WEDNESDAY, 3 JUNE 2020
The Speaker took the Chair at 2 p.m.
Prayers.
ORAL QUESTIONS
QUESTIONS TO MINISTERSQuestion No. 1—Finance
1. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: What recent reports has he seen on the New Zealand economy in the context of the global COVID-19 pandemic?
Hon GRANT ROBERTSON (Minister of Finance): In its latest weekly commentary, released yesterday, Westpac said that "There was a definite bounce in the economy after the Alert Level 4 lockdown was lifted,". It said recent card-spending data points to an encouraging degree of resilience in households' spending appetites, while key indicators such as electricity demand, heavy and light traffic movements, and a slower pace of job losses recently were also pointing to a faster recovery than we had expected. Westpac said that although there had been a large lift in the number of people on the jobseeker benefit, it was a more modest increase than expected, largely due to the Government's wage subsidy scheme. Accordingly, it expects unemployment may not reach its own forecast peak of 9.5 percent. I am pleased to see that this commentary recognises the impact of New Zealanders' efforts in getting the virus under control, coupled with the Government's unprecedented level of economic support so that we have the best chance of our economy recovering well.
Dr Duncan Webb: What reports has he seen on the scale of the Government's support for the New Zealand economy?
Hon GRANT ROBERTSON: The Government's unprecedented $62.1 billion in available economic support includes the wage subsidy scheme, the Small Business Cashflow (Loan) Scheme, $2.8 billion in business tax changes, an estimated $3.1 billion tax loss carry-back scheme, $3 billion for new infrastructure projects, $1.6 billion for the trades and apprenticeship training package, the billion-dollar environmental jobs package, $216 million for the international business sector, and, as of today's announcement, $150 million for research and development loans. According to analysis from Treasury, this package represents nearly 20 percent of GDP, which puts it as one of the largest fiscal support packages in the world, well above Australia, Japan, Singapore, Canada, the US, and the UK. From the outset of this pandemic, our Government has committed to going hard and going early, cushioning the blow for households and businesses, and kick-starting the recovery on the other side. The scale of our fiscal support represents the scale of our commitment to New Zealanders to help see them through the crisis.
Dr Duncan Webb: What reports has he seen on the international context for the New Zealand economy?
Hon GRANT ROBERTSON: I've seen a range of reports that indicate that many other countries may be facing greater economic impacts from COVID-19 and a slower recovery from it. The Reserve Bank of Australia and the Australian Treasury are both forecasting unemployment to rise to 10 percent in Australia. According to the International Monetary Fund, Ireland's unemployment rate is forecast to rise to 12 percent this year. The unemployment rate for April in the US was officially 14.7 percent, but a report from Goldman Sachs estimates it could be as high as 21.5 percent in May.
Hon Gerry Brownlee: A thousand a day.
Hon GRANT ROBERTSON: That's not true, Mr Brownlee. We have always been upfront that the road ahead will be difficult. We will not be able to save every job or every business, but these forecasts show that, thanks to our collective success in fighting the virus and our efforts at cushioning the economic blow, we face less damaging immediate impacts and the opportunity for a stronger recovery.




Question No. 2—Prime Minister
2. TODD MULLER (Leader of the Opposition) to the Prime Minister: Why isn't New Zealand already in alert level 1?
Rt Hon JACINDA ARDERN (Prime Minister): While ongoing zero-case days have given us confidence to move forward consideration of a move to alert level 1 to 8 June, earlier than that would not have given sufficient confidence that transmission was not occurring that has not yet been detected. The incubation period of the virus is up to 14 days; it's only been 13 days since bars reopened and five days since gathering sizes were lifted to 100. We also have to bear in mind that it is worse for our economy if we move backwards and forwards between alert levels rather than making the right decision the first time. It is also important to note that we began our staggered approach to alert level 2 less than three weeks ago, and New Zealand already has some of the most liberal restrictions in the world because of the effectiveness of our strategy to date. We need to ensure that as a team of 5 million we do not lose the gains we've made to date and go backwards.
Todd Muller: Why is she so reticent to move to alert level 1, when Dr Ashley Bloomfield has said there is—and I quote—"no evidence of community transmission in New Zealand"?
Rt Hon JACINDA ARDERN: I'm acting on the advice of Director-General Dr Ashley Bloomfield. He is the one giving us the guidance to remain where we are. He has expressed comfort with us making that consideration on 8 June, but that is not an accurate reflection of his views.
Todd Muller: Is it correct that—and I quote—"from a public health perspective alert level 1 means there has been a period of more than 28 days with no new cases of COVID-19 caused by community transmission and there is an extremely low public health risk from the virus", as is says in the paper I have here in her name titled COVID19 Alert Level 1 Controls, which I understand was discussed at Cabinet yesterday?
Rt Hon JACINDA ARDERN: The member knows that we have made fully and widely available the settings of alert levels 1, 2, 3, and 4, and in the criteria for decision making it does say, "trends in the transmission of the virus, with the threshold varying by alert level, including the director-general's confidence in the data." So, yes, we've included a period where we haven't had cases—keeping in mind we're only up to 12 days presently—but also the number of days where we haven't had a case from community transmission, which was roughly about a month ago now. But that is not the only criteria. The director-general has to be confident in the data. We know there is asymptomatic transmission. We know there is a long tail. I would rather move once, do it right, and not continue to risk our economy.
Todd Muller: When was New Zealand's last case of community transmission?
Rt Hon JACINDA ARDERN: As I just said, it was at the beginning of May. However, that was not the last case that we had, which was, from memory, 12 days ago. I have to say I am alarmed at the suggestion from the member that, even with some of the loosest restrictions in the world, the member would still be willing to act against the advice of the Director-General of Health, open up before he has advised that we do so, and put at risk the huge effort and sacrifice of New Zealanders. I would rather do it once and do it right.
Todd Muller: Why did you say that it was—
SPEAKER: Order! Order! "She", thank you.
Todd Muller: To the Prime Minister: how can you match that answer with the fact that on 20 May, you said—and I quote—"the last case of community transmission where the source was unknown was early April."? That means we've had now three full cycles of transmission with no community transmission cases in New Zealand—60 days since—
SPEAKER: Order! Order! Order!
Rt Hon JACINDA ARDERN: We had a case that was linked to overseas travel but the overseas travel was outside the period of infection. So the view was that it could either have been community transmission or overseas travel. Again, the member forgets that that is but one of many criteria that we take into consideration, and we must listen to the advice not only of the scientists and epidemiologists but also the Director-General of Health. If the member thinks he knows more than all of them combined, I congratulate him, but I would rather listen to the advice, get it right, and not risk our economy.
Hon Chris Hipkins: Has the Prime Minister been advised that as recently as yesterday, Australian states were reporting new cases of community transmission, and will the Government take that into consideration when considering the Opposition's urging to reopen the border with Australia with urgency?
Rt Hon JACINDA ARDERN: Yes. We of course are mindful of the impacts of every restriction on our economy, on our businesses, but I equally will not jeopardise the gains and sacrifices made by those businesses by either opening us before we're ready or moving alert levels before we're ready. I reflect on the comments made by a small-business owner that they would rather live with the restrictions now than risk going back later on.
Todd Muller: Prime Minister, isn't it time for a captain's call on level 1 so that a team of 5 million New Zealanders can get back to rebuilding this country and recovering their jobs?
Rt Hon JACINDA ARDERN: I have proudly made captain's calls all the way through, and it is one of the reasons that, alongside our team of 5 million, we are the envy of the world in terms of our position right now. I stand by every call I've made and that's why we are waiting until 8 June.
Hon Chris Hipkins: Supplementary question, Mr Speaker.
SPEAKER: I can't tell if it's a point of order or a question, because of the yelling that is going on. I can't quite work out the reason for it today, but there seems to have been something in the water at lunchtime on my left, and I would like the volume to be turned down, and I would like the provocation to be turned off by the people who are not called to answer questions.
Hon Chris Hipkins: Will she accept the urging from the Leader of the Opposition to make a captain's call to reopen the border with China with urgency?
Rt Hon JACINDA ARDERN: No. And I do reflect on the fact that yesterday the member did say that he didn't have all of the information in front of him to make a decision around moving to alert level 1, and I would just reflect on that. I actually support the position the member took at that time. There are a number of things that have to be considered. Cabinet makes those decisions alongside the advice of the director-general and the best scientific advice we have. It has to be about moving as quickly as we can but as safely as we can.
Todd Muller: Why is it that your vice-captain doesn't actually have—
SPEAKER: Order! Order! No, look, I warned the member once and he sort of half corrected it, he did it again, and he's done it wrong again. My vice-captain is over there. Ask the question again.
Todd Muller: To the Prime Minister—
Rt Hon Winston Peters: Sir, to you!
SPEAKER: Oh, for goodness' sake! I heard a very wise kaumātua on the radio this morning, talking about breaches of rules and the consequences of them. The member will stand, withdraw and apologise.
Rt Hon Winston Peters: I withdraw and apologise.
Todd Muller: Why wait till midnight Wednesday, when the whole country needs us to be in level 1 today?
Rt Hon JACINDA ARDERN: Because the whole country needs us to not go backwards. The whole country needs us to move once and to do it right, and the whole country wants to move with confidence. The member does a disservice when he explains that the decision-making process is as simplistic as he describes—it is not. We factor in a range of issues, including economic impact, including compliance, including transmission, and our unknowns. And I stand by every decision we have made to date.
Hon Gerry Brownlee: Well done, captain!
SPEAKER: Mr Brownlee, I think people will describe people correctly in the House from now on. We're not going to have a big argument about it now.




Question No. 3—Finance
3. Hon PAUL GOLDSMITH (National) to the Minister of Finance: What is the Treasury's best estimate of job losses from being at level 2 as opposed to level 1?
Hon GRANT ROBERTSON (Minister of Finance): I'm advised that that would depend on the time spent at each level and other factors such as the global economic environment and the level of domestic activity under the different alert levels. Treasury's central Budget forecasts assume that the country would be at level 4 for a month, level 3 for a month, and then either levels 2 or 1 for the remainder of the year to March 2021. Treasury assumed growth in employment—i.e., a net increase in jobs—from the start of the September quarter, beginning 1 July. This is a period in which Treasury assumes the country is either at level 2 or level 1. Therefore, employment growth is expected under both levels 2 and level 1. 
Hon Paul Goldsmith: Can he understand the anger of small-business people seeing their businesses taken closer to the edge every day they remain under restriction, when the general public, including the Prime Minister and her selfies, seem to have moved on?
Hon GRANT ROBERTSON: I don't know about the end of that question, but I share the view of most New Zealanders that we should do this job once and do it right.
Hon Paul Goldsmith: Can he understand the frustrations of AJ, owner of Novelty restaurant in Botany, who normally operates with 100 patrons but under level 2 can only operate with 30 to 40 patrons, and who said today, "Every day we stay at level 2, it really threatens the very survivability of the business"?
Hon GRANT ROBERTSON: I understand the frustration of many New Zealanders that COVID-19 has arrived and had such a massive impact on our society and our economy. But I also believe—and I think I've seen survey work to back this up—that New Zealanders back the idea of doing this job once and doing it right. I invite the member to look around the world at other countries who have not had the success New Zealanders have, who face many, many months of restrictions. We've done well. We've just got to finish the job.
Hon Paul Goldsmith: Rather than continually congratulating himself and his Government, would he not do better to acknowledge that as one of the most isolated countries in the world, with a small, sparsely spread, and relatively young population, New Zealand should have led the world in getting on top of the virus, and we have? 
Hon GRANT ROBERTSON: Well, there are certain geographical advantages in New Zealand, but I think the member does a disservice to the 5 million New Zealanders who sacrificed a great deal to get us to the position we're in. We should be proud of New Zealanders' efforts, not belittling of them.
Rt Hon Winston Peters: Could I ask the finance Minister that if this is, as was just posed, a relatively young country, why would they be wanting to put the retirement age up?
SPEAKER: Order! Order! It's just too tangential.
Hon Paul Goldsmith: Why can businesses not return to normal operations without current restrictions, when the Director-General of Health, Ashley Bloomfield, has said there is "no evidence of community transmission in New Zealand"?
Hon GRANT ROBERTSON: This matter has just been covered by the Prime Minister in answering the Leader of the Opposition, so I invite the member to share their questions with each other in the future. But it would be fair to say that that is not an accurate representation of the views of the director-general. 
Hon Paul Goldsmith: Why were 4,000 people able to gather to protest without any social distancing on Monday, yet businesses are being forced to abide by strict social distancing rules and gathering restrictions which are pushing many of them to the brink?
Hon GRANT ROBERTSON: It's a fairly basic rule of life that one person breaking the rules doesn't justify it for everybody else.




Question No. 4—Education
4. MARJA LUBECK (Labour) to the Minister of Education: What decisions has the Government taken on investing in training and education for people who have lost their jobs or who want to move into a different sector?
Hon CHRIS HIPKINS (Minister of Education): The Government's trades and apprenticeships training package will pay the cost of learners of all ages to undertake vocational education and training over the next 2½ years. The initial set of targeted areas that will qualify for this support, starting on 1 July this year and for the rest of 2020, include primary industries, building and construction, community support, manufacturing, mechanical engineering and technology, electrical engineering, and road transport. Further details are available on the Tertiary Education Commission website. Circumstances dictated that we needed to move fast, so for the beginning of 2021, we'll be refining these initial targeted areas to reflect the work that's under way across Government to better understand how industry workforce needs are being affected by COVID-19 and what skills will be needed to support the country's economic recovery.
Marja Lubeck: Will apprentices have the same eligibility as people in other forms of training?
Hon CHRIS HIPKINS: No. All apprenticeships, including those outside of the targeted areas, will be eligible for the fees support. This is aimed at industries that are expected to be particularly hard hit by COVID-19, including hospitality, tourism, and food, where we want employers to keep their apprentices on, and we'll be supporting them to do so.
Marja Lubeck: What response has he seen to the trades and apprenticeships training package?
Hon CHRIS HIPKINS: A very, very warm response—heaps. Master Builders' representatives have said it's going to ease the burden of young guys wanting to get into the trade, because it's a cost they won't have to bear. 
David Seymour: Just guys?
Hon CHRIS HIPKINS: Otago—well, yes, that's right; there'll be some women wanting to get into the trades as well. The Otago Secondary Principals' Association have said the initiative would open doors to employment for school leavers at a time when many were closing. Representatives of the viticulturists' industry have said that it's really exciting for them. And the Southern Institute of Technology chief executive, Penny Simmonds, has said, "We believe the minister's release of initial programmes for supported training to aid Covid-19 recovery will stimulate demand for a number of … programmes SIT has expertise in. … This may mean SIT will need to run additional intakes, but we are well prepared … [and] able to do that."
Marja Lubeck: Are the industries suffering the most economic harm, such as hospitality, tourism, and retail, missing out on this fund?
Hon CHRIS HIPKINS: No. We want to provide training options, particularly where people are enrolled in pre-employment programmes that will lead them to strong job prospects. It doesn't make sense to encourage people to train in areas if the jobs aren't currently there. On the other hand, those who are already in training and on job training, we want them to complete their qualifications, which is why we're supporting existing apprentices in those areas to complete their apprenticeships. That means that we're supporting those whose employment could otherwise be adversely affected by COVID19.




Question No. 5—Environment
5. DAVID SEYMOUR (Leader—ACT) to the Minister for the Environment: Does he believe it is appropriate to impose new regulations on the rural sector, given it is likely that New Zealand is about to enter a recession?
Hon DAVID PARKER (Minister for the Environment): I believe that allowing pollution to get worse is both wrong environmentally and economically, because if it continues to get worse, it would cost more to clean up, not less. The new national environmental standards, in effect, hold the line. The changes under the national policy statement do not take effect for several years, by which time New Zealand is expected to have recovered from the economic impact of COVID-19. I note that the overall time frame to clean up all of our waterways to a healthy state is a generation, and that will span a number of economic cycles.
David Seymour: Is he concerned about the job losses and mental health pressures that the Ministry for the Environment's own analysis says will result from the regulations he's putting in place?
Hon DAVID PARKER: The cost-benefit analysis, which is very, very thorough and has been peer-reviewed, says that while many important benefits can't be quantified, those that were quantified have an aggregate annual value of $359 million per annum up to 2050—primarily from improved swimmability reducing health risks, ecosystem services, water storage as a consequence of wetland protection, and the like. The estimated costs are approximately $166 million per annum, which means that, overall, the net benefit is $193 million per annum over 30 years, excluding brand benefits, which can't be quantified but are positive.
David Seymour: Why is the Government focusing on putting new costs on the rural sector instead of resourcing local government in urban settings to clean up waterways, such as Remuera's Hobson Bay, where E. coli readings are 700 times safe levels?
Hon DAVID PARKER: We're not. And to use the language that the ACT Party used to relate to, what we're doing is internalising externalities to avoid the tragedy of the commons. In respect of urban issues, we are applying the same standards to urban areas. I think it is noteworthy that the Auckland Council is bringing forward more than a billion dollars of expenditure to separate sewage from storm water to avoid the very issues that the member complains of, which I agree do need to be addressed.




Question No. 6—Health
6. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: Has he received any advice regarding the number of health procedures unrelated to COVID-19 that did not take place as planned due to COVID-19; if so, what is his best estimate of the number of these procedures?
Hon Dr DAVID CLARK (Minister of Health): As I explained to the member previously, Budget 2020 included a one-off investment of $282.5 million to fund a planned care catch-up campaign following disruption caused by the COVID-19 global pandemic. Preliminary data suggests that approximately 8,500 elective and acute in-patient surgeries, 11,200 minor surgeries, 11,800 scans, and 3,200 endoscopy procedures were deferred. I'm advised that the Budget 2020 funding will more than cover that level of deferred care.
Hon Michael Woodhouse: Has he seen the report of the Cancer Control Agency that concludes there were more than a thousand fewer cancer registrations in April 2020 compared with the same period last year, and a third fewer curative cancer surgeries?
Hon Dr DAVID CLARK: I have seen that report. I've also seen it's about 500 overall behind this year, because of that month in April setting back the number of diagnostics. It's true that there has been a global pandemic, and that the Government is prioritising catch-up. It's also good that cancer diagnostics were running ahead of previous years before the lockdown this year.
Hon Michael Woodhouse: What is the Government's acceptable number of lives lost or shortened because of non-COVID health conditions during the lockdown?
Hon Dr DAVID CLARK: I'm advised that, in fact, clinicians are doing a very good job of prioritising the care needed. Of course, if people needed urgent care during the lockdown, they were able to get it.
Hon Michael Woodhouse: So is it his position that non - COVID-related morbidity and death was unaffected by the lockdown?
Hon Dr DAVID CLARK: I'm advised that clinicians have been prioritising care appropriately. It is impossible, actually, to make that judgment at this stage, but I guess we have the international comparison, where countries that did not go hard and go early, that did not have a team of 5 million, have far worse outcomes, still have restrictions on access to hospital care, and are likely to do so for many months to come. I want to thank the hard-working clinicians that have made our response so successful by international comparison, and the New Zealanders who have worked so hard and made sacrifices to make that happen too.
Hon Michael Woodhouse: What firm plans, if any, have district health boards made to clear the publicly funded backlog of elective surgery?
Hon Dr DAVID CLARK: The DHBs are making detailed plans to ensure that they are delivering more care for more people; indeed, year on year, they have been doing that every year under this Government, and I'm sure that the $3.92 billion record investment that this Government has put in in this Budget into DHBs will also make a significant difference. This Government has followed on from another Government that neglected the health system for nine years, that underfunded it, and, as a consequence, as we've put more money in, we've seen 1,500 more nurses than when we took office, we've seen 900 more doctors, we've seen 600 more allied health workers, and we're seeing more care for more people. I thank the member for the opportunity to outline the progress that is being made.
Hon Michael Woodhouse: Well, if a detailed plan for clearing elective surgeries does exist, will he make it public?
Hon Dr DAVID CLARK: The DHBs, of course, have an annual planning process under way that will provide extraordinary detail on what they will be doing in the year ahead, and that will be, of course, public, as it is every year.




Question No. 7—Māori Development
7. TAMATI COFFEY (Labour—Waiariki) to the Minister for Māori Development: What announcements has she made to support Māori tourism operators? 
Hon NANAIA MAHUTA (Minister for Māori Development): We've acted to safeguard one of Aotearoa New Zealand's icons of Māori tourism, Te Puia and the Māori Arts and Crafts Institute (MAKI), by investing $7.6 million over the next two years to safeguard the future of Toi Māori. The legacy contribution of MAKI has seen the teaching of carvers, weavers, waka exponents, and arts and crafts experts hone their skills and contribute to cultural revival over the last 100 years. This investment will continue their contribution as a training institute. 
Tamati Coffey: What additional support has the Government provided to Māori tourism? 
Hon NANAIA MAHUTA: First, I want to acknowledge New Zealand Māori Tourism, who have a specific mandate to support the Māori tourism sector and the work that we do. In addition to the economic recovery packages the Government have announced for businesses, such as two rounds of wage subsidies and small-business loans, we've allocated $10 million contingency of funding to New Zealand Māori Tourism to support the Māori tourism sector to pivot in the new environment. We've supported the stand up of a business support service led by New Zealand Māori Tourism and supported by Poutama Trust and the Māori Women's Development Inc. to help Māori small and medium sized enterprises' position during this challenging time. In addition to this, New Zealand Māori Tourism provides further specialist support for Māori tourism operators. We anticipate those businesses will be a key feature of local and regional tourism networks now and moving on into the future. 
Tamati Coffey: How will the recovery of Māori tourism support an integrated network of tourism operators and an increased focus on regional destinations and experiences? 
Hon NANAIA MAHUTA: Fantastic question. The Māori tourism sector employs about 14,000 people across the country and includes some of the country's most iconic and globally renowned tourism attractions. Māori tourism's contribution to New Zealand is more than just financial. The network of Māori tourism businesses contribute to New Zealand's overall image, brand, and reputation. There is a unique point of difference on the world stage—
SPEAKER: Order! Order! I'm going to interrupt the member, partly because of the way she started and partly because of the very poor use of the word "iconic" and the fact that the answer is far too long, as the others were. 
Tamati Coffey: What is the biggest challenge for Māori tourism operators as they pivot towards attracting a domestic tourism market while borders remain closed? 
Hon NANAIA MAHUTA: Undervaluing and underpricing our experiences and tourism product experiences because of the view that it's in our backyard. By getting behind our local businesses and tourist destinations, we can support the sector to rebuild its way towards a recovery that retains a strong and unique point of difference to any other country in the world. As the saying goes, "Let's back our backyard". Value our language, culture, and local stories—that way, we'll all benefit. 




Question No. 8—Foreign Affairs
8. Hon GERRY BROWNLEE (National—Ilam) to the Minister of Foreign Affairs: Has work by his officials on a trans-Tasman bubble progressed to a point where he can put a date on its start?
Rt Hon WINSTON PETERS (Minister of Foreign Affairs): We considered the issue of a trans-Tasman bubble even before New Zealand went into lockdown. Our responsibility was to try and anticipate every outcome and ensure that we make the right decisions when faced with tough choices. On 23 March 2020, before the lockdown began, I met with the chief executive of the Ministry of Foreign Affairs and Trade and started our plan to develop a trans-Tasman bubble that day. We committed to talking to the Department of Foreign Affairs and Trade (DFAT) in Australia and begin communications on this project. The House should note that, at the same time, many, many countries weren't even thinking about the effects of COVID-19.
Hon Gerry Brownlee: Have the parameters for a trans-Tasman bubble been discussed by Cabinet?
Rt Hon WINSTON PETERS: It is true to say that Cabinet colleagues are well aware of the work that's been going on with respect to this. But, despite all the work that's gone on, this is not a decision that we can make just by ourselves. It has to be made with a country called Australia, which, unfortunately—or fortunately, depending on how you look at it—constitutionally has a federal system. And so it's also to be made there state by state, as you see. So if, for example, Australia is not travelling interstate, it's very difficult for us to go inter-country. But we're working as hard as we can on it.
Hon Gerry Brownlee: So have the parameters for a trans-Tasman bubble been discussed by Cabinet?
Rt Hon WINSTON PETERS: If the member means by "parameters" the restrictions, the answer is no, because, again—because we do believe in consultation on this side of the House—we're in full consultation with my counterpart in Australia, the Minister for Foreign Affairs, Marise Payne. The Prime Minister has been in discussion with Scott Morrison, the Australian Prime Minister. And so, with respect to the parameters, that will be an agreement between both of our countries on all aspects of the trans-Tasman bubble as to when it gets started.
Hon Gerry Brownlee: Does he appreciate that, without a publicly available time line, tourism business planning is very difficult and will lead to even more job losses?
Rt Hon WINSTON PETERS: I think the answer and evidence for that is that on 23 March, before we went into the lockdown, my department started work with DFAT Australia to ensure that when the time came for us to be able to inter-country travel, we'd be ready. Yes, we do appreciate that. That's why we didn't waste one day of our time.
Hon Gerry Brownlee: Then would he be prepared to speculate for the House about what a time line might look like? In the absence of an official time line, at least some hope for those businesses might be able to be given to the House by the Minister today.
Rt Hon WINSTON PETERS: Can I say that if one wanted to cross one's bridges before you got to them, you might talk about speculating, but that would be irresponsible in the extreme, because we're talking with other countries and other states apart from Western Australia, Tasmania, Queensland, New South Wales, and, dare I say it, in time, Victoria. And to say you're going to get up and speculate about something like that, when the province of decision making lies in their hands as well, would be utterly wrong. That's why we're in foreign affairs. We do things with tact and diplomacy.
Hon Gerry Brownlee: Then is it reasonable for New Zealanders following this question to assume that there's been no point where a trans-Tasman bubble can be identified as likely to occur?
Rt Hon WINSTON PETERS: It would be entirely wrong to be misled by such a forecast or prescription as the one we've just heard. The truth is, as I've said, on 23 March we started working on this. It requires us to go interstate as well. I know, for example, the Premier of Tasmania has said he wants to open up now. We know that New South Wales has a similar view. There's a tremendous number of people in the tourism industry in Queensland who also want the same, but the state is not ready yet, by their public pronouncements. We have got a system of Government unlike theirs. They have a federal system; the decision has to be made not just by Canberra but by every state capital. It makes it very complex, but it doesn't mean that we have not, with fervour and unction and urgency, got on with the job.
Hon Stuart Nash: Has the Minister seen any politicians advocating for a bubble with China, and what is his view on that?
Rt Hon WINSTON PETERS: I can say yes, I have seen that—
SPEAKER: No. I'm going to interrupt. The question was one relating to the trans-Tasman, and the Tasman Sea doesn't go that far.
Rt Hon WINSTON PETERS: I raise a point of order, Mr Speaker. You might say that, excepting that when that was propositioned in this House, there was a suggestion that it did go that far and that we add it to the trans-Tasman bubble. That's why I think it's apposite and relevant. Can I answer it please, because I'm certainly prepared to.
SPEAKER: If the question had been phrased in that way, then the member would have been allowed to answer it.
Hon Stuart Nash: With regard to a trans-Tasman bubble or any other bubbles opening up, has the Minister of Foreign Affairs heard suggestions that there should be any other countries that we should form a bubble with?
Rt Hon WINSTON PETERS: The answer is: most certainly—
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I can understand why the Minister wants to answer that question. It might save a little bit of grace for him, given the answers—
SPEAKER: Order! Have we got a point of order?
Hon Gerry Brownlee: Yes, I have.
SPEAKER: Well, get to it, because the member is not starting that way.
Hon Gerry Brownlee: Surely, simply by referring to the trans-Tasman bubble and then asking for "any other" is not strictly in line with the primary question that's been carefully put on the Order Paper today.
SPEAKER: The member's absolutely right.




Question No. 9—Transport
9. CHRIS BISHOP (National—Hutt South) to the Minister of Transport: Did officials recommend in the Cabinet paper released in June 2019 titled "Progressing our plans to deliver light rail in Auckland" a process for Auckland light rail that would have allowed all market participants the opportunity to bid for the delivery of the project; and when, if ever, does he expect to take light rail to Cabinet next?
Hon PHIL TWYFORD (Minister of Transport): One of the options presented to Cabinet would have allowed a full market process, but there were a range of options, and Cabinet was advised on the pros and cons and the trade-offs between them. It's not in the public interest to reveal the officials' recommended option, as this matter is still being considered as part of both the commercial process and Cabinet decision-making. I expect to take a paper to Cabinet about light rail in the coming weeks.
Chris Bishop: Was it the preferred approach of officials that there be a process for Auckland light rail that would've allowed all market participants the opportunity to bid for the delivery of the project?
Hon PHIL TWYFORD: Light rail is an important part of our Government's solution to Auckland's growth and congestion problems. Cabinet first gave the New Zealand Transport Agency leadership of this project, then we received an unsolicited bid from NZ Infra, and I thought that bid was worth serious consideration. I took to Cabinet a recommendation that we look at both of those options as part of a twin track process, and this was following advice from officials that there were a number of options that could be taken at that time. We're now in the middle of that process. It's a commercial-in-confidence process. This Government believes in behaving ethically in business and in good-faith negotiations. We're not able to reveal the details until this process is complete, as we must retain the integrity of both the commercial process and Cabinet decision-making.
Chris Bishop: How does it affect the integrity of the commercial decision-making process to reveal that his officials' preferred approach was contrary to the one that Cabinet undertook?
Hon PHIL TWYFORD: Because we're in the middle of a process that was agreed by Cabinet, the matters are subject to commercial probity, and the Cabinet decision-making process is under way. We should let that process run its course. It's not in the public interest to reveal those matters at this time.
Chris Bishop: Why will he not tell the public that Treasury and officials advised him to open up the process for Auckland light rail to wider market participants than just the Transport Agency and NZ Infra?
Hon PHIL TWYFORD: I've already explained that Treasury and the Ministry of Transport had input into the paper that set out a number of options, including going out to the full market, that the paper, the advice that went to Cabinet, included consideration of the pros and cons of those options and the trade-offs between them. Cabinet considered all the options and Cabinet took the decision to run the twin track process.
Chris Bishop: Will Cabinet consider Auckland light rail after 19 June 2020 when the pre-election period commences?
Hon PHIL TWYFORD: As the member probably knows well, it would be unwise in a Cabinet process to put a precise date on that, but, as I've already said, I intend to take the light rail paper to Cabinet in the coming weeks.
Chris Bishop: Has he been advised of any risk that NZ Infra may choose to walk away, given that he hasn't announced a delivery partner for Auckland light rail, and, as he's just said, it has to be decided before Cabinet by 19 June?
Hon PHIL TWYFORD: I'm not prepared to divulge the detail of a mountain of advice that was received on this matter, but I think that if the member looks at reports that have been in the media in recent days quoting NZ Infra, he'll see that his assertion doesn't hold weight.




