| TUESDAY, 28 APRIL 2020 | |
| The Speaker took the Chair at 2 p.m. | |
| Karakia. | |
| MINISTERIAL STATEMENTS | |
| COVID-19—Move to Alert Level 3 and State of National Emergency | |
| Rt Hon JACINDA ARDERN (Prime Minister): I wish to make a ministerial statement on the New Zealand COVID-19 response and record the ongoing extension of the state of national emergency until Wednesday, 6 May 2020. | |
| Today is day one of COVID-19 alert level 3. We move down one alert level today thanks to the efforts of roughly 5 million New Zealanders who've stayed at home to break the transmission of the virus and to save lives. The success of our four-week lockdown—we've got ourselves to a position of no current widespread and undetected community transmission in New Zealand—is attributable to nothing less than the collective action of New Zealanders determined to eliminate a virus that threatened both lives and also livelihoods. What greater example of a nation is there than one which unites in the defence of our most vulnerable and, ultimately, in defence of our way of life? | |
| Decisive action, going hard and going early, helped us stamp out the worst of the virus. Yes, we had the insight, those vital extra weeks, to look at the agonising spread and loss of life around the world, and we devised a plan for our country and for our people. We executed that plan together, and we must continue to execute that plan. Modelling provided publicly on the eve of the lockdown suggested New Zealand was on a similar trajectory to the likes of those places overseas who have seen the virus escalate, and that our cases could have grown to more than 10,000 without the actions we've taken together—and, of course, that would cause countless deaths. Today, we have had fewer than 1,500, cases, and more than 1,200 people have recovered. | |
| Within 25 days of our first case, we closed our borders to all but New Zealanders. Germany took 49 days; Spain, 52; Australia, 55; Singapore, 61. Our lockdown was in place from day 31, with just over 200 cases. Our first economic package was in place 18 days after the first case; most other countries took more than 40 days. Ours was 6 percent of GDP, bigger than the UK, France, Germany, Italy, Spain, China, Korea, and Japan at the time, and unlike others, it injected cash flow into businesses immediately, with more than $10 billion paid out to more than 1.6 million New Zealanders in the form of a wage subsidy. The Government has initially invested $23 billion into our COVID-19 response to keep our people safe and our economy ready to be revitalised in the next stage of our response. | |
| New Zealanders fully committed to level 4, with Google tracking capturing an overall reduction in the movement to places of retail and recreation of 91 percent during the lockdown. Even visits to the supermarket and pharmacy, which were essential services and open at level 4, dropped by half. Yes, it's been the most restrictive environment New Zealand has experienced in modern history, but late last week we saw figures that showed, following our decision to move to level 3, that there was huge support from New Zealanders for the plan that we have collectively executed. | |
| I do want to thank the Opposition, too, for their support of our decision to move to level 4 and for their role in the Epidemic Response Committee. The stripes of the political divide have rightly paled to allow for a collective response to get our country through a global pandemic, the kind of which comes but once in a century. | |
| We've done life differently for a while: Anzac Day; lockdown birthdays; many, many home-cooked meals and walks around the block. We have a new national lexicon: bubbles, Zoom, staying home and saving lives. | |
| As the Government, we moved to provide guidance on essential businesses, and as we prepared for our move to level 3, we made arrangements for safe, contactless retail and takeaway, for hunting, for moving day, for sport, and throughout the past weeks we've not wavered in making sure food supplies, accommodation, and mental health support got to those who needed it most. We used section 70 of the Health Act, issued epidemic notices, and put New Zealand under a state of national emergency, which has led to car parks requisitioned for testing clinics, thousands of food parcels distributed, and roofs put over people's heads. Police have prosecuted more than 500 people who have breached the Civil Defence Emergency Management Act or Health Act, while countless New Zealanders have joined the call for us all to stick to the plan and stick to the rules. | |
| Children have been learning at home, and we've moved to connect 80,000 households without internet or devices. To date, we've delivered 2,200 computer devices, with 9,500 also sent by schools from their own stocks; 18,000 Wi-Fi routers to secure internet connections; 131,000 hard packs have been delivered around the country; and 1.5 million have tuned into educational TV channels and reconnected with Suzy Cato. | |
| We've brought 1,480 New Zealanders home from around the world on repatriation flights once all other options were exhausted, and we housed those who have recently returned in mandatory isolation at Government-approved hotels if they were without symptoms and in quarantine if they were symptomatic. I do want to acknowledge the huge work undertaken by the Deputy Prime Minister to bring those New Zealanders home. | |
| Our transmission rate is at 0.4. It means our testing and contact tracing has surged into a complementary system that is both rapid and comprehensive and can see us through level 3 and beyond. We can now test up to 8,500 people a day and, if needed, have the capacity to make up to 10,000 calls a day if needs be. We've done 1,430 community surveillance tests, all negative. Experts tell us that being able to contact trace at the capacity that we are now is providing very strong protection for our population. It means we hold our border controls and quarantine rules rigidly in place, because we know they are our best defence against resurgence of the virus here, and we know that our best public health response is also our best economic response. | |
| All of this has not been without pain. Loved ones have been lost to the virus and other causes, and grief has been compounded by limitations on the comfort that can be provided; weddings have been put on hold; 335,457 people are on the main benefit, which is 11.2 percent of the working-age population. Last week, nearly 7,000 more people came on to jobseeker support, bringing the total to 174,630, which is 5.8 percent of the working-age population, while more than 1.6 million New Zealanders are now on a wage subsidy provided by the Government. | |
| But today we begin to see activity return. We push forward to restart our economy. We are a country of half a million businesses and sole traders and 2.6 million workers. First off the block today, 400,000 more people returned to work, joining 750,000 essential workers who kept working through level 4. Activity under level 4 was assumed to be down about 40 percent, which now lifts to being down about 25 percent under level 3—or, put another way, we see the economy lifting from 60 to 70 percent of usual capacity. Forestry restarts—log harvesting, sales, wood processing, planting, and spraying; construction restarts—major roading and rail projects, manufacturing, 60 Provincial Growth Fund projects representing more than $400 million. | |
| Economic analysis from Treasury shows that the very worst thing for the economy would be the uncertainty of those sectors yo-yoing between levels. We are doing what we can to do it once and to do it right. Their scenarios also show that a week longer in level 4, which we've executed, was better than returning to level 4 in the future for two or more weeks if all our hard work went to waste and we left too early. With further Government investment, the scenarios show we can keep unemployment lower than it would have been. There is a path to keeping it below 10 percent with the right decision-making. That requires a forward-looking Government focused on making sure that the recovery supports workers and business at the same time. | |
| So as the Minister of Finance has set out, our economic recovery comes in three waves: (1) fighting and cushioning the impact of the virus, which we've been doing, (2) recovery and kickstarting the economy, which we begin today, (3) we reset and rebuild into the future. We retrain people. We work in partnership with sectors to find new ways of doing business. Along the way, we engage with the business community to ensure a rapid recovery. We are in a strong economic position going into this, with net debt below 20 percent, compared to between 50 and 80 percent in comparable countries around the world, and we will be strong coming out. Charting a course to recovery relies on the foundations we have established to cushion the blow and keep workers connected to their jobs, and the actions that we took immediately. | |
