, ultimately, this House is about making good laws, effective laws, evidence-based laws that will look after and protect and improve the health of our young. With that, on balance, the National Party will be supporting this bill at second reading. 





LOUISA WALL (Labour—Manurewa): Tēnā koe e Te Māngai o Te Whare. Tēnā koutou katoa. It was my absolute pleasure as the chair of the Health Committee to be involved in the deliberations on the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill. The reason I enjoyed that process so much is because a group in Northland led by the Cancer Society, young people, and Māori who are passionate about auahi kore petitioned this Parliament. They petitioned this Parliament because they saw through their own evidence that a lot of the adults in the Northland community were smoking in cars with children. And that's where this bill came from. 
I implore colleagues to read the select committee report. In highlighting the 147 written submissions and the 19 oral submissions, I want to read a list of groups that incorporated the voices of our children. So in addition to Cancer Society Northland, it was Wellington community justice, Holistic Action Sustainable Through All Generations, Hāpai te Hauora Māori public health, Empower Tangata Trust, the Office of the Children's Commissioner, Meremere holiday programme, Invercargill City Youth Council, and the students of Wainuiomata Intermediate School. 
So this bill—if you ever were to look at one which puts children at the centre of a piece of legislation that actually listens to the voices of children, it is this particular piece of legislation. Underlying what they told us was—I used that in the select committee—#wecantbreathe and #pleaseprotectus, and it was also #pleasehelpourparents: please help those adults in our world that smoke, that are finding it difficult, that need resources, they need a bit of tautoko. Which is why, to be quite frank, the 18 months allows the community through public health promotion initiatives to change behaviour before we actually need the enforcement by the police. 
So there are no changes to this piece of legislation; that is a truism. There were a whole lot of other things discussed, including the differential between what is public space and what is a private space, and us being very clear in the smoke-free environments bill that we would never infringe on people's private spaces. We can get into the debates about, you know, the scenario that colleague Michael Woodhouse brought up, and the National Party can sell its own Supplementary Order Paper, but the reality is we need to pass this bill. We need this done urgently, and so I commend this bill to the House. Kia ora. 