Question No. 10—Forestry
10. Hon TRACEY MARTIN (NZ First) to the Minister of Forestry: What recent announcements has he made?
Hon SHANE JONES (Minister of Forestry): Along with my colleague the Hon Damien O'Connor, from the one billion tree fund, the Government, through my good self and my colleague, have announced $10 million to aid planting wetlands and waterways, create jobs in communities, and improve the environment. In addition to this, it will boost the local nurseries but, most importantly, provide sorely needed jobs in the rural community in the primary produce sector. [Hon Shane Jones knocks over glass of water]
Hon Tracey Martin: How will this build on other initiatives which protect our wetlands and waterways?
SPEAKER: Speaking of wetlands!
Hon SHANE JONES: I do have a reputation as being a Minister who's hot to trot, and I've now been cooled down. I accept that. Last year, in a neglected part of Aotearoa, the Waiapū catchment, we allocated a sum of $5 million, and, in fairness to my colleagues from the other side of the House, it was picking up an obligation that they took on board in the settlement of the Ngati Porou claim. We worked out that in areas such as that, catchment improvements are not possible until we get the nephs off the couch and teach them, actually, how to start fencing again. We bring forward people that have been dislocated from the job market, and we hope to continue doing that with the $80 million recently announced for waterways, riparian planting, and stock reticulation. There is so much to talk about, and more will be stated as we move closer to a certain date towards the end of the year.
Hon Tracey Martin: What other announcements has he made recently?
Hon SHANE JONES: It's important that we bear in mind that it's not only about growing trees and environmental resilience but it's also investing in the next generation. Ngā Karahipi Uru Rākau, forestry scholarships, have recently been announced. This is to encourage young women, those who have already left school, Māori school-leavers, and, indeed, anyone who wants to invest time, money, and effort in gaining a qualification so that we can turn the forestry sector from a low commodity game and increase both the skill, the talent, and the transparency, in particular, amongst those who play a role in advisory services and our log mongers—and need a great deal of training and education to ensure that our future industry is on the strongest footing possible.




Question No. 11—Customs
11. Hon Dr NICK SMITH (National—Nelson) to the Minister of Customs: Does she agree with the statement by Steve Sullivan from Nelson's marine engineering company AIMEX that "The Government's policy to refuse entry of vessels for engineering and maintenance work is costing jobs and millions of dollars in work", and does she stand by her department's decision to refuse entry to the fishing vessel the Captain Vincent Gann?
Hon JENNY SALESA (Minister of Customs): I do stand by Customs' decision to give effect to immigration rules. This Government's position has continued to be that the best economic response is a strong public health response. While I appreciate this is an incredibly difficult time for many businesses in New Zealand, our Government has made unprecedented support available for businesses like AIMEX. I encourage them to take up any and all support that they are eligible for from the Government during this unprecedented time.
Hon Dr Nick Smith: Is the Minister saying it's better for New Zealand for companies like AIMEX to take a wage subsidy rather than actually letting them do the work that earns the company and the country income?
Hon JENNY SALESA: The question is mainly about whether or not we allow a fishing vessel like this to come through. The decision made by the Government has not been to open up our border. We are 12 days into having zero COVID-19 cases, with only one active case. In terms of foreign ships, on 26 May a foreign fishing boat emerged as one of the points of transmission where a foreign-flagged, foreign-crewed vessel with 29 members of its crew being COVID-19 positive was heading towards the Pacific. A vaccine is not yet available for COVID-19, so the fact is that we are focused on saving lives and focused on public health. We are now looking at the recovery of our economy, but I stand by our Government and our response.
Hon Dr Nick Smith: Why did she state yesterday in this House that the Customs refusal to allow entry of the Capt. Vincent Gann from American Samoa to New Zealand was based on advice of the ministry and Director-General of Health, when her department has admitted it never sought any advice from the Ministry of Health or the director-general on that vessel from American Samoa?
SPEAKER: Before the member answers, I heard at least three members from this side make comments as to a member's pronunciation. I think that we all know that we have a variety of skills in this area, and it ill behoves members, unless they think they're absolutely perfect, to criticise in that way. It will stop.
Hon JENNY SALESA: The question that the honourable member asked me yesterday was whether I stand by Customs' policies and actions—a very general question. Then he followed up with the question about this particular vessel. Had he put down a specific question like that, I would have been able to answer in specific ways.
Hon Dr Nick Smith: Does she accept that the COVID-19 risks for the fishing crew from American Samoa are far less than from the film crew that's been allowed in by the Government from California, when American Samoa has had zero cases and zero deaths, and California has had 115,000 cases and 4,200 deaths?
Hon JENNY SALESA: I reiterate that this particular ship was a foreign-flagged, foreign-crewed ship. They were not all Americans or American Samoans on that particular ship. Customs enforces the rules and laws that Parliament and Cabinet set. The exemptions for visas are by the Minister of Immigration and the exemptions for jobs are by the Minister for Economic Development. The honourable member, who has been a member for many, many decades—more than me—should know if he was to put down this kind of question who the right Minister is to ask about these sorts of issues.
SPEAKER: Order! Order! I looked at the question, I looked at the responsibility, and I thought it has been put to the wrong Minister, but it is the Government's responsibility to transfer it, and the Government should have transferred it, if the member really thinks that the answers to this should be given by other Ministers. It's no good coming to the House and saying it was put down the wrong Minister. If the member thought that, it was her ability to transfer it.
Hon Chris Hipkins: I raise a point of order, Mr Speaker. The issue with this particular question that's been put down is it covers a number of Ministers' areas of responsibility and the Government cannot anticipate what supplementary questions the member putting the question down may choose to ask. He could well have asked a series of supplementary questions directly related to this primary question that related to the responsibility of the Minister of Customs. The Minister of Customs could not transfer this question to another Minister on the basis that she thought he might ask a range of questions that weren't related to her portfolio. [Interruption] 
SPEAKER: No, I'm going to deal with that one first, and if there are further questions, I'll deal with them later. I looked very carefully at this question when it came in. I read yesterday's Hansards on it. It became clear to me at that stage that her department was giving effect to a decision that was made by another department, and, in fact, it was not her department's decision to refuse entry to the fishing vessel; that decision had, effectively, been taken or was the responsibility of other departments. Therefore, in my opinion, it would have been better if the question had been redirected to those people, but it was not at the point where I was prepared to strike the question out.
Hon Dr Nick Smith: Speaking to the point of order, Mr Speaker.
SPEAKER: No, we're not speaking to the point of order. I've dealt with the point of order. There is no point of order there at the moment, so unless there's a new one—
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. It is a point of order in the House that the question itself was about the Minister's own statements in this House—supplementary question, I should say.
SPEAKER: No, it wasn't. The member should read the question.
Hon Dr Nick Smith: I seek leave of the House to table the email from the Customs department to the company concerned, saying the vessel could not enter New Zealand.
SPEAKER: I have seen the email, and I've also heard and listened to the background to it. I'm quite happy for that to be put. I think it's already part of the system because it was part of the authentication to the question. Is there any objection to its being tabled? There is.
Hon Dr Nick Smith: Does she stand by the advice of her Customs officials, dated 21 May, that the Capt. Vincent Gann, that has previously had $6.5 million of work in Nelson, should, and I quote, "undertake the repair work in Hawaii."?
Hon JENNY SALESA: I do stand by Customs' decision to give effect to the immigration rules. I am informed that the ship was not advised to head to Hawaii by New Zealand officials; rather, it was asked why it was not heading to Hawaii because it was requiring repairs immediately. I understand that Hawaii was the nearest port at that time for this foreign-flagged, foreign-crewed ship.
Hon Dr Nick Smith: Will she or any of her ministerial colleagues visit the Port Nelson marine engineering base and directly explain, to the workers that will be losing their jobs in the next weeks, Government policy?
Hon JENNY SALESA: I will take advisement from Customs officials on that.




Question No. 12—Employment
12. Dr SHANE RETI (National—Whangarei) to the Minister of Employment: How do the performance and policies of Mana in Mahi compare with all his employment programmes?
Hon WILLIE JACKSON (Minister of Employment): As the member will be aware, Mana in Mahi is primarily an apprenticeship-type programme. However, it differs from other programmes in that it also recognises employment and qualifications that are industry led and includes pre-employment training, incentivised payments that keep participants connected and energised in their placements, and provides pastoral care, which is why of the 729 participants who have come on to the programme, 81 percent have exited benefit dependency and have not returned. These outcomes compare favourably to other similar employment programmes, despite Mana in Mahi supporting those most disadvantaged in the labour market. Mana in Mahi is very distinct from other employment programmes I have responsibility for, and comparing Mana in Mahi to programmes, for example, such as He Poutama Rangatahi, does a disservice to both.
Dr Shane Reti: When he said last week that he has oversight for five critical employment programmes, what are those five programmes?
Hon WILLIE JACKSON: I have oversight for Mana in Mahi, He Poutama Rangatahi, cadetships through Te Puni Kōkiri, the Māori apprenticeship fund, skills and jobs hub, and regional skills leadership groups. I was one short; it was actually six, but thank you for the question. As well as that, I have oversight in terms of the New Zealand Employment Strategy, which concentrates on vulnerable groups: Māori, Pasifika, disability sector, ethnic groups—all the groups that the National Government forgot.
Dr Shane Reti: Does Mana in Mahi have an age cut-off at 24 years of age, and, if, so, what proportion of people currently needing employment are automatically ineligible?
Hon WILLIE JACKSON: We primarily concentrate in terms of the 18- to 24-year-olds. We are looking to expand the criteria in terms of Mana in Mahi. In terms of the member's question, I'll come back to him on that if he wants to put it in writing.
Dr Shane Reti: How does Mana in Mahi's projected capacity of 2,000 participants compare with National's JobStart, which would employ 50,000 people?
Hon WILLIE JACKSON: I think National's JobStart is just a dream, like their silly promotion of $5,000, or $10,000, I think, to the employer. Mana in Mahi is a much better programme. As our Prime Minister explained very eloquently yesterday, we are looking after the employer, we're looking after the worker, and, in fact, we're looking after the community—a community that that member should remember he represents, and he appears to have forgotten over the last couple of weeks.
Dr Shane Reti: What does it say about work ethic as a performance measure when the statement is made that under Mana in Mahi, the employer doesn't have to worry about whether or not a trainee turns up to work every day; and is that statement a fair assessment of Mana in Mahi?
Hon WILLIE JACKSON: Of course it's not, and I'm not sure who said that. It disappoints me that this member has taken that position, given the 81 percent success rate in terms of Mana in Mahi—an 81 percent success rate. It's a programme that is incredibly successful and continues to be successful, unlike the National Party, that just keeps dropping in the polls.
Dr Shane Reti: Will he then ask the Prime Minister to correct her statement in the House yesterday, given that it was her who said "[Mana in Mahi] provides pastoral support so the employer doesn't have to worry about whether or not a trainee shows up … [to] work every day."?
Hon WILLIE JACKSON: I think, again, sadly, that's a low-down, dirty, rotten perspective of what our wonderful Prime Minister said yesterday. He knows that and this House knows that—disgraceful, again, from Mr Reti.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I know you take a fairly lenient view on some of these more animated questions, but I think it's inappropriate for any Minister answering a question to refer to a statement made and recorded in Hansard as low-down and dirty. 
SPEAKER: I'm relatively prim and proper myself, but I think—[Interruption] All right, maybe I shouldn't do irony in rulings. I think low-down and dirty is not quite as low-down and dirty as many things that have been said here.
Rt Hon Winston Peters: How many reports has he received from excited members of Parliament up north on the enormous Māori Mana in Mahi programmes—for example, with KiwiRail and the hundreds of jobs coming there and all sorts of Provincial Growth Fund developments around the north—and how many of the Northland MPs have congratulated him on that?
Hon WILLIE JACKSON: Well, without doubt, the New Zealand First MPs have made a huge contribution. Though it's interesting, people like Matt King turn up and congratulate us all the time. Northern National MPs, they hide—they actually ask us not to reveal their names when they come to Shane Jones' launches. It's been a huge success in the Tai Tokerau, and New Zealand First and Labour and the Greens have been working brilliantly in conjunction in terms of getting the nephs off the couch.
Marja Lubeck: How does Mana in Mahi compare with other employment initiatives that he has seen?
Hon WILLIE JACKSON: Kia ora. As the member will be aware, Mana in Mahi has been brilliant, and I've heard that in terms of the initiative, it compares so well with JobStart, which has a 5K start-up payment and another 5K to be paid in 90 days. Mana in Mahi, on the other hand, when you compare Mana in Mahi with that National Party programme, is made up of a $9,580 wage subsidy but goes further and covers payment for any pre-employment training that is a required, incentivised training payment—a total of $25,000. So we don't need to create new programmes for the sake of creating them. Mana in Mahi is doing the business at the moment, and it's actually embarrassing the National Party so much that they just keep asking questions about it, which is fantastic. 
Dr Shane Reti: What is the average truancy rate for Mana in Mahi over any time frame he chooses, given the Prime Minister said yesterday that with Mana in Mahi the employer doesn't have to worry about whether or not a trainee turns up to work every day?
Hon WILLIE JACKSON: Again, I take offence at the member twisting our Prime Minister's words. I'll say again—I'll say again: Mana in Mahi has an 81 percent success rate. It had an 84 percent success rate, but it dropped a bit over a couple of weeks by 3 percent to 81 percent. But that indicates to me that Mana in Mahi is still incredibly resilient when over the same period that it dropped, I saw the National Party support had dropped by 17 percent.
Michael Wood: Does he stand by the performance of Mana in Mahi or would he prefer to write off young people as "pretty damned hopeless"?
Hon WILLIE JACKSON: Yes, sadly, I've heard that statement from members from the other side. And you could never write off something that has been so crucial in terms of uplifting young people. You know, we renamed that. In fact, I renamed the Mana in Mahi programme. It used to be called "working for the dole", which is what the National Party wanted it to be called. So this is a programme that is changing society and changing this country. And I welcome Shane Reti to come to some of our programmes, because despite everything I've said about him, he is a respected member in the North.
Hon Gerry Brownlee: Does the Minister really think that the Government's entire re-employment programme should be based on Mana in Mahi, which over its time so far has only placed about 650 people in permanent employment?
Hon WILLIE JACKSON: Seven hundred and twenty-nine, actually, Mr Brownlee—729 and—
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. 
SPEAKER: Oh, look, this is a warning. 
Hon Gerry Brownlee: Yes. I'm happy to have your warning.
SPEAKER: Right, the member's on a warning.
Hon Gerry Brownlee: Well, the member's just stood up and said that there are 729 permanent jobs. Previously, he said there were 729 placements with an 81 percent success rate. So my number is correct; his is wrong.
SPEAKER: Order! How long has the member been here? Certainly long enough to know that he doesn't dispute an answer, especially partway through it, but at all, by way of a point of order. Today feels like it's a Thursday afternoon just going into a recess. Again, I say I don't know what's in the water on both sides of the House, but I will ask people to settle down. And as I've reminded the author of the words earlier, further breaches will result in consequences.
Marja Lubeck: Thank you, Mr Speaker—
Hon Gerry Brownlee: No answer.
Marja Lubeck: Has the performance—
SPEAKER: No. I'll make it very clear. The answer was interrupted by the member, and I decided at that point that because he improperly interrupted, he didn't want to hear any more. 
Marja Lubeck: Has the performance of Mana in Mahi been impacted by COVID19?
Hon WILLIE JACKSON: Yes, it has. Not hugely—not hugely. 
Hon Gerry Brownlee: What about work from home?
Hon WILLIE JACKSON: As I said, Mr Brownlee, when I appeared before the Epidemic Response Committee, Mana in Mahi had a success rate of 84 percent. So over four weeks, later on, it dropped by 3 percent. So, yes, it has been affected, but only slightly. But it just indicates to me that Mana in Mahi is incredibly resilient, unlike the National Party, that dropped 17 percent over the last three weeks.
Rt Hon Winston Peters: Is the Mana in Mahi flexibility programme able to, for example, accommodate an ageing politician from the South Island in 3½ months' time?
Hon WILLIE JACKSON: We'll take everyone on. We don't discriminate. We don't care what political parties they're affiliated to. And even if Mr Brownlee wants to apply, we'll put a good word in for him.
 





BUDGET DEBATE
Debate resumed from 2 June on the Appropriation (2020/21 Estimates) Bill.
Hon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you, Mr Speaker. It is my pleasure to rise to take a call in this debate. I think it is worth us reflecting on the privileged position we are in, in this House, to be routinely meeting as an assembly of lawmakers and to be in this unique set of circumstances. 
I think, even more broadly, it is worth us reflecting on the incredibly liberal way in which we are living our lives in New Zealand now, compared to the rest of the world. That was made possible because of our team of 5 million. We all know that we are in unprecedented times of both a health and a global crisis. 
In New Zealand, it was our team of 5 million who have set about eliminating this virus, and that same team of 5 million who are setting about kick-starting our economy. To hear today in this House the Opposition stating that they believed that we have done so well because of our geography I think belittles the contribution of every member of that team, every New Zealander who has sacrificed so that we are in the privileged position we are today. 
We all know that getting our country back on track is going to take time, but we've made a strong start. What we have heard from the Opposition again in this House was not only the belittling of the team of 5 million and the sacrifices they've made but the urgency that they are calling on to reopen the borders with Australia and China. They want to put our collective hard-won gains at risk with knee-jerk political reactions. 
These are times that call for leadership. These are times that call for the type of leadership we have seen from our Prime Minister, Jacinda Ardern; not these knee-jerk political reactions. We all want to see our borders reopen. We all want to see normality return. But New Zealanders do not want us to put their efforts at risk. New Zealanders do not want us to play roulette with the sacrifices that they have made, and that is something that we are committed to on this side of the House. 
Our economic response is working for New Zealand. We're protecting jobs, with more than $10 billion in wage subsidies already paid out to more than 1.6 million workers. Treasury has forecast that we could be growing again as soon as next year, with unemployment back to pre-COVID levels—near-record lows—within a couple of years. If we look around the globe, these are extraordinary projections and ones that we should rightly be proud of, and, of course, our COVID response, the Budget that we're here debating in this debate, comes on top of our $12 billion New Zealand Upgrade Programme, which was announced, in what seems an age ago, back in January. Our economy is well placed to weather the global downturn. The Government's response has cushioned the blow of COVID-19 for workers, for families, and for businesses, positioning well through the entire lockdown, right through to the recovery. 
Prior to COVID, we were in the position of having interest rates, debt, and unemployment at low levels, and our books were balanced. This is the rainy day that we've been saving for. As our Minister of Finance keeps telling us, we are in a strong position thanks to the careful management of the books in New Zealand over previous years. It is very pleasing to see the work that we have put in as a Government being endorsed by ratings agencies maintaining our Aaa position. 
So the Budget that was delivered this year is, obviously, a Budget that no Government ever expected to deliver. They were extraordinary times. The Budget that we delivered addresses some of the immediate needs as people find themselves out of work, but we have not let go of taking that future-focused vision as we approach our response phase, and it is vital that we do that as a Government. 
The vision and leadership of our Prime Minister and our Minister of Finance means that we are in a great position to be able to bounce back and continue the strong growth prior to the emergence of COVID-19, because what our Minister of Finance delivered to us on Budget day was a jobs Budget. It's recognition of the fact that employment needs to be the central pillar in our response. This is evident in so much work that we've done through our extension of the wage subsidy scheme, which has already put the over $10 billion I referred to into the hands of Kiwi employers and their employees. 
Of course, we also have record investment in trade training through the $1.6 billion Trades and Apprenticeships Training Package, which will provide opportunities for New Zealanders of all ages to receive trade training. One of the areas that I reflect on as a Christchurch MP is the lessons we must learn from the past. Throughout the Christchurch rebuild, we did not take the opportunity to train enough of our young people to be rebuilding our city. I am pleased to be a member of a Government that is not going to squander an opportunity like that and that is truly investing in skills and trade training. 
But in the time that I have left, I particularly want to talk about something that I consider is of utmost importance to all New Zealanders, and that is ensuring that more people have suitable housing. I am extremely proud to be part of a Government that stood here on Budget day and announced it will be delivering an additional 8,000 new public and transitional homes. This not only addresses the chronic shortfall in housing that we are trying to fix but also gives confidence to the construction sector that they can see that there is a forward plan of work coming through public housing to them. It builds on our Government's record of delivering on public housing since we took office just a little more than 2½ years ago. 
The evidence of our success is demonstrated in that the Budget delivered $100 million to fund the over-delivery of 1,650 public houses that were built ahead of schedule over the last 2½ years. It is always a good position to be in as a Minister starting your talks with the Minister of Finance, pointing out that you need funding to fund your success in over-delivery in an area, and in the area of public housing we have done that. With the extra 8,000 houses that we have funded through Budget 2020, our Government will have delivered or have in its pipeline 18,350 public and transitional housing places, representing the largest public housing programme in decades. This turns around the decade before that saw us decrease our public housing stock by 1,500 homes. This is a Government that has put public housing back on the agenda of New Zealanders. 
This investment isn't just about making sure more New Zealanders have warm, dry homes to call home; it's also about supporting our construction sector because, on this side of the House, we will not repeat the mistakes we saw from the previous Government throughout the global financial crisis (GFC). We aren't going to stand back and leave the recovery to the market while the public housing waiting list grows and another generation is pushed further and further away from homeownership. 
The additional 8,000 public houses that we funded through this Budget will have an economic impact far beyond the $5 billion worth of investment that will be taken to build those houses. We will be supporting our local construction companies. We will be supporting the plumbers. We will be supporting the electricians. We will be supporting those small-business owners who deliver our small trades by making sure that there is a pipeline of work. Now is not the time to turn off the tap. We saw that from the previous Government through the GFC, and it is not a mistake that we will repeat. 
Something else that I want to point out is that in the nearly one year that I have had the privilege of being the Minister of Housing in this Government, I am yet to hear a constructive plan from the Opposition on what they will do with housing. I want to know what the Opposition's plan is. What is their plan to support the construction sector post-COVID? What is their plan to support first-home buyers? What is their plan to reduce the public housing waiting list? What is their plan to tackle homelessness? What is their plan to support the aspiration of Māori and Pasifika in the area of housing? 
That is what New Zealanders want to hear from their politicians at the moment. It is what they are hearing from the Government, but we are hearing deafening silence from the Opposition when it comes to a plan around housing. Our Budget delivers that plan. Not only does it deliver the plan, but it delivers the funding. Thank you. 





Hon NIKKI KAYE (Deputy Leader—National): I am pleased to speak on the Budget, but what I am sad about is when we look back in history and we compare this Budget to previous Budgets of previous Governments dealing with major financial crises. I think it is important to look back. Under the last National Government, when we dealt with the global financial recession, when we were staring down a decade of deficits, what we did was, when we were in that situation, we left New Zealand a legacy of some world-class infrastructure, whether it's ultra-fast broadband, which connected every school in New Zealand to uncapped, fast data for every school across the country, whether it was the Victoria Park Tunnel, or whether it was the huge number of roading projects that occurred. So when we look at this Budget and we look at this situation that we find ourselves in, it is important to understand the feelings of many New Zealanders—but also of this side of the House—to be disappointed. 
The reality is that we are in the largest economic crisis of a generation, and it is not good enough to turn up in this Budget and have a bucket of cash but not have detailed plans. What we have seen on this side of the House is that despite the largest economic crisis in a generation and 150,000 projected job losses, the linchpin of this Budget should have been job retention and job creation. The reality is we've just heard from Willie Jackson about Mana in Mahi. This Government's plan in this Budget but also from Willie Jackson himself is 729 jobs. So when Megan Woods stands up in this House and tries to give the Opposition a lecture on what our plans are, I'm very proud that our leader, Todd Muller, announced on Friday a plan for 50,000 jobs; not 729, Willie Jackson. 
When we hear in this debate a lecture about building public houses, it is important to consider the backdrop, in which this Government promised 100,000 houses via KiwiBuild. So it's not OK to be turning up with tens of billions of dollars available and then not to be meeting the mark in terms of a large-scale project like KiwiBuild. The reality is this is a Government that is very, very good at press releases, but, actually, when it comes to the detail and delivery on every major measure, this Government has failed. In the area of transport and infrastructure, this Government has delivered very little. In the area of housing, this Government, again, by its own standards, is nowhere near what its targets were on KiwiBuild. So as we travel around New Zealand, we believe that this election will be fought on who is able to best power up and power New Zealand out of the largest economic crisis of a generation. 
Again, what that requires is some form of plan. What we saw in this Budget was, again, a contingency which enables members opposite to put out press releases of initiatives that are highly likely to never be delivered, because that is their record of 2½ years in office. On the alternative side, our party is very focused—very focused—on the 480,000 small businesses, who need a few things. The first thing they need is certainty. That is why we are asking questions about level 1. It is our view that we should be able to move there. It's not just the view of the Opposition; it's also the view of the Deputy Prime Minister. 
It is incumbent on this Government to be able to turn up into the small businesses—the butchers, the factories, the other shops and retail areas of New Zealand, and hospitality—and tell those businesses why we're not in level 1 now, because that matters, and it's relevant to the debt that will occur for generations. If the Government spends every additional day with restrictions, then it will cost us more. So it is our view that we should be in level 1 now. 
The second area of our economic plan is absolutely ensuring that we do what we can to save these businesses. The wage subsidy has been great, but it is not enough. That is why, on this side of the House, we have put up very comprehensive plans around GST refunds. We understand that there are people now who are being let go, and we understand that there are many businesses in my electorate and in other people's electorates who are shutting their doors because the Government has not been able to provide direct cash flow and the Prime Minister has continued in this House to obfuscate and to put up a whole range of other things except for actual policy that will ensure that these businesses survive. That is why the other prong of our plan has been around job creation. 
On Friday, we announced the JobStart package, which is about $10,000 to enable an additional hire to really ensure that for those potential 150,000 people that find themselves unemployed, they actually have a hope of getting another job. This is the side of the House that understands the economy, that has a leader that has business experience, and that has the capacity to ensure that people are in work and that they are helped through this very difficult time. 
I turn my mind then to areas like education. Again, this is a Government that promised a huge amount. We know there are more than, I think, 40 promises in education that have not been delivered, despite tens of billions of dollars in this Budget. So the question for Ministers in the education area alone is where is the package around the viability of schools to get through COVID? The number of principals that have messaged me that are dealing with huge bills due to the loss of international students at their schools or due to a lack of fund-raising. There was not a package in this Budget to deal with those issues of financial viability for the schools across New Zealand. 
What about the tertiary sector? Again, it was a huge hit around international students. In this Budget, there was $20 million for students for hardship. Again, that is nothing compared to the huge hit that the tertiary institutions of New Zealand have faced. 
So where we find ourselves in terms of this Budget is that it is disappointing. We are going to be dealing with a more worse situation. Every day, we are talking to businesses across New Zealand and we're talking to families. They are in extraordinary hardship, and what we have is a Government that does not have the team to deliver. It does not have a record of delivery in the best possible times, and it doesn't have intelligent plans to be able to deliver and ensure that the 480,000 small businesses of New Zealand survive and keep families in work. It doesn't have a record of delivery across infrastructure. 
So what we find, again, from Ministers is that they go across the country issuing press releases, but they fail, again, to actually deliver when it comes to execution, and this Budget is a classic case of that. We know that they will spend probably $10 billion in the next three months, and the reality is, when I talk to people in their 20s and 30s and 40s, they say this: "This is the rainy day. We want to invest in infrastructure. We want to invest in people and training. We want to invest in people and skills. We want to build houses. We want to do all of these things.", but what they expect is that we spend this money wisely. 
What they know is that if we don't, there will be no legacy as a result of the greatest financial recession of our history. They will be working longer. They will be paying higher taxes. So we have a moral obligation in this House to scrutinise this Budget, to acknowledge that members opposite—despite some amazing conditions until COVID—have failed to deliver, and to acknowledge that in one of the worst periods of our history from an economic perspective, the heroes of this recovery, our small businesses, have been left high and dry. It is only National that has the plans, whether it's job creation in JobStart, whether it's GST refunds to keep those businesses afloat, or whether it's our infrastructure plan, of which Todd has said we will deliver the largest ever infrastructure plan in our nation's history. It is only National that has the team of people to execute that and that has the plans to deliver, and this Budget is a disappointment. 