| But now is the time to lock in the hard-won gains and ensure the only thing that bounces back are jobs and our people, not COVID-19. We can all be heartened by low case numbers, but this is a persistent disease. Starting up the oven of the economy again is work that must run in tandem with our health response, so community testing continues, border restrictions remain. We must be vigilant. As my Chief Science Advisor Juliet Gerrard told me, "It's getting harder and harder to find the needles in the haystack, so we really need everyone to help us find the last causes so we can move to level 2 and avoid any second wave of the virus." So I conclude with this: I ask Kiwis to keep doing what you're doing. Stay home if you're sick, get tested quickly, work and learn from home if you can, stay in your bubbles, stay in your region, and, most importantly, stay strong, be kind. We are going to be OK. | |
| Hon SIMON BRIDGES (Leader of the Opposition): Thank you, Mr Speaker. In the absence of Parliament, it's been good to chair the COVID-19 committee, the Epidemic Response Committee. I just want to acknowledge all members of all parties who have played an incredibly, I think, constructive role on that committee, asking the good questions and improving our nation's response to COVID-19. Of course, it's been no substitute for this place, Parliament, this last—what is it?—five or so weeks, and it's important that we get back to normal in Parliament as soon as we safely can. We have, in New Zealand, an incredibly proud democratic heritage, and it's one we shouldn't take for granted. | |
| A lot in relation to COVID and the response has gone incredibly well. New Zealanders have done a great job self-isolating and social distancing. We've flattened the curve. National has always supported lockdown, and, indeed, we called for it. We've, in fact, been consistent on the things that matter here, since the start of the year: quarantining the border; testing, in terms of quantity—in doing more and then more again—and the quality of that testing; tracing—those same basic issues again of quality and quantity—and personal protective equipment (PPE) and making sure that all New Zealanders who want and need it get it. | |
| The questions now are about the future, and our view is clear. This has been going on too long. We want to get New Zealand working again—safely and sooner than later. The reason for that is that we believe the medicine is worse than the disease. In our health system, we've all heard—on this side of the House, and possibly across the House—from people like Margaret, who contacted me in the fifth week of lockdown and can't have her colonoscopy for possible bowel cancer; through the health associations that have come along to the COVID-19 committee and made quite clear the tens of thousands of surgeries that aren't happening at the moment; and through Louise Blair, a chiropractor, who came to the committee today and is unable to provide pain relief to long-term clients at this time—before we even talk economically whether the baker in my electorate or many others who understand the importance of our effort in relation to COVID-19 together but don't want to be—as the baker put it—a sacrificial lamb in this, paying the cost disproportionately for our shared national effort, and who won't make it to Budget 2020. | |
| We've seen Australia, the situation where for, when all is said and done, incredibly similar health outcomes, they are freer economically. They went in with higher unemployment, and I think, without doubt, will come out with lower unemployment. In the last 24 hours, we've seen a situation in Australia where they continue to relax more than they said they would and certainly more than in our country in terms of social distancing—as I say, just in the last 24 hours, from open homes to boot camps. | |
| We can be vigilant on the things that matter—our border, our testing, our tracing, our PPE, and our distancing—and get New Zealand working again. We've done well so far, and that allows us to do more. The concepts aren't mutually exclusive. We can keep safe and get New Zealand working again. Our Prime Minister has said we have to stop a wave of devastation. We now face another wave, a bigger wave: the risk of economic devastation. We need to get New Zealand working again. | |
| Lockdown and what we are in now—near lockdown—are not so hard when you still have a job. I have a job. Our Prime Minister has a job. The members in this House have a job. Our bureaucrats have a job. But tens of thousands of New Zealanders don't, and they are suffering—7,000 a week go on to jobseeker support, and that number is growing. We need to get New Zealanders working again. | |
| The challenge is in three phases. The short term: getting out of lockdown as soon as we safely can. The wage subsidy, as we heard so poignantly from submitters today at the committee, masks the carnage, but only in the short term. Even with it, many won't survive the seven or eight weeks until Budget day. Then the medium term: as we come out of lockdown, stimulating our economy and how we operate in a 2-metre world, these are crucial issues. It could be handled badly, and it could be a massive drag on our productivity and livelihoods as a nation, or work well with clear, pragmatic rules and access to swift testing and PPE so we can regain momentum. And then, thirdly and finally, how we best, in the long term, position our country to succeed in a post - COVID-19 world. | |
| Our view is the answer isn't a Wellington committee with politicians, a union rep, iwi, and Business New Zealand. We understand and accept that Government was, is, and will be critical to our response, but we also need to unleash the potential of private business people, like we heard on the committee today. From Rocket Lab to the Rockit apples my children eat, we need to make sure that these businesses rise up and provide the recovery and the solutions in New Zealand rather than Government committees. | |
| We've flattened the curve; we don't need to flatten our country. Indeed, we now need another curve, an upward growth curve—growth, jobs, and a track back to normality. Let's get New Zealand working again. | |
| Rt Hon WINSTON PETERS (Deputy Prime Minister): Mahatma Gandhi once said of the seven sins that they were politics without principle, wealth without work, pleasure without conscience, knowledge without character, commerce without morality, science without humanity, and worship without the sacrifice. When this lockdown started, we knew that (1) there would be a massive economic downturn, (2) the Government needed to intervene to keep business running and people employed, that the Government could spend money to increase economic activity, that the Government is not unlimited, that the Government needed to rapidly increase employment, that the Government could change regulations and legislation to increase economic activity, and that this would cost the Government almost nothing. We knew sectors like hospitality and tourism would not recover quickly, if at all, so there would be a huge number of people needing work in other industries, and that this meant training programmes for people needing to transition from one industry to another to simply survive. | |
| Before the COVID-19 pandemic, the global economy was already in a troubled state. Already struggling with slowing economic growth and a massive accumulation of debt, the fundamental factors behind the 2008-2009 recession were never resolved; they were just plastered over, and then along came COVID-19. The global economy was only being sustained by unprecedented monetary stimulus, quantitative easing, which is shorthand for printing money, and ultra-low interest rates—rates that were already at bedrock; couldn't go any lower. That catastrophe is not a singular crisis like COVID-19, for which a vaccine may ultimately be found. The COVID-19 crisis is an unprecedented deflationary shock to the entire global economy. | |
| Responding to the crisis will lead to huge increases in Budget deficits and our Government debt in New Zealand, as everywhere else. All the rules on fiscal prudence are now obsolete, and here's the uneven impact. An important decision on the crisis will unevenly impact everybody. Wage and wealth disparity and income insecurity have been growing rapidly as an aspect of globalisation. Widespread discontent was seen in 2019 in countries like Hong Kong, Chile, and France. This may be spread with uneven consequences of the crisis, as we watch internationally right now. A profound crisis calls for society to respond in a cohesive way and New Zealand has shown that capacity under the Prime Minister's leadership. | |
| Now, that's despite social media appearing to undermine social solidarity, because, rather than sharing a common experience, as we are free to pick and choose content that coincides with our prejudices and opinions—in other words, we tend to see what we want to see. And the social media embodies the notion that what is important—what matters—to us as individuals is all that matters. This can undermine a sense of collective or shared reality, and in dealing with a crisis such as COVID-19, that sense of sharing a common challenge is vital. | |
| The global industrial system is in massive shock. The longer the pandemic prevails, the greater the probability that all sorts of unforeseen second-order disruption will kick in as the global economy unravels. The fragility and the vulnerability inherent in the highly interconnected and networked global economy have been revealed. The recent collapse in oil prices is just one example. The downside to the global current economic system has been exposed. Much of the global economy, such as the international tourism and aviation sector, has been built on assumptions that no longer apply. The economy will not pick up where it started in 2020. The notion of returning to business as usual fades minute by minute every day now, as global output collapses and unemployment soars. | |