Dr SHANE RETI (National—Whangarei): Thank you, Madam Speaker. It's a pleasure to speak to this in the second reading of the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill. 
Clearly, the goal of this bill is to protect children from second-hand smoke. What we know we already sort of knew going into the select committee, but what was reaffirmed to us through the select committee process was that the benefits here are clearly for young children and clearly for Māori in deprived areas. They seem to get disproportionate benefit. I think one of the submissions, particularly—from the Auckland Regional Public Health Service—helped quantify exactly what those benefits to avoiding second-hand smoking for children will be. They said that for under-16-year-olds, 15,000 children with asthma attacks will be prevented. They said for under-two-year-olds, 500, roughly, will be spared from being admitted with chest infections. 
Again, for under-two-year-olds, 15,000 glue ear operations will be prevented. I hadn't really sort of thought on it before as to that relationship. I knew the relationship existed between smoking and glue ear; not quite sure around the physiology. I mean, how does that work? So I sort of tried to look at it over the past few days. I'm not much clearer other than it seems to be that the cigarette smoke irritates the Eustachian tube, closes it off, pulls the eardrum in, and you get glue building up behind the tympanic membrane, which is sort of the best conclusion I could get to. So that sort of makes sense, and that substantiates the data showing that there is a relationship there. 
If we look at these submitters to the select committee, there were 120 submissions: 19 of them were oral submissions, 95 percent were in favour of the bill, and the other 5 percent were more just saying "We think education is a better solution." Submitters had six groups of concerns. Some didn't understand the bill, and you always get that in select committees, so there was a clarification task to be done. 
A number of submitters wanted vaping to be included in this bill and thought it was appropriate. If I could read here from the departmental report from officials addressing this, it says "The Smoke-free Environments (Vaping) Amendment Bill,"—and this is the departmental report from September 2019, September last year—"will be introduced shortly in the next few weeks,". Wow, September 2019, and officials are telling us it'll be introduced in the next few weeks. Goodness, that's a long few weeks. That's a lot of time between drinks before that's happened, yet that was the belief that officials were telling us, and that was the evidence that we proceeded through the select committee. 
Hon Maggie Barry: Still no date. 
Dr SHANE RETI: Still no date. 
The third of the six concerns that submitters had was the exemption for young people to smoke in a car. Officials again pointed to clause 37, where they said "A person under the age of 18 who is smoking in the motor vehicle, either on their own or while people over the age of 18 are in the vehicle, is not committing an offence under [this] Bill."—it's this next line from officials—"The purpose of the Bill is the protection of young people from second-hand smoke, not direct smoking." When would we go past the opportunity not to offer protection and advice to children from direct smoking? Let me read that again: "The purpose of the Bill is the protection of young people from second-hand smoke, not direct smoking." 
I think this bill is a good example of lost opportunities. We seem to have lost the opportunity around vaping. Here we are, we are losing the opportunity to address and help young people directly who are smoking. In officials' own words, it's a lost opportunity. 
The fourth concern that submitters had, as my colleague the Hon Michael Woodhouse has discussed, was the issue of stationary vehicles being considered a dwelling and being able to smoke as if it was a private dwelling in that vehicle. We've got issues with that. We're going to raise that as a Supplementary Order Paper in the committee of the whole House. So we think that needs another go around. It just does not make sense. 
The fifth was reducing the lead-in time, an 18-month lead-in time. Again, substantively, that is for the IT requirements for police to be able to prosecute, if they need to, those who are caught. Wow, what a resource this is going to be for police. As, again, Michael Woodhouse said, how do we align that with the hands-off approach under the Misuse of Drugs Act? We'll exercise discretion, but, oh no, no, we're going to prosecute and need 18 months for police resources to figure out an IT system that lets us prosecute those who are smoking in vehicles. That also doesn't make sense. 
The sixth was submitters thought that enforcement shouldn't be punitive, that there needs to be some reflection around how we might change behaviour, but that it shouldn't substantially be punitive. 
So there were these six things that submitters—six themes, if you like—talked to in this bill. They were thoughtful, and I acknowledge what Louisa Wall the chairperson was saying. I think some of the early start-off to this was the young folks under the help of the Cancer Society in Northland, who brought down a petition. It was on a board, because I recall getting it at Whangarei Airport. They said, "Shane, can you take this down and give it to either John Key or Bill English?", so I recall doing that. That would've been maybe 2015, I'm guessing—there or thereabouts. Right from then to now, the young folks in Whangārei have sort of stayed in this mode, and it still beats for them. 
Look, it beats for all of us too, and that's why we're supporting it. But we think there's some parts here that can redress these lost opportunities, and we think we should take that ability that we have to fix it and get it right. There's a few things here we can do to make it better. So, with that, we're happy to support this through to the committee of the whole House. 





JENNY MARCROFT (NZ First): Tēnā koe, Madam Speaker. It's a pleasure to rise and take my call on behalf of New Zealand First on the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill. It was a pleasure to sit on the Health Committee as we took a good look at this piece of legislation through that process. 
I'd just like to, really, point out that this bill is very narrow in its focus because it is all about protecting children, and that is the sum total about this bill. It is sensible and practical and very pragmatic to take care of our tamariki. The first and foremost thing we must do is to change the social norm around smoking in vehicles, particularly when there are children and those under 18 years of age in that vehicle. So we are very pleased to be able to support this bill. One hundred and forty-seven written submissions were presented to the committee, 19 oral submissions were heard, and, of those, most were overwhelmingly supportive of this bill. 
A couple of things that struck me through that process in select committee were that when we put our focus on children, children absolutely add value to our thinking. They enhance our policy development. So it was an absolute pleasure to hear from all of the rangatahi, all of those that came to speak to us in the committee. We learnt about how they want to ensure that any young people don't sit in cars and suck in that second-hand smoke. We also heard that winding down the window is not a clear air solution. So literally stubbing out those cigarettes and not lighting up in the first place in a car is ideal if there are children in it. 
We also heard about their concerns about vaping. I haven't really come across a lot of vaping, and it was interesting to hear from them how so many young people are vaping and it's all about the biggest cloud you can create. So they had concerns and actually wanted to have vaping included in this legislation. 
All in all, really, it is a very narrow bill which is all about taking care of the health and wellbeing of our children, because when they're in a car and an adult or a person is smoking, they do not have a choice. This now gives them that choice. I commend the bill to the House. 