JENNY MARCROFT (NZ First): Tēnā koe, Mr Speaker. Thank you for the opportunity to take my call to speak to Budget 2020. I'd just like to acknowledge my colleague opposite, Nikki Kaye, who's just resumed her seat, on being elevated to her new position as head girl of the National—pardon me, as the deputy leader of the National Party. 
I will begin my contribution this afternoon acknowledging the health sector in the response to this global pandemic. It has been a highly successful public health response, and I think we can all agree with that. The way that every individual, whether they stayed at home, whether they were an essential worker and went out into their community and performed the function that was required of them—everybody played their part, and we have had a really positive response. So a big thankyou, particularly to all those essential workers working in the health sector for keeping the hospitals and the medical centres ticking over. 
Budget 2020 has a big number attached to it: $50 billion. There is another number I'd like to mention right now, and that number is zero. It's a number that perhaps is a very small number, or maybe it's not even a number at all. But it's a number that, day after day, for the last 12 days in particular, we have wanted to hear that number: zero, zip, nil, nada—cull—new cases of COVID. 
Throughout the course of lockdown and over the last number of weeks, families and individuals gathered around their televisions or their iPhones—maybe it was even with your teenagers—and we watched at 1 o'clock as the mighty Director-General of Health, Dr Ashley Bloomfield, told us about the situation of COVID. But, particularly, we have been watching with bated breath over the last couple of weeks to hear those words from him: "No new cases of COVID.", and so now we can focus our attention as a country on recovery and rebuilding. 
But I'd like to go back to a comment made by the previous speaker, who said that when they were in Government, they left world-class infrastructure. So I'd just like to mention: can you tell that to the thousands who were left homeless under their watch? Can you say that they left world-class infrastructure when there was faecal matter oozing down the sides of public hospitals? I say no. 
My leader, the Rt Hon Winston Peters, in his statement said that "It's a Budget that responds aggressively to our present conditions, it's a Budget that will support our transition to recovery, and it's a Budget that has our people, New Zealanders, front and centre." This Government has been focused from the get-go in 2017, when we came into Government, on the people. Our health response was about protecting the people. Our economic response in Budget 2020 is about the people: getting them back to work and getting them back into jobs. 
I'd like to make note, as we turn to our recovery, of the health response inside Budget 2020: $5.6 billion in services and $755 million in capital investment, and $3.9 billion has gone to the DHBs because our DHBs are playing catch-up, and so that has been earmarked for healthcare spending over the next four years. Now, this is a deliberate intention to mitigate the consequences of past belt-tightening and retrenchment policies. Also, $160 million has been sent off to the combined pharmaceutical budget managed by Pharmac. Now, this critical investment takes Pharmac's medicines budget to a record $1.045 billion, and that's over the 2020-21 year. There is also $832.5 million for disability support services. 
So as we move ahead into our recovery, I'd like to highlight that a lot of people actually read a few books while they were in lockdown—they had time and space to do that—and one thing that was very disappointing for a lot of people was that the libraries were shut. They were shut because absolutely everyone was home. But now that people are back out into our communities, we can go back to these hubs of our communities, and something that my colleague the Hon Tracey Martin, through her budget of $58.8 million, has done is made an investment in our libraries so that we can ensure free internet access at all libraries. There's 600 libraries in New Zealand, with 2,500 employees. 
So that announcement was made last week, and, on the very same day, the Auckland Council, basically, said that across all their libraries, for our relief librarians, they won't be getting any extra work. There will be no extra hours for librarians, if they needed to pick up a few extra hours of work. So, as the Auckland Council said, they will retrench in the library space. Our Minister said, actually, we need to invest in our libraries because of the importance of libraries being a connector in our communities. 
One of the things that we learn from history is that in times of crisis, often it will stimulate exciting new artwork. Now, we had an announcement about "What will we do, and what is the role of art in the time of crisis?", so there is a new arts funding package. I'd like to draw your attention to the fact that over history, we've seen some incredibly inspired artworks that have come from a period of time when there was political and social turmoil. So I'd take you back to the time during South Africa at the end of apartheid and the artwork that was being produced then, the Solidarity era in Poland in the 1980s, and also the time that accompanied the Berlin Wall coming down in the 1990s. 
During these periods of uncertainty and risk, there is an amazing amount of art that is produced. It forces a crystallisation of thinking, and we have now put in a package of $175 million to support the artists and the cultural creation in New Zealand, which I believe is not just about "Can they produce more work?" but also they have families that will be taken care of because there will be some income there for them. There is $7.9 million for Careers Support for Creative Jobseekers, $70 million for creative arts recovery, and $60 million over three years for a cultural innovation fund. So we are backing the arts in a really big way, because it is about people. 
Back in the early 1900s, my grandmother Herene Kīngi travelled from the North in Tai Tokerau to Rotorua to work at Whakarewarewa. She went down to Te Puia to be a guide. From the arts and Māori tourism package, $7.6 million has been delivered to Te Puia and the Māori Arts and Crafts Institute in Rotorua to keep our young people training in carving and weaving, ensuring those skills will continue to be developed throughout this recovery period. As a young girl—because I grew up in Rotorua—my dad learnt to carve, so I'm really pleased that that institution, which has about a 100-year history in New Zealand, will continue to thrive because of the heart of this Government caring about our people. 
I will just mention my connection up North, in Tai Tokerau and Hokianga, and the dreadful housing situation some whānau find themselves in, whether it's homelessness or housing states that, really, no one should be living in. There is $40 million from the Māori and Iwi Housing Initiative, the Māori housing and development programme, and we saw it rolled out in a very real way as we went into lockdown in an immediate response, working with the Māori collective Te Kahu o Taonui. They sent up 60 campervans to the Far North to support homeless whānau so they could be in a safe space and also be able to physically distance. 
This is a bold and exciting Budget package at a time where the country really needs to be united and to ensure that we can look after each other. We've done the health package. We have taken care to ensure that we have, literally, isolated ourselves from the COVID crisis. Now it is time to take care of our people as we move forward into jobs and work, because it is necessary that we get the country moving again by getting our people employed, and where they can't have a job any more with that job, we can transition into new work. That will enable our economy to get moving again. So that is a grand plan, and I'm proud to be part of this Government. Thank you, Mr Speaker. 





BARBARA KURIGER (National—Taranaki - King Country): Thank you, Mr Speaker. It's a pleasure to speak on the Budget debate this afternoon and have the document in front of me around rebuilding together. I have no doubt that six months or 12 months ago, the Government would not have had any plan to deliver this Budget in exactly the same way that they've had to because of COVID-19, which means that it's required some quick thinking and some adjustment to the Budget figures. Also, as we've seen, there's $20 billion that was in there that was unallocated. So in that regard, the fact that it's done with quick thinking means that it's going to require a lot more intense scrutiny, because when things are done in a hurry—and we've seen it with legislation in the House, in particular—things do get missed. 
One of the first things I read at page 33, as I'm going through the fiscal strategy, is that "The global COVID-19 pandemic has placed extreme stress on the global economy". That's true, but the Government of New Zealand is not responsible for the global economy, and neither can the Government use the global economy as an excuse for our own. It has an effect on it. It has an effect on trade, and, obviously, through this period with COVID-19, tourism, I would say—as we all know—is one of the biggest sufferers as an industry of the effect of COVID. So it's not an excuse, and, as we went through the global financial crisis a few years ago, we were one of the Governments—led by John Key—who was leading the growth economies around the world. 
So we can't use it as an excuse, but it creates some broader thinking, because, in any economy, there are the economic factors, the environmental factors, and then there are the social factors, and right now, as an economy, some of the things that have been under attack are going to be the very things that will save our economy and will provide the social wellbeing expectations that our people have come to believe in. So when we hear—quite frequently these days—that farming is the backbone of our economy, for the last 2½ years, we haven't been hearing that. Look, it certainly underpins our economy, and I would be the first one to accept that there are some changes needed in agriculture. But what we have to remember when we're doing Budgets, whether they be economic budgets or environmental budgets, is that what we do in this country, as a great little place down the end of the world, is not going to have massive, massive effects on climate change. 
So we really need to think about our Budget, going forward, economically as a country, think about some of our natural resources, think about the fact that our farmers in New Zealand are actually world leaders when it comes to issues of climate change, and think about how we economically use our intellectual property to influence the rest of the world. Last night, we were here debating the changes to the climate change bill. Several trees had been cut down to produce the bill in the first instance. It's about a ream of paper, and then the Supplementary Order Papers are almost another ream of paper. I question this Government on how that is going to make any difference to climate change, because it's going to create a whole lot more administration, and what we need is tools to drive things forward. 
So I would not disagree—in this document, page 35—that "Now is the time to use our strong fiscal position to respond to COVID-19". I would acknowledge the Minister of Finance, Grant Robertson, in acknowledging both Bill English and Michael Cullen for the work that they've done in the past. I always believe in giving credit where credit is due. It is time to use our strong fiscal position, but the way we respond to this is going to make a big difference. 
We've had lots of discussions in this House about the wage subsidies. Now, the wage subsidies have been a big help for businesses, and no one's actually going to deny that. But there seems to be some denial on the Government side of the House about the difficult position that many, many, many businesses still find themselves in. 
The wage subsidy has been helpful. We hear time and time again that, yes, under level 2, businesses are open. There is a huge difference between opening the door and running a profitable business. If we think about some of our restaurants, certainly, in level 3, it was really difficult watching those people with their little table out the door, waiting for customers to come and get takeaways. You don't go to a fine restaurant to get takeaways. It was very difficult. Even now, there are some restaurants, under the guise of the rules that we operate in level 2, that are allowing people to come for dinner for an hour, because they need to get that turnover in that business to make the money. You cannot expect people to go and get nine friends, as it was at that stage because the limit was 10, to go out with a group and say "We're going out for an hour.", because the reality is those sorts of things don't happen. So we really do need to think about the dynamics of what we would call being open for business. 
The time frame and the path for meeting our long-term objectives as we recover is on page 39 of the document. The time frame has been something that we've been arguing about quite a bit as to when we change levels, and the path is the other one. It appears that as a Government and as a country, we've been quite picky and choosy about the path and about the people that we allow into this country. Yes, I don't have any objection that movie-making has helped this country a long way down the economic path, but when we start picking and choosing between different industries—and we've heard Nick Smith's objections to blocking the boat out of his local area, which is, basically, taking $3.5 million out of his community when the boat's coming from a country where there is no COVID. It's not only about the time frames and the levels; it's about how we make the decisions on who we let in and who we let out. 
I just want to touch a little bit now on some of the expenditure in agriculture. It's very good to see the continuation of expenditure on the Mycoplasma bovis eradication programme. It was pretty rough at the beginning, probably a bit like COVID's being rough on a lot of people, but I do see some forward planning has been going on with the Ministry for Primary Industries for the last year or so, which has actually made the process easier, particularly relating to the wellbeing of farmers who are going through that dreaded process. So I commend them for the human factor that came into that process much later in the piece. 
The other part of that process was the National Animal Identification and Tracing (NAIT) scheme, and it's good to see there's funding going into maintaining compliance for that. NAIT let us down at the time when it came to the Mycoplasma bovis outbreak. It was often referred back to farmers not doing what they were supposed to do, and in some situations, I don't doubt that that was the case. However, the NAIT system was not operating as it should be, so it's good to see some money going into that. 
I'm really thrilled to see more money going into the Global Research Alliance on Agricultural Greenhouse Gases, because when we talk about the emissions trading scheme and we talk about taxes, that's not going to fix our problem. The global research alliance and the science is going to fix our problem by building up the tools. People just want to know: "Where am I now, where do I need to get to, and what tools have you got to help me?" It's no good taxing things that we don't have answers for. 
So I'm really, really thrilled to see that happening and also thrilled to see some increase in capability for the post-entry quarantine and the laboratory services for new horticulture markets, because we've had some difficulties there in the last year or so. Lawrence Yule is very aware of some of the stock for horticulture that's been through a tough time as well. 
So thank you, Mr Speaker. That's a very quick summary of my view of the Budget. 





CHLÖE SWARBRICK (Green): E Te Māngai, tēnā koe. Tēnā koutou e Te Whare. I firstly just want to start my contribution on behalf of the Green Party today, in this split call, addressing some of the concerns raised by Barbara Kuriger, the speaker just before me, being primarily those around climate change. She was simultaneously saying that what we do won't change anything, but then also saying that we're world leaders. I just really want people to inspect that, because you can't have it both ways. If we want to be world leaders here, if we want to inspire others to come up to our standards, we have to keep leading the world, and we don't get there by falling behind the mark. 
With regard to the context of this Budget, as many before me have already spoken to, the context has entirely shifted to where we were months ago. A lot of people right now are talking about future generations, and they are harking back to the situation that we saw ourselves in as a country and, indeed, as a world and a global economy in the 1930s, centring around the Great Depression. There, it's interesting to investigate that we saw a similar mobilisation of governmental, political, and parliamentary forces to rise to the challenge that was being faced, particularly with the creation of what was arguably the world's first safety net, recognising a manifestation of the social contract that all of us who live in this country will look after others when hard times come upon them. Unfortunately, it is the case that over the past few decades subsequent to that introduction, it has been dismantled by Governments following it. 
However, what has been highlighted in the context of COVID-19 is what is possible and what can be achieved, particularly those things that we have been told for so long are impossible, such as flexible working for those with disabilities or those who are sole parents, such as housing of the homeless, and such as the raising of core benefits. All of these things that we were told were impossible happened literally almost overnight, and what that has done is expose that these issues have always been solely an issue of political willpower. 
So on the issue of the economy, as it's been bandied about, I really want to begin to unpack that, because, in the words of the environmentalist Paul Hawken—and I quote—"We have an economy that steals from the future, sells it in the present, and calls it GDP." There are a lot of speakers throughout this debate who have invoked future generations and who have invoked the need for us to sacrifice as we move into the next few years to pay back the debt that is coming down the pipeline. I really, again, think that that is deserving of going under the microscope, because the economy isn't a sentient being; it is, in fact, the rules and the organisation that we place on all of us and the environment that we live in. The economy doesn't suffer; we do. What that demonstrates is the importance of the social contract, and the importance of different regulatory and legislative machinery that we are able to mobilise as a Government, as a Parliament, as leaders in this country, to change the way that things like inequality are presently playing out. 
On the point around future generations, I really just want to call across the House, across both the Government and the Opposition benches, and ask for people to really think about the kind of rhetoric that they are invoking here, because we are simultaneously hearing people ask about future generations and the debt that will befall them. But if we're really concerned about future generations, perhaps we should stop trying to speak on behalf of them or for them, and speak to them about what matters, because when you speak directly to our tamariki and to our rangatahi, what you will hear is quite different to the issues that are regularly bandied about in this ivory tower. In fact, it is things like climate action, which I am appalled to hear certain members now asking to delay so that we can supposedly service this economy, which again, we have unpacked, is mythology. So too, we would be caring about students. We would be removing all barriers. Notably, this Budget does remove those barriers for certain trade training, but we have the opportunity to go further. Kia ora. 





GARETH HUGHES (Green): Kia ora, Mr Speaker. Ngā mihi nui ki a koutou, kia ora. I think the most important question members should ask themselves in the Budget Debate is: how does it help regular, real people in New Zealand? Now, it was Sir Geoffrey Palmer who once said about being a member of Parliament that it's the best education you can have into your country. Now, I don't think he meant about sitting in this Chamber. I think what he meant was actually getting out and talking to people in their factories, their workplaces, and their offices, and for me, the greatest privilege of my decade here is literally being invited into people's homes and getting to have those conversations. 
For years, when I've gone into people's homes, I've been talking about the Green Party's work to insulate them, to set better rental standards, and to have better-quality housing, and it would shock you what I've seen in Kiwi's houses. I've seen black mould on the roof as if it was painted on with black paint. I've seen houses with holes in the walls. I've seen houses with plants and mushrooms growing out of the walls. I've seen in Dunedin—where I got to judge the worst rental flat competition as part of the city council's campaign to clean up their rental standards—super unsafe staircases almost falling over. I've seen window panes that you can literally peel the wood like it was a Cadbury Flake because it was so damp and rotten. 
So that's why, when I'm thinking about real people, I'm so proud of this Budget, because we're making a huge difference for real families' lives. Now, we've seen the more than $1 billion for more than 11,000 jobs in nature, but it's the 9,000 extra homes which are going to be insulated as a result of this Budget that I'm incredibly proud of because it's those homes that are going to make a difference. Now, the Government's come in and made sure that it can fund 90 percent of the cost of insulation. In some regions, that's up to the total cost that's covered. There's new grants of $2,500 for clean-heating devices, including efficient woodburners and heat pumps. That's thousands and thousands and thousands of Kiwi families that are going to be warmer, drier, and healthier as a result, and then their power bill is going to be less too because we've doubled the winter energy payment. 
But we know we have to go further and faster, because 9,000 is great, but there are still 600,000 substandard homes in New Zealand that are making our kids sick and, even worse, that are making them miss school and, even worse, that are seeing them in hospital. Tragically, we are seeing Kiwis die at a rate greater than the road toll because of their houses. Our houses are more dangerous than the road toll. So that's why we need to set a goal to insulate every single house in New Zealand to make sure it's of a warm, dry, healthy standard. 
We need to bulk up the building code, because, while London and Christchurch have similar heating demands, in the UK it's two times the wall insulation standards and five times the underfloor standards that we have in New Zealand. We need smart, sustainable buildings and offices. So while we've admirably got through one health crisis, we also need to make sure we flatten the emissions curve to tackle the much, much deadlier looming climate crisis. 
As Christiana Figueres from the UN pointed out this week, the investments we make as part of this Budget in the COVID response fund are going to lock in the emissions for the decades to come. All those decisions and those investments could give us the tools to reduce our emissions and to build a prosperous, low-carbon economy to help Kiwi families. 
So while we're warming up homes with insulation on the roof, let's also make sure we're putting a solar panel on it as well. Let's make sure we're putting solar panels and batteries in every single State house and running it as a clean, virtual network. Let's stop burning fossil fuels for electricity and for milk dehydration. Let's save people money by replacing their old, inefficient light bulbs with new, free efficient LED light bulbs. Let's invest in energy-efficient advisers and good, smart technology. Let's strengthen our grid so we can get to 100 percent renewable electricity. Let's support community groups who want to do it themselves and produce their own clean, cheap wind and solar power. To reach our transport and electricity goals and to get to our Paris carbon goals, we need to electrify transport as an industry. 
This is the great challenge facing us as a country. If we're going to meet those goals, we may have to double our electricity production in the next decade. Our great challenge is we have to do what's taken us 100 years to get to this point in only 10 years and do it cleaner and cheaper than ever before. This is our mission. This is our generation's great movement, our great moment. With the economic stimulus, it's how we can grow those clean, sustainable jobs and grow a richer, more prosperous economy. 
Meanwhile, on the other side of the benches, we see a party which is looking to the past. It wants to bring back oil and gas exploration. It wants to see more mining. It wants to see more cars, cows, and coal. That's a recipe for disaster, that's a recipe for poverty, and that's a recipe for death. 
The Green Party is pushing forward the ideas to take us further and faster to build on the great work that we've delivered in Government and to make sure that we're building that low-carbon, prosperous economy for the future. 





SIMON O'CONNOR (National—Tāmaki): I actually quite enjoyed that contribution by that member. We wouldn't agree on a lot of it, actually, but it's a calm rationality. It's a different form of opinions, but I actually really respect Gareth Hughes, and, in sad anticipation, he will actually be missed in the House. I know this was not a valedictory, but it also just shows, I think, the best of the House in these debates, which is that, actually, all parties can bring, if you will, a particular philosophy and perspective. 
It's a refreshing change from earlier Green contributions, which, unfortunately—particularly around this situation of COVID—give truth to the adage "Never let a good crisis go to waste." The idea that because of COVID, we can say "Look at all these amazing things we did."—that that somehow is a platform for going forward. So while it's been good that we're able to put all the homeless together—we heard from an earlier Greens speaker that it's just amazing what powers a Government can have and use to bring about a particular agenda of parties, and that's just not particularly helpful in a democracy. But, as I say, the Green Party and others very much like a crisis to allow them to push through their particular agendas, and we're seeing that, sadly, around the world. 
We've also seen in the whole COVID situation at the moment a Government that I think, by and large, has done a good job, but I'd be remiss in this Budget debate—it has pumped billions and billions of New Zealand's taxpayer dollars and, in fact, borrowed enormous amounts from overseas. The Government has made some mistakes—and I think, as the MP for Tāmaki, I need to acknowledge those—from, I believe, a lockdown that came not hard and fast, as we're often told, but came too late. 
I think it's important, as the spokesperson for customs, to also note that we had a situation where the border, on 3 February, was closed to China, but over 38,000 people from China—or travelling from China. They were not necessarily from China. They came here—38,000 people—and were only, effectively, giving a pinkie promise to stay self-isolated. It doesn't make any sense. I think it's a problem, and a number of constituents have raised with me that we needed to have closed the border sooner in order to manage things. 
We have seen, since, of course, New Zealand has locked down. We have been able to contain and manage the virus. The problem is, however—and I've certainly seen it as I go around my electorate—the community has suffered. It has suffered. It understands why we've had to lock down, but week after week has wrought enormous damage. 
I fear that whatever this Government is trying to do, it is not going to be enough, not because of the amounts of money—they are scary amounts of money; eye-watering amounts of money—and the fact that it will take generations to pay off. The problem is that it's not well structured or focused, and we only need to think of the $50 million package the Government announced—a slush fund in my mind—because there is no clarity around how it's being spent. 
There are two, if you will, broad examples coming out of my electorate where people are definitely struggling. Certainly, in businesses, and that will be no surprise to anyone in this House. Businesses are struggling. You cannot stop an economy for almost nine weeks and not expect businesses to be incredibly damaged, and simply giving them cheap debt is not a solution. The wage subsidy has been, I would say, excellent for the workers, but that does not directly assist the business. Put relatively simply but, I would suggest, accurately, it's all well and good to pay someone a wage subsidy, but you want them to have a job at the end, and I don't think the Government has focused on that sufficiently. 
Certainly around my electorate, when I think of Tamaki Drive, it's driven a lot by hospitality. Those cafes and restaurants continue to struggle with what have, basically, become rather arbitrary rules. It's quite possible, it turns out, for thousands of people to gather in central Auckland and protest together—for good reason—but, up to a few days ago, you couldn't have more than 10 people sitting together properly in a restaurant. It's all become rather arbitrary. 
Need I point out as well the outright discrimination by the Government against people of faith and religion. It's the fact that, again, you could protest, you could play sport, and you could go to strip clubs and restaurants, but you couldn't actually gather for your bar mitzvah or the mosque or churches. It's been absolutely ludicrous, and I feel we're continuing in this line, in some ways, to be puppets pulled by strings around all these continued levels and discussions and rules. 
You can't walk down the street without having to see signs about kindness and calmness. There are signs on the street telling me to keep left; in fact, even in this building, there are signs on every stairwell telling me how to walk up some stairs. We're beginning to live in some bizarre dystopian little world, and it needs to stop. It is simply a form of propaganda, and it's just completely unnecessary. 
I've been calling for a while for us to return to normal on the fundamental principle that New Zealanders are smart, intelligent people. We know how to manage our lives and we've had enough of the Government constantly telling us how to do this. As I said at the start, the left, in particular, love a crisis because it allows them to justify getting into every aspect of our lives. 
Speaking of getting into our lives, I want to touch very quickly on social housing. The Government's made enormous promises. They've told us today, in fact, in a select committee that they are absolutely confident that they will build 3,200 new houses in the next year—just State houses. None of them are going to bought or leased. These are completely totally new builds. I just want to clarify and put that on the record today, because I am telling you now that in about nine or 12 months, we will be going to the Minister of Housing and wanting to see very clearly that 3,200 new homes are going to be built. 
As I was pointing out, we already have seen the huge failure that is KiwiBuild, but also we know the Government promised in the last year to build 1,600 new houses and it failed. The Government was only able to build 1,400. Now, I don't want to take away from it. That's good—1,400 is good in itself—but that's not the 1,600, and now the Government's doubled its target. So it's thrown a lot of money around and an incredible amount of rhetoric, but can it deliver? I'm going to make my own little statement here: no, they won't. They won't deliver, and it'll be our role to keep them on track. 
I also want to jump back into my electorate—and I'm bouncing around here a bit—around our businesses, particularly around the enormous cuts which the Auckland Council has announced in my area. First and foremost, it's putting ratepayers in a terrible position of choosing between rate increases or having their projects cut. That's actually quite an unfair choice. It's a form of blackmail, if you will. But, really importantly—and it's my pitch, if I would, to the Government—they have talked about shovel-ready projects. I really encourage Government to announce those quickly and/or provide the billions of dollars promised to the council. A number of the private businesses who help our infrastructure—it doesn't matter if it's the water to the roads—need certainty. They need certainty. We cannot have what is a boom and bust dynamic, with that being that councils cut the services, the private contractors are cut, workers are lost, and then, let's say, in three months' time, the money pops up and those businesses are trying to re-form. It's not going to work. So I encourage Government there. 
Look, in my final thoughts, actually, I want to turn more into the foreign affairs space and to customs, another set of portfolios or interests. In the customs space, I'm disappointed to see that the Budget had, effectively, no new money—no new money. The singular primary vector of coronavirus is through our border. One would think the Government might have just put a few more dollars into that space to allow the Customs Service to do the excellent job that they already do. 
My last point's around foreign affairs. We have seen more money there, but I would encourage the Government to speak more loudly, particularly about what's happening in Hong Kong. Today, in something that's never happened before, myself and three other foreign affairs chairs from around the world have signed a joint letter to the United Nations and to our respective Prime Ministers. So that's Tom Tugendhat from the United Kingdom, David Fawcett from Australia, Michael Levitt from Canada, and myself. It's a joint letter to the UN Secretary-General, calling on the UN to put in a special envoy to Hong Kong. What is happening there under the auspices of the Chinese Communist Party is an affront to democratic principles, and our countries must stand up strongly against that. We have also—all four of us—written to our respective Prime Ministers, asking that they add their voices with a special session of the United Nations to call for that envoy. 
I implore the Government, the Prime Minister, and the Minister of Foreign Affairs to speak up clearly. If democracy matters, it matters not just in New Zealand but around the world, and I for one will continue, in my role as a member of Parliament, to speak up for the importance of freedoms and rights around the world. Again, I just want to put on record that I am very proud—in a sense, this is the first time that I know that this has happened—that four chairs of foreign affairs committees have united together and spoken with one voice. On that, I think I might end my contribution. 





Hon KELVIN DAVIS (Minister for Māori Crown Relations: Te Arawhiti): Tēnā koe, Mr Speaker. Before I get to the substance of what I'm going to talk about, I'd just like to address some of the discussion points that Simon O'Connor, the member who just took his seat, raised: 92 percent of the country agree with the approach that the Government has taken to dealing with COVID, so he's obviously in the 8 percent that disagree, and he speaks about the Government's response to COVID-19 with a degree of sadness or concern. It's almost like he was wanting our approach to be less effective than it was and that more people would get it. 
We know from projections that we were looking down the barrel of maybe 3,000 deaths in New Zealand if we didn't go hard and we didn't go fast—as we did—and countries around the world are only congratulating New Zealand on the approach we have taken. We've now had 12 days in a row without any new cases of COVID-19, and we need to be patting ourselves on the back and saying thank you to the team of 5 million people who have contributed to that. But what we're hearing from the member who's just spoken is that he would have preferred that we relaxed our approach and, potentially, risked us going back up the alert levels, which, of course, is the worst thing that could possibly happen to New Zealand and the economy. 
So we have taken steps to make sure that we have protected New Zealand and New Zealanders. Our best economic approach was our strong health approach, and I think that the National Party just need to tone down their opposition to the way that we've approached this, because it has had the best impact economically for New Zealand as well as health-wise. 
We've heard all the stories about those people who lost loved ones during the lockdowns and how difficult it was for them to mourn and grieve, not being able to attend their funerals. Now, just imagine if there had been those 3,000 COVID-19 deaths, and there would be 3,000 more whānau, 3,000 more families, potentially, who could be affected by that and could be grieving by themselves. My cousin, in fact, in the early days of lockdown, at level 4, lost his mother. Because he's a grave digger at our marae, he was one that had to dig her grave, and just a handful of them buried our auntie. It sounds like members opposite are almost disappointed that the situation wasn't worse, but I hope that's not the case. 
This Budget delivered $900 million for Māori. Now, I have to admit that in the Māori caucus, while we're happy that $900 million is a lot of money, we're disappointed we couldn't—for the first time—get to the billion-dollar mark for Māoridom. It sends a signal to Māori that this Government value Māori and we value the relationship we have, and it shows our commitment to continuing to work with Māori to make our country better for everyone. 
Now, gone are the days of previous Budgets under the previous Government, where the National Government would under-invest in Māori. I recall in one of the last Budgets that they put out that there was some scheme where they would have a van driving around the Waiariki electorate. The member for Waiariki at the time was a member of the confidence and supply partners to the previous Government. It was to drive around the Waiariki dispensing—I don't know; I'm not quite sure what it was meant to dispense—Disprins, Panadols. It was meant to be there as a health response for Māori health. It would have been ineffective and it didn't get off the ground, but that is an example of what the previous Government did. They just paid and walked away—pay Māori, walk away. 
Now, one of the things that I'm most proud of is the $200 million we got for the kōhanga reo, but it's actually not the $200 million that I'm most proud about; it's the relationship that we have created between the kōhanga reo and the Crown after a decade of neglect. Now, under the previous Government, the kōhanga reo didn't get a bean, they didn't get an audience with Ministers—they were left out in the cold—and, as a result, Te Reo Māori education for our youngest babies was absolutely neglected. The first thing when I spoke to Te Kōhanga Reo National Trust when I became the Associate Minister, was I sat down and said that I am committed to kōhanga reo. I grew up in a monolingual home, not being able to speak Te Reo Māori, and I still remember the shame of going on to our marae and not understanding what was going on, and I don't want any other Māori child to grow up in that same situation that I grew up in. So I expressed then my commitment to work with the kōhanga reo to make sure that all Māori children, if they wish, can have the opportunity to grow up speaking Te Reo Māori. 
We had to work hard, first of all, on just the relationship. I said to them that when we work on the relationship, then we can start talking about their aspirations for the next 30 or 40 years and we can put those aspirations into a plan, and we can start to address those aspirations over time. Last year, in last year's Budget, we got them $32 million and we said that that's a start. This year, we managed to get them $200 million. Now, $232 million in two years is still just the start. We are still committed to that relationship with kōhanga reo and to Māori education. 
Now, there was another $200 million that went towards Māori education as well, and that was going towards other parts of the education system. One of them was $50 million going towards working with whānau. Now, for years and years, we've invested in the principals and schools and the boards of trustees and teachers with professional development, but there is one component of the education system that's been consistently neglected, and that's the relationship between whānau and the education system. So we've put $50 million in there to help Māori whānau to engage with the education system and to be demanding consumers. 
Te Ahu o te Reo is our programme. We started four pilots last year, and those pilots were to help teachers to integrate Te Reo Māori throughout their curriculum. Now, I went to the pōwhiri for one of the cohorts up in Ōtaki, and when I got there I saw a whole heap of really shy people participating in this pōwhiri quite to the side, very quietly, and I thought, "Oh my gosh, what's going to happen here? Is this going to be a success?", because these people, very few of them who were Māori, seemed to be lost. Roll forward two or three months later, when they graduated and I was waiting outside, I could hear this singing coming from inside the hall where we had the graduation. I said to the organiser when he came out to greet me, "Which group did you bring in for the pōwhiri?" He said, "No, that's not a kapa haka group. That is the cohort of people, of teachers and educators, who participated and who turned up two or three months earlier at that pōwhiri." 
Such was the success of that professional development that teachers who previously had had very little, if any, exposure to Te Reo Māori were engaging with me in Te Reo Māori after the pōwhiri. It was quite an astounding success. Like I said, very few were Māori—70 percent were non-Māori. Such is the success, now we're looking to expand Te Ahu o te Reo Māori so that more and more teachers will be able to engage in and integrate Te Reo Māori into their classrooms by 2025, so that all Māori students, regardless of whether they're in mainstream or are bilingual, will be able to engage with their culture. 
We've also launched Te Kawa Matakura this year. We launched it up in Tai Tokerau at Waitangi during the Waitangi week. Te Kawa Matakura is a leadership programme for Māori. What it does is it is brings in the old-time learning that schools don't teach. It is growing our Māori leadership, and they leave that programme with a degree. 
We're also investing $14.6 million to increase Te Reo Māori curriculum resources. That's because there's been a dearth ever since I was teaching. When I was a principal, I always said that we needed Te Reo Māori resources to support the curriculum and the programme, and it's great to go from being a teacher and a principal saying, "I wish we could be able to do these things." to now being the Associate Minister and actually making these things happen. 
But what's great—just to start to wind up—is that the $900 million, again, is just the start. We'll have many more Budgets in the coming years to grow on that and build on that so that our people know that we've got all these Māori Ministers and we've got a ton of Māori MPs who will become Ministers in their time, who are going to continue to fight the good fight for our Māori people. As I said, gone are the days when it's acceptable for National Governments to just pay and walk away from Māori. Those days are gone. Those Governments are gone, and good riddance to them. Kia ora. 