| So into the future, with all the uncertainty, there is no clear global consensus on what's needed, but like everywhere else, New Zealand needs to seriously think about its future in the transformed global economy. This is the time for critical perception of the possibilities that the future offers New Zealand. | |
| Now, New Zealand First is resolved that our future economy will have these features about it, because they've learnt something. One: far greater autonomy for New Zealand. In short, if we can grow it or make it at near competitive prices, then we will grow it or make it, use it or export it, rather than use valuable offshore funds importing it. The pitfalls of globalism have been laid out dramatically before us, and some of us have known that for a long, long time and have been saying it. Number two: if the job can be filled by a New Zealander, then that job should be filled by a New Zealander trained, skilled, and paid properly to do it. Three: we need to put up the shutters to more offshore ownership of this country's economy and go back to owning as much of it as we possibly can. | |
| If there is to be an overseas investment, which is a good thing, it must be in terms of the New Zealand economy's needs, the New Zealand people's interests, and building resilience by means of our—not foreign—ownership. It means overseas investment should be encouraged where it expands our employment, our wealth creation, and export capacity in a way that is clearly new and not just an offshore takeover or raid of something we already owned before. It means that if you're a banker, then the rules that apply to fair, sound, reasonable, and competitive banking offshore will apply to New Zealanders onshore and to your bank onshore, New Zealand—not one set for New Zealand and a different set for a place of ownership and domicile somewhere else in the world. And it means that if we are to have a responsible and responsive social welfare system, then part of that social pact is that the recipient will do something for the receipt of the State's largesse. In short, it's not an alternative not to work but a stopgap before or between work. | |
| It means that all New Zealanders need to be productive, and if they can in any way help to fund our society, then they and we should do that. It means designing welfare that places emphasis on the need for all to contribute to the economy, rather than accepting some beneficiaries choosing to take from it and give nothing back in circumstances where they clearly can and they should. And last, it means all of us being eyes wide open about the impact of this crisis. Every ounce of our collective effort is going to be required to, right here right now—in the short-, the medium-, and the long-term future—fix it. | |
| On public health, like every country New Zealand needs to strengthen its public health system. The threat of a global pandemic was always there, even if its specific form was unknowable. You know, on 24 April, the UK Guardian revealed that in 2019 UK Ministers were warned about a pandemic virus and its potential catastrophic social and economic consequences—the Cabinet was warned that even a mild pandemic could be disastrous—and it set out the need for capability to mitigate the risks to the UK and the potential damage of not doing so. That warning was not heeded, and the tragedy in their tens of thousands is to be seen today. | |
| In short, it is all very fine now in this time and this crisis, when we are going in our first day to level 3, to look into the future—and trying to forget some of the valuable lessons so clearly before us that we should have learnt over and over again. Our dream and hope and vision is that we have not wasted this moment not to have learnt what we should have learnt, and that we'll go forward a clever, more smart, more responsible people. Last year, you know, New Zealand was in the grip of the worst measles outbreak in two decades, after a cluster of cases occurred in Canterbury in March 2019. It was an example of the need for vigilance and preparedness in the area of public health. | |
| Now, in 1882, our first export of frozen meat left New Zealand and confirmed that we were going to be then, and thereafter, an export nation. All our policy should be focused on that as well as import substitution. We're going to go back, dare I say it, to make New Zealand the great country it has been in the past, not because we have some nostalgic dream but because in past times our country got it right. And of late, for far too long before this happened, as we tried to change our economy we've been getting it wrong. New Zealand has enormous wealth and natural products above ground, below ground, and at sea, and it has, as the Prime Minister has referred to, a truly amazing people when put to the test. | |
| On the question of banking, on business rentals and leases, I can't put it more clearly than Cameron Bagrie did the other day when he referred to that: if you've got credit and you've got a tenant, try and keep that tenant going, try and keep that tenant in business. And one last thing, can I say, Mr Speaker, and it's this: we're in level 3, and to everybody that was in level 4 and to everybody that today's on level 3, please honour the rules. Stick to the regime. Think about this: people on level 2 and level 1 and normalcy want to get back to work too. So if you do your job, think about them needing to have a job, then we'll get through that. We will be stronger together. | |
| MARAMA DAVIDSON (Co-Leader—Green): Tēnā koe e Te Māngai o Te Whare. Tēnā koutou e hoa kaimahi. For many of us here the past five weeks have been the longest consecutive time that we have all stayed at home, stayed put—if it's like me, for my entire political career—and it is quite bizarre to see people in the actual flesh today and to see our colleagues, many of whom we've seen on a day-to-day, two-screen, two-dimensional basis. I greet all of us in coming back to the House today and learning this new way of working that we're all getting used to in the precinct. | |
| We should be proud of what we have achieved in Aotearoa over the last five weeks. We've shown our capacity as whānau, as friends, as colleagues, and neighbours to come together to make a difference to people's actual lives. And we've shown that above all else it is the wellbeing of our whānau and our communities that matters most of all. So today, as some of us return to work or reconnect with the people and the places we've missed, I ask us to reflect on what the last five weeks have taught us about who we are, what we value, and how we can build a future for the generations that follow us. | |
| For me, that has been a profound reminder that ensuring the health and wellbeing of our people and our planet is a collective effort. Over the last five weeks, we've worked together to stop the spread of COVID-19 and now we must move forward together to reimagine an Aotearoa where everyone can live decent lives. Every one of us has a role to play in connecting the extraordinary work we have done to overcome what we hope was the worst of COVID-19 with the future we want to create tomorrow for ourselves, our families, and our communities. | |
| What we see around the world is that COVID-19 has revealed one particularly striking thing about our economic approach—that is, that it does not give sufficient thought for everyone we deeply rely on: the people who go to work every day to earn just enough to provide for their families; the people who make sure supermarket shelves are stocked with everything we all need; the people who care for us when we need them most, like midwives and nurses and health carers and cleaners. I hope that the wake-up call is that all of us are valued members of our community. | |
| Here in Aotearoa—you see right now, I'm valuing the people who used to bring us some water and I wish I had remembered that memo—successive Governments lauded GDP as our prime measure of progress, but that focus can camouflage the real truth. For decades, our economic progress has come with a number of underlying conditions, the starkest of which are inequality and ecological instability. Our Government has done an incredible job so far of supporting those who need it most, but in some ways the need for that support is a symptom of the way we run things. For thousands, work has become increasingly precarious. There are more zero-hours or short-term contracts, more self-employed people with erratic incomes. | |