DAN BIDOIS (National—Northcote): It's a pleasure to rise and take a call on this bill. Just to pick up where the previous speaker, Jenny Marcroft, left off, I think there's a lot of the purpose of the bill and the goals of this bill that we all agree on. We all want to make sure that our most vulnerable Kiwis, being our young Kiwis, are protected, and so I don't think we're disagreeing on that. We're not even disagreeing on supporting the bill. We are, in fact, supporting this bill through to the committee of the whole House stage, but we want to make sure that this bill has the maximum impact that it could possibly have. 
I don't sit on the Health Committee, but I've had a chance to digest some of the key themes. I want to just pick up on, I think, a really important aspect from the select committee, which was around vaping, because I can't understand why we're advancing this bill to protect our young children, yet we're not making any substantial changes in the area of vaping—particularly as it relates to, of course, protecting our young New Zealanders. There are no changes that come from select committee to this bill in the area of vaping, and this Government has had many chances and a lot of time. 
You know, for the last two years we've had calls on this Government to introduce some framework around vaping that would regulate it and protect our most vulnerable New Zealanders, our young children, from accessing and getting hands on these products, but this Government hasn't given us a date on, in fact, where we're at with that vaping legislation. They could have told us tonight; they were supposed to tell us a few weeks or so after September. Well, we're a few weeks after September of 2019. So we're failing to take action on what I think, and what the select committee submitters think, is a serious issue, which is around vaping and the lack of regulations that there are currently in existence. This is important, because of our goal in New Zealand, which is to be smoke-free by 2025, and vaping is a channel by which we can achieve that goal, but we do not have the clear regulations around that for New Zealand. 
So, we'll be putting up some Supplementary Order Papers around this in the committee of the whole House, but I ask and I call on the Government to act on this issue now. Introduce your legislation around vaping. We've even given you a helping hand. There is a member's bill in the ballot that, effectively, regulates it. It's from my colleague Nicky Wagner. She's got a fantastic bill—and I say this earnestly in a non-partisan fashion, right? She's got a great member's bill. You could just delete her name and take it as a Government bill, if you like. 
Hon Nicky Wagner: I'll give it to you. 
DAN BIDOIS: She'll give it to you. This is such an important issue for New Zealand. 
It's an important issue for my community in Northcote, where I've got half a dozen vape shops around my area. They don't have the certainty of knowing how to go about their business. The people who are using these products don't have the certainty, and, as a result, the issue of the welfare of our young children in New Zealand is at risk. So I call on the Government to take my colleague's bill out of the members' ballot, to call it their own, and to introduce legislation tomorrow for vaping. 
So, on balance, we're supporting this legislation in the House. There are a lot of flaws with this legislation, but I commend this bill to the House. 





Hon JAMES SHAW (Minister for Climate Change): It's a pleasure to rise on behalf of the Green Party to support the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill. The submissions were largely in favour of the bill. We know that passive smoking, particularly in closed environments, leads to higher mortality rates, particularly from cancer—in other words, passive smoking in motor vehicles carrying children. This bill will save lives. 
Given all of that, we commend this bill to the House. We're looking forward to its rapid passage through the committee of the whole House stage, and on to its hasty conclusion—it's that simple. Thank you, Madam Speaker. 