Hon TIM MACINDOE (National—Hamilton West): Kia ora e Te Mana Whakawā. Let me assure the Hon Kelvin Davis, the Minister who has just resumed his seat, that the National Party has never walked away from Māori. In fact, Māori have achieved more of real substance under National Governments than they have under Governments led by his party over decades in this country. 
This has been a year like no other in our lifetime. Equally, Budget 2020 was a Budget like no other that any of us can remember. I do actually feel some sympathy for the Minister of Finance and his officials, because whatever work had been done up to the beginning of March will largely have gone out the window, given the events that followed in the weeks immediately afterwards. So the document that was presented here in this House on 14 May was really more of a fiscal update than a detailed Budget. Cobbled together in a matter of weeks and with circumstances changing daily, it is understandable that it was light on detail and left so many questions unanswered. But the Government now needs to show much greater understanding of what this country needs in order for us to rebuild and to save shattered livelihoods. 
This, of course, was our first COVID Budget, and every foreseeable Budget in the years ahead will have COVID recovery as its dominant theme. So I want to acknowledge again those whose lives have been upended by COVID, because, as I mentioned, their livelihoods are now at risk as jobs are being lost, as businesses are going under, as export markets have been put at risk, as our tourism sector has taken such a hit, and so it goes on. That has to be the focus of any Budget. Sadly, from the current Government, we have not been hearing enough about investing in initiatives that will turn those very serious challenges around. They must be the focus of all future Budgets. 
Most of those who died of or, in some cases, with COVID in New Zealand were older citizens, and so in my capacity as National's spokesperson for seniors, I'd like to send my aroha and my condolences to their grieving families. I also want to acknowledge and thank the New Zealand Aged Care Association and all the wonderful staff who work in the many retirement villages, care facilities, and similar institutions around the country looking after so many of our senior citizens. I know that at least one of those very special New Zealanders who they look after is watching this afternoon. She is a constituent of the member for Tāmaki and I send her my love. 
Simon O'Connor: Who's her favourite MP? 
Hon TIM MACINDOE: Ha! Her favourite MP is probably Mr O'Connor; I'd like to think that her son might come in a close second. But thank you, Mr O'Connor, for asking. 
Mr O'Connor was one of several National colleagues who have made very fine speeches in this House this afternoon. Their analysis of the Budget has been thoughtful and, especially, their understanding of the economic and social challenges that our country now faces has shown that the National Party is a team match-fit, full of talent, and ready to govern, and we look forward to having the opportunity to present our alternative vision to the country in just a few weeks from now, as we face the general election on 19 September. 
We will be highlighting how disappointing this Budget was in failing to provide the leadership and a clear outline of our choices and what our priorities should be in a post-COVID world. Never has the work of our farmers and our other primary producers been more important, yet, currently, they have a naive Government that continues to believe they should be put at a competitive disadvantage with less efficient producers of the healthy food the world so desperately needs and which New Zealand produces so well. We must not kneecap our farmers and our primary productive sector. 
The current Government, or Ministers within it, have supposedly set aside for themselves $20 billion for unspecified purposes, so that amounts to unprecedented fiscal irresponsibility. No one doubts that money must be spent, and a lot of it, but it's money we don't have. So it will need to be repaid for decades by our children and their children, and I do not want to saddle my descendants or the descendants of any other New Zealanders with a bill that is literally going to make life miserable for so many of them. So the money that the Government is setting aside, and a future Government will also set aside, must be spent wisely and in ways that will stimulate jobs growth, promote our economic recovery, and save livelihoods. 
Gareth Hughes asked in his contribution—which was one of the better ones from the other side—about half an hour ago, how does the Budget help people. Of course it's a fair question, because Budgets are always about people. That's what our primary focus should be, as any politician. But, unfortunately, it's a question that people are still asking now, three weeks after the Budget was delivered. I said that Governments must spend taxpayers' money responsibly, and not say that they'll put aside $20 billion that we don't have and then think later about what they will do with it every time they need to scratch a pre-election itch. Make no mistake, it's all about buying votes. That is appalling pork-barrel politics of the type we have seen far too often in the last three years, particularly with the shameful $3 billion slush fund, which looked dreadful at the time and yet now is small beer by comparison with what they're doing. 
Well, we're not playing Monopoly—this is not a game. People's livelihoods are at risk. Hundreds of thousands of them are losing their jobs this year—37,500 of them lost their jobs in April alone—and they need a Government that backs them to get back into work as soon as possible. We must move into alert level 1 right now, because every day that we fail to do that, more jobs are being lost, more businesses are at risk, and more people are suffering, and, frankly, there is no longer sufficient reason to justify that. 
That's why Nationals' JobStart policy that was announced by our new leader, Todd Muller—who will be a fine Prime Minister of this country—was the right approach. It has the potential to assist many businesses to have the confidence to invest in staff and start rebuilding. It's why we in the National Party have offered to work with the Government to share our policy, to cooperate with them, and to implement it as soon as possible—not to wait until we have an opportunity to do so after the election—and it's indicative of more positive initiatives that our party will be introducing in the weeks and months ahead. 
Well, I want to make it very clear in the little time that I've got remaining that because Budgets are about people, we will continue to work as constructively as we can with other parties. We are all in this together—we said that when we went into the lockdown—and we're all in it now. But they must ensure that they are willing to respond appropriately to initiatives, and not give the trite, facile answers that we had from the Prime Minister when asked questions about her approach to dealing with the National Party on the JobStart programme. 
Could I, in just the short time remaining, acknowledge the recipients of the Queen's Birthday honours, because they're people who have often contributed hugely to economic growth in our country. I want to acknowledge in particular the founder of Hamilton Zoo, founded just over 50 years ago. Murray Powell, who was also a pioneer in the deer industry of this country and who has been one of the great conservators of wildlife, not only launched Hamilton's fine zoo, which is one of the best in the Southern Hemisphere, but, in 1976, generously gifted it to the nation. Dr—now Dame—Karen Poutasi, a very distinguished public servant, is now doing a wonderful job as the commissioner for the Waikato District Health Board. I congratulate Murray and Dame Karen on their awards—both well deserved. 
Could I finally pay tribute to Ismail Gamadid, who was the former president of the Waikato Muslim Association and the Waikato Refugee Forum. Sadly, he died of COVID in Mogadishu about 10 days ago. He had returned there, after 20 years of living in Hamilton, to take up a ministerial post in his native State. He did a fine job in our area of promoting race relations and helping new settlers in our region to settle in. I was proud—
ASSISTANT SPEAKER (Adrian Rurawhe): Order! The member's time has expired. 





Hon CHRIS HIPKINS (Leader of the House): I move, That this debate be now adjourned. 
Motion agreed to. 





CLIMATE CHANGE RESPONSE (EMISSIONS TRADING REFORM) AMENDMENT BILL
In Committee
CHAIRPERSON (Adrian Rurawhe): I remind members that the House has agreed to trial the removal of the four-call limit in the committee stage. I therefore encourage you to keep your contributions focused—five minutes is not a target—and relevant to promote good interaction with the Minister in the chair. We have the ability, then, to take short calls and have a series of questions and answers between members and the Minister. You can be confident that you will get a number of short calls. Can I just add also that if the member on their feet yields to the Minister, the member can be assured they will get the next call. Can I suggest the Minister can come closer to the officials, if that would be easier? I think it would be.





MATT DOOCEY (Junior Whip—National): I seek leave of the committee that the Climate Change Response (Emissions Trading Reform) Amendment Bill and the Mental Health and Wellbeing Commission Bill be taken as one debate respectively.
CHAIRPERSON (Adrian Rurawhe): Leave is sought for that purpose. Is there any objection? There appears to be none. It shall be so. 





Parts 1 and 2, Schedules 2 to 7, and clauses 1 to 3
Hon SCOTT SIMPSON (National—Coromandel): I yield to the Minister.
Hon James Shaw: I seek leave for all provisions to be taken as one debate, with the questions to be put separately.
Hon Members: We've already done that.
Hon James Shaw: Oh, I beg your pardon.
Hon SCOTT SIMPSON: Sorry, Mr Chair, I was yielding to the Minister. We've got through the procedural stuff and we're OK to go? OK. Good.
Look, thank you, Mr Chair. This is a complicated, multifaceted, detailed piece of legislation. The bill itself—the document that's sitting on the Table—runs to in excess of 400 pages, and so as the debate on the specific clauses and sections of the bill pursues this afternoon, I and my colleagues will want to ask the Minister a number of questions about the practical application of this piece of legislation. And, in so doing, we are very cognisant on this side that, actually, this is the "doing" piece of the climate change reform package that the Government has introduced. The first portion of the legislation was the zero carbon Act, and that, essentially, set up the framework for the establishment of a commission and the various targets around time frames and gases for reduction. But this emissions trading scheme piece of legislation is the one that actually provides the Minister of the day with the levers to have an impact on the day-to-day lives of New Zealanders through a pricing mechanism that is our emissions trading scheme. And, effectively, that's exactly what it is: it's a piece of statute that is designed to, effectively, reward good behaviour and, effectively, punish poor behaviour in terms of carbon emissions.
So that then leads to a whole range of consequential impacts, not the least of which is the situation regarding the potential for much more exotic afforestation of the countryside than many people feel comfortable with. It's on that point, at this stage in the debate, that I'm keen to know from the Minister in the chair: does he feel that this legislation actually poses a risk to primary production, particularly our export-led primary producers—in that, if the carbon price is increased, as his announcement yesterday indicates that it will be, with the cap moving to $35 a tonne, will that actually provide an incentive for further afforestation and, potentially, create an environment where it's financially viable and profitable for carbon farmers to plant pine trees on land that, up till now, has been producing grass and the associated primary products that come from sheep and beef and cattle farming?
So we are, on this side, concerned that, in the legislation, there doesn't appear to be sufficient, robust ability to prevent mass afforestation, and that's been an issue that has been of huge concern to people in rural communities and provincial communities who are worried that, in order to have this situation take place, it will be their communities that are, effectively, depopulated and denuded in terms of effective, functioning communities. And so I am keen to have that answer from the Minister. Where is it in this piece of legislation? Where is the mechanism that prevents mass afforestation in a way that can give assurance to rural and provincial communities that land that is currently in pastoral, productive business won't be just planted in forests. We also want to have—and I'll take another call later on, Mr Chair. I'm interested to know about the Government's general view on offsets per se. But, in the meantime, just initially keen to have an indication from the Minister on the point I raised.





Hon JAMES SHAW (Minister for Climate Change): Thank you. I thank the member Scott Simpson for his question. So in response to the member's question about where in the legislation is the mechanism to limit the risk of mass afforestation of productive farmland: this issue was canvased during the debates around the zero carbon bill last year. Of course, the zero carbon bill was an amendment to the Climate Change Response Act 2002, and this bill is also an amendment to the Climate Change Response Act 2002. The member's party actually won a concession during the zero carbon legislation, which is that it's a mandatory consideration for the Climate Change Commission when considering its emissions budgeting processes, and a similar obligation on the Minister and the Government when responding to the advice of the commission, to consider the implications of land-use change for communities and the wider economy. So that was actually built into that legislation.
As the member has said, this legislation here is where the rubber hits the road—metaphorically, obviously—in that those considerations, at the high level that the commission has to consider in those 5-year emissions budgets, and then emissions trading scheme settings and so on, filter down to this piece of legislation. So that concern is built into the legislation already as a result of that.
In addition, I wanted to say that I understand the concerns of rural communities. There has been a 0.25 percent—i.e., a quarter of 1 percent afforestation of land in beef and lamb territory, for example, at the moment. I just want to compare that to historical trends. So planting rates actually peaked in 1994—and I see the Hon David Carter's in the—
Rt Hon David Carter: Wonderful year.
Hon JAMES SHAW: —Chamber, and he may remember this—when 98,000 hectares of land were planted in forests. Throughout the 1990s—during which time, of course, there was a National Government through pretty much all of the 1990s—a total of 554,000 hectares were planted. So if you compare that to today, there are only 13,300 hectares per year—so considerably lower than the afforestation rates that took place during the 1990s. What we've anticipated is that the forestry changes to this bill will result in an increase to 23,000 hectares a year, which is still, again, substantially lower than the afforestation rates during the 1990s.
The other thing, of course, is that there has been a considerable deforestation rate. So after the planting in the 1990s, which was considerably higher than it is today, there was considerable deforestation rates. So there have been, for example, 70,000 hectares deforested just in the last 10 years alone, and deforestation has outstripped afforestation over the course of the last two decades. So, for example, in 2017 we had 6,000 new hectares of planting but 9,000 hectares of deforestation. So on a net basis, actually, the rates of deforestation have outstripped afforestation historically.
I also just want to be mindful of the fact that, actually, forestry itself has an economic value. There are 35,000 people employed in the forestry and wood-processing sector. I understand that red meat employs about 66,500, so roughly twice as many people as are employed in forestry, but on five times as much land. So the forestry sector actually employs more people per hectare than the red meat sector. Forestry is a $7 billion export revenue earner. So you need to sort of balance out the set of considerations.
I completely understand the concerns, and I also know that the lived experience doesn't necessarily match the data, right? So when someone, let's say for example, in Wairoa, gets up in the morning where there has been sheep out on the fields and then they kind of get up and they see huge amounts of forestry, it feels like the whole world has changed. It hasn't, but I can understand that their experience may be such.





Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Chair. I've got a couple of questions for the Minister for Climate Change, thank you very much, but before I do pose those questions, just to confirm that National views this Climate Change Response (Emissions Trading Reform) Amendment Bill to be the "doing" part of the climate change response. National did support the zero carbon Act and, overall, supports where New Zealand is going, towards a lower carbon economy, but we do have several misgivings, and I'll use this contribution to open with a couple of questions.
I did have my two questions set, but the Minister just made a comment that I would like some further explanation on, and that was that forestry employs more people per hectare compared to the red meat sector. The reason I'm interested in that is because that is not my perception, although I'm sure the Minister has plenty of information to back up that claim, and I'm looking forward to him expanding on why he says that—perfectly prepared to accept his explanation. The only comment I would make around that assertion is that it may well be true that the forestry sector may well employ more people per hectare than the red meat sector, but where are those people? Where do those people live? There isn't a sawmill on every corner, and yet there is a farm on arguably ever corner of rural New Zealand, and so I am interested. Because the demographics of the spread of workers, the workforce, does matter in New Zealand, doesn't it? We're a country of several large cities, but many, many small rural communities, and those rural communities are supported by the red meat sector. That forms one of our objections to this bill: that the impact of this climate change bill at this time will mean that small communities will pay an economic penalty because of the timing of this bill in the post-COVID world. So I am interested in the Minister's greater response to that question.
My second question, again, is a matter of timing, and again it is in the context of our post-COVID environment, which, for the primary industries and for the red meat sector and, particularly, for the dairy sector, but also others, is that one of the requirements in this bill is that there will be mandatory reporting obligations on livestock emissions, and they will apply at farm level for emissions from the year beginning 1 January 2024. Now, 1 January 2024 is not that far off in fact. So 1 January 2024, if you work backwards from that, this bill will be enacted—let's say this bill will become law in the latter half of 2020. The Parliament will pause for the general election. We will resume, potentially, in November; break for Christmas. Suddenly we're in 2021 and that leaves two years until the reporting obligations come into force at farm level. So, when I get to the real nub of my question—it is given a runway, if you like, of around two years—what is it going to take, what support is going to be given to the red meat sector to be able to comply with those obligations?
Look, I'm sorry I came late to this bill; I only joined the committee in late February. Are all the regulations in place, or are they—like a number of other measures in this bill—still to be developed; in which case, do we have to shorten that runway even more? Thank you.





Hon JAMES SHAW (Minister for Climate Change): I'd just like to start by saying that the member has actually got quite a good handle on it, given the complexity of it and the time that she's had available. There are a number of questions in there. I can give a partial answer on the locations of forestry jobs. I've got them for forestry, but I don't have them for the red meat sector, so it's not easy to compare. The 35,000 people employed in the forestry and wood-processing sector: there's 7,500 in tree planting, harvesting, and forest management; 2,500 in log transport and at ports; and 25,000 in wood-processing. So those wood-processing facilities, obviously, are located in rural towns around New Zealand. I've got 66,400 people working in the red meat sector, and, obviously, some of those would be on farm in the same way that, you know, some of the forestry sectors are out on the land, but also a lot of them would be in processing also in rural communities and small towns. But I don't have the distribution within that 66,000, so I'm sorry about that.
In answer to your second question, you had questions around the time lines for mandatory reporting at farm level. There are a few things I'd like to say about that. First of all, that time frame was actually worked out with the agricultural sector itself. The member may remember that, in about September of last year, we entered into an accord with the agricultural sector called He Waka Eke Noa, which is a process which is essentially a partnership between the Government and the large sector representative bodies to develop a farm level measurement, management, and pricing system for farm level emissions of biogenic methane, in particular. So those time frames actually came as a result of that conversation. The sector has said, "Look, it's challenging, but it's doable." And the feedback that we've had from them is they're really keen to show New Zealand that they can do it because they are aware that they are the only sector that isn't in the emissions trading scheme at the moment—and, of course, quite keen not to be part of the emissions trading scheme. The emissions trading scheme is really most effectively designed for industrial sectors, and the whole idea behind the He Waka Eke Noa work stream is that it will develop, essentially, a parallel system, but one that is much more suited for the agricultural sector. So we're comfortable with that because we launched that with the sector itself.
The other thing that I'd like to say about that is that we're not starting from scratch. So, for example, Fonterra are already doing farm plans for virtually all of their farms. Synlait are doing it for all of theirs. Horticulture New Zealand are doing it with all of their planters around the country. In fact, the previous Government had a significant investment programme stretching back 10 years for agricultural greenhouse gas research, which tens of millions of dollars has gone into and which has started to yield some results.
So I'm pretty confident that with the investment that's historically gone in both from the public sector, and also from the private sector over the course of the last decade and the commitment that the sector itself has made to those time lines, they are doable.





Hon JACQUI DEAN (National—Waitaki): Thank you to the Minister for Climate Change for providing those answers. I just have a further question around the mandatory reporting obligations and those time lines. Thank you for explaining to the House that the industry have worked together with the Minister to develop strategies for meeting their obligations. I'm interested to know whether that work was completed in its entirety before the lockdown in the middle of March or whether that work was completed subsequent to the COVID-19 lockdown. 
Together with that, I'm interested to know from the Minister: what are his projections for how long it is going to take the red meat industry to recover from the COVID-19 lockdown and its impacts? I'm talking about things like the bottleneck that we experienced at processing plants during level 4 and, to a certain extent, level 3 and the subsequent impacts on farming operations from having to hold stock, stock losing condition, having to buy an extra feed, and the subsequent feed budgeting into the spring and then on to the summer, all of which, I'm sure the Minister will be aware, will have an impact on farmers' work programmes, their ability to rise to new challenges, and just simply getting through the day. So I want to know that the Minister has completed this work with the industry bodies, taking COVID-19 into account, because my very rough runway for compliance of two years could very quickly shorten up to 18 months to six months.





Hon JAMES SHAW (Minister for Climate Change): Thank you. So the time line is such that the roll-out doesn't happen on farms until 2023, 2024, 2025. The work stream that we set up with the industry is, essentially, an R & D function—that would be one way to think about it—where we're pulling together all of these different pieces of work that have been done by both Crown research institutes and the sector bodies and so on over time to try and knit those together into a sort of coherent whole. But the point of having a reporting deadline is to actually get those systems out on to farms by that time. So if you think about it from the lens that the member was just referring to, which is what's happening at the farm level today, then by the time we're actually rolling this out in 2023, 2024, 2025—assuming that there's no additional outbreaks and so on, but actually the present crisis will have well passed by the time it gets to that level.
There is a steering group for that work programme, which includes, from memory, Beef and Lamb New Zealand, DairyNZ, Fonterra, Horticulture New Zealand, Federation of Māori Authorities, an iwi representative, and representatives from the Ministry for Primary Industries and the Ministry for the Environment, and they have been meeting virtually—as have we all—over the course of the last couple of months, and I haven't been advised by them that they foresee any significant delay in that work programme as a result of COVID-19. I think that's probably a function of the circumstances of the timing where we are. You can imagine, for example, if the pandemic outbreak had occurred in, say, 2023, right at the exact point that we were trying to roll this out on farm, that it would cause considerable disruption to our ability to do that, but it doesn't at the moment. That also, by the way, I have to say, doesn't relate to the bill, but rather to that work programme.





Hon JACQUI DEAN (National—Waitaki): Thank you to the Minister for Climate Change for providing that explanation. It didn't directly address the question I posed, which was: given that farming operations have been impacted by COVID-19 and farming operations don't just suddenly recover all by themselves—because they have to make planting decisions for the spring and they have to make sure they have enough feed; they have to have feed on the lambing paddock. All of those considerations have got to be in the minds of farmers. 
I want to thank the Minister for the explanation of the work that is being done, but what allowance will there be in this law if farmers and farming groups cannot comply with their obligations by 21 January 2024? How is the Minister going to deal with the "what if"? What if the farming community, farming sector, cannot comply?





Hon JAMES SHAW (Minister for Climate Change): The Climate Change Commission has the ability to review progress and to suggest any changes to the programme. But, again, I think, given where we are in terms of the pandemic today, by the time we get to 2024 it won't be a problem. Certainly no one in the sector has suggested to me that there should be, at this point, any decisions made about deferring or changing the time line for that roll-out based on what's happening today.





ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. I'd just like to start by saying to the Minister that his officials were outstanding at committee. As Mr Simpson mentioned, this was a hefty bill, it was full of detail; frankly, it was really difficult to get our heads around those 400 pages, and the officials that were provided were outstanding, and they put up with some—well, certainly from my point—questions that they may have found a bit trying. But to get our heads around this, we had to ask them.
The Minister, in his speech and many other contributions yesterday, talked about the need for certainty and how this bill was going to bring about certainty. I want to ask some questions around trade-exposed industries and the automatic phase-down of allocations. We heard from submitters in select committee, and it certainly wasn't their view that this bill was bringing certainty. I can't imagine a world in which, until 2050, we're going to not need steel and aluminium and concrete and glass—those things are going to be required, and National always made a provision to allocate trading units to trade-exposed industries, like steel and cement and aluminium, so as not to force the closure of those industries and risk thousands of jobs and potentially carbon leakage overseas. Our policy was not to phase out this assistance until other countries—in our region, at least—had introduced a carbon cost, and none have done that as far as I can see. So I want to know what the Minister's thoughts are on that, because we are putting those industries at risk, because the bill phases out support at a rate of 1 percent and then 2 percent and then 3 percent. 
The other thing that I'd like to ask the Minister is that the bill makes this regulation power to vary the phase-out date after 2030, but only if it's recommended by the Climate Change Commission. Now, it's always been our position that the commission should have recommendation powers only, and I'd just be interested in the Minister's view on that. We heard from New Zealand Steel and we heard from O-I Glass and a number of other trade-exposed industries, and they talked about the lack of certainty and the lack of any technology coming on the horizon that's going to allow them to meet these targets, and so they are facing significant costs in the future if the allocation of units is phased down, and they certainly didn't think this bill brought them certainty.
The other question I've got for the Minister—we're in a new world. We've potentially got 300,000 Kiwis out of a job in the next year or so. Hopefully, it's not that big, but that's what the Ministry of Social Development are planning for. They're losing their incomes, they're potentially losing their homes, we are potentially in the worst economic crisis in living memory, and this bill—no one can argue—will increase the cost of living to all New Zealanders. Now, I know in the zero carbon bill, because I sat in on that bill, that there is a mechanism in that bill, when there are events like this, for the Climate Change Commission to alter its views on things, and for the Government as well.
But what I want to specifically ask the Minister is that yesterday he put out a press release and he's announcing, under his regulation-making powers, caps on the emissions trading scheme of 160 million tonnes of CO2—but this doesn't mean anything to New Zealanders. What I want to know is: what does this do to the price of fuel? What does it do to the price of carbon per tonne? What is this going to do for the basket of groceries for New Zealanders? Given that we're in these—as everyone always says—unprecedented times, has he thought about the effects of COVID-19 on his press release yesterday and what that means for everyday New Zealanders in a post-COVID world? And, like under the zero carbon bill, is there anything in this bill, or under these regulation-making powers, that he should think about when imposing caps under those regulation-making powers? Thank you, Mr Chair.





Hon JAMES SHAW (Minister for Climate Change): I thank the member for her questions. Just in relation to that very last question, remember that this is an amendment to the same piece of legislation as the zero carbon bill, and therefore all of the mandatory considerations that we built into the zero carbon bill also apply here, because this, essentially, is subservient to that higher-level framework that we agreed last year. So I think that that's built in. But there are two quite complex groups of questions in there: one around the energy-intensive trade-exposed firms, which I have given considerable consideration to over the past 2½ years, and also around household costs and impact on households. 
So I'll just say, in relation to the energy-intensive trade-exposed sectors and businesses, the industrial allocation—if you go back to 2008 and 2009 when the emissions trading scheme was first introduced—was actually supposed to phase out, starting then at a much faster rate than what is being proposed here. And in response to the global financial crisis and the Christchurch earthquake, the Government at the time cancelled that phase-out, and that has put us in a position where essentially no progress has been made in the intervening 12 years. 
So this bill has actually been five years in the making. It was the result of a review that was kicked off, I think, by Tim Groser when he was in the climate change role, recognising that, actually, at the settings at the time, we weren't actually making the kind of progress that we needed to make. So the process of working through the phase-out rates for industrial allocation has been signposted with those companies regularly and they've been consulted many, many times over, over the course of the five years, not just in the recent weeks as we've been deliberating on the bill, but actually in the design of it as we went through. 
So I have to say I'm sceptical about claims that it's unpredictable. The whole point is predictability, because we're actually saying over a 30-year time horizon, here is the phase-out rate. Up until this point, all it's saying is, "Well, there's a kind of sword of Damocles, which is we may phase these things out at some point, but we're not going to give you the ability to plan for that because we're not actually signposting in advance what it is."; whereas what this bill does is it actually signposts over a three-decade time horizon what that looks like. 
Second of all, the claim that there are no new technologies emerging is actually also not borne out by the evidence. So in the past sort of three or four years, there have been significant innovations on zero emission production of both steel and aluminium using hydrogen, and those technologies—in fact, Apple and Alcoa entered into a $2 billion contract. I think it was Alcoa or Alcan that entered into a $2 billion contract to set up the world's first hydrogen-based zero emission aluminium smelter in the northern hemisphere. So that new technology is there. Clearly, it's not here yet, but the point is that with the kind of phase-out rate and the length of time that we're giving these businesses, assuming that they decide to stay onshore for, you know, other business reasons, they'll have access to that technology easily within the time available.
To give you a sense of the impact of the cost on those firms, if you take New Zealand Steel, for example, their revenues were $937 million in the year 2019. Their allocation of units—so what we gave them—was valued at $44.6 million, assuming a $25 a tonne carbon price, which is roughly what it's floating at, at the moment, and has been for a while. Their exposure is the equivalent of 1.48 percent of their revenue. If we start the phase-out rate as outlined here, at 1 percent, that equates to 0.49 percent of revenue—so under one half of 1 percent of revenue—and the numbers are lower for aluminium, at 0.34 percent, and for Methanex it's 0.27 percent. So you can see that the impact of what we're suggesting, that 1 percent phase-out rate, is absolutely marginal. And when you consider other costs that they face—for example, fluctuations in currency or fluctuations in electricity price or the argument, of course, that the aluminium smelter constantly has about transmission pricing—those are many, many, many more times more material to this business. [Bell rung] Mr Chair?
CHAIRPERSON (Adrian Rurawhe): James Shaw—the Hon James Shaw, shall we?
Hon JAMES SHAW: You can call me what you like, Mr Chair. 
Hon Member: OK.
Hon JAMES SHAW: Not you; him. Actually, what we're talking about is really small, but it does start to send that price signal and signal a direction. 
The other thing I want to say about industrial allocation is that there is a risk there we're actually over-allocating businesses at the moment. So whilst we say that they get a 90 percent free allocation under the scheme and are only liable for 10 percent of their obligation—we're starting to investigate this; we don't have evidence yet—we think that there is a possibility that at least in some cases, they may be receiving over 90 percent and, in fact, in some cases over 100 percent. In other words, the Government is allocating them more cash value than they are obliged to pay in total. And so the impact of the phase-out should have, if that bears out over the course of the next couple of years, really no impact on their profitability at all. 
The other thing that the member asked was around competing countries. So I'll just refer to China, which is, of course, the world's largest producer of steel and a direct competitor to BlueScope Steel in New Zealand in terms of products available in the New Zealand market. China has seven provincial-level emissions trading schemes operating. They ran those for a number of years, essentially, as an experiment to try and work out what are the optimal settings. They are, I think, from this year, putting in place a nationwide emissions trading scheme. Now, initially, it only applies to the electricity generation sector, i.e., coal-fired power plants, but they're phasing in other sectors at the rate of—I may need to check this, but I understood that it was at the rate of one new sector each year, and that does include steel. So they will be imposing carbon pricing on their steel production as well. The nature of their emissions trading scheme is different to ours, but the point is that there will be a price applied at the margins. 
We've been for many years in quite close contact with the Chinese officials about the design of the schemes, because, of course, everybody is in the same boat in relation to this. Any country that has to produce steel needs to cooperate with other countries that produce steel if there is ever to be any kind of emissions pricing on steel anywhere, whether that's via an emissions trading scheme or via a carbon tax. So I'll leave it at that, at the moment, although I understand the member may have additional questions around industrial allocation and the emissions-intensive trade-exposed firms. 
I'll just bring my comments now to her questions around the impact on households. There is quite a lot of work that's been done on this. This is one of the interesting debates about whether now is the right time to do this? And if you look at the impact the economic crisis has had on petrol prices, I think that retail prices have dropped—again, I'll need to check this—by about 48c a litre over the course of the last few months, because demand has dropped. By comparison, the additional price that would be imposed, let's say, if prices rose to $35 a tonne from the current $25 a tonne—that would impose about a 9c a litre additional cost. You know, prices have fallen 48c per litre, so you can see that, actually, households are still better off in terms of their petrol prices. 
The other thing I want to say about this, of course, is that the whole point is to induce change. So all of the modelling—and this is a source of some frustration to me—assumes no change, and therefore everything only ever appears in the modelling as an increased cost. But, of course, if firms do start to, for example, introduce a biofuel component into the mix of their petrol, then the carbon obligation would go down and, therefore, the cost would go down. If there's no price, then there's no incentive to change and you end up with the same result.





Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. I just want to pick up a little bit on the comments made by my colleague Erica Stanford in relation to the industrial allocation. I want to thank the Minister for his answers to her questions, but there are a couple of matters that I do just want to tease out, if I might. At select committee and in our report, we felt—well, a majority of us felt—that actually there was a greater need for ministerial flexibility when it came to reviewing industrial allocation phase out. The statute that we are considering suggests initially that, if there are to be changes, it should be on the recommendation of the commission—and we don't have any disagreement with that—but, because the number of high-emitting businesses that are allocated industrial allocations is relatively small, some of them have very specialised contributions to make to the New Zealand economy and our way of life.
One of them that came to select committee and really did go into some detail was the New Zealand refinery up north at Marsden Point. And therein lies a real issue, because they told us that they had a special agreement that had been entered into in good faith years and years ago, at the time when the refinery was set up, going back as far as the mid-1960s, to a period of time before the refinery was set up, when actually we imported refined fuels into New Zealand in a finished state. I don't think we would want to, as a country, go back to that. So there's a case in point where the refinery company makes a good, solid contribution in terms of the day-to-day lives that we have—and, yes, over a period of time, one would expect that the reliance that we have as a nation on fossil fuels to provide fuels for transport, for light and heavy vehicles, will diminish. That's fine and dandy. But the Minister, in his answer to my colleague Erica Stanford's question, was quick to point out that the component that was the free allocation cost, if you like, to that business, relative to revenue, was very tiny. But, as a former boss of mine used to often tell me, a sale isn't profit. And, what's more, actually it's the margin; it's the proportion of the impact on the profit and the ability for that entity to trade profitably on an ongoing basis that's, frankly, more important than the revenue number.
And, yes, in recent months, petrol prices at the pump have dropped, but I don't think, even in his wildest imagination, the Minister is expecting that to continue for very long. And, at the current level of $25 a tonne, it's estimated that that portion is about 4c a litre—and if I heard the Minister correctly, he said, at $35, it's going to increase by nine. So is that 13c in total, or is that 9c in total at $35? So I'm keen to know just clarity around that, because $35 a tonne is just the sort of transitional stepping stone, and it's the point at which New Zealanders start to understand the true impact and cost of climate change when it hits their wallet. Of course, when you get, for instance, at $35 a tonne, a 9c a litre impact at the petrol pump, that has a ripple effect through the entire economy. It's not just the price that the consumer pays at the pump; that's the same price that the courier or the freight company delivering tins of spaghetti to the supermarket—and that has a price component that multiples through the economy.
So I'm keen to know just, firstly, about some of those industries that are currently receiving the industrial allocation who play a special part in the very fabric of the New Zealand economy and our way of lives, and how he sees that playing out and the flexibility he sees in this legislation to enable him as Minister to respond to situations as they have occurred. And, for instance, we've seen just in the last month or two, an unexpected huge situation arise, that no one could have rationally foreseen, that requires an ability for ministerial intervention in a nimble, flexible, timely way, if necessary. And, secondly, I'm keen for him just to be a bit more precise about the impact, for instance, of petrol prices at $35 a tonne and also what that might mean beyond petrol prices and for other aspects within our economy.





Hon JAMES SHAW (Minister for Climate Change): Right, so just for the sake of clarity, it's an increase of 3c to 9c, right? My point was to illustrate the fact that during an economic downturn, when you have reduced demand, prices fall—statement of the blindingly obvious. But the point is that, in introducing change now—which is the central argument that the National Party has been making about this legislation—because prices have fallen so much, the cost, actually, is a lot lower. If COVID-19 hadn't continued—
Hon Member: The hurt is lower.
Hon JAMES SHAW: Well, what I'm saying is that, actually, the prices that households are paying for their petrol—same amount of petrol if you're driving around—are considerably lower today than they were three months ago. And that, actually, if COVID-19 hadn't shown up, and, you know, the economy was humming along, and we're at capacity constraints, and all of that kind of stuff, then prices would be higher because of the pressure in the economy, and, therefore, that marginal additional difference would be felt a great deal more at that moment. So I guess what I'm saying is: I dispute the central notion that now is the wrong time because, actually, prices are so much lower right now than they would normally be that you don't notice it. This is the point about a market mechanism, of course, is that it changes depending on the conditions in the market. Carbon prices themselves are lower now because there is less demand for units because, for example, Air New Zealand is flying less than they have, and so their requirements for units have really shrunk. Therefore, prices have come down. And that's a fundamental difference between an emissions trading scheme and a carbon tax, for example. A carbon tax is simply a staged increase over any number of years—just wanted to say something about that.
Second thing, he's asking for ministerial oversight. One of the key things that we were trying to do with the zero carbon bill was to depoliticise the debate. I'm concerned about the idea of reintroducing too much political debate and also, frankly, the ability of organisations and sectors that have got strong lobby groups being able to influence political decisions at their own advantage but, actually, at the disadvantage of other sectors in the economy. I have to say, we've seen a bit of that recently where, you know, people acting in their own self-interests, which is entirely understandable, propose a change to the legislation that would have, perhaps, a catastrophic effect for another sector or, actually, for household prices. So the reason for ensuring that Government acts only on the advice of the commission is a way of guarding against those two things. However, of course, Parliament is supreme, and, as we've seen over the course of the last few weeks, in an emergency, it is possible and entirely understandable for emergency legislation to be introduced if there is a need to do so, and we've got a number of cases of that just recently
Finally, the member asked about the refinery, and the refinery is actually a unique case because they were not—in fact, at the moment, are not—participants in the emissions trading scheme. They entered into a negotiated greenhouse gas agreement in the 1990s with the Government, which was essentially a special arrangement where they made commitments to achieve certain targets, and, in return, they wouldn't come into the emissions trading scheme until a certain point. The member is absolutely correct; they entered into that agreement with certain undertakings. The issue recently, of course, is that, since those undertakings were made, technology and other things have changed. So there was a concern that they were going to be brought in on a different basis from firms that were already in the emissions trading scheme that were receiving industrial allocations. Now, there are a number of concerns about industrial allocation, obviously, but we made the call to say, look, we should honour the agreement that was entered into, regardless of, you know, history since. And also, we should treat them on the same basis that we are treating all of the other emissions-intensive trade-exposed firms that receive an industrial allocation. And that was the certainty that they were looking for, and we gave them that. Now, there will be a review of industrial allocation, but it isn't just going to apply to one company or one sector; it will apply to all equally. So everyone will be treated fairly as we progress through that.
That is quite a slow process, which brings me to the member's next point, which is that revenue and profit are not the same thing. The reason I was using revenue is because I can see revenue. But the nature of profit is not always so easy to discern, particularly when it comes to international companies where, due to the nature of tax arrangements and so on, it is possible for firms to have quite high revenues, but quite low profits in one territory if they think that that forms an advantage. So we've been using revenue, recognising that it's not a perfect measure, but because, you know, we can't look through firms into all of the finer details of their accounts, it's not really possible for us to use profit as a basis of comparison. The other thing, of course, is that you can compare revenue between different companies, but you can't easily compare profits between different companies for the same reason. So revenue is not a perfect measure, I acknowledge that, but it's a more functional measure than using profit in this regard.





Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Chair. I'd just like to thank the Minister for Climate Change. I think he's been very helpful this afternoon in the way that he's responded to questions. If he can carry on that approach—because, as a respected Minister, I think he's actually doing a very good job in the House this afternoon. So if we could carry on that approach, it would be good. 
I've just got a few questions that have arisen from his answers, and the first question is just what we just talked about before about the increase in the petrol price. The Minister said, well, basically, there's been a 48c reduction. Consumers might have a 9c increase or 3c increase, but, in general, they're not going to be too poorly off because they've had a massive reduction. I just want the Minister to answer what it actually means for the average household on their income side though. The reason you've had a 48c reduction in petrol prices is because the world economy stopped. The world economy stopped because of the crisis. So world prices of oil, basically, went to zero—negative, actually. That is not going to last, as the Hon Scott Simpson said—but the impact on households will last because we are going into a recession, if not a depression, and, in that period of time, the most vulnerable households will lose income. 
It's all right talking about the expense side and saying, "Well, they were paying less in fuel.", but they are now facing a situation where they don't have a job. They're now facing a situation, if they did have a job, where it's on reduced hours. And they're now facing a situation, if they did have a two-income family, where they've probably only got a one-income family, if that. So it's all right to say, well, "Hey, you're not going to lose too much on the expense side.", but the reason petrol prices are low is because these people aren't going to have work. They're not going to have the income. 
That's our point. At the very time the most vulnerable people out there will be hurt through a crisis like this—the rich will always find a way of getting around it, but the most vulnerable people will hurt the most out of this crisis. When that price of fuel goes up, they can't avoid it. They just can't avoid those fuel costs. It might be less than what they paid for before, but they're earning a lot less than what they were earning before. 
So I want the Minister to look at it. He talked about economics and things like that. Well, the first economic question I've got to him is: how does he explain the rationality for having a cost increase on the most vulnerable people when they're going to have an even bigger reduction in their revenue in the next few months to couple of years? And how can he, in good conscience, do that to the people that are most vulnerable out there?





ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I just want to pick up on what I started, Mr Scott Simpson continued, and the Hon David Bennett has mentioned. 
I want to take issue with the Minister when he says that now is the right time, because I would argue that now is the worst time. And I'd argue that it's the worst time because we have no idea, at this stage, of the impacts of COVID-19 on our economy. 
We're predicting potentially 300,000 people out of work. I don't think we have any idea of the potential impacts on New Zealanders. It doesn't matter if the price of fuel is $1.50, or if it's $2.50, when you don't have a job and you don't have any income and your livelihood has been destroyed by COVID-19. As Scott Simpson mentioned, we don't know what the price of fuel is going to do. 
James Shaw, the Hon James Shaw, mentioned earlier that in 2008 to 2009, after the Christchurch earthquakes and after the global financial crisis, National made some decisions in pulling back on some of those levers round the emissions trading scheme. And we did so for good reason. We did so because we wanted to protect New Zealand's jobs and New Zealanders' livelihoods. 
We're in an even worse situation now than we were then. And this Minister thinks that now is the right time to, effectively, impose new taxes on everyday New Zealanders who are potentially going to be going through the worst possible time of their lives because of this crisis. 
What we are proposing is to just put it out for a 12-month period so that we have the full information about exactly what this economic crisis is going to do to New Zealanders. I don't want the Minister to stand up today and tell me how this climate change is so very urgent that we must act now, because the Minister has had $100 million of a Green Investment Fund that he's been sitting on for three years and not done anything with. He had a promise to electrify the Government's fleet. He hasn't done that. Those are simple things he could have done to reduce New Zealand's emissions and be a leader in climate change reduction, and he hasn't done any of that stuff. So it would be very rich for him to get up today and tell us that it's so very urgent, that we can't put it off for a year, when we're looking at, potentially, the worst economic crisis in living memory. 
Sorry I get a bit het up, but I just find it very rich when the Green Party tell us about this climate change emergency, when they can't even spend the $100 million that they got in the Green Investment Fund in the negotiations post-election. There's been nothing on electrifying the Government fleet like they promised. We've got West Coast, small-scale hydroelectric dams that they're turning down. These are things that can actually make a difference now that they're not doing. So I don't want to hear that it's that urgent. 
I want to know from the Minister why now—without any of the information that we could potentially have in 12 months about the scale of this disaster—and why he thinks now is the right time to impose new costs, new taxes on Kiwis who are going to be struggling after the potentially 300,000 of them lose their jobs, and, potentially, their homes, their businesses, their livelihoods. 
At this point in time, I would argue that it is the worst possible time—without all of that information in front of us—to be making such enormous decisions about new taxes that will increase the cost of living for everybody in this country.





CHLÖE SWARBRICK (Green): Thank you, Madam Chair. I am directing my questions now to the Minister for Climate Change. I wasn't intending to take a call in this debate, but with the contribution of the Hon David Bennett—and, I would argue, my mistake in heckling him. I do feel as though I've poked the bear, and we may now be extending this debate well beyond the dinner break. 
But I just wanted to ask the Minister about some of the thematics that have arisen particularly from the Opposition's contributions in this committee of the whole House debate tonight, some of which I've just jotted down. The first is really that I intend to unpack what appears to be surfacing, which is this false binary of a choice between jobs or the environment. 
On that point, I really want him to drill down, in particular, into this abstract notion of the economy, as is often bandied about, particularly with regard to GDP, which I note the Minister for Climate Change actually spoke about prior to becoming the Minister. I remember back in the mists of time—I think it was an op-ed authored for Stuff, potentially—about the fact that GDP, as a measure, is such a flawed measure of the success, the welfare, and the distribution inside of our society. The reason for that is the gross domestic product is literally just a measure of the amount of transactions that we are having inside of our economy. It is not a measure of the quality, of the contribution to, for example, the health of our environment, nor the distribution of them. The point therein is that our GDP can continue to go up, as it was so artificially inflated under that former National Government, as per really poor policy decisions that degrade our environment. 
GDP goes up when there is an oil spill. GDP goes up when there is a car crash. GDP goes up when somebody gets cancer. GDP goes up when there is a natural disaster. That is because there have to be economic transactions in order to undo that social ill, and the point here—the question that I am putting to the Minister for Climate Change—fundamentally comes back to this false binary being presented by the Opposition tonight on the environment and the economy. 





Hon JAMES SHAW (Minister for Climate Change): Well, I feel we are straying a wee bit away from the substance of the bill. I was going to start by complimenting Erica Stanford on her fine piece of political theatre that I think will do very well for her social media channels, but I feel that it's equally distributed around the House.
So look, what I want to just address is this point about is it the right time or the wrong time and costs on households. So to start with Mr Bennett's question: if prices were to double—right, so they're currently floating at around $25. If the carbon price was to double to $50 a tonne, the impact on middle-income households would be about $3.40 a week. For households in the lowest 20 percent of income levels, the weekly costs would increase by about $2 a week, and that—like I was saying before to an earlier question—assumes no change. So that assumes that everything ticks along and nobody changes anything—so a return to the status quo.
Now, we have doubled the winter energy payment this year, we've increased the base benefits across all benefit classes by $25 a week, we've put out wage subsidy schemes, and so on. So it is possible to address those costs in a variety of ways, but they are at the margin. Now, I know for a low-income household, $2 a week, actually—given how low benefit rates are in New Zealand; below cost of living—that makes a difference. But what that says to me is that we need to do more to ensure that people have adequate income to cover their cost of living.
That leads me into some of the points that Erica Stanford was making about whether now is the right time or the wrong time. There is an economic downturn approximately every 10 years globally, which affects New Zealand to a greater or lesser extent. So if you went back to 2009, you had the global financial crisis (GFC), the Christchurch earthquake—obviously the Christchurch earthquake just affected New Zealand, but there was an impact of the GFC on New Zealand, obviously, as there was around the world. If you went back 10 years before that, there was the Asian bird flu which did affect New Zealand in terms of the economic impact here. You also had the bursting of the dotcom bubble in 2000—
Hon Tim Macindoe: This is nothing like that.
Hon JAMES SHAW: I understand that this isn't like that but I haven't finished the point yet. My point is that every time that there is an economic downturn, when they're in Government, the National Party says, "Great. Let's defer action on climate change. Let's put it off until things get better." And then things get better and you kind of think, OK, well we probably need to review those settings, right? Roughly five years after the last economic crisis—2015 was the review. Then that whole process, because it's so complicated, takes a few years to roll in, and then you say, "Look, great. Here's some reforms that we need to do.", and then, boom, there's another economic downturn, "Let's kick the can down the road."
Now, when it comes to climate change—and she did say that she doesn't want me to talk about urgency, but I'm afraid if she asks the question she's going to need to tolerate my answer, which is that climate change does actually have a time frame on it. If you read the science, what it suggests is that globally carbon dioxide emissions need to fall by approximately 50 percent in the next 10 years in order for us to stay within the 1.5 degree threshold of global warming. Now, every year that we defer action—because carbon dioxide is a stop gas and stays up there and it accumulates—means that we're imposing additional cost the following year, because you not only need to do that year's action, you need to do this year's that you've given up as well. We have been doing that for 30 years—we've been putting off action. What that means is we are now at the point when we're out of time and the cost that previous Governments have imposed on us by kicking the can down the road is so much higher. It is much more expensive and much more difficult to do the longer you leave it. So that's why we're in the position that we are in of having to take action now because action wasn't taken 10 or 20 or even 30 years ago.
So you compare that to the United Kingdom. Here is another part of the argument that is fallacious in my view, which is the idea that this only comes at cost and that there's no such thing as a return on the investment. If you look at the country that has been most successful in reducing its greenhouse gas emissions, it's the United Kingdom. The United Kingdom has reduced their emissions—
Hon David Bennett: Because they've destroyed their economy over 20 years—went from an industrial economy to a service one.
Hon JAMES SHAW: Mr Bennett, hear me out. The United Kingdom have reduced their emissions by approximately 40 percent below their 1990 levels in 10 years, and, at the same time, prior to Brexit, they had the fastest growing economy in the G20 over the same period of time. So the notion that acting on climate change will somehow destroy the economy runs against the evidence of those countries that actually have reduced their emissions over the course of the last decade or so.
So intellectually, it would be a more honest position for the National Party to take to say, "Actually, we think that acting on climate change is only ever a cost and an impost, that there can be no benefit from it, and therefore let's just give up on it, let's forget about it. Let's get rid of the emissions trading scheme, let's get rid of the zero carbon Act, let's take no action on climate change at all." because the mentality that's coming through is that it only has a cost, but it doesn't. The evidence is actually that once you get started—and the hard part is getting started, and we've never really gotten started in this country—the transition is faster and cheaper than any of the modelling ever suggests. So I think that the basis of the argument that we need to defer only ever increases costs on future generations of taxpayers and households, and that's why the situation that we're in—we want to avoid that. And because prices are lower at the moment, the cost in the margins now simply won't be felt.
So those are my points there. I can't remember—I think I may have addressed most of Mr Bennett's questions, but clearly he's keen for some more.





Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Chair. I take offence at some of the comments that the Minister has made around the National Party and our approach to the emissions trading scheme. It's just simply not the case that the National Party puts it off and just sees it as a cost. We are here in this House working with the Green Party on many environmental bills—in the past, when we were in Government and in Opposition. We don't see it as a cost. We see that there is a lot of competitive advantage too, as our country transitions and that. So don't get us wrong: we're not just trying to put it in that cost element. That's the deflection the left always puts on the right to say, "Well, that's why you're not interested in these things." That's not actually—
Hon Member: That's exactly her argument.
Hon DAVID BENNETT: No, the point that my colleague made is that at this very point in time, people are going to have lower incomes. To think that just because they've got one lower expense, they can sustain that expense and it doesn't matter to them when they're actually in dire straits income-wise—is our point. It's not that it's just a cost.
We had an economics lesson, which was completely irrelevant and wrong, and then we heard the Minister for Climate Change talk about the UK. Well, the UK used to be the industrial belt of the world. They fought a war making planes and everything, and now they're just into a service economy, effectively. Their industrial economy went out the door over the last 50 years, and they transitioned to a service economy. So of course their emissions are going to go down. Look at the Russian economy—very much the same thing. A historical basis is not a reason for him to say that suddenly they've made great strides in economic and environmental planning.
I want to go back to those numbers that he talked about. The Minister was very good earlier in this piece when he went and explained the numbers around what the Hon Jacqui Dean asked about. I want him to give us that clarity around those numbers now.
So you're telling us that there's $340 a week. Is that for the average family—the increase in costs at a $50 carbon price?
Hon Member: $3.40.
Hon DAVID BENNETT: $3.40. And for the lowest 20 percent, it's $2.
Hon Member: Yeah.
Hon DAVID BENNETT: OK. That's good for us to see, because it sounded like $340 when you said it, so we were a bit challenged by your numbers. 
Hon Member: Getting excited.
Hon DAVID BENNETT: Yeah. 
So when we came to Jacqui Dean's economic analysis of the beef and lamb sector against forestry, you talked about the number of jobs there that are in the beef and lamb and agricultural sector. Do you want to expand on that 60,000 jobs, I think, you talked about there—what your breakdown of that is. 
Also, it would be really interesting if you've done a breakdown on the revenue per hectare. The effective argument that was being made was that the forestry industry in New Zealand employs 25,000 people or something like that and is only a quarter of the land, and yet sheep and beef is 66,000 people for four times the area of land. Well, let's have a look at the real economics of that. What's the revenue per hectare from those bits of land? Is the sheep and beef farm providing a revenue per hectare of $1,000 a hectare and forestry $200 a hectare? What's the revenue for New Zealand that comes from those blocks of land? Do you have those numbers?
CHAIRPERSON (Hon Ruth Dyson): I don't.
Hon DAVID BENNETT: Does the Minister?





Hon JAMES SHAW (Minister for Climate Change): Well, I would have thought that, as the National Party's primary industries spokesperson, he would have those numbers, actually. So you have to remember that the bill is cross-sectoral. The emissions trading scheme covers all sectors, right? It's not designed to deal with one sector over another; although there are pieces of legislation that deal with that. So I don't have the red meat revenue per hectare, but maybe I can give you some proxies for some of that.
So, as I said before, I didn't actually have with me the breakdown of the locations or the sub-sectors within the red meat sector, because, frankly, they're not terribly relevant to the bill. But, if you want to talk about the increased cost, which is the point that the National Party is making over and over again, my point that I was making was that we understand that this could have an effect on household prices if nothing changes and no one changes their behaviour, and that is one of the reasons why we've done that modelling. And, like I said, for a middle-income household, it comes out at about $3.40 a week, assuming no change. But, getting rid of the emissions trading scheme, or gutting the emissions trading scheme, or allowing it to remain busted, isn't the solution to that problem, right? The solution to that problem is to make sure that people have adequate incomes, which is something that we are doing as a Government.
Let me give you a sense of—again assuming no change—what the effect of this bill would be in the rural sector. It would introduce—could introduce, depending on what happens in reality—an additional cost of 1c per kilo on milk solids in the year 2025—
Hon Member: I'm listening to you.
Hon JAMES SHAW: Well, I mean, it was his question; so I want to make sure he's making notes; so I want to make sure he gets all the details. It would introduce a cost of 1c per kilo on milk solids in the year 2025, right, compared with, say, changes in Fonterra payouts of between 40c and 60c per year, on average, since 2017. So, again, it's really at the margins, and what Fonterra decides to do makes many orders of magnitude more difference than what this does.
But to draw the analogy to the previous conversation, we wouldn't try and deal with changes in the Fonterra payout via the emissions trading scheme; it's a separate thing and it itself has impacts, and we try to manage those impacts through a variety of Government policies. In terms of lamb, you're talking about 3c per kilo in lamb in 2025, and if you compare that to the fluctuations in the farm-gate returns for lamb of about 100c per kilo over the course of the 2018-19 season alone, you're talking about a 1 percent variance versus the kind of business as usual variances. So the costs really are absolutely minimal.
The other thing that I wanted to say is that there are drystock farmers who will directly benefit from the changes that we're introducing here, because one of the issues that the emissions trading scheme has is that it is, frankly, mind-bogglingly complicated, and for someone who wants to be a forestry participant in it, it's tended to favour large, complex businesses that are able to navigate the complex system that's been created. One of the things that we wanted to do was to simplify it so that a farmer who's got plenty to deal with on their plate but does have a small patch of their land that they wouldn't mind getting more value out of is able to participate much more easily. So what that means is that there will be farmers who will be able to get more revenue per hectare for some parts of their farms than they currently can.
So one of my concerns is that, if we were to defer this—particularly at this moment in time—what that would mean is that we would be limiting the ability of those farmers to earn additional revenue that they currently can't easily access, and I think that's pretty significant.
CHAIRPERSON (Hon Ruth Dyson): Before I call the Hon David Bennett, could I ask him to do two things? First of all, don't bring me into the debate; it's the sort of Mark Mitchell syndrome that's spread across to you. So if you could try—I know it's quite hard when you're having a conversation too, but if you could try. But, also, for the last three or four speakers, we have had a lot of repetition on a very narrow point. It's a big bill and there's lots to talk about, so if you could expand the conversation?





Hon DAVID BENNETT (National—Hamilton East): I just wanted to go on to another point at this stage. One of the key themes the Minister has used in his answers tonight has been that there will be a positive impact, not just a negative impact, from the changes, and "Let's not forget that when we are making our calculations and we're looking at the legislation." That's true, and we understand and accept that as well. But there is one bit which I feel is very difficult to understand, and that is that—and this is the second point that the Minister has had as a theme, and in his second reading speech it was very clear—there's a degree of trust between the Government and the primary sector. They've come to an agreement, and he's very clear that that agreement is something that they and the primary sector feel they can meet, and the Minister is very privileged and happy to have that agreement and sees it as a great combination—and I think anybody in New Zealand will see that as well.
The question then is: if there is an agreement, if there is that trust, and if there is that positive impact from what can happen, why then do we need a hammer over the industry in 2022, where the Minister can just say, "They haven't done enough, but I decide that I want more and I require that this happens in 2025."? How can there be, really, a trust in an agreement when the agreement can be overridden by one party at a later date, without any negotiation, without a sense of fair play? And, for farmers, that is the crucial thing: they have uncertainty in their business every day. The Minister has talked about the fluctuation in prices that are reliant on international prices and exchange rates—all that—and more uncertainty over the weather. You know, droughts and all those things are all part of the uncertainty of farming. And here we add another uncertainty on, where their industry groups go and do a deal with Government in the best interests of their farmers and in the best interests of New Zealand, and yet the Minister isn't really going to trust them. The Minister is holding back something—holding back the ability to override that agreement whenever he feels they haven't met what they want, from the Government's perspective.
I want him to take that out of the bill, because, if he really believed what he's been telling us tonight—that there are positives that are going to come out of this legislation—if he really said and believed that that agreement is something that is standing and positive and shows the direction forward, which we all want, then why does he control in the end the ability to override it at his will, at any point in his time? And, as a Green Party that espouses the values of trust and negotiation and fairness and equity, how can somebody have an agreement that can be overridden by one party at a later date without giving the people that will be affected that certainty around their business—that certainty around what they're doing for New Zealand at this point in time and what they're going to be asked to do in the next couple of years to save the budget of this country?
So if the Minister took that out, took that override provision out, it wouldn't make any difference. We're looking at two or three years where everybody has to work together anyway. He's got plenty of time to always come back and negotiate with those parties. He's got plenty of time to come back to this House—or whoever the Minister may be—but, no, he's going to retain a power to enforce something that isn't needed at this time, and that would take a lot of uncertainty out of farmers' interests at the moment if they knew they were working in an industry agreement, they knew that they were working under those agreements to get the best options. But, now, they don't have that, because all they know is that, in two years' time, the Minister, at a whim, could decide that they haven't performed and then create a new level of regulation. So I implore the Minister, in his good nature and the way he treats issues, to actually do that in practice as well and not have a bill that actually does the opposite from good faith, because I've never heard of a negotiation where you come to an agreement and then, two years later, one party can override it.





Hon JAMES SHAW (Minister for Climate Change): That may be because the member, David Bennett, is not a lawyer. It may not surprise the member to learn that I am not going to take that out of the bill. The reason why that provision is there—
Hon Member: He's got confidence you'll be here in two years' time, anyway.
Hon JAMES SHAW: I would like to reassure the member that, actually, his nightmare scenario that he's painting of me—who, clearly, according to his projections will still be the climate change Minister in two years' time, and I thank him for his confidence—that I will be able to, at a whim, simply override and bring them into the emissions trading scheme (ETS) at the process level regardless of anything. Actually, if he reads the bill, what he'll see is that the Minister cannot do that. It's actually outlined that there is a process by which the Climate Change Commission monitors progress. The Climate Change Commission then makes recommendations to the Government, and then the Government must respond within a period of time. So the Government cannot on a whim do anything, actually. The Government can only respond to the advice that it is given, and it cannot act without the advice of the commission.
Second of all, what the member is suggesting is a voluntary agreement. Whilst the zero carbon bill was going through the House and before we had a Climate Change Commission, we set up something called the Interim Climate Change Committee, which had a number of people on it who had had some experience over the last 30 years with agricultural greenhouse gas research and various attempts, over the course of the last three decades, to make progress on this issue. There have been voluntary agreements between Governments and the sector before, which haven't resulted in anything. We also got advice from the United Kingdom, because they also have a voluntary agreement in the United Kingdom. The advice is they said it's not going anywhere. So it's an issue of incentives.
I also just want to correct the member on something. He suggested that we came to an agreement and then introduced this provision. This provision is part of the agreement. It was negotiated between us and the sector at the time. When we stood up in the Legislative Council Chamber and we launched the partnership with the agricultural sector, we did so on the basis that this was the provision.
Now, I understand it wasn't comfortable, but it also wasn't comfortable for those who would like to see agriculture introduced into the emissions trading scheme immediately. Remember, Mr Bennett, that it is the only sector of the economy that is not currently covered, so they have preferential treatment at the moment because other sectors are included in the emissions trading scheme.
Hon David Bennett: So—
Hon JAMES SHAW: Just let me finish. 
This is part of the agreement. There were safeguards that were built into it. We heard the concerns of the sector at the time. We also heard the concerns of—
CHAIRPERSON (Hon Ruth Dyson): I'm 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.
Hon JAMES SHAW: Thank you, Madam Chair. I'll be brief. I understand, from memory, that the question that I was asked was about the ability of the climate change Minister to simply call in the agricultural emissions work programme and dump them into the ETS. I was just reassuring the member that that is actually not possible in the legislation, that there is a process that has to be gone through, and that there is, essentially, an independent audit, which leads to advice which the Minister can then respond to. That would be consistent with the principle that his colleague Scott Simpson was talking about: the principle of ministerial oversight. But we do want to make sure that the Ministers cannot act by themselves. So there is that.
The other thing that I think I was just starting to talk about was how the experience in New Zealand and overseas of voluntary agreements hasn't yielded results over the course of the last 20 years or so. The advice that we received from the Interim Climate Change Committee was that we needed another mechanism.
I just wanted to talk a wee bit about how the incentives are set up. So in a purely voluntary agreement, you can imagine that the incentive—not through any malicious intent—is to go slowly, right? If you're on to a winning wicket, why would you want to change? In a voluntary agreement, there's no particular reason to achieve any particular outcome by any time, right? You can just continue doing R & D and so on, because there is no point where you need to actually change behaviour, right, or to change any systems. 
What we've set up here is a system which says there will be a pricing mechanism from 2025 and the sector will design that—obviously, in partnership with Government. But the intention is to say that if they don't come up with that, then it will become part of the emissions trading scheme via the processes, which is the least-best outcome, right, because of how the sectors work. But that creates a deadline that says, actually, the incentive then flips on its head, and the incentive is to get that work done as fast as possible rather than to defer it, which has been the experience both in New Zealand and overseas. 
That was, simply, why that mechanism is there. It's not to do with a lack of trust at all; it's just, really, to make sure that we've got the incentives aligned to get through that work programme. Like I said, that is part of the agreement that we have with the sector. So whilst some of them might not have been—you know, they might have been a bit grumpy about the design of it—ultimately, they said, "Look, if that's the quid pro quo for us to be empowered to actually do the work and to demonstrate that we can do it, let's go for it." So I'm pretty happy with where that got to, and, frankly, given the fraught nature of the negotiations and what it took to get to that point, I wouldn't want to unpick it at this time. I think that that would create yet more uncertainty.