| Of course these things interact with one another. Inequality means that some people have been affected more than others by the COVID-19 lockdown, in terms of not only their health but the resources they have to get through. Those with the least support and resource have felt a desperation even with the support we have put in place. So as we rebuild, we must take stock and learn what a more stable, fairer, more equitable future will look like. If we do not take this opportunity to redesign our future, we will be leaving thousands of people to worry that should something like this happen again they may not find a way through. Before COVID-19 hit, we already had too much inequality in Aotearoa New Zealand. We cannot allow that to worsen. We need to ensure that low-income families are a priority in the economic recovery. We also need to protect and restore the natural world that we depend on. Any separation of health and economic policy from environmental policy would be a mistake. Our health and our economy entirely depend on a healthy natural environment. | |
| Right now, our Government's priority is, understandably, getting things going again, but soon the conversation is bound to turn to what we do about the debt we have accumulated. How should the burden of paying it back fall between generations, between different levels of income, and between different parts of the country? When that happens, I ask that we remember how we have come to define "essential" over the last four weeks—and, again, I want to acknowledge not just the Parliament staff who would be here today keeping us lubricated and watered but all of the Parliament staff who have continued to work for every single one of us over this time in interesting and often challenging situations from homes, from places that aren't particularly set up comfortably to work from, and they have been going above and beyond through all of this unknown nature of what we've all been working through. | |
| We must not ask the people who have got us through, some of whom are amongst the lowest paid, to bear the big costs of recovery. And I'll add again, right now, I am really feeling for students who are being asked to pay rent for halls of residence that they are not actually able to live in right now. I'm pleased to see that there is some advocacy and action on the issue, including from people like our spokesperson, Chlöe Swarbrick, alongside other politicians to see a fair outcome for those students. | |
| If we get that right, we could emerge from the crisis more connected, more prosperous, and more equal—a New Zealand where people, no matter where they are from, have everything they need to lead fulfilling, meaningful, and prosperous lives, where our precious plants and animals are protected and our wild places are looked after for future generations. It won't be easy but if the last five weeks has taught us anything, it is this: when we as a community work towards shared goals with hope and with courage, anything is possible. | |
| Before I finish off, I also wanted to acknowledge the hardships that people have experienced, including those who have passed away through contracting COVID-19 but also those who have lost loved ones over this time to other causes and have had to bear a different way of grieving our loved ones in saying goodbye and farewelling them—a way that is often even more hurtful because of the lack of connection that we have been able to afford at this time. I think of you all, and I think many of us would have examples of that in our own families and communities. | |
| Both the crisis of COVID-19 and the many other challenges we face from inequality to degradation of our natural environment reveal that our world is inextricably interconnected. The health and wellbeing of people and planet are as strong or as fragile as those connections. If we are to hand our children and grandchildren a better planet, we have to strengthen these connections. Kia ora. | |
| DAVID SEYMOUR (Leader—ACT): Thank you, Mr Speaker. I rise on behalf of ACT in reply to the Prime Minister's statement, and let me start by paying her a compliment. Our Prime Minister has extraordinary communication talents. She's used them throughout this crisis, and New Zealanders have responded, in her words, astoundingly well. When we commemorated Anzac Day on this weekend just been, I couldn't help but think that the original Anzacs would recognise the call for cooperation and sacrifice against a common enemy, the same call that modern New Zealanders just heard. Surely, as they rest in peace, they are proud of the way that New Zealanders a century on can still rise to a challenge and cooperate to repel a common enemy. | |
| I also said when this Parliament last met that the role of an Opposition was to give constructive criticism where necessary and helpful suggestions where possible, and the Government even took notice of some of the suggestions. No one was more astonished than me to see the words "safe not essential" go from an ACT Party newsletter to Government policy in just one month. I welcome the Government adopting my suggestion of an MP pay cut—Grant, I know you read it—and I will seek leave to introduce a bill to that effect at the end of this speech. The nation's hunters were pleased to see the original ban on hunting walked back, even if only for private land, and issuing a proper section 70 notice so the legal rights of New Zealanders were in writing was the right thing to do, after the Epidemic Response Committee asked for it. | |
| But we also require some more honesty from our Government about where we're up to in the fight against COVID-19. We need to confront the simple fact that the rate of growth in new cases was already flat-lining as the lockdown came into effect. The Prime Minister said this morning we had a transmission rate of four before the lockdown. Well, that's news, because Shaun Hendy says he couldn't calculate it. She should tell us which days that rate of infection that was so important to key decisions occurred. It's not good enough to obfuscate the numbers and then point to the worst-performing countries in the world, pat New Zealanders on the head, and say, "Aren't you lucky that you're not them?" That is the politics of fear and post-justification, and we need to have a politics of aspiration and openness as this situation carries on. | |
| If we scare ourselves by looking at Italy, we must ask why Australia is doing better. We should be asking how Taiwan—23 million people heavily integrated with the Chinese economy—managed only 400 cases and six deaths with no lockdown. The simple answer is they went smart and went very early. We should be asking what Sweden tells us about the original warnings that tens of thousands "would die if we did nothing." We need this more honest, open, and aspirational approach to solving our problems for one simple reason: the situation is not over. The Government will have to be much more agile. It will have to make decisions led by that wide-ranging debate without the spectre of fear haunting its background. | |
| We should start by acknowledging that the debate we face is not lives versus the economy; it is lives versus lives. Not only has the lockdown created a backlog of people awaiting other healthcare; it will mean greater shortages of healthcare in the future. Just last week, Pharmac froze its plans to fund Keytruda because it was concerned about cost. The ability to afford warm, dry homes for many people has just been set back years, and that has health implications too. And then, most sadly, there are the costs of domestic violence, depression, and anxiety throughout this period and to come, which can cost lives too. I'm sorry to say that to the best of my knowledge, this Government has made no attempt to quantify those costs that is remotely comparable with the enthusiasm it has shown for modelling and pointing to the risks of the virus. We shouldn't be paralysed by fear of the one thing while ignoring those other dangers; we need to balance them both. | |
| When it comes to the recovery, we need to talk about the role of Government. Some say that the role of Government must expand in the wake of this crisis. Well, let's think about this for a minute. When a business underperforms, it loses market share, it loses customers, and, make no mistake—and let me just explain what I mean by this. Government, the institution of it, has done a poor job. That's not a political attack on these Ministers and their colleagues who happen to be elected right now. I suspect, behind closed doors, they've been as frustrated as any of us at times. It's also true that Governments around the world in many cases have done worse than ours, but the fact remains that we have had a debacle just trying to source and distribute personal protective equipment. Thank you to the entrepreneurs who filled those gaps with planeloads of private initiative. The level of testing got to world-leading levels, but only after weeks of obfuscation, and poor contact tracing meant that we had stay locked down for another five days. The elusive tracing app has finally been released, but, I'm sorry to say, as a proud Kiwi, in Australia. | |
| All of this is a reminder that the institution of Government, as someone once said, is not the solution to the problem; it very often is the problem. What was good economic advice before COVID-19 remains good economic advice after it. We now hear the finance Minister asking his officials, "What new functions should the Government take on?". "What goods should we make in New Zealand?" we just heard from the Deputy Prime Minister. It would be a mistake to reward the institution of Government by expanding it when its failures are in part responsible for the scope and size of the crisis we now face. | |