Hon NICKY WAGNER (National): Thank you, Madam Speaker. This is an interesting bill. There's no doubt about it, we should not be smoking in cars. If we want to look after our young children's health—anybody's health, actually—we shouldn't be smoking in cars, but it's unfortunate that we actually have to bring this bill. 
It is such an obvious thing to anyone that's involved in smoking and who has any knowledge at all about the effects of smoking that of course you wouldn't smoke in your car. It's a shame that we have to spend time on this, because I think one of the issues about this is how you enforce it. If people are still smoking in their cars when they understand the dangers of doing that for their children, it's very difficult to enforce that. We have seen around the world other police forces are tending to take a deep breath when they see somebody smoking in their car and to perhaps have a discussion with them, which is a good thing, because anybody who is smoking in their cars with young people is obviously addicted to smoking and really needs help rather than prosecution. 
I would like to echo what Dan Bidois said. I would far rather be sitting in this House tonight debating a bill that regulates vaping. We've got to the stage where, if we want to achieve Smokefree 2025, we really have to make sure that people have options to give up smoking. What we've got left in our community is people who find it really difficult to quit, and there's very strong communities that find that difficult. We need to give them all the support and all the resource to help them quit. One of those resources is regulating vaping. 
Now, the issue that we have with vaping is: how do we get the balance right? We want to encourage anybody who is a smoker to quit, and to use vaping to quit is a good option. For people who haven't been able to quit any other way, and who've tried every other option—they've tried abstinence and they've tried nicotine patches, they've tried every kind of way to give up smoking—vaping often is the answer for them. So we want anybody who smokes now to attempt to vape to quit. 
But what we don't want is young people taking up vaping. We understand that vaping is up to 95 percent less harmful than smoking, but we still don't want our young people taking it up. If you don't smoke, you shouldn't vape. So how do we promote vaping to people who are smokers to help them quit while not encouraging young people to take up vaping? 
Actually, it's interesting. The research that's come out most recently has said that even though young people do try to vape, very few of them actually continue to do it regularly, particularly on a daily basis. That makes sense. Young people are absolutely wired to take risks—to do things that their elders don't approve of. So I would far prefer, if it were my children, that they tried vaping than smoking. The key issue here is not to get too frightened about children taking up vaping, because the chances are that if they weren't vaping, they'd be trying to fag behind the bike sheds. So the key issue here is how do we help people quit smoking by trying vaping and to support them with vaping, and how do we make sure that that balance is right so we don't encourage young people to vape? 
I think if we reflect on what's happening around the world, we have the UK, which has had vaping for about at least a decade, or maybe 12 years. They've had good, strong regulations around that and they don't seem to have had any problems, whereas we look at places like the US, which had very little regulation, and they've got all sorts of issues there and problems that have come because there are no controls. 
Now, my bill, which I developed when I was the Associate Minister of Health, and I do have to point out that back in 2017—it seems a long time ago now; about May 2017—the National Cabinet passed a paper that endeavoured to produce that bill for Parliament. That bill was written up and it was ready to go. If we'd been in Government, it would have been in the House much earlier than it is today. I took that Cabinet paper. I worked with that Cabinet paper to create a member's bill which is sitting in the ballot. The people who wrote that Cabinet paper are the same people that are advising the Minister of Health today about vaping. 
So I would like to suggest that we should take up that bill, that we should use it, and we should get regulation in New Zealand, because at the moment it's the wild west. At the moment, young people have got the ability to vape, with no rules around it. If we have clear regulations to make sure that we look after the quality of not only the vaping implements but also the vaping juice, I think we would protect young people, so I ask the Minister to please get some regulations around vaping. I'm very happy for her to use my bill. Thank you. 
ASSISTANT SPEAKER (Hon Ruth Dyson): This is a split call. 





ANGIE WARREN-CLARK (Labour): Thank you, Madam Speaker. I'm delighted to stand and speak in the second reading of the Smoke-free Environments (Prohibiting Smoking in Motor Vehicles Carrying Children) Amendment Bill. I'm going to leave aside vaping and talk about the bill. I do also acknowledge what the member Nicky Wagner is saying. However, we're talking about a bill that 147 written submissions were gathered for and we had 19 oral submissions. Now, I wasn't a member at the time that the submissions occurred. However, I was around at the first reading. 
One of the things, I guess, that is really important that we all understand about this bill is that it is set up specifically to support the most vulnerable in our country. It's around those young people who are absolutely unable to make the choice to get mum or dad or someone else in the car to stop smoking. So this bill is a very simple, very small bill, with very limited scope, and that's what we are dealing with here—very limited scope. It, essentially, just says that it becomes an offence. 
Now, one of the things that the Opposition have been talking about tonight, which I would like to correct, is that it does not become a criminal offence and there is no prosecution. This is an infringement. So there will not be a criminal charge against the person. It's an infringement notice, so it is a very minor notice. People have talked about the fact that there will be a prosecution, but that doesn't happen in the infringement system. I just wanted to clarify that because I think it is extremely important that we're talking about a long run-in time. We're talking about 18 months in order to get this set up so that they police can train their staff. We're talking about having a computer system—the ITS system—managing this infringement process. 
But the reality is, very simply, it is protecting our young children, our young people, from smoking in cars. It doesn't do anything more than that. It's a good start. There is more to come, as the Minister said. I commend the bill to the House. 





Hon MAGGIE BARRY (National—North Shore): I don't agree with much of what's been said on the opposing side, but I do commend this bill to the House and urge everyone to get on with it—an 18-month delay. At this stage, we can talk about vaping, and that's what happens at second readings—you talk about things that submitters have proposed. A lot of them talked about it. The Cancer Society has just said today—
ASSISTANT SPEAKER (Hon Ruth Dyson): I'm sorry to interrupt the member, but the time has come for the debate to be interrupted and set down for resumption next sitting day.
Debate interrupted.
The House adjourned at 10 p.m.