MARK PATTERSON (NZ First): Thank you, Madam Chair. Before I get to my questions, I'd just like to thank the Minister for the way he's methodically stepped us all through this bill. This is an incredibly complex piece of legislation and is incredibly wide ranging with wide implications for how our economy and our society will be shaped over the next 30 years. So I think we all appreciate that, and I think, also, outside of this committee stage, I'm sure, not only for those of us on this side, but I'm sure you've been available to the other side as well.
Just a comment for a start around the He Waka Eke Noa initiative. I think that is a brilliant initiative. It does give farmers a chance to design a scheme that is suitable, because it is a different—we're talking about a flow gas and also, of course, a pastoral sector and horticultural sector that's incredibly important to our economy. That we have got a bit of time to design a system that's fit for purpose is, I think, appreciated by the industry.
My particular question is around, there has been some commentary around the—I guess you could say they're the carbon farmers, or those looking for permanent forest sinks, and when we're talking about forestry, we're talking about plantation forestry most of the time in our own minds when we're discussing this, but there is also a place for permanent carbon sinks, particularly in the more erosion-prone land. I think we've seen a good example up Gisborne way on the East Coast two or three years ago where we had a significant environmental impact from, perhaps, forestry in areas that may not have been suited to it. So I think part of the mix will be, in some areas, some permanent forest sinks. And it may open us up to some diversification of income around, say, mānuka honey and the like, so it's a different way to skin the cat, I guess. But those investors that are looking to get into that space have expressed some concern that there's a wee bit of lack of flexibility where they've, maybe, taken out existing plantation forestry, that they're looking to maybe not incur the liability there if they can plant somewhere else, and I'd be just interested in the Minister's thinking around that. Is there merit in that suggestion, and getting a bit more of his thinking. Thank you.





Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. Well, look, the previous member who was just speaking must have been reading my mind, because that's, essentially, the subject that I wanted to raise with the Minister, and that's the general principle of forestry offsets. Mark Patterson has raised, I think, a reasonable point in that at select committee, when we were discussing offsets and forestry offsets more generally—and there's quite a lot in this bill relating to what's affectionately referred to as P90 offsetting land—there was some very genuine concern raised by some of the carbon farming organisations, as Mark Patterson has raised.
So I'm keen to tease out from the Minister just why he's taken a policy position not to explore, at this point in time, the proposal put to the select committee, for instance, by New Zealand Carbon Farming Group, who made some pretty generous offers in terms of being able to use finance that had been generated through offset funding, for instance, when a company—just for an example, maybe Air New Zealand. If the Minister was to tick the right box when he purchases his Air New Zealand ticket, he can claim or pay an offset fee. Those offset fees get collected somewhere and eventually get used to plant a tree somewhere. That's, essentially, where organisations, such as Mark Patterson has been talking about, derive their income stream.
So they're not interested in a plantation forest. They're interested in using that offset money that has been raised. One could argue about the merits of raising funds like that and the potential for, essentially, trying to buy your way out of sin in terms of carbon emissions, but the situation exists where those funds are available, and companies like the New Zealand Carbon Farming group and others have funds to invest, they want to plant native trees, primarily, on land that is not productive pastoral land—on, frankly, what we would call pretty scrubby, maybe stewardship-type land; non-productive land. I think that just on the face of it, if nothing else, there is some merit in the proposals that they have put forward. Yet, in this bill, there is no provision for that type of modelling to occur.
The second point I just want to raise while I'm on my feet at this point relates to the general principle of offsetting. Really, if there's a matter in this legislation that is not comprehensively addressed, it is that matter. I'd like to have an indication of how the Minister sees that debate and that policy discussion being brought to light, particularly in terms of what I thought was a very thoughtful and good and well-considered report released in March of last year by the Parliamentary Commissioner for the Environment, the Hon—I think he might be even the Rt Hon Simon Upton. He argues in that document at some length that, essentially, the current approach of reducing climate change for countries like New Zealand relies very heavily on the planting of trees. But if you follow that logic to its natural conclusion, without change to emissions creations, sooner or later you run out of land to plant trees on no matter how big the landmass is. So that's not a long-term, sustainable proposition in terms of, eventually, sending the right messages about a transition to a low-carbon economy over a time frame.
In fact, Simon Upton argues that by allowing offsets in the way that we do in this legislation, arguably we are actually delaying the kind of change that the Minister's looking for. When we were talking before the dinner break about the high-emitting industries and the industrial allocations, that argument can be extended to other emitters who find by simply offering their customers or paying themselves for offsets, they don't make a change but go to bed at night feeling they've done good because a nice native tree has been planted somewhere in New Zealand. So I'm interested to hear the Minister's views on that in relation to this bill.





Hon JAMES SHAW (Minister for Climate Change): Thank you, Madam Chair. There's a lot between those two questions, and so I'll just try to unpick it as best I can.
Firstly, just to complicate matters even further, there are two types of offsetting. One is where you—which is I think what the Hon Scott Simpson was referring to—buy an offset in the form of forestry. There's also something called offset forestry, which is where you have an existing forest in one part of the country, and you plant up another, and then you cut down the other forest. So it's about flexibility in land use. The idea is that if I want to cut down this forest over here permanently and convert it to, say, dairy, or some other land use, then in order to avoid the liability of losing that forest I have to plant up another. So the new forest is the offset against the one that I've cut down.
NZ Carbon Farming's proposal was actually related to that second type. One of the features of this bill is that we're changing the nature of how we account for forestry. So the member will be familiar during the select committee that historically we've used a sort of sawtooth accounting. So you acquire units up to a certain point, you cut your forest down, you surrender the obligation, and then repeat. 
What we're moving towards is an averaging system. So you accumulate up to the average life of the forest and then you, basically, stick with that average over time, even if you cut down and replant that forest over time. That's one of the ways of making the system simpler for smallhold forests to participate in the scheme, because they don't have to worry about this constant acquisition and obligation system there. 
However, in moving between those two systems, it creates a discrepancy which ends up with a liability on the Crown's books, which we've got to settle up in the year 2022, between those two systems. So the issue that NZ Carbon Farming are saying is, "Well, we've got these pre-existing forests. We'd like to be able to move them to another part of the country, and in so doing we can take advantage of the sort of financial income that would enable us to then scale up even more." which on the face of it, sounds good. However, there are some complications to that, one of which is it creates a significant liability on the Crown's books and, in Treasury's view, would result in a transfer of several hundred million dollars from Treasury to that company.
So whilst the—
Hon Member: How much please?
Hon JAMES SHAW: Several hundred million dollars, from Treasury to that company. Whilst the issues that they're pointing at are worth exploring, given the need to make sure that we consider all of the unintended consequences, we do need to drill into the issue of the liability on the Crown's books.
We need to test some of the other issues that we were exploring earlier about what it would mean in terms of afforestation in areas where it may be inappropriate for that to occur. The view that we took was now is not the time to introduce that at this point in the legislation. As has been pointed out a number of times, this is five years' work, with multiple rounds of consultation, huge amounts of analysis, and so on. 
So this change that's been proposed is simply too significant to introduce at this stage without a similar level of analysis and consideration. What we have said is that we will explore it. Actually, this was a policy decision that we made sort of right before we started drafting—that we would come back in 2021 looking at organisations like that and to explore that. So that's on one side. 
On the other side, of course, we've got—in particular beef and lamb and others in the drystock who are concerned that—about what I was saying, a significant move like that could lead to loss of productive land in areas where it's inappropriate, or would have an untoward effect on rural economies and communities and so on. 
There were some proposals there as well for limiting the ability of the other type of forestry offset, which is the ability to use offsets.
Hon Member: That's kicked to the commission though isn't it?
Hon JAMES SHAW: Yes. Those two things are kind of countervailing forces, and both of them have significant sets of implications, some of which I've canvassed quite a lot already. So we do have a work programme. It is some regret to me that once we have passed this bill, it will not be the final chapter of the emissions trading scheme, that there is therefore further work to be done. And we will come back again, possibly with a future amendment based on exploration of those two sets of factors. 
I just want to come back to—
Hon Member: It's the climate equivalent of RMA.
Hon JAMES SHAW: Yeah, a little bit! Ha, ha! God, I hope it's not like the Resource Management Act. I do want to come back to the point that he made—this sort of high-level point, though, about the use of forestry emissions offsets to kind of buy your way out of sin. Now, part of the issue here, of course, is that the price has been artificially low. And one of the reasons why organisations choose to buy forestry offsets for their emissions, rather than invest in new technologies that have a lower emissions profile themselves, is because it's been cheaper to buy forestry offsets than it has been to change the technologies and their manufacturing processes, for example. 
So there is a point—and this is kind of counterintuitive—at which if the price is allowed to float and operate like a true market, it actually becomes cheaper to invest in the new technology than it does to buy a forestry offset. So, different technologies kick in at different prices. 
One of the pieces of advice that we've received is that some of the low-grade industrial heat for things like milk drying units, for example, become quite feasible at about $40 a tonne. Whilst you might say, well, at 40 bucks a tonne, you're talking about carpeting the country in trees. Actually, it becomes more feasible for Fonterra and other users of that kind of heat in their industrial process to swap out their existing technology for new technology. That is actually how the scheme is supposed to work. The problem is that because we've had this artificially low price cap, Fonterra's never been allowed to get to that point, so they've gone for forestry offsets instead. I know that seems counterintuitive, but that is actually how the programme is supposed to work. 
There's another component to that as well, which is that organisations are already looking at—they're starting to forward-price decisions. So even whilst the price is still comparatively low at $25 a tonne, they're starting to make investment decisions on the basis that the price will be eventually $40 or $50 or higher. They're not quite sure when that will occur but the point is, if you're having to buy a new plant, that plant's going to have 30 or 40 years in its asset life and at some point during that 30- or 40-year period, you know that the price will be above $40 a tonne—and probably sooner rather than later. 
Therefore, if you buy, you know, a fossil fuel - powered replacement now, then you're actually going to be stuck with a really expensive liability within, say, 10 or 15 years. And therefore, it makes more sense to invest in the new plant, even at $25, in the knowledge that, you know, that's not always going to be the case. An example of this was Synlait, who invested in an electrode boiler in their plant down in Canterbury. At 25 bucks a tonne that makes no sense at all. But it was a new boiler and they know that that's going to be in place for quite some time and so it makes very good economic sense within the life of that asset. 
Similarly, Ports of Auckland made a choice. One of their tugboats had come to the end of its life. They have a commitment to be carbon neutral by 2030. So the next tugboat they buy, which will have a life of about 40 years, 30 years of its service will be after the point at which they're supposed to be carbon neutral. Therefore, they had to buy a zero-emission tug. Now, it turns out that no one in the world makes zero-emission tugs in that weight class. So they had to go looking for a manufacturer. That drove the price up to twice what it would be for an off-the-shelf diesel-powered tug. But, you know, if you take the full life-cycle cost of it, it actually ends up saving them over $2 million, both in the operations and the capital expenditure. 
So that is one of the unintended consequences of artificially holding the price low because there's an economic crisis on that has really long-term consequences, which is that, you know, organisations don't have that predictability to be able to make decisions on that basis.





ALASTAIR SCOTT (National—Wairarapa): I raise a point of order, Madam Chairperson. The Minister mentioned a document that explained—and it seemed an official document—the couple of hundred million dollars that it was going to cost the Crown and be transferred to another party, and I'd just like him, if he could, to table that document.
CHAIRPERSON (Hon Ruth Dyson): If the Minister was quoting from an official document, then he will table it. He may wish to voluntarily do that at some time. He's not required to—
Hon James Shaw: Yeah. 
CHAIRPERSON (Hon Ruth Dyson): —unless he was quoting from it. 





Hon JAMES SHAW (Minister for Climate Change): No, I wasn't quoting from a specific document. But I'd be happy to go hunting for any advice that we've received. 





KIRITAPU ALLAN (Assistant Whip—Labour): I move, That the question be now put.
CHAIRPERSON (Hon Ruth Dyson): Before I call Hamish Walker, could I just remind the committee of the new rules that we're trialling: the removal of the four five-minute-limit speeches in order to try and have more of a conversation with the Minister. So the five-minute speaking time is not a target. You're more than entitled to make your point or your question, and resume your seat. 





HAMISH WALKER (National—Clutha-Southland): Thank you very much—I'll make it nice and succinct. I just want to ask the Minister—he made some comments in his previous speech around the removal of the cap and in terms of New Zealand Carbon Farming. So, Minister, my question is: you remove the cap, the carbon price will rise, this will result in more conversions of farms into forestry—there's obviously that incentive there. It will be more profitable land use because of the stilted price mechanism—when you've got all the analysis which indicates that, because of that cap, because of that price rising, the fossil fuel emitters would rather offset their emissions rather than reduce them because of that. So, Minister, if you could please answer this. What protection have you got in place for those rural communities with the incentive of that increased carbon price? What protection have you got in place?





Hon JAMES SHAW (Minister for Climate Change): I'll be repeating something I said at the first part of the committee stage, but just to correct you, what I'm saying is, actually, that if you allow the market to operate as it is supposed to do and the price does rise, then it is counterintuitive that, yes, there will be some more afforestation, but also it becomes more economic for polluting firms to change the technology than it does to do offset forestry, right? So let's, hypothetically, say that the carbon price rose to $50, which is the complete upper limit that we're putting in, and that if it went up to there, what that is saying is that it would cost you $50 to plant forests but only $40 to change your technology if you're an industrial process heat user, right? So it's $10 cheaper per tonne to swap out your technology than it is to plant forests. So then, of course, what happens is people change their technology, demand for units then falls, and so the price comes down a bit. So you get a sort of equilibrium. That is what I meant by that.
But in response to the second part of his question, you're asking about protections around, I guess, aggressive afforestation. This was a debate that was had last year when we passed the zero carbon bill, when the Opposition got a provision included in the zero carbon bill that there is a mandatory consideration that the commission must include—and then the Government must also include in their response to the commission's advice about the effects of afforestation on rural communities and economies. It's one of several things that they have to consider, and, obviously, they need to come to a balance of those considerations, but that is written into the legislation and the zero carbon bill. Because it is an amendment to the primary Act, and this is also an amendment to the primary Act, that consideration applies to everything in this bill. There are also other protections, but that is written in here.





Hon DAVID BENNETT (National—Hamilton East): Just following on from that, and I noted in your speech yesterday, Minister Shaw, you said the same thing about the commission having to consider. What tests or thresholds would that consideration entail? You know, at what point would the commission consider that the potential implications of land use change are significant enough for it to act? Have you set any guidelines for them, and how would you set those guidelines? And, you know, is it 10 percent of a region or is it going to be 10 percent of the income from a region? Can you give us some clarity around that, because just saying "Consider the implications." doesn't really give us much comfort? We need to know what the tests they will be applying would be and the threshold they would use.
The other thing is it would be good to get some clarity around that independent audit process you're talking about with the primary sector deal. My understanding is that it goes to the commission, and the commission then makes a recommendation to the Minister. So you seem to be implying that there is an independent audit process in there. Now, whether that's because you consider the commission to be an independent body, and their decision, you're saying, is an independent audit, or what normally would be considered an independent audit would be a third-party organisation, other than the commission or the Minister, that would be then independently auditing what has happened—so I need clarity around that because I feel your definition of the commission's interpretation will be an independent audit. That's the way I'm taking it, and I'm not sure if that's quite what people would consider an independent audit.
The third thing is that you made a couple of comments just before the dinner break around farmers haven't been having to pay and having preferential treatment up to now. I just wanted you to give some clarity around the industrial allocations. My understanding was that the dairy industry didn't get any industrial allocation, unlike other big industries in New Zealand—so like New Zealand Steel and all those who've had an industrial allocation for 10 or 15 years, or whatever the time period has been, whereas the dairy industry, in its processing side, has actually been paying during that period of time. So it's unfair now to say, "Well, hey, they've had preferential treatment, they haven't actually been involved.", when, in fact, the only major manufacturing industry in New Zealand to have been paying for the last decade is the New Zealand dairy industry. That's my understanding of it. Now, if they were getting those industrial allocations, that's news to me, but I'm pretty sure that they were excluded from that.
So it'd be great to get the Minister to explain those three questions.





Hon NATHAN GUY (National—Ōtaki): Thank you. Just while the Minister for Climate Change is talking to his officials to seek some advice, I thought it's worth taking a call. Can I acknowledge the Minister in the chair this evening—normally a little bit closer, on the front table there, but I understand the situation that we find ourselves in. The Parliament is sitting under COVID-19 response conditions. 
I also want to acknowledge the Minister and the way that he's been open in answering our questions. Madam Chair, you covered that off nicely before, saying that we're using this opportunity to glean some information, and those that are—
Hon Scott Simpson: It's very useful. 
Hon NATHAN GUY: —it has been useful, Mr Simpson—listening will also be, I think, well engaged in the question and answer session that we're having this evening. 
Just following on from the Hon David Bennett, who posed some very good questions, I'm quite keen to drill a little bit deeper into this impact that the commission's going to have a look at, to do with afforestation in the future. We know that it is a live issue in certain rural provincial parts of New Zealand right now. We're seeing large chunks of land, in fact, in Stuart Nash's electorate, which he may visit, up into the Wairoa District, occasionally. Mayor Little has, no doubt, been on the phone to the local MP, saying how concerned he is about losing jobs in that community because of afforestation. 
So I'm keen to understand what the parameters are that the Minister is going to set for the commission to delve into the detail to try and understand. Is it when the rugby clubs close down and the local primary school's gone as a result of afforestation? That's what we are most concerned about at the moment, so it'd be really good to try and set the record straight there. 
Another question that I have is that the Minister indicated that we're heading very quickly into a $35 a tonne carbon price for the next year or so, and we know that it's been bouncing around at $20, $25. We know it's softened a bit because of COVID-19, and I think everyone gets that point. I'm keen to understand from you—I think the fuel price at the moment as part of that is about 4c. I'm hearing that it could be 9c or 10c a litre as a result of going to $35 a tonne. [Interruption] Sorry? 
Hon James Shaw: Never mind. 
Hon NATHAN GUY: OK. So I'd appreciate you putting my mind to rest that it is not going to be that high—that's the indication I just got from you then. It'd be good to hear some detail on that. 
The other point is the costs on food production as a result, potentially, of going to a processor levy. At the moment we've got the agreement between the primary sector leaders out there trying to sell that to rural communities, for farmers to get on board with technology, and the Government's contribution to supporting farm plans and more technology in the lab and on farm and all of those sorts of things—so that's a tick from me. But if, for some reason, in a couple of years the Minister for Climate Change and the Minister of Agriculture deem, when they get advice from the commission, that this isn't going fast enough, then the fear that I have is that those Ministers can just say, "Well, we're now heading to a processor level.", and that will mean that all of the good work that's currently happening on farm will just go down the drain, because a processor level emissions rate or tax—I'm going to call it—is not going to change behaviour. My farm here versus the neighbour's farm—we could be doing things completely different in terms of managing emissions, and to have a blunt instrument as a processor tax is not going to change behaviour inside the farm gate. 
So I'm very curious to know at that trigger point of I think it's 2022, when the Ministers will be colluding, talking to the commission about it—at what point is it that Ministers are satisfied that the agriculture industry is heading in the right direction, and they're not going to make a knee-jerk reaction and go to a processor levy/tax, which is ultimately going to mean we're less competitive in the international market place? That is really important right now, when you think about farmers and agriculture processors really dragging the plough through this COVID response. They're the big part of the New Zealand economy that doesn't get well acknowledged. When tourism is on its knees, people look to the primary sector and say, "Thank you for what you're doing." I'd hate for the election to come and go, and for the Minister of Agriculture and the Minister for Climate Change from, potentially, a left-leaning Government to get together and say, "Well, farmers haven't done enough. We're now heading to the crude pricing mechanism." 
So I'd really appreciate the Minister answering my concerns and questions. Thank you. 





HAMISH WALKER (National—Clutha-Southland): Madam Chair, thanks very much, and I just thank the Minister for Climate Change for his previous answers. My question's reasonably specific, and it's to do with the Tīwai aluminium smelter. Anyone who hasn't been there needs to go there for a visit. It's a wonderful place. My question's really around the industrial allocation phase-down, mainly from 2030, and what the Minister plans to do in terms of carbon leakage. So industries here that are taxed to the hilt—where they see it's no longer feasible to continue, that industry will, basically, just go offshore, and someone offshore will produce it, often, the majority of times, through a much higher emission rate. 
So my question's really around the industrial allocation phase-down and what he's going to do to stop that carbon leakage. Industries that produce, for example, the cleanest, purest form of aluminium in the world—that comes from Tīwai. It supports around about 1,000 direct jobs in Southland. It's been in place for a number of years. It's a wonderful organisation. So why would we want to risk that wonderful company going overseas—all those jobs down the drain? We already produce the cleanest, best aluminium in the world. It often goes into items like this phone here and an Apple iPhone. Not many people know that. So my question's really around: what's he going to do stopping industries like that going offshore, which will produce a lot more emissions in total?





Hon JAMES SHAW (Minister for Climate Change): Thank you, Madam Chair. So I just want to mention that many of the dozen or so questions there were asked and answered in the session before the dinner break. But at the risk of repeating myself, I will do those members the—
Hon Nathan Guy: Thank you. Go for a quick buzz around.
Hon JAMES SHAW: You should know by now, Mr Guy, that there is no such thing as a quick buzz around when it comes to the emissions trading scheme. So let me just kind of cover a number of the points that were raised.
So Mr Bennett asked me about what "consideration" means. That's contained in the zero carbon bill; that's not part of this piece of legislation. It was something that was thoroughly canvassed with the now leader of the National Party at the time when we were negotiating what that piece of legislation would look like. So it's not contained in the legislation, but remember, we have common law in this country, and if someone feels that the commission or the Government have not paid adequate consideration of those matters, they can ask for a judicial review. So it will emerge over time what those things look like, but we have a fairly well-established tradition in this country. You've got mandatory considerations in all sorts of legislation covering many different provisions; we've got a pretty good idea of what that looks like. Part of that includes consulting with affected communities in sectors and so on and so forth. So I don't think that we need to go any further than we have in any other piece of legislation where we have mandatory considerations.
One of the questions that the Hon David Bennett raised was around whether dairy companies are already in the emissions trading scheme and whether they receive free units in the industrial allocation system. The point that I was making before was that agricultural emissions in the form of biogenic methane and nitrous oxide are not part of the emissions trading scheme; so industrial users like Fonterra—which was the point that you raised—are because that's carbon dioxide, so it's an industrial gas and is covered by the emissions trading scheme. But my point was that in the sector, in terms of the primary production component, those gases are not included in the emissions trading scheme—only carbon dioxide and a handful of other minor gases are.
He's also correct that Fonterra and other processors don't receive an industrial allocation under that system for milk drying. I wasn't around at the time when someone dreamt up the industrial allocation system, and we are taking a look at that whole industrial allocation system because of the various inconsistencies that have arisen over the course of the last 10, 12 years. But at the time that the decisions were made about who qualified for an industrial allocation and who didn't, the process of milk drying didn't meet the threshold of emissions intensive and trade exposed. So there was a whole process by which they looked at every form of industrial use and so on. Whey and lactose do—so there is an industrial allocation for that. Tomato growing does. So those are contained in terms of industrial allocation, but he's correct that milk drying is not. And that's probably a good thing, because milk drying is one of those things where it is low-grade heat, so it is actually quite an easily substitutable at a reasonably economic price technology. So if you subsidised it and you said that they didn't have to face those allocations, then there would be absolutely no incentive for them to shift out of coal or gas or fossil fuels into alternatives.
The next question was around the milestones in He Waka Eke Noa—what the audit processes are. So it took us quite a long time to work through the various milestones that need to be reached in the whole five-year process of that with the sector. So quite a lot of effort was sort of put in to make sure that for those milestones it is reasonably clear about whether or not thresholds have been met. I know that the member does have a background in audit, so it's not strictly the same, but the whole point of the Climate Change Commission is that it is an independent third party, removed from Ministers to the point that there is even a nominating committee in order to put people on to the commission; again, to just provide yet more arm's length.
In terms of costs on production, I think we canvassed that pretty well before the dinner break. It's sort of between, I think it was 1c a litre for milk and 3c a kilo for red meat—just to respond to that point. There was a question which wasn't asked before about processor-level obligations versus farm-level obligations. I will just make this point: there were actually dairy sector organisations that were arguing for a processor-level obligation, because if you're one of those processors and you've got—I don't know—25, 100 farms in your system, whilst you the organisation, the processor, would be the point of obligation, you'd actually be able to work with all of those farms collectively on a response. And we all know for some farms it'll be really easy for them to bring their emissions down quite a lot; other farm systems much more difficult to bring them down. Wouldn't it make more sense to be able to say, "Well, let's kind of net that out across the whole thing."?
So we bought the argument that was made to us by the sector that in an ideal world it would be a farm-by-farm - level obligation, and that's why we set that whole work programme up, because it does allow individual farmers to have control over their farm system. But there is an argument for processors to be involved in that, and Fonterra and Synlait and Silver Fern Farms and you name it are all getting in on this and, actually, have made several years' worth of progress already.
Finally, there were the points around Tīwai and aluminium. Again, I did canvass this before the break, but the point that I was making is that the marginal price here—even if the price was to double to $50 a tonne—is tiny in comparison to other fluctuations like, in the smelter's case, the transmission pricing review or, frankly, currency fluctuations, which are many orders of magnitude more significant than this. We had a whole conversation there about profit versus revenue and so on and so forth, but it is a very marginal cost.
The one thing I would say, as the member's brandishing his iPhone, is that Apple—and this is a point that I am repeating—have entered into a US$2 billion agreement with another aluminium producer to do hydrogen-based, zero emission aluminium smelting, and that makes our smelter completely uncompetitive. So what we want to do in an ideal world is onshore that technology to our smelter here in New Zealand, but we won't do that as long as there's absolutely no incentive for them to do so. We're really keen to work with them to get our hands on that technology and to bring it in, just as we are for some of the emerging—steel's probably about another five, 10 years behind where aluminium is, but we're quite keen to see some of what a new hydrogen-based steel production is like for our steel mill for the same reasons.
I think the principle here is that, actually, we've got to take some responsibility for what it is that we're consuming. We're consuming steel; we're consuming aluminium. Wherever in the world it comes from, we do have an obligation to work out how to deal with the emissions that arise from the industrial processes that are associated with the products that we consume and rely on; and that means getting into the really thorny issues of how to measure, manage, price, and ultimately to change the technologies in those industries, and we're really keen to partner with those industries in order to do that.





Dr DEBORAH RUSSELL (Labour—New Lynn): I move, That the question be now put.
Motion agreed to.





The question was put that the following amendments in the name of the Hon James Shaw to the proposed amendments set out on Supplementary Order Paper 506 in his name be agreed to: 
in clause 110(3) replace new section 127(2) with:(2)However,—(a)the EPA may amend an emissions return or assessment at any time to give effect to the correction of a unique emissions factor under section 91A; and(b)if the EPA is satisfied that an emissions return was fraudulent, was wilfully misleading, or deliberately omitted mention of emissions or removals in respect of which an emissions return was required to be submitted, the EPA may amend the emissions return at any time, under section 120, so as to—(i)increase the number of units required to be surrendered by the participant:(ii)decrease the number of New Zealand units to which the participant is entitled in respect of removal activities.
in clause 110(3), new section 127(3), replace "subsection 2(c)" with "subsection (2)(b)"
after clause 223B, insert:223BASection 127 amended (Time bar for amendment of emissions returns)
after section 127(2)(b), insert:(c)if a person submits an emissions return on receiving a notice from the EPA under section 134A(1), the period of 4 or 7 years in which the EPA may amend an emissions return under subsection (1)(a) or (b) starts from the date of submission of the emissions return.
A party vote was called for on the question, That the amendments to the amendments 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.
Amendments to the amendments agreed to.
The question was put that the amendments as amended set out on Supplementary Order Paper 506 in the name of the Hon James Shaw be agreed to.
A party vote was called for on the question, That the amendments as amended 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.
Amendments as amended agreed to.
A party vote was called for on the question, That Parts 1 and 2, Schedules 2 to 7, and clauses 1 to 3 as amended 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.
Parts 1 and 2, Schedules 2 to 7, and clauses 1 to 3 as amended agreed to.
Bill to be reported with amendment presently.