| Politicians in Wellington cannot plan a long-term recovery. It must be a bottom-up recovery led by business and led by workers. It won't come from the Reserve Bank printing free money. It won't come from the Government trying to borrow its way to prosperity. Normally, it would be a caricature of a Labour finance Minister that he or she was dropping money from a helicopter. I had to read and check twice when I saw our actual finance Minister suggesting helicopter money might be an option. If the Government abandons sound cost-benefit analysis and diverts resources away from the projects that have the best return just because it's a crisis and somebody needs to do something, it will make us poorer and it will make the recovery slower. | |
| The aim of Government, first and foremost, should be to do its public health job well. It needs to test, track, trace, and isolate so we don't have another outbreak. We need to resume international travel as soon as possible while managing coronavirus, or COVID-19. The Government is going to have to look around the world and partner with the private sector and with other like-minded countries, because as the most isolated country and one that has pursued a strategy of elimination, our economic survival will depend on having the world's smartest borders. | |
| After that, the goal should be to return to surplus by 2024 at the latest without raising taxes or relying on more unconventional monetary policy that deflates New Zealanders' savings. If Government is going to offer relief, it should be targeted at businesses and events in tourism, those types of businesses that cannot carry on even at level 2 because their whole point is to bring people together. The Government should be asking about all of the costs that it imposes on business. If Southern Cross can give its policyholders a premium holiday, then why can't ACC? We know there have been less car crashes and less workplace accidents. When every business is cutting costs, Phil Twyford should be threatening the councils with punishment if they do increase rates, not if they don't. | |
| This is a good day for New Zealand. We now need an open, transparent, and aspirational debate to go forward together again. | |
| ORAL QUESTIONS | |
| QUESTIONS TO MINISTERSQuestion No. 1—Prime Minister | |
| 1. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government's statements and actions? | |
| Rt Hon JACINDA ARDERN (Prime Minister): Yes, particularly the Government's work to prevent COVID-19. Going hard and early has put us in a good position. Many countries have not had the chance that we have had, have faced thousands of deaths, and economies grinding to a halt regardless—these were the projections that we saw here too. Right now, we need to hold on to our hard-won gains and not allow the virus to bounce back. The next phase will be keeping on top of the virus as we start opening up economic activity. We need to continue our collective approach to make sure we stay safe, save lives, and save livelihoods. | |
| Hon Simon Bridges: Will the Prime Minister assure New Zealanders that we will come out of level 3 in two weeks, so that many more tens of thousands of Kiwis will be able to go back to work? | |
| Rt Hon JACINDA ARDERN: That is our aspiration, but whether or not we succeed is actually not in the hands of anyone in this House but actually in the hands of our team of almost 5 million. It will be a collective job. If we stick to the rules, we manage to keep away community transmission, and stay in control of the virus, then our ambition is, of course, to move to level 2. | |
| Hon Simon Bridges: Does she accept we can keep New Zealanders safe as well as get many more tens of thousands back into work than is currently the case at level 3? | |
| Rt Hon JACINDA ARDERN: Of course, at level 3 we get up into a position where we have economic activity at around 75 percent—so there is a significant return. What we need to, of course, weigh that up against are some of those areas of work such as beauty therapy or those that require close contact. At level 3, we are still trying to reduce that contact while we're, really, in a waiting room, to really ensure that we don't have an up-tick in the virus and that we don't put ourselves in a position where we yo-yo between levels. We want to get down further through the alert levels so that more economic activity can take place and so we don't end up back in lockdown. | |
| Hon Simon Bridges: Does she accept the urgency for businesses and jobs, such as the 10 percent of workers in retail, of getting out of level 3? | |
| Rt Hon JACINDA ARDERN: I absolutely do. I heard the member reference in his speech making sure that we hear New Zealanders. We may not have been able to have face-to-face discussions with those operators and retailers, but we have been acutely aware of their needs and their desire to get back into a position where they're trading face to face again, because online offerings, I know, will never be a supplement for many people's current way of operating. So that is our ambition. Equally, the Treasury modelling will show, as well, that we will be better off in the long run if we can get out and stay out of these more restrictive levels. That is our goal—and that is our goal so that we can continue, for instance, as Mr Seymour pointed out, getting to a position where eventually we have large-scale events again, because those industries are severely impacted by where we are right now, and even where we'll be at level 2. | |
| Hon Simon Bridges: Is she aware how many more New Zealanders are going on to the jobseeker benefit—or the dole—each week at the moment? | |
| Rt Hon JACINDA ARDERN: Of course we are releasing more frequent information. The last detail that I saw had an extra, from memory, about 7,000 people going on to jobseeker. At the moment, job seekers as a percentage of the working-age population represent about 5.8 percent—that is just a touch above what we saw at the global financial crisis (GFC). We have always indicated, as have commentators around the world, the impacts on employment here are likely to be worse than the GFC, and significantly so. Our job is to make sure we connect people, keep them connected to work, and get them back into work as quickly as possible. On that note, can I add that we've had over 2,000 people this month come off jobseeker and into work. So even in lockdown, work has been under way by the Ministry of Social Development to redeploy people to those areas of essential work—food production and processing—to keep people connected to the workforce. | |
| Hon Simon Bridges: Will the Prime Minister assure New Zealanders regarding the Government's COVID-19 economic recovery that her way out will not include raising taxes or creating new ones? | |
| Rt Hon JACINDA ARDERN: I've been asked that before, and have already said that. In fact, if you'll see from our initiatives so far, we've actually been providing tax relief. The first business tax package had tax deductions for assets that, for instance, are often used to enable people to work from home. We raised the provisional tax threshold. We wrote off late tax penalties. We allowed building depreciation. We've added to that a second package worth $3.2 billion, including tax loss carry-back, tax loss continuity support, and, of course, that sat alongside services like business consultancy services, to make sure people are accessing all of those packages. | |
| Hon Simon Bridges: Does she accept, for businesses, while the wage subsidy has been a welcome lifeline, they are still struggling to pay all of their costs, like rent and rates, that tens of thousands will go out of business and fire many tens of thousands of Kiwi workers before Budget 2020 if they don't receive more Government support urgently? | |
| Rt Hon JACINDA ARDERN: The first thing I'll say is we've never waited for the Budget in order to move quickly to support business, and that's why you've seen a significant investment already to try and respond to need as we've seen it. The more than $10 billion wage subsidy scheme, I do want to point out, unlike other economies—like, for instance, Australia—we got that out the door within days; Australia is not yet paying their wage supplement. And so that's been incredibly important. The second difference: we have paid that out in bulk, so that was a 12-week payment that came right up front to support businesses; that has given them the flexibility to manage their needs, with the only proviso that people keep connected to the workforce and that they keep paying people's wages. We did look at that other significant fixed cost for many businesses, which will be their rental cost, their lease arrangements; there we made proviso for their arrears to be able to accumulate for a longer period before they're able to be terminated. There were limitations on what we were able to do in that area, though. Finally, things like tax loss carry-back is a significant initiative in order to help with cash-flow issues for businesses, as well. But we've never ruled out continuing our supplementary support, and that's what we've done all the way through. | |
| David Seymour: Can the Minister confirm for business owners that there will not be relief for commercial leases? | |