MENTAL HEALTH AND WELLBEING COMMISSION BILL
In Committee
CHAIRPERSON (Hon Ruth Dyson): Members, we turn now to the Mental Health and Wellbeing Commission Bill. I understand that this is being debated as one question.
Parts 1 and 2, Schedules 1 to 2, and clauses 1 and 2
Hon Dr DAVID CLARK (Minister of Health): The Health Committee recommended the bill unanimously with several suggested changes, which were supported by the Government. 
Hon Nathan Guy: Put some passion into it. Come on!
Hon Dr DAVID CLARK: This is a happy occasion, I tell the honourable member, because the bill was supported by all parties at second reading. If the majority of Parliament votes in support of the bill, it will go through, of course, to its third reading, either immediately following or on the next sitting day and, following that, to Royal assent.
This is a bill that's making swift progress. It is something whose time has come, and I want to thank, from the outset, the coalition partner, New Zealand First, that has supported and worked with Labour to progress the mental health commission, and also our confidence and supply partners, the Green Party. All parties are very keen to see this go through, so it's been on the agenda for this term of Government. Of course, all of these parties also were supporting the mental health inquiry, He Ara Oranga, despite the Government of the day, the prior Government, opposing that work. 
Now, this has come out as one of the recommendations out of He Ara Oranga that we re-establish the Mental Health Commission after the previous National Government disestablished it. But I'm really pleased that now the whole Parliament has united again behind that idea of having a mental health commission. So to respond to Mr Guy's comment, it is something worth being passionate about. It is exciting that we have a whole Parliament united to have a mental health commission in place once again. The bill establishes the commission as an independent Crown entity that will hold Government and other decision makers to account for improving mental health and wellbeing, and it will contribute to better mental health and wellbeing outcomes for people across New Zealand. I'm convinced of that. It will also contribute to achieving equity for Māori and other groups that experience poor mental health and wellbeing outcomes, or poorer than the general population. 
Establishing the new commission is widely supported beyond this Parliament. The majority of submissions to the select committee supported a new commission, and it was pleasing to hear the support for the bill during that second reading debate right here in the Chamber. So I want to acknowledge also before I end this contribution, the members of the Health Committee for their work—
Hon Michael Woodhouse: You're welcome.
Hon Dr DAVID CLARK: —and the improvements that have been made to the bill. That does include you, Mr Woodhouse. Thank you for your work on this. It was great to see a unanimous recommendation from that select committee back to the House with some changes which we have been happy to adopt. So I move that this be taken as one part.
CHAIRPERSON (Hon Ruth Dyson): That's already been agreed to, so you don't need to do that.
Hon Dr DAVID CLARK: Apologies, just instructed by the whips—making sure I'm doing the right thing. I look forward to the contributions across the House.





MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. I thank the Minister for that introduction. He is correct: the National Party is in support of the Mental Health and Wellbeing Commission, although we do have some concerns on this side of the House. The Minister is correct: the Mental Health and Wellbeing Commission came out of the recommendations of the Government's mental health inquiry, He Ara Oranga. But, equally, a concern of this side of the House is that the mental health commission will not have the authority to drive real change.
As the Minister has stated, this is a bit Back to the Future. The previous Mental Health Commission was disestablished in 2012, and there'd be many in the mental health sector who agreed with that decision, because it felt the Mental Health Commission of that day had lost its way. So, fast-forward to today, we have the Mental Health Foundation, who came out after Budget 2020 and were worried, after that Budget, that there seemed to be no resourcing and implementation plan for the recommendations of He Ara Oranga, and it was appearing to stall and drift. So my question to the Minister would be: how is he going to ensure this commission will have enough authority to drive those recommendations forward and, ultimately, drive mental health forward for New Zealanders, who do want to see a real change?





Hon Dr DAVID CLARK (Minister of Health): I thank the member Matt Doocey for his questions. He'll be aware that there's an interim mental health commission in place currently, with board members, that has been supported through the Ministry of Health. It is our intention to ensure that this commission is appropriately resourced, because we all in this Parliament want to see it succeed. In fact, there is one difference to the Mental Health Commission that the prior Government disestablished, in that this one will actually be a more independent Crown entity, and thus will have the ability to hold this and future Governments to account for their work in the mental health space.





MATT DOOCEY (National—Waimakariri): I thank the Minister for that. Right, there is some independence, but independence will not necessarily bring the commission authority.
I do want to draw the Minister's attention to my Supplementary Order Paper, where this side of the House would like to see, under clause 11, the inclusion of the line "including recommending targets that provide clear and specific actions to be undertaken to improve people's mental health and wellbeing". On this side of the House, we do think the mental health commission would benefit from the ability to recommend targets, to set targets, and to report to targets, because, of course, the indicative target of the inquiry was to increase access for New Zealanders from 7 percent to 20 percent. I think it would be important that the mental health commission was able to recommend those targets, to work across various Government departments, to hold them to account, and then to report back to the public that they have been able to increase access for those specifically at the mild to moderate end, who the mental health inquiry, quite rightly, pointed out were not able to access mental health services. I would be interested to know from the Minister why there is no ability for the commission to be able to recommend targets and report on targets.





Hon Dr DAVID CLARK (Minister of Health): As part of its assessment of effectiveness, efficiency, and adequacy of approaches to mental health and wellbeing under clause 11(1)(c), the commission will absolutely be able to consider all recommended targets if it thinks that is what the commission should be doing. If it believes that that is helpful to the Government's progress, or to assessing the Government's progress, it's free to do that. Nothing in the bill precludes the commission from recommending targets if it determines that that's an appropriate approach. The commission will be able to make informed judgments based on evidence; changing the legislation is not necessary to give effect to what the member is suggesting.
I think we probably will agree that if that's something that proves to be useful, we would encourage the commission to do that. But I think it's important that the commission has the flexibility to comment on what it thinks needs to be done, that we preserve that independence, and I don't want the commission locked into specific targets or specific assessments that it has to adhere to, set by this Parliament. I think it's up to the commission to decide how it wants to approach this issue. It has been established as an independent entity, as we have already canvassed.





Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. Just picking up on that last point that the Minister of Health said, there was a slightly circular argument about that, because it's not the commission's responsibility to adhere to the targets but the health sector's. I heard the Minister say that it would be problematic in some way to bind the commission to either do or not do something. Well, I think that's flawed logic. If, as he says, the commission is free to set targets, then why not build that in as part of the functions under clause 11? I very strongly support Supplementary Order Paper (SOP) 509 in Mr Doocey's name, and, indeed, I've got a bill in the members' bill ballot to do more or less the sorts of things that this proposes, right across the health sector. And, indeed, it's modelled on the very language that the Prime Minister herself used in the bill that was passed with child poverty reduction targets.
I think we've seen ample evidence in the health sector in the last 2½ years about why the absence of clear expectations for service delivery leads to drift. The Minister, in his opening remarks, talked about some kind of change of heart that the National Party might have had in respect to the Mental Health Commission. I don't think that's what's happened, because I will have no time and no truck with a commission that acts in most respects more like a Monday morning quarterback, sitting on the sidelines of the mental health sector, making comments about what's going on without any real ability to influence the direction that the sector is going in. I think we're already seeing the same sort of drift, with the lack of delivery, from the mental health report, the Paterson report, that was, I think, so important in actually setting a broad direction.
Lots of hope and money, but no actual detailed plan for the how and the who and the where and the when, is exactly the sort of thing that Mr Doocey's SOP will actually require and encourage the commission to do. So I want the Minister to think very carefully, particularly about the changes in SOP 509 to clause 11, because we can say anything we like about what the intent of the commission is; it's the black letter law that will guide their behaviour, and I think we have a unique opportunity right now to say this is important to us. Bringing clarity to what is expected in the sector, and setting clear targets and specific actions to deliver improvements of mental health, is going to be a fundamental ingredient in the success of this commission.





Hon Dr DAVID CLARK (Minister of Health): To respond to the points raised by the Hon Michael Woodhouse, the challenge, of course, with having targets is that, in this particular context, He Ara Oranga was much more focused on prevention and promotion of wellbeing. It may be that a commission would consider an approach around access targets or other targets too focused on a treatment or illness approach rather than a wellbeing or prevention approach. I think it should be free, as an organisation, as an independent entity, to choose how it sets up its measures of success across the system. So that's what permitted. As I've mentioned before, there's nothing to stop it setting up targets if it thinks that's the right thing to do to hold a Government of the day to account. Indeed, I think it would be anticipated that if the Government of the day set itself targets, the commission would be there to judge the success of the Government of the day in achieving those particular targets it had set itself. That would be a reasonable role to assume the commission might fulfil as an independent monitor.





Hon MICHAEL WOODHOUSE (National): Well, that would be absolutely fine, except the Minister of Health has done an 180 degree turn-around in respect of the setting of targets, particularly in mental health. As shadow Minister in 2017, he called on the Government and the Minister of Health to set a suicide reduction target and proposed a 20 percent reduction in suicidality in New Zealand. Indeed, he forced Dr Coleman, basically, to match him. It was like a mental health telethon on the campaign trail. The moment the Minister gets to office: oh no, that's a bit hard. The narrative was one death is one too many, and that I agree with; I'm not doubting that. But we need to set off on a journey of reduction in self-harm and suicidality in this country, that will not be achieved if we aren't very clear about that as the goal. 
Now, broadly, we all agree that that's the case, but, in order to be able to say, "Well, let's take the first steps in that.", we set the target, we understand the plan, and we understand where the risk is. Whether it's in rural communities—we just had a sharp spike in poor mental health outcomes and suicidality—whether it's our youth, whether it's Māori and Pasifika, who all have higher rates of suicidality than the general population, then that highlights those things for the commission to be able to say, "OK, sector. This is where you should be looking. Good looks like a reduction in these areas and specific actions being taken to improve the mental wellbeing of the people in those most vulnerable groups." 
The Minister can, sure, say, "Well, that can happen at any time." The fact is he leads. He leads the discourse and the thinking around this, and he pivoted on that. The moment he had the opportunity to set a target, he equivocated. He stepped back from that. Actually, I think that strengthens the case for the commission to be able to be more of a watchdog than a poodle and say, "You know what: this Government and its agencies should be heading in this direction." That's why putting it into the law is going to be so important.





Hon Dr DAVID CLARK (Minister of Health): At the risk of getting into the debate about what targets should be and so on, as the member has, I would say that the interim mental health commission is precisely tasked with ensuring that the Government is doing the things it said it would do in terms of rolling out a programme of increased access.
But the Government has chosen to put a record amount into mental health, $1.9 billion. Included in that $1.9 billion is half a billion dollars that is focused on widening accessibility to mental health. It is the very job of the interim mental health commission, and in a similar way I'd imagine a permanent mental health commission to hold the Government of the day to account for the tasks it set itself for delivery of those particular goals.
What those goals might be is, indeed, a matter for debate. I don't agree with the way the member has characterised my previous views or positions. I don't want to get too far in to that. But I fundamentally think the important thing here is that the commission has the independence to, if it chooses, set some goals or things it's going to hold the Government to account on, or to hold the Government to account on, in an independent way, the tasks it set itself. It's up to the commission, and the bill is entirely permissive, in that regard. We seem to be having the same conversation backwards and forwards, so I'll leave it there.





MATT DOOCEY (National—Waimakariri): Well, just to carry on where the Minister left off, I think the Opposition and the Minister going back and forth, in fact, experientially highlights the argument we're making, because if there is no clarity on who sets the targets, then can the commission and the Government just have that circular discussion that gets nowhere? Then we end up with the problem we had with the last commission where people felt it had lost its way because it had no authority to make a difference. So if the Minister is saying, "Well, we don't need targets in this legislation because the Government can set targets.", what happens then, when the Government chooses not to set targets? Then how can the commission hold the Government to account? The whole point here is, by setting a target, you become accountable, and then the Mental Health and Wellbeing Commission will have authority.
On this side of the House, we're concerned that we will have a commission set up, and then no one will listen to it. So how is this commission, if it's not having targets, going to have teeth to make a difference, because there wouldn't be one member in this House who hasn't been moved by the stories they've heard of their constituents impacted by mental health themselves, their family, and their work colleagues. We've all heard the call in the 52nd Parliament that we need to get on and work together to make a difference. Now, the Opposition agrees with that, but if the Minister could just clarify, then: whose role is it to make targets: the Government or the commission? How do we end up not getting in this circular discussion that we are tonight where both the Government and the commission can't hold each other to account?





Hon Dr DAVID CLARK (Minister of Health): Well, I mean, the member asks good questions here. The point I would make is that the commission's job will be to hold Governments to account for their delivery of mental health services, for the improvement in mental wellbeing across society, and so on, whatever that looks like. So, if the Government, as some Governments have chosen to do, sets narrow—I would argue, pointless and/or misleading—targets for themselves that they think they can achieve politically but actually make no meaningful difference to people's wellbeing, the commission can choose to observe them or ignore them, or it can set out real measures of progress, consult experts, consult the consumers in the sector who use the service, and make its own judgment about whether a Government is making progress or not. So I don't see that the authority should sit with the Government about what the right targets to measure are or aren't. I think that should sit with an independent commission that can choose to consult with those who are actually using the services, consult with experts, look at the international evidence, and form a view on whether Governments are doing the right thing by their people in terms of mental health or not, regardless of whether the Government of the day chooses some convenient political targets that it might meet.





MATT DOOCEY (National—Waimakariri): I thank the Minister for that answer. Then, if he agrees that the Mental Health and Wellbeing Commission should be able to set targets, where in the legislation does it give the authority to set targets?





Hon Dr DAVID CLARK (Minister of Health): I have covered this point previously, but I'll cover it again. As part of its assessment of effectiveness, efficiency, and adequacy of approaches to mental health and wellbeing, under clause 11(1)(c), the commission will absolutely be able to consider or recommend targets if that is what the commission thinks the Government should be doing.





CHAIRPERSON (Hon Ruth Dyson): The question is that Matt Doocey's amendments to clauses 8 and 11, set out on Supplementary Order Paper—
Matt Doocey: Madam Chair?
CHAIRPERSON (Hon Ruth Dyson): —509, be agreed to.
Matt Doocey: I'm sorry, I'm a bit confused. Are we carrying on with our calls?
CHAIRPERSON (Hon Ruth Dyson): Well, I didn't hear anyone take a call, so I started putting the vote. [Interruption] Sorry, you didn't seek a call, so I didn't—
Matt Doocey: Yeah, I was a bit perplexed. I didn't realise that we were—
CHAIRPERSON (Hon Ruth Dyson): I don't call people who don't seek a call, as a general rule.
Matt Doocey: I didn't realise we were near the end of the debate. I thought we would be at the start of it, and I thought there'd be some leniency for the Minister sitting down and the Opposition members collecting their thoughts.
CHAIRPERSON (Hon Ruth Dyson): Mr Doocey, do you have a point of order?
Matt Doocey: No. I'm seeking a call, Madam Chair.
CHAIRPERSON (Hon Ruth Dyson): I had already started taking the vote. You could urge for my reconsideration.
Matt Doocey: I raise a point of order, Madam Chairperson. Speaker's ruling 63/3 says the member may seek a call before the Chair takes the vote.
CHAIRPERSON (Hon Ruth Dyson): I'd already started it—I'd already started taking the vote.
Matt Doocey: That's right. But Speaker's ruling 63/3 says that the Chair would need to finish the vote, and the member can seek a call before it's finished.
CHAIRPERSON (Hon Ruth Dyson): Could I just ask the member to resume his seat. Mr Doocey, if you want to be called, you have to stand and seek a call. So if Mr Doocey wants to try that now—Mr Doocey.





MATT DOOCEY (National—Waimakariri): Madam Chair, thank you very much. So it's fair to say the Minister has been very clear tonight that he does not want the word "targets" explicitly mentioned in the Mental Health and Wellbeing Commission Bill, and one can only, well, assume why that might be. That might be also to do with when the Opposition does ask how the Government is tracking on increasing the access target from 7 percent to 20 percent and doesn't get an answer.
The next part I want to move on to on my Supplementary Order Paper is looking at the focus of the Mental Health and Wellbeing Commission on research. This side of the House, under functions of commissions, believes that the commission should have the authority to direct research into mental health. What is interesting is after Budget 2020, the organisation New Zealanders for Health Research put out a press release, and they did some analysis: under Budget 2019, there was only $131 million put into health research. That is 0.81 percent of the healthcare spend. In Budget 2020, that had fallen by $13.7 million to $117.5 million—down to 0.71 percent. They are advocating that on an international benchmark, New Zealand should be investing into health research at 2.4 percent of our health spend. You could even go further and, potentially, look at some ring-fencing and say that, out of that total health research spend, a percentage of that should be for mental health. One of the reasons I think this is important is because, as we know in mental health, we still don't know a lot. In fact, I've heard academics say we are 50 years behind where physical health is, in the sense of research, and, if you look at the amount of research and development in the last 50 years for physical health, it shows how much we have to make up.
So my question to the Minister is: why is there no mention of research, and what importance does he put for the Mental Health and Wellbeing Commission on focusing on the need for research in mental health?





Hon Dr DAVID CLARK (Minister of Health): The commission is required to have sight of evidence. It is a broad term; that includes research and also includes other components such as data and evaluation. The commission's regard to consider the available evidence clearly encompasses research. So my assessment of it is that changing the legislation is not necessary to give effect to the point being raised by the member.





Hon MICHAEL WOODHOUSE (National): While we're on the subject of what the bill does and does not say, I want to draw attention to the amendment to clause 11(3) in Mr Doocey's Supplementary Order Paper 509, which talks about promoting a social investment approach in carrying out the functions of the Act. I recall from the report—and I can just about give the member the page number; it's 201—in its summary of the core functions of the mental health commission, that it is specifically identified in the recommendations that the commission "Develop an investment and quality assurance strategy for mental health promotion and prevention". Yet the functions and powers of the commission as listed in clause 11 do not include that. I think that's a really, really important additional function that the commission should have in law, because what an investment approach does is it takes the question of where the investment in our mental health resources is best put, and, at the moment, frankly, I think the DHB system is one that works against where the best investment should be going, which is into that low to moderate mental health need, which the report specifically identified. Whereas I think there are plenty of examples, including in the Minister's own home city, where the DHB has probably diverted—well, not probably: it has diverted resources into that secondary care sector at the expense of the very much needed primary and community NGO-type mental health for low to moderate conditions, where that was the better investment.
Actually, I think the amendment to clause 11(3) by the addition of (3A) is absolutely vital in making it clear, not only to the commission but to the DHBs themselves that that is where—rather, I wouldn't jump to the conclusion—the research that Mr Doocey talks about, but also a specific focus on where the best investments should be put absolutely should be in the black-letter law so that there be no doubt that the commission can direct, can require, rather than being the Monday morning quarterback that I talk about. For that reason, I think that clause in particular is very much needed in the bill.





Hon Dr DAVID CLARK (Minister of Health): My view is that there's no particular need to specify the commission have a particular approach, or promote a particular approach, such as the social investment approach. In fact, the commission itself, through assessment of the evidence, which is the point we've just covered—the available research currently—may decide that a different approach is better for advancing the wellbeing.
So this is somewhat contradictory in terms of what the member's put forward: at the one point suggesting that you've got to have an eye for the available evidence and research, and then suggesting a particular approach that might come from that research. I would say that the commission, ultimately, would be best placed to consider whether a social investment approach or another approach is the appropriate way to perform its functions.





MATT DOOCEY (National—Waimakariri): Just following up on that, I think the Minister misunderstood his own legislation, because it says very much, under clause 8(2), "the Minister must have regard to the need for members to collectively (a) have knowledge, understanding, and experience of—", and then it goes on to have a range of approaches: public health, population health, improving health outcomes. All that this side of the House is saying is that, out of the range of those health approaches, why would you not have "social investment approach", because, as we know with social investment, it is taking the longer-term view—and the Minister himself talked about the challenge between treating mental illness and also taking a preventative approach. We all know the social investment approach is grounded in looking at long-term welfare liability, committing resource upfront—that might be doubly expensive—but to be actually intervening early and making a difference.
I think you could apply the same with mental health, especially when we know that, for people with lifelong mental health illness, 50 percent of them first present before the age of 14; 75 percent of them first present before the age of 24. Yet the average age of their first presentation is late-20s, early-30s. So we know there's about a 10-year gap where we don't capture people, and actually taking an approach that would actually be also data driven would be ensuring that all our services are feeding in the data at an anonymous level so that we can build that evidence base. And where we would disagree with the Minister around the term "evidence" is that evidence only points to where the evidence is at the moment, and that comes back to my original point—that we should actually be growing the evidence base. That's why, in my Supplementary Order Paper, it talks about the mental health commission, in clause 11(1)(d), "to promote alignment and collaboration in research undertaken in respect of the effectiveness of approaches to mental health and wellbeing, including identifying gaps in the evidence base and promoting research to address those gaps".
So I would like to hear from the Minister: yes, he does have evidence mentioned in this legislation but where does it refer to the responsibilities of the Mental Health and Wellbeing Commission to actually focus on research and direct research to inform that evidence base? Or this mental health commission, in fact, will have no oversight or interest in research.





Hon Dr DAVID CLARK (Minister of Health): Promoting collaboration across entities that are involved in or contribute to mental health and wellbeing may involve encouraging good practice, sharing information, and working with stakeholders to identify unmet needs and gaps. It will also include sharing evidence and ensuring that the evidence base is strong. I think that's likely to be a clear part of the commission's role. Again, I don't think that that needs explicit stating, and, in particular, I don't think that a particular approach needs to be recommended. The commission should have regard to the evidence. They should seek to learn the evidence as it's emerging, and involve themselves in that.
I think also the other point to make, in response to the member's wider point, is that the Health Committee's recommendation—accepted by the Government—that the bill is clear that when it's carrying out its functions, the commission must consider the available evidence, is specified in clause 11(3)(a) of the bill—so, you know, to take it right back to the point of where this is already cited. So I think the bill as drafted addresses the issue adequately, without getting us into a position where it's recommending one particular approach that is fashionable right now be adopted.





MATT DOOCEY (National—Waimakariri): To conclude, in my final call for tonight on this committee of the whole House for the Mental Health and Wellbeing Commission Bill, National will be supporting this bill. But, for the reasons we have outlined in this debate, we do want to put it on Hansard that we do have concerns that the Mental Health and Wellbeing Commission may not have the authority to deal with the demands that New Zealanders and mental health services are facing today, especially in the context of COVID-19, where the Epidemic Response Committee has heard of forecasting by Sir Peter Gluckman of potentially tens of thousands of New Zealanders who will lose their job and lose their incomes and develop real, serious mental distress. No one in this House wants to see the Mental Health and Wellbeing Commission go back to the future. We have been here before. Many in the mental health sector felt the previous commission had lost its way, and we do implore the Government that giving this commission the ability to focus on some of those key points mentioned in my Supplementary Order Paper today will give the commission more authority and ability to work across many Government departments—Corrections, Education, Justice, Health, and others—to actually develop a mental health strategy which is whole-of-Government and will make a real difference in New Zealanders' lives. Thank you, Madam Chair.





Hon Dr DAVID CLARK (Minister of Health): Just to close, I do want to thank that side of the committee for its support of this commission, that has been worked on by New Zealand First, Labour, and the Greens. We believe that this is a huge step forward in having an independent commission able to hold this Government and future Governments to account, in a thoroughly independent way. I commend this bill to the House.





The question was put that the amendments set out on Supplementary Order Paper 509 in the name of Matt Doocey be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 56
New Zealand National 55; Ross.
Noes 63
New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.
Amendments not agreed to.
Parts 1 and 2, Schedules 1 to 2, and clauses 1 and 2 agreed to.
Bill to be reported without amendment presently.





PRIVACY BILL
In Committee
CHAIRPERSON (Hon Anne Tolley): I understand that agreement has been reached to take this as one part. 
Part 1 to 9, Schedules 1 to 10, Clauses 1 and 2
CHRIS PENK (National—Helensville): Thank you, Madam Chair.
Kieran McAnulty: They don't even care.
CHRIS PENK: Oh, I care deeply, Mr Iain Lees-Galloway. I care more than the Minister of Justice, clearly, because I'm here and presenting on behalf of the National Party. 
We support the Privacy Bill, we continue to support the Privacy Bill, we have since it was largely—or at least, commenced in the conception and drafting thereof under a previous Government. We think that it is a matter of some importance to the nation, and it's appropriate that the Parliament take it seriously. Privacy is a human right and should be recognised as such, at least in the form of a good bit of legislation such as we have before us today. 
I think it's worth noting that the Privacy Bill doesn't cover every scenario in terms of protecting privacy in this country, but it is good as far as it goes and should be judged on those merits for the purpose of the committee stage. Obviously we'll confine ourselves to making comments about that which is in the bill and not that which is not in the bill. 
I look forward to something of a discussion with the Minister, or a Minister, in terms of a couple of questions that we have in the way that we conduct these committee stage exchanges. I will pose a number of questions, but happy, obviously, to engage throughout, and on a couple of areas that seem to me reasonably key. I did have the benefit of being a member of the select committee for some of the process of its consideration and the deliberation, albeit not all of it. So on some occasions I'll be asking questions that I'm reasonably confident I know the answer to, but think it's worth putting on record so that the Minister has an opportunity to provide some clarity and some guidance and also, of course, an element of testing, albeit from a point of view that is somewhat—not in an unduly or unhelpfully partisan manner for a subject area that as I began my contribution, I think is well agreed in principle. 
So my first question to the Minister would be around the fact that we have a new piece of legislation that, like its predecessor, is based on a number of information privacy principles. There are 12 of them, and I wonder if the Minister would care to provide a comment. I'm just looking in his direction. I don't want to catch him out, so to speak. But I'm curious to know if the Minister has any thought about whether there should be any further information in terms of privacy principles or if he's happy that we, essentially, relegislate under the current framework of the existing principles, but merely update the detail under each of those. So that would be my first question, if the Minister is in a position to answer, failing which I'll continue on another. In fact, I see he is.





Hon ANDREW LITTLE (Minister of Justice): Thank you, Madam Chair, and I thank the member for his question. This bill, the member might well know, goes back some years. In fact, it started under the previous Government, and it's no criticism that it has taken this long to get to this point. A very important area of human endeavour—particularly in this day and age—is to ensure that we have a good legal framework to protect privacy. 
So these privacy principles were well canvassed and well thrashed out in the original legislation. They were well reviewed and well considered in the review of the legislation, and in putting together this bill. Even though the bill started life in 2011, I think, and has been reconsidered since—and certainly on the change of Government, there was a further reconsideration about whether it met the mark. There were some changes made to bring it up to spec, particularly with the European data requirements. But these principles have proved to be enduring, and with some minor changes and tweaks, I think, generally, members on both sides of the House have got to the position that, actually, they serve the purpose well. They're a good, high-level indicator of what is expected and the extent of protection that ought to be in place, and a basis on which the rest of the legal framework can fall. 
So I stand by the principles as they are. They've been well considered, and they've been proven to work in practice. 





CHRIS PENK (National—Helensville): Thank you, Madam Chair, and I'm grateful to the Minister for that answer. On this side of the committee, I think we're in a very similar space, at least as far as the ambit of the bill itself is concerned, as I noted earlier.
I'm interested also to just flesh out a little bit of the Minister's thinking around the operation of the new offences and penalties that are created by the bill. It's one of its key features. So for those who haven't had the benefit of reading it closely, I'll note, for the sake of the debate, that the bill does create new criminal offences, including misleading an agency to obtain access to someone else's information or destroying a document containing personal information, with the context being that it was known that a request had been made. There are penalties of up to $10,000, which is considerably higher than the fines under the current legislation. So no small matter, but that's appropriate if we regard privacy as a serious matter of protection, or indeed as a human right, as I characterised it earlier.
So my question for the Minister is how he views these penalties under the Privacy Bill—soon to be the new Privacy Act—in relation to the penalties that are available under the civil regime. So where the tort of privacy currently exists and it's available to a person to take a cause of action against another person for a breach of privacy, I'd be interested to know from the Minister how he feels that these should interact—whether, for example, an offence allegedly committed under the Privacy Bill would preclude a civil action in a similar kind of space or in relation to the same action and vice versa, bearing in mind, of course, the principle of double jeopardy at play. So I'd welcome any comments that the Minister has on that.





Hon ANDREW LITTLE (Minister of Justice): I thank the member, Chris Penk, again for his question. I think the member can be assured that the level of penalties for offences in this bill are comparable to offences in, for example, the Human Rights Act and those that would also be considered by the Human Rights Review Tribunal. So we know that at that sort of civil level of penalty, that $10,000 mark for an individual is pretty much the top end. It is a pretty severe penalty for an individual who offends against the provision. But it's not at the $100,000 or $500,000 mark. You wouldn't expect that for this sort of thing. 
These penalties are greater than what appears in the current legislation, but that is right, not only because inflation will have eroded the value of those penalties but also because there is, for good reason, greater sensitivity in this day and age about privacy and about breaches of privacy that ought to attract a material enough penalty, which I think these provisions do.





CHRIS PENK (National—Helensville): Thank you, Madam Chair, for the opportunity to continue a little bit on the subject of penalties, and I'm grateful to the Minister for his explanation of the level of penalties set by the bill, but I wonder if he can provide any guidance on how he sees the operation of offences under the Act as compared with what might be available to a private litigant? So, in a civil action under the tort of privacy, it might be available for a person to sue for a breach, and I'm wondering if the same action that falls within the ambit of this bill might also be available to a person to sue in respect of that in that civil realm.





Hon ANDREW LITTLE (Minister of Justice): The jurisprudence on privacy in New Zealand has really been geared around the Privacy Act, and it's what the Privacy Commissioner and what the Proceedings Commissioner has done in relation to the Human Rights Review Tribunal. In terms of private action or a piece of civil litigation in relation to privacy, a litigant would have to demonstrate harm, which is what they're, effectively, seeking, either compensation for that or reparation for that or some sort of exemplary damages. But that area in New Zealand common law is not well developed, so I'm not particularly fussed that the offence provisions here don't allow somebody who has suffered a civil wrong to launch litigation for that. This is the means by which people can enforce their privacy rights. They can do it through the Privacy Commissioner and they can do it through the Proceedings Commissioner, who takes cases to the Human Rights Review Tribunal. So that's the important part of the privacy jurisprudence for New Zealand and will continue to be so.





CHRIS PENK (National—Helensville): Thank you, Madam Chair, and, again, grateful for the interaction on that one. My next line of questioning, or perhaps exploration, is in relation to the exemptions for news media.
I note that the way that the bill is structured is that it is an "agency", as defined in the legislation, who has certain obligations for the treatment of private information. There are a number of exclusions, one of which we might come to a bit later, but, initially, I'm interested in the exclusion that an "agency" does not include a news entity in relation to its news activities. We see that a "news entity" means one that is, essentially, conducting news activity, which in turn means, among other things, publishing news observations and current affairs and so on.
So given that "publishing" in the bill can mean publishing on any medium, just wondering if the Minister's got any views about how this may apply, whether immediately or perhaps in due course, to social media platforms. I appreciate that it's a vexed area more generally and outside the realm of privacy legislation as well, and I do acknowledge that it's an evolving area, so I don't think it'd be reasonable for anyone to expect the Minister would have a complete answer in that regard. But, certainly, any guidance he can give I think would be useful to sort of develop the thinking of this committee, and no doubt for others who are interested in developing and, indeed, applying privacy law going forward.