| Rt Hon JACINDA ARDERN: We looked at all the options and we had limitations there on what we were able to do that did not exist for residential tenancy. But even if we can't do things that are directly attributable only to the fixed costs of commercial leases, what we have tried to do is deal with cash-flow issues through, for instance, the tax system or through wage subsidies to try and help in other ways. | |
| Hon Simon Bridges: In light of those answers, can we expect more cash support, whether for rent or rates or otherwise, for businesses—particularly small businesses—imminently? | |
| Rt Hon JACINDA ARDERN: We've always said we want to keep assessing the situation for our businesses. What we have looked at is, rather than some of the more generic support mechanisms and packages like wage subsidies, whether or not now is the time to look at more targeted offerings. I am very aware that, for instance, tourism—those who work in large events are going to be specifically affected for a longer period of time. So that's work that the Government continues to do. | |
| Hon Simon Bridges: Is Phil Twyford's warning to councils last week that they must not provide relief to ratepayers on rates, in fact, Government policy? | |
| Rt Hon JACINDA ARDERN: I haven't read those explicit comments. What I will say, generally, though, is, of course, councils have the issue that Government has at the moment, where revenue streams for council have been impacted by COVID-19, but they have continuing ongoing costs. What I hope is that central government and local government will continue to work together to make sure that we have the stimulus we need in our economy to continue to create jobs—and local government has a role to play in that, as well. At the same time, I think we're all agreed, we want to lessen the burden of cost on our ratepayers and taxpayers at present, because this is a time where people are facing considerable potential costs, particularly if they've lost their jobs. | |
| Hon Simon Bridges: Was Phil Twyford right—as reported in Stuff, I think, last week—to tell council leaders that "any move by councils to trim rates will impact the Government's ability—or willingness—to invest in any proposed partnerships."? | |
| Rt Hon JACINDA ARDERN: Again, I'd rather see the full context of Minister Twyford's statement. But, also, what I would point out is that there are a number of services and ongoing projects that councils, of course, are obliged to continue to deliver. But those are ultimately matters for them. | |
| Question No. 2—Finance | |
| 2. Hon PAUL GOLDSMITH (National) to the Minister of Finance: Does he stand by all of his statements and policies? | |
| Hon GRANT ROBERTSON (Minister of Finance): Yes, in the context they were made and undertaken. | |
| Hon Paul Goldsmith: Can he explain to New Zealanders why so many people still can't go back to work when the Prime Minister says the virus is "currently eliminated"? | |
| SPEAKER: Well, I'm going to let the Minister answer it, but it doesn't actually flow from the question. | |
| Hon GRANT ROBERTSON: Firstly, I don't believe that's an accurate representation of what the Prime Minister said, and, secondly, the Prime Minister has just outlined very clearly in her statement to the House the importance of doing this once and doing it right. | |
| Hon Paul Goldsmith: Does he remember Auckland Chamber of Commerce boss, Michael Barnett, begging his Government to help struggling businesses with rent, and, if so, why has there been no significant policy response so far? | |
| SPEAKER: Ibid., for my response. Grant Robertson. | |
| Hon GRANT ROBERTSON: Yes, indeed. I have regular conversations with Mr Barnett, who I have a lot of respect for. We do know that nearly 70 percent—or probably more than 70 percent—of the $10 billion of the wage subsidy scheme has gone to small and medium enterprises, who Mr Barnett represents, within the Auckland Chamber of Commerce. Many of the tax changes that have been proposed and will soon be passed through this House will also benefit those small and medium enterprises, and, as the Prime Minister has just said, we continue to work with them on what else we may be able to do. | |
| Hon Paul Goldsmith: Why does he say that the wage subsidy has gone to small and medium sized businesses when so many submitters this morning made the point that the wage subsidy has gone to the employees, and the businesses themselves have actually received little in the way of cash support? | |
| Hon GRANT ROBERTSON: I'm sure the member is well aware that the wage bill is the biggest bill of most small businesses. | |
| Hon Paul Goldsmith: Does it concern him that Rotorua bar operator Reg Hennessy at the Epidemic Response Committee this morning predicted that there will be a "huge shit fight" over rents as small businesses struggle to cope with substantial ongoing costs but zero revenue? | |
| SPEAKER: The same response: I just want to warn the member that when he uses a general question like that, it's very easy to relate, but none of his supplementaries yet have. | |
| Hon GRANT ROBERTSON: We're well aware that for many small businesses, having no revenue has been a huge struggle. That's what the wage subsidy scheme was about, and it's why it was paid as a 12-week upfront lump sum, in order for businesses to be able to plan. We continue to work with small businesses on what else we can do. | |
| Hon Paul Goldsmith: Does he think it's fair that under Government policies, small business operators have been told by the Government to close in the national interest, and yet they should be taking so much of the economic pain on behalf of the entire community? | |
| Hon GRANT ROBERTSON: It's been the recognition from the Government from day one that we all needed to work together to be able to get through this. That's why we are very pleased by the fact that more than $10 billion has gone out the door to support businesses and workers. It's why another $12 billion worth of support via the tax system, the business loan guarantee scheme, and many other initiatives have been put in place as well. | |
| Hon Paul Goldsmith: What hope can he offer Wellington bar owner Andy Gray, who told the Epidemic Response Committee this morning that under Government policies so far, support has been "not very much use"? | |
| Hon GRANT ROBERTSON: There are many different views, I'm sure, within the community. Myself and other Government Ministers are in receipt of people who have described the support that has been provided as a lifeline. | |
| Question No. 3—Finance | |
| 3. KIRITAPU ALLAN (Labour) to the Minister of Finance: What actions is the Government taking to support New Zealand businesses and households to respond to and recover from COVID-19? | |
| Hon GRANT ROBERTSON (Minister of Finance): The best economic response to the virus has always been a strong public health response. That's why the first wave of our response is aimed at fighting the virus and cushioning the blow of it on our businesses and households. We allocated a $500 million fund early on in our response to strengthen our health services to fight and contain COVID-19. In addition, we have provided $10.5 billion in wage subsidies, meaning affected businesses received support directly from the Government to keep their staff on; a $2.8 billion income support package for our most vulnerable; $2.8 billion of business tax changes to reduce cash-flow pressure; a $6.25 billion business finance guarantee scheme; and a suite of other measures to support businesses, including the $3.1 billion tax loss carry-back scheme. We put in place a safety net for as many Kiwi households and businesses as we can, and these immediate measures will mean we are all in a better position to bounce back on the other side of this crisis. | |
| Kiritapu Allan: How is the Government developing a plan for the New Zealand economy in the wake of COVID-19? | |
| Hon GRANT ROBERTSON: The second wave of the Government's economic response plan is to position for recovery and kick-start the economy. As we move into level 3, many more parts of our economy are opening up to work. The Government is working with sectors across our economy and society to develop recovery plans as we move further down the alert levels. This includes the infrastructure industry reference group and in areas such as housing, training, Māori and Pasifika response, tourism, and the media. Ministers are tapping into all the ideas and talents New Zealand has to offer, including from our businesses, entrepreneurs, academics, and unions. Through these plans, the Government will provide a kick-start to economic growth as restrictions ease further and as we move further towards a new normal. | |
| Kiritapu Allan: What steps is the Government taking to ensure New Zealand's long-term economic recovery? | |
| Hon GRANT ROBERTSON: As we look ahead, we must be aware of what our economy could look like. The crisis represents an opportunity to reset and rebuild our economy. There are some longstanding challenges which we will continue to face, including low productivity, inequality, climate change, and a lack of diversity in our export markets. We know we now have a chance to reorient our economy and society, and we want to take these opportunities and tackle these problems. We have formed a macroeconomic response group of Ministers—including the Prime Minister, the Deputy Prime Minister, myself, and Minister Parker—to guide this work, and this work will also include a critical role for the private sector, unions, NGOs, and others. Our long-term plan is to build a productive, sustainable, and inclusive economy that protects the long-term wellbeing and living standards of all New Zealanders. | |
| Question No. 4—Health | |
| 4. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: What percentage of identified COVID-19 close contacts who have been contacted to date were contacted within three days? | |
| Hon Dr DAVID CLARK (Minister of Health): The most up-to-date data I have available covers the period 13 to 17 April. From the information provided to me by the Ministry of Health, I can confirm to the House that 36 cases were identified as having close contacts, a total of 120 close contacts were followed up, 79 percent of those close contacts were traced within 48 hours, and 91 percent were contacted within 72 hours. | |
| Hon Michael Woodhouse: I raise a point of order, Mr Speaker. An interesting answer that didn't address the primary question. The Minister has chosen a date range of four days out of the 60 days since our first case. | |
| SPEAKER: He did address the question. | |
| Hon Michael Woodhouse: What percentage of identified close contacts of COVID-19 cases who have been contacted to date between 29 February and 23 April—which is the last available update—were contacted within three days? | |
| Hon Dr DAVID CLARK: I have just provided the House with the most recent data available, but I would note that until recently, there was no national database for contact tracing as it was all being done by local public health units, and this Government has done what no Government before has done. With the establishment of the National Close Contact Service, we are now gathering national data and, as such, we're getting better access to an overall picture. Moving into the future, we will have that data in a much more granular fashion than it has ever been provided before. | |
| Hon Michael Woodhouse: Why wasn't the data in a more granular fashion, given the importance the Government has placed on early contact tracing? | |
| Hon Dr DAVID CLARK: Because, as I noted, no Government had ever set up a national contact tracing system. The steps forward in terms of the IT solution that supports that is going to be incredibly valuable as we move into the future, and because of the efforts of nearly 5 million New Zealanders, we are in a unique—almost—in the world position where we have the opportunity to stamp out this virus, and into the future, we will be able to have a very clear picture of how quickly that is happening. | |
| Hon Michael Woodhouse: Can he confirm the advice given to him in the ministry's situation report No. 83 that of the 10,093 close contacts identified, just 5,560 were traced at all—a success rate of just 55 percent? | |
| Hon Dr DAVID CLARK: At present, the average time to contact people is 1.1 days, and my expectation is that as we continue to contact trace 80 percent of cases within 48 hours, we will see a picture of success that we want to see as a nation. | |
| Hon Michael Woodhouse: How many of Dr Ayesha Verrall's six urgent or critical recommendations on contact tracing reporting have been fully implemented? | |
| Hon Dr DAVID CLARK: They are all being urgently implemented. The member can see from the data that I've just provided that we now have measures about how quickly contacts have been traced, and the picture in recent times is a very, very encouraging one. The bigger issue, actually, currently, is the time taken between people first having symptoms and then getting a test done. That is our big challenge ahead, and what all members of Parliament can do is encourage their constituents, members of the public, to seek a test at the very hint of any symptoms. | |
| Question No. 5—Small Business | |
| 5. Hon TODD McCLAY (National—Rotorua) to the Minister for Small Business: What official estimates has he received, if any, of small business failure and job loss as a result of the level 3 and 4 COVID-19 restrictions? | |
| Hon GRANT ROBERTSON (Minister of Finance) on behalf of the Minister for Small Business: On behalf of the Minister, official estimates of the type that the member is asking for are not available at this time. The member will be aware that Treasury has recently provided scenarios for the public, showing how the economy could respond in the future to a range of different COVID-19 response levels, and obviously this includes a range of levels of unemployment. We can say that as at last week, 33,000 more people had applied for the jobseeker benefit since 20 March. How many of those are related exactly to small and medium enterprises is not currently available. We also know that at least 70 percent of the $10 billion wage subsidy scheme has gone to small and medium enterprises. We will continue to work with SMEs and representative organisations to support them. | |
| Hon Todd McClay: Will there be direct cash-flow grants to help small businesses meet mounting cost pressures and growing debt, to reduce the number of businesses that fail and the resulting avoidable job losses? | |
| Hon GRANT ROBERTSON: As evidenced by the many initiatives we've already put in place that support small and medium enterprises, we continue to look for ways to do that again in the future. | |
| Hon Todd McClay: Will there be direct financial assistance for small businesses and landlords to help them with their lease and rent arrears, to reduce the number of businesses that close and resulting avoidable job losses? | |
| Hon GRANT ROBERTSON: As the Prime Minister indicated earlier, the suite of measures we put in place have been, to this point, fairly universal. There is now the opportunity for us to work with small businesses and particular sectors in the economy on what the best response is to support them to get through this. We remain committed to ensuring that as many New Zealanders as possible stay in work and as many New Zealand businesses as possible continue to operate. | |
| Hon Todd McClay: Why can supermarkets open under level 3 restrictions but butchers and greengrocers cannot? | |
| Hon GRANT ROBERTSON: As, again, the Prime Minister has already said today, level 3 is still a restrictive level. We are still trying to limit the number of interactions there are between people. We, of course, are seeing a very large number of businesses open for contactless commerce today, and judging by things that I've seen in the media, many businesses are taking that up, as are many customers. | |
| Rt Hon Jacinda Ardern: Can he confirm that during level 4 we, unfortunately, did have cases of COVID-19 within essential services like our supermarkets, thus proving how important it was to reduce down the potential contact of too many individuals outside those essential services so we could manage as best we could any potential transmission? | |
| Hon GRANT ROBERTSON: Yes, I can confirm that, and indeed that's a subset of the overall view that most small businesses in New Zealand take, which is that if we can do this once and do it right, that means we can get back to a new normal of commerce that looks much more like what we've seen in the past. | |
| David Seymour: Has the Government, then, considered it might have reduced the spread within essential services such as supermarkets if people were able to access butchers, bakers, and fresh fruit and vegetable stores instead of driving further to bigger, more crowded stores such as supermarkets? | |
| Hon GRANT ROBERTSON: I already answered this in my earlier supplementary question. The whole point of both level 4 and level 3 is to reduce the amount of contact that people have with one another and to break the chain of transmission. | |
| David Seymour: I raise a point of order, Mr Speaker. He has not addressed the question. The question was not whether we're trying to reduce transmission but whether a particular policy would— | |
| SPEAKER: Order! Order! It was addressed right at the beginning. | |
| Hon Todd McClay: Why has the Government given $50 million in relief to the media but not delivered any specific direct financial assistance for small business? | |
| Hon GRANT ROBERTSON: I utterly reject the second part of that question. Billions of dollars is going out to support small and medium enterprises, both through the wage subsidy scheme and also the various other initiatives we've undertaken. | |
| Question No. 6—Social Development | |
| 6. GINNY ANDERSEN (Labour) to the Minister for Social Development: What initiatives has the Ministry of Social Development implemented in support of the Government's response to COVID-19? | |
| Hon CARMEL SEPULONI (Minister for Social Development): We acted early, in March, establishing rapid response teams initially in areas feeling the greatest economic impacts, but subsequently across all Ministry of Social Development (MSD) regions. We temporarily removed stand downs to ensure timely access to income support. The Government announced an increase in main benefits of $25 per week, as well as a doubling of the winter energy payment in 2020, as part of phase one in our recovery package. MSD has also stood up the wage subsidy scheme with the support of IRD and the Ministry of Business, Innovation and Employment, which has supported over 1.6 million New Zealanders to stay connected with their employers, as well as established the COVID leave support and essential workers leave scheme. MSD has gone to great lengths to also adapt its core services to ensure it continues to be responsive to people across all COVID alert levels. They have streamlined benefit application processes, so people could apply and be approved online or over the phone, and they continue to redeploy people into work where possible. On top of this, we announced the $27 million to support our social services. As a Government, we have acted quickly to get support to New Zealanders who need it, and MSD have been an integral part of that response. | |
| Ginny Andersen: What recent initiatives has the Minister announced? | |
| Hon CARMEL SEPULONI: Today, I announced a suite of initiatives that build on our already existing employment focus and the work of MSD's rapid response teams. I announced the Keep New Zealand Working online recruitment tool, an easy and free to use service where employers and employees can connect to recruit and find work. I also announced 35 new employment centres across the country, a Keep New Zealand Working fast-tracking service for those on benefit who are able to re-engage quickly with the job market, and working in partnership with industry to provide quick upskilling solutions—for example, the new free online community health courses with NZQA unit standards. As we continue to respond to the impacts of COVID, MSD will continue to be agile in refining its employment-focused offering to ensure those who can are able to work. | |
| Ginny Andersen: What employment activity has been happening over recent months? | |
| Hon CARMEL SEPULONI: These new initiatives I've just spoken about complement MSD's existing employment services and contribute to the Government's broader employment strategy, which I'd like to acknowledge my colleague Minister Jackson for his leadership on. Over alert level 4, MSD's employment focus continued. MSD placed 6,648 clients into employment in March, and so far this month, MSD has placed 2,478 people into work. Even during this very restricted period, MSD has found innovative ways to continue to support and connect people to opportunities for redeployment and work. | |
| Question No. 7—Health | |
| 7. Dr SHANE RETI (National—Whangarei) to the Associate Minister of Health: How many flu vaccines have been ordered, and how many have been administered to New Zealanders this year? | |
| Hon JULIE ANNE GENTER (Associate Minister of Health): Thank you, Mr Speaker. This year's flu campaign will be the biggest on record in New Zealand, with 400,000 more vaccines available in 2020 compared with last year. This means that 1.768 million flu vaccines have been ordered for New Zealand. By necessity, the initial order was undertaken well before the COVID-19 pandemic. As at 17 April 2020, 587,000 people have been vaccinated. This is more than double the 290,000 who had been vaccinated on the same date in 2019. | |
| Dr Shane Reti: What percentage of the four priority groups for flu vaccine were administered the vaccine by the original deadline, and what percentage have now been vaccinated? | |
| Hon JULIE ANNE GENTER: I don't have those numbers with me right now, but if the member puts a question in writing, I'm sure that we can get something to him. I can confirm that there have been extremely high levels of vulnerable people vaccinated. Two-thirds of the vaccines entered into the National Immunisation Register are people over the age of 65, over 5,000 are pregnant women, and we also know that record numbers of DHB front-line health workers have been vaccinated. | |
| Dr Shane Reti: What communications has she had with the New Zealand Medical Association to understand their concerns after they described flu vaccination administration as a debacle? | |
| Hon JULIE ANNE GENTER: Thank you, Mr Speaker. I completely understand that this situation of unprecedented demand during a global pandemic would've put extra pressure on nurses, GPs, and pharmacists who are working on the front line. The Ministry of Health has stepped in with the distributor to ensure flu vaccines are getting to those who most need them. I mostly want to thank all of those front-line health workers—the GPs, the nurses, the pharmacists—who have achieved this incredible result of twice as many people so far vaccinated as at the same date last year. | |
| Dr Shane Reti: How much influence on supply has it been with respect to flu vaccines administered to private payers who did not qualify for the free vaccine? | |
| Hon JULIE ANNE GENTER: Sorry, I'm not sure I caught the beginning of that question. | |
| Dr Shane Reti: How much influence on supply has it been with respect to flu vaccines administered to private payers who did not qualify for the free vaccine? | |
| Hon JULIE ANNE GENTER: The Government moved to start the flu campaign two weeks early this year, and we did that with the understanding that we would be able to ensure that funded people had an opportunity to get their vaccines early, and we extended that prioritisation period out an extra two weeks. So there's basically been a five-week period in which our expectation is that GPs and other providers were prioritising the funded groups. | |
| Dr Shane Reti: Will she make the flu vaccine free to essential workers given her statement yesterday that all essential workers who are still at work, such as supermarket workers, should get the flu vaccine? | |
| Hon JULIE ANNE GENTER: Pharmac makes the decisions about who gets funded. This Government did take the extra additional step of ensuring that we can cover the funding for aged-care workers as well as all health workers like those in DHBs, and, ultimately, I would hope that the supermarket employers are paying for the vaccine for their employees. | |
| Hon Dr David Clark: Can the Minister confirm that recent data showed that around 1.2 million vaccines had been distributed this year, as opposed to just over 600,000 at a similar time last year? | |
| Hon JULIE ANNE GENTER: Yes, that is correct, and, indeed, 1.2 million is getting close to the total for the entire last season and was the total amount that were administered every year from 2013 through 2017. | |
| Question No. 8—Education | |
| 8. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: Is he confident that the Government has provided adequate support to education institutions, students, and educators as a result of COVID-19? | |
| Hon TRACEY MARTIN (Associate Minister of Education): on behalf of the Minister of Education: Not only am I confident but, considering the extremely unusual circumstances, I'm exceptionally proud that after only five weeks since the announcement that we would go into a level 4 lockdown, the ministry, the teaching profession, parents, and students have taken us to a point where the majority of students are supported to enable distance learning, including the creation of two television channels. I want to acknowledge and thank all those that made this possible. | |
| Hon Nikki Kaye: With half of early learning centres indicating they will not open tomorrow, what advice has he been given about the expected numbers of children likely to attend early childhood education (ECE) and schools tomorrow? | |
| Hon TRACEY MARTIN: As of today, my understanding is that there is an estimated 6 percent of children attending who would normally attend ECE. I have on the back of some piece of paper here—there are 381 ECE centres open today; 1,322 children are attending. It is estimated that 3 percent of the normal student body will be attending school tomorrow and that today is a teacher-only day. So at the moment, there should be no children attending physical school. | |
| Hon Nikki Kaye: What evidence can he give that there has been a full and thorough analysis of COVID-19 incidents at schools such as Marist and Pakuranga College? | |
| Hon TRACEY MARTIN: I would direct the member, probably, to send that question to the Minister of Health as—that is, to follow up around COVID conditions is a Ministry of Health priority. But if she would like more detail from the Ministry of Education themselves around what cleaning has been done, what disinfecting has been done, what other parameters have been put in place, then I would invite her to put that in writing and I'll make sure she gets that detail. | |
| Hon Nikki Kaye: Is he confident that all schools and ECE centres in New Zealand opening both today and tomorrow have adequate access to personal protective equipment (PPE) and flu jabs for educators? | |
| Hon TRACEY MARTIN: What I can tell the member is that all criteria by which ECE centres and schools are opening have been created under the advice of the medical experts. So with regard to those who need PPE, those who need other supports, and other restrictions that have been put into place, they have all been created and have been passed out to the sector under the watchful eye of the medical experts. | |
| Hon Nikki Kaye: When will the Government announce additional financial support for ECE, schools, and tertiary institutions, given we have situations like students being locked out of their accommodation and charged inappropriate charges because their tertiary institutions can't survive? | |
| Hon TRACEY MARTIN: I have asked officials to meet with the New Zealand University Students' Association to look into this issue. They're meeting, I understand, at their