Hon ANDREW LITTLE (Minister of Justice): Thank you, Madam Chair. I think, from the outset, the current Privacy Act was conceived on the basis—and it was a very debateable point at that time—that the news media were able to protect their sources. As a liberal social democracy, we've long cherished the role that the fourth estate plays as part of our democracy, not just calling politicians to account but calling private organisations and public organisations and individuals to account, particularly those who wield power or exercise power and influence. So protecting the news media has always been a vital objective in the legal framework that we've got.
In terms of defining what that is, clause 6, which is the interpretation section, is very clear in its definition of both news activity and news entity. So news activity involves gathering, news gathering, observation on news, current affairs. Now, somebody might say, well, somebody with a Twitter account is observing news, sometimes very insightfully and sometimes not—in fact, I'd say more often not insightfully. But I think where the rubber hits the road is in the definition of news entity, and a news entity is one that is subject to oversight by the standards agency—so the Broadcasting Standards Authority, the New Zealand Media Council, or equivalent. 
So it's not anybody who rocks on up and says, "Right, I'm a news outlet." We expect them to observe basic journalistic principles: the need for fairness and balance, a commitment to accuracy. No one's perfect and people get it wrong, but you want an institution that is committed to that. So I'm satisfied that the definitions in clause 6 of the bill provide the safeguards in relation to the protection afforded news media. We want them to have that protection, but we don't want anybody just rolling around claiming that they're somehow a news entity and doing news activity, when that isn't the case. I think there's a very clear definition here that protects those who are subject to the accountability of the real news media and it protects the news media in doing their job.





CHRIS PENK (National—Helensville): Thank you, Madam Chair, and, again, thanks to the Minister. I suppose I might just add, if I may, an observation on that area, having had the benefit of a discussion at the select committee level. We thought that it would be helpful to provide as much clarity as possible—notwithstanding that it is a developing area, of course—in the social media space. So with "news entity", which the Minister rightly highlights as being a key aspect of that definition, essentially—and, therefore, that exclusion—we talk about those who are, or are employed by one who is, subject to the oversight of the Broadcasting Standards Authority, Media Council, or other body prescribed as a regulatory body by regulations made under the relevant section of this Act. So I presume it would be within the purview of the Minister of Justice, in whose name this bill comes before us, effectively, to be able to control that. In fact, actually, I should acknowledge I might be wrong in terms of the Minister who would be suggesting that those regulations be made. But, in any case, it would be within the ability of the Government of the day to make regulations to acknowledge updating circumstances in the media space as a bit of a compromise whereby we want to provide as much certainty as possible and not merely talk in general terms about what it is to be a publisher, and so forth. So I think that's, if I may say, a helpful discussion that we've been able to have on both sides of the House, and, indeed, following the select committee process that was also very constructive in that regard.
I did have one other question in relation to the definition of "agency", and it was an invitation for the Minister to comment on the exclusion to do with inquiries. So, for anyone following along at home, or, indeed, the Minister himself, in the "Interpretation" section—that's clause 6(1)(b)(x)—an inquiry is not included in the definition of an "agency", whereas some of the other exclusions are very worthy. For example, members of Parliament in their official capacity are excluded, which, I have to say—albeit with a vested interest—I think is very right and proper. For an inquiry to not be subject to the principles and the prescriptions and the proscriptions of the Act seems to me, perhaps, surprising, but there might be a good explanation for it. So any thoughts that the Minister may have, and I appreciate I'm putting him on the spot somewhat, in a relatively small aspect, albeit important, given the number of inquiries that are conducted. If the Minister has got any comments in relation to that, I would be grateful to hear them.





Hon ANDREW LITTLE (Minister of Justice): Thank you, Madam Chair. I think the reason for that, if I could assist the honourable member, is because the framework around inquiries is generally covered by the Inquiries Act. So an inquiry, as we commonly understand it, which is usually public, is subject to a number of constraints and rules and regulations, and so any privacy obligations and obligations to protect privacy are covered under that legislation. So it doesn't need to be replicated or duplicated under this, the generic Privacy Bill. 





CHRIS PENK (National—Helensville): Thank you, Madam Chair, for the opportunity to have one more call—thank you.
I'm just, finally, curious on the subject of what is described in the commentary, as reported from the Justice Committee—that fine body—in relation to commissioners' decisions on access requests. And so what we've got is an understanding that the commissioner, being the Privacy Commissioner, would be able to make directions on complaints about access to information. And then if the person who'd made a complaint was not satisfied with the finding, or, perhaps, someone being dissatisfied in having a finding made against them to be able to appeal that to the Human Rights Review Tribunal. So that's a deliberate policy decision that's been made. I make that observation on the basis that, previously, I think I'm right in saying, the Human Rights Review Tribunal would have a prior involvement in the process. So if there's any particular thinking behind that that the Minister's able to share with us, that would be useful to know. Thank you.
Simeon Brown: Madam Chair.
CHAIRPERSON (Hon Anne Tolley): I think the Minister's—do you want to respond to that or do you want a bit more time?
Hon Andrew Little: If Mr Brown wants to take his call and I'll respond to both.





SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair, for the opportunity to take a call on the Privacy Bill, an excellent piece of legislation which was brought to this House by the National Government—a great piece of National legislation which the Government's still progressing many years into its first term, and only term, in Government—this, the Privacy Bill.
I just want to cover a couple of points in this legislation. I'd like to talk about cloud services, which are not to be covered by the principles relating to overseas disclosure. It says in the commentary, "We consider that the obligations in clause 19 of the bill as introduced, IPP 11(3) to (6) (which, for reasons … we recommend renaming to IPP … should not apply to an agency transferring information to a cloud storage provider or other overseas processor." I was wondering if the Minister would like to give the committee some explanation as to why that has not been covered in those principles and that those principles do not apply to an agency transferring information to a cloud storage provider or other overseas processor.
A big issue which is developing—cloud storage services are becoming more and more part of our lives, and I think it would be helpful for the committee to be able to understand the issue that is at play here and the impact that it has on cloud storage services, which New Zealanders use in their day-to-day lives. Thank you, Madam Chair.





Hon ANDREW LITTLE (Minister of Justice): Thank you, Madam Chair. Just responding to Mr Penk's—I was going to say his final question, but I hesitate to tempt fate on that regard, but just to say that access to information is a vital principle and a vital objective. So the Privacy Commissioner has a role to play to ensure that those seeking or who have been declined access to personal information from an agency can go to the Privacy Commissioner and get a ruling on that, and the Privacy Commissioner can take an interest in that. That is important, and the bill is about—as, indeed, is the current Act—maximising access to personal information held about you so that you can get that or a person can get that.
In relation to Mr Brown's question, a number of issues arise with information stored on the cloud. The question is, of course, who controls that, and if a cloud operator is an overseas entity, it's going to be difficult for the Privacy Commissioner to have jurisdiction over that. The way the Privacy Commissioner operates and what we seek to do is to ensure that where information is stored in the cloud, the agency who has stored it is the outfit who you go to to claim your right of access where that is an issue. And we are currently working with many countries about ensuring that we can protect the rights of citizens, of individuals, in terms of access to their information that, although it might be controlled by an agency, is stored by cloud services that themselves are controlled offshore, and we want to make sure that individuals don't lose control over that data and the way that is processed and used by that cloud operator. But the ability to do that cannot be covered in this legislation because it is confined to New Zealand territory. The extraterritoriality requirements that we might have will be covered by other provisions.
The question was put that the following amendments in the name of the Hon Andrew Little to the proposed amendments set out on Supplementary Order Paper 482 in the name of the Hon Andrew Little be agreed to: 
in clause 2(2), replace "1 November 2020" with "1 December 2020".
in clause 19, information privacy principle 12(3), delete "and sections 212A and 212B".
in clause 47, replace "an individual" with "a person".
in clause 64(2), replace "individual" with "person".
in clause 67, replace "an individual" with "a person".
in clause 74, definition of action, replace "section 6" with "section 6(1)"
in clause 75(3), replace "request made by an individual" with "request made by a person".
replace clause 102(1) with:(1)This section applies if a complaint or matter is referred by the Commissioner to the Director under section 84A, 89B, 96(5)(b) or (6), or 99(4)(a) or (5).
replace clause 127(2) with:(2)The agency must—(a)comply with the notice as soon as practicable after receiving it unless it is cancelled or suspended; and(b)if applicable, remedy the breach by the date stated in the notice unless that date is varied or modified.
in clause 191, replace "8 November 2020" with "8 December 2020".
in clause 216, replace "8 November 2020" with "8 December 2020".
in Schedule 1, clause 1, replace "1 November 2020" with "1 December 2020".
in Schedule 8, replace "1 November 2020" with "1 December 2020" in each place.
Amendments to the amendments agreed to.
The question was put that the amendments set out on Supplementary Order Paper 482 in the name of the Hon Andrew Little as amended be agreed to.
Amendments as amended agreed to.
Parts 1 to 9, Schedules 1 to 10, and clauses 1 and 2 as amended agreed to.
House resumed.
The Chairperson reported the Climate Change Response (Emissions Trading Reform) Amendment Bill with amendment, the Mental Health and Wellbeing Commission Bill without amendment, and the Privacy Bill with amendment.
Report adopted.





RESOURCE MANAGEMENT AMENDMENT BILL
Second Reading
Debate resumed from 2 June.
Hon EUGENIE SAGE (Associate Minister for the Environment): Tēnā koe, Madam Speaker. Thank you. Very pleased to take a call on the Resource Management Amendment Bill. When we were last in the Chamber discussing this, Opposition members were railing against the bill. It is a very important bill and it is the first phase of this Government's changes to the Resource Management Act (RMA). There is a review panel chaired by Judge Randerson and that is looking at more comprehensive reform. But this bill is important because it removes some of the worst changes that the former National Government made to the RMA with their Resource Legislation Amendment Act. 
Some of those key changes are the very Draconian powers which the former environment Minister, the Hon Dr Nick Smith, provided for himself, and they were widely criticised in submissions. Those were the powers in section 360D, where it enabled the Minister to make regulations to either prohibit or remove rules that councils had developed and included in their district plans, if they overlapped with any other subject matter. So these were really Draconian powers allowing the Minister just to come down on top of a district plan which had been through the whole public consultative process, maybe even had been to the Environment Court and had appeals resolved there. These Draconian powers are going, under this bill. Similarly, for the powers that the former National Government put in, in section 360G of the Act, which allowed the Minister the ability to make regulations so that certain resource consent applications had to be considered and processed in 10 days. So a very narrow window of time to consider those applications and no ability to make public submissions.
One of the other Draconian powers that this bill removes from the RMA is section 360H, which was the Minister's ability to make regulations, again overriding the primary legislation by requiring that there not be public notification on certain activities, cutting right across the ability of councils to set out in their plans what should be notified and what shouldn't. So those changes in this bill are quite an important removal of the tinkering which the Resource Legislation Amendment Act did. 
But more important are the changes that this bill makes to the way in which freshwater planning is done at the regional level through New Zealand. With the new strengthened national policy statement (NPS) on fresh water and the new national environmental standards on fresh water, which this Government has put in place to ensure that our rivers are swimmable both for people and fish and for gathering mahinga kai within a generation, we need a much more nimble process for enacting the changes that the NPS requires in regional plans. So what the bill does is set up a new process by which councils have a panel of freshwater commissioners who consider the submissions on the plan changes which implement the NPS, and those commissioners include people with expertise in tikanga Māori, recognising that mātauranga Māori and te mana o te wai are at the heart of the freshwater NPS.
So people will have the appropriate expertise. There will be a senior judge involved in that, and these freshwater commissioners will come from a centralised pool, highly specialised. There'll also be a representative from the regional council on that panel of commissioners. It is a process for considering and making changes to the regional freshwater or land and water plan, which is very similar to that which was adopted in Auckland for the development of the unitary plan. So, yes, there will be some restrictions on appeal rights, but that is only if the regional council rejects the recommendations which this panel of commissioners makes. It is a major improvement to regional land and water planning, which has been often controversial around New Zealand, because of the different interests of water users, land users, and those valuing instream values, whether they be for recreation or supporting birds and wildlife. 
One of the other major changes that this bill makes is to ensure that it is compatible with the zero carbon Act, which we enacted in the Parliament in December last year. That Act sets out a framework of enduring institutional arrangements with the establishment of the Climate Commission to ensure that New Zealand is on target to mitigate and adapt to climate change. But one of the problems with the RMA at present is it doesn't allow decision makers to take into account the greenhouse gas emissions of activities. So the bill enables that matching up with the zero carbon Act to occur, and the implementation of these changes will only take place when emissions reduction plans have been done by the Climate Commission and when central government has had an opportunity to provide some national guidance on how that should be implemented under the RMA to ensure that there is national consistency. Ensuring that our climate change targets are reflected in the RMA will help ensure a cohesive approach to climate change, so it's quite a major change that the bill is making. 
In terms of the other areas where the changes are important, in subdivision the National Government with the Resource Legislation Amendment Act (RLA Act) reversed the presumption, the quite restrictive presumption, in the RMA around subdivision to potentially make it a permitted activity. This bill puts it back so that subdivision can't happen unless it's allowed by resource consent or a rule in a district plan. That is because in an age of rising sea levels, more intense storm events, and increased floods, we want to make sure that subdivision and housing development occurs outside of areas of natural hazard. Having a very permissive approach to subdivision cuts right across that. So there are some quite substantial changes in the bill. 
The last of the areas I'd like to comment on was just the increase in public participation, cutting out some of the changes that the RLA Act made that really restricted the rights of the public to get involved. This Government has a different approach and recognises the value that public participation—submissions, appearing before hearing panels—has in providing more information to decision makers. The bill actually restores that, because those changes that the former Government made were widely opposed by submitters. 
This is the first in other changes to the RMA to make it more effective, more nimble, to reintroduce public participation rights, to override and remove those very Draconian powers that were given to the Minister by the former Government, and to really make our freshwater planning system more nimble, and to ensure that the RMA aligns with the zero carbon Act. I commend the bill.





Hon JACQUI DEAN (National—Waitaki): Thank you very much, Madam Speaker. As with previous readings, it is for me to indicate that National opposes this Resource Management Amendment Bill at its second reading, and really to note that what this bill, in effect, does is largely to reverse the changes made to the Resource Management Act (RMA) by the previous Government, under National's Resource Legislation Amendment Act 2017, which was all about reducing the bureaucracy that simply gets in the way of creating jobs, of building houses, and also of providing for good environmental protection. It is ironic that, at the very time we are in this House debating yet another RMA amendment bill, the Environment Committee is at the very same time considering the Urban Development Bill, which does exactly the opposite of—I'm looking behind me for my colleague Erica Stanford, who sits on the committee with me and who shares, I'm sure, the same dismay at the fact that, on the one hand, the RMA is loading up bureaucracy and proudly doing so, if the last speaker was anything to go back, yet at the same time the Urban Development Bill is doing exactly the opposite. So which way is it for this Government?
Hon Member: It's incoherent.
Hon JACQUI DEAN: Well, it is; thank you for that. It is an incoherent approach to planning in New Zealand. And what, I guess, makes it even more incoherent is the fact that, last November, the Government appointed an expert Resource Management Review Panel to review the RMA and to produce reform proposals. So not only do we have an RMA amendment bill in the House today, which is proposing more bureaucracy, we have an Urban Development Bill cutting down on consultation quite severely. But the third leg to this unfortunate stool is that the Government has a Resource Management Review Panel and something like 300 working groups which this Government is churning through—they call that work. It's called working groups.
So this Resource Management Review Panel is going to produce a report this month. So that report from the expert panel was due at the end of May. It's now June. I believe that the chair of the panel is a gentleman with timely habits; so I'm very interested to know where that report is. But I'm also even more interested to know why we are tinkering around the edges of the RMA—and that's all this is; it's just reversing changes, and it was acknowledged by the Hon Eugenie Sage. Why is it that the Government is spending this House's time reversing those changes—it's mere tinkering—when there is a substantive report due? It defies logic. I would assume that, in doing so, this delay, this confusion, will be causing further disruption to the current users of the Resource Management Act at the very time, in this post-COVID world, when one would hope that a certain amount of certainty and planning were to be desirable.
At the select committee stage, there were a couple of things. One of those reversals of previous decisions made by the previous Government that is occurring in this bill is on the power of councils to consider climate change in RMA decisions with neither public consultation involved nor any degree of costing involved. That provision around climate change provisions has been reinstated into this bill. So the power over emissions is now in the hands of councils, the Environment Court, and boards of inquiry with no consultations, and there's no costings around that. The previous Minister who spoke did signal national guidance but, in the absence of that, are councils now to make up their own standards and their own policies around climate change? I think we know the answer to that.
So the National Party believes very strongly that any substantial changes to the RMA should be made with a full consideration of the expert panel's recommendations, and I am at a loss, my colleagues are at a loss, to know why we are ploughing through with, I think, the 19th iteration of the RMA, when in fact both Labour and National have signalled a complete rewrite of the Resource Management Act is, in fact, what is required. So this is a mystifying piece of legislation, but none the less we are obliged to plough on with it, albeit that we are opposing it all the way through.
I just want to raise one other point, which is that there is significant change around fresh water and, if one believes Eugenie Sage, much progress is being made in this regard. But, actually, it's a switch in power, and it's a switch in power to the centre, which we have seen several times by this Government, one of them being polytech reforms—and there is some work going on in reticulated three waters, which signals to be yet another switch in power to the centre. So watch that space. But a significant change in the bill is that the new freshwater commissioners will be appointed by the Minister for the Environment rather than the regional council. Now, this is a significant move, and it shouldn't be underestimated that this removes decision making and the power to appoint from a regional council to the Minister of the day. Are we comfortable with that? Regional councils weren't very comfortable with that. I'm not very comfortable with that.
The irony is huge here, because the Government parties so strongly opposed the appointment of commissioners to Environment Canterbury a decade ago, when Environment Canterbury failed to notify a water plan, but are now creating legislation which allows the Government to do that and to appoint commissioners all through New Zealand. So the irony and the policy muddle prevail all through this bill—mostly through this House. The Opposition party is the largest party in Parliament, and so we oppose this bill.
DEPUTY SPEAKER: This is a split call. I call Dr Liz Craig.





Dr LIZ CRAIG (Labour): Thank you, Madam Speaker. It's a real pleasure to speak on this bill because this bill is going to make a real difference down in Southland, where I live. If we look at what's been happening with our New River Estuary down South and just decades of accumulation of silt coming down the rivers and nutrients, what it basically shows is that if we drop the ball on freshwater management, we end up with what we've got down South, which is knee-deep, waist-high—depending on where you're standing in our estuary—toxic, thick mud. So what this bill will do is create the framework and the consistency for regional councils across the country so that they can do their freshwater planning in a consistent way. 
If you look at the previous national policy statement and what happened—and I think the previous speaker, Jacqui Dean, was talking about "muddles". But looking at it under the previous system, each regional council pretty much did its own thing, and so we get incredible variability across the country in terms of how they're managing it. So what this is doing is creating a much more strategic framework that sets out how we will be managing this and it sets up freshwater hearing panels. What we've got there is some consistency, because we've got freshwater commissioners appointed by the Minister who are taken from a common pool, which means they've got consistency of view across the country, but we're also including members from regional councils and also local tangata whenua. So we've got the right mix for making decisions. 
This is an important bill. It sets up the framework for where we need to go forward on freshwater quality, and I'm really happy to commend this bill to the House. 





ERICA STANFORD (National—East Coast Bays): Thank you, Madam Speaker. I'm pleased to take a call on the Resource Management Amendment Bill.
I'd just like to start by saying that there was a really interesting comment a couple of debates ago when we were debating the emissions trading scheme (ETS) bill, where James Shaw, the Minister in the chair, said he hoped that the ETS bill wouldn't end up like the Resource Management Act (RMA). And I thought that was very telling because it indicates that not only Labour and National but also the Greens, and I think most people in this Chamber and in this Parliament, believe that the RMA has become, sort of, unwieldly, difficult, hard to navigate legislation that has had its day and needs to be repealed. It makes planning and building houses more difficult, and it certainly isn't getting the environmental outcomes that we want.
We all know that significant change is required to the RMA, but this bill, this RMA bill, can be quite well summed up as a delayed and incoherent mess. This is a Government that, remember, campaigned vigorously on building houses and sorting out housing affordability and dramatically increasing supply, and so we got KiwiBuild, which is one of the biggest failures of all time—and I think Megan Woods is realising it's getting worse by the day as she's forced to put out fire after fire. And now we have RMA reform.
Here the Government has the opportunity to make some really meaningful changes to the RMA in order to get houses built more quickly and more cheaply. But what we have here, which is their heralded RMA reform, is basically the Government kicking the can down the road; it's just stage one. In my first reading speech, I said that I suspect it's a tinkering-around-the-edges bill. After the select committee process what I thought was confirmed, because this is just the entrée—the meaty stuff that they're planning on doing is coming at some further stage down the track, maybe in the future.
So in a nutshell, this Government have spent three years developing a bill that basically just reverses all of the previous changes to the RMA made by the last National Government, changes that we made to make the process easier, fairer, quicker, and cheaper, so that we could get on and build affordable houses. But this bill just basically undoes all that. It quite clearly will make the process of building houses more complex, more time consuming, and more costly. It won't go in any way to addressing affordability.
The initial briefing we received from officials in the environment select committee was very telling. They took us through an overview of the changes, including removing regulation-making powers, reversing the changes, repealing the—all the "R" words, I won't go into in detail; speakers before me have talked about it at length. But the point is that the words "remove", "reverse", "repeal" come up a lot in this bill.
But what makes these changes completely incoherent and, frankly, a joke is that while this bill increases costs and delays and does nothing for housing affordability, there are two other major pieces of reform that are doing exactly the opposite. Jacqui Dean stated, before me, that already the Urban Development Bill, currently before the Environment Committee, gives the Government the power to fast track development by removing barriers to planning constraints or having to deal with the RMA. And the Minister, in May, took a paper to Cabinet proposing the COVID-19 Recovery (Fast-track Consenting) Bill, which, again, is basically designed to bypass the RMA. It proposes a non-notified consenting and designation process in the main for Government-led projects. So the Government knows very well the constraints of the RMA in building and development, and they threw these two very bills that they are proposing to carve out RMA exemptions for themselves. But in this bill they make it far more difficult to get on with building houses for everybody else by undoing the changes that we made to make things easier.
It's, like I said, an incoherent mess. Minister Parker needs to explain. He said in this Chamber quite recently—I remember him saying—that the RMA causes delays and it causes costs. So why is he bringing a bill to this House that adds more delay and more cost? And to add to more of the chaos, we've got this working group, this RMA working group, that's been under way and was supposed to be reporting back this month; we hear it's another two months away. That's supposed to give the Government all the answers. So why is it that this is all backwards, that they're introducing a bill that makes minor tinkering changes around the edges, making things far worse for building houses, but they're still waiting on this big chunky report to tell them how to do it properly? It's an incoherent mess, and we cannot support this bill.





ANGIE WARREN-CLARK (Labour): Thank you, Madam Speaker. I support this bill absolutely. It does four fundamental things. It ensures that the Environmental Protection Authority has the ability to support the regional councils on enforcement action. It enables faster and better nationally consistent water management. Time is short, so I'm going to just jump to the final thing that I love the most, and that is that it enables climate change to be brought into the Resource Management Act. I think this is a fundamentally wonderful bill. I commend it to the House.





DAVID SEYMOUR (Leader—ACT): Thank you, Madam Speaker. I rise on behalf of the ACT Party in opposition to this bill. I should first just assist the member Angie Warren-Clark, who's just resumed her seat, and say climate change considerations have been in the Resource Management Act (RMA) for a long time. It's actually a mistake, because, if the emissions trading scheme (ETS) legislation we debated last night is truly putting a proper price on carbon, then people will be able to make decisions about emitting carbon based on that price and we actually don't need a second layer of legislation in the Resource Management Act, because people would already be considering it because the ETS is working. So either last night's legislation is working and this is not necessary or this is necessary and last night's legislation doesn't work. That's the simple logic of it, but we don't get that sort of critical thinking and analysis from the Government benches. So much for rebuttal. 
The reason for opposing this bill is that, frankly, it's pathetic. I mean that in the proper sense of the word. In comparison to the problems that this country faces under the Resource Management Act and the level and scale of reform that is necessary and possible, this bill is pathetic. It is like setting a capuchin monkey of a solution on a gorilla of a problem. Let me tell you what those problems are—something that one might think the Labour Party would care about deeply.
Under the Resource Management Act, over the past 30 years, we have had inflation in New Zealand—consumers price index inflation of 61 percent. The cost per metre of building a home has gone up a lot more than that—260 percent. But the price of the median section in Auckland has gone up 900 percent over those 30 years. That is what this piece of law, the Resource Management Act, has delivered.
I've just seen Clayton Mitchell hold up a sign with a 7½ on it. I can only guess that he was scoring my speech so far out of five, because, by the standards of his party speaking in Parliament, that's about what it deserves—150 percent. There we go, it is out of five. Thank you, Clayton Mitchell, for that adulation. I hope he learns something, because the New Zealand First Party in the previous Parliament postured politically that it was prepared to cross the floor and work with ACT and National to pass real Resource Management Act reform. Now the possibility exists to do just that—to cross the floor and work with National and ACT to pass real Resource Management Act reform—and where is New Zealand First? Nowhere. As per usual, throughout their history, they're more than happy to take the baubles of office and leave no lasting policy improvements for New Zealand. What a shame. All he can do is sit in the corner of the House and hold up silly signs. What a shame. No wonder New Zealand First is on the way out, and the great tragedy is they'll leave nothing behind. 
But we should come back to this piece of legislation. This piece of legislation is introduced into a context where the inflation in the price of a section in our largest city has gone up 900 percent—10 times inflation over the period that we have been trying to build more homes. In that same period, the amount of income that the lower quintile—that's the bottom 20 percent—of households spend on housing has doubled. Thirty years ago, the poorest people in New Zealand spent a quarter of their income on housing. Now they spend half their income on housing. Now, that's something that a good social justice warrior like Iain Lees-Galloway should care about. You'd think he'd care about it. But, instead, the Labour Party comes down to Parliament and introduces Resource Management Act reform that does nothing to fix the problem of land supply and housing, and that is one of the greatest shames of this current Labour Government. That's our history. We'll see it: nothing to improve the Resource Management Act, under which the price of housing for the poorest New Zealanders has doubled as a share of their income.
The fundamental problem with the Resource Management Act that should be getting fixed but isn't, is that it has no regard for property rights. You look for property rights—the right of people to use their property in the way that they see fit—and you try and find it in the 900 pages that make up the contemporary Resource Management Act, and those words cannot be found. One of the results of that is that people that want to develop their property, people who want to subdivide—do you know the words "inappropriate subdivision" appear in the RMA dozens and dozens of times. That's why it's so hard to subdivide—because the councils won't allow it, because the RMA won't allow them. What people find when they try to use their property to build new homes and expand the supply of housing for the poorest New Zealanders is the RMA stops them doing it, time and time again. 
What does this piece of legislation do about that? Absolutely nothing. It introduces a new freshwater commissioner—yet another bureaucrat empowered by legislation passed by this Government and this House. That doesn't help the poorest New Zealanders. It introduces climate change legislation, which should be dealt with by the emissions trading scheme but instead will become another way that disinterested persons can stop the owners of property from developing their property.
What else does this bill do? It strengthens public consultation. Do you know what that means? That means that people who have no interest in your property are able to tell you what to do with it and come along and submit and obstruct, and that means fewer houses get built. That's going to be, historically, the great failing of this Government: that it promised so much on—I would say it won an election on—housing, and then it gave us KiwiBuild.
If this Government was serious, it would be reforming the Resource Management Act and making it about property rights. Do you know why it would do that? Well, another good reason is that one of the reasons there's so much opposition to development is that people whose property is actually affected often have no say. So I see people in Central Auckland who find that they're able to have property seven stories high up against their single-story home in their back yard, right up against their back fence. That's OK under a Resource Management Act that says nothing about people's rights of peaceful enjoyment of their property. But, at the same time, someone that lives in another suburb can come along and tell you that you can't develop your property even if your neighbours are quite happy with it. That's what this bill should be alleviating. 
In the Part 2 principles sections, sections 5, 6, and 7, it should be saying this bill exists so that people have the peaceful enjoyment of their property. You can't damage the environment in that regime, because to damage other people's property environmentally would be forbidden. You can't impinge on your neighbour's enjoyment of their property under that regime, but you can develop your property so long as you're not harming anyone else. That's the regime that should be debated tonight, but, tragically, it is not. 
The result of that is, when the historians come around and say, "What sort of Government was this?", they'll say it was a Government that came into office promising to deliver on housing and failed epically because it wasn't prepared to do the real work and reform the Resource Management Act properly, even when it had the mandate. Instead, it gave us KiwiBuild; instead, it let down the poorest New Zealanders, whose biggest cost is housing; and, instead, it lost the moral authority to govern and be respected for its success because it couldn't deal with the most important issue on its books. I have to oppose this bill because, frankly, it's pathetic.





KIERAN McANULTY (Labour): Well, I'm quite happy to support this bill, in contrast to the previous speaker, David Seymour, because this bill is actually what is needed in terms of approaching a very particular and specifically important issue for New Zealand, and, in part, that is around the two-stage approach to addressing our water management system.
Now, healthy waterways are vitally important to this country. There is a birthright to all New Zealanders: that many of us believe that we should be able to swim in our rivers. Now, that is quite an emotive argument, but it is one that resonates with most people in this country. But there is a strong economic argument for why we need clean rivers and waterways and to ensure the wetlands and lakes remain pristine where they are, or get back to that point where they can be. And that is that we rely on our competitive advantage to sell our products overseas, and if we continue to let those degrade, we undermine that. I commend this bill to the House.





The question was put that the amendments recommended by the Environment Committee by majority be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 63
New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.
Noes 56
New Zealand National 55; ACT New Zealand 1.
Amendments agreed to.
A party vote was called for on the question, That the Resource Management Amendment Bill be now read a second time.
Ayes 63
New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.
Noes 56
New Zealand National 55; ACT New Zealand 1.
Bill read a second time.
The House adjourned at 10.01 p.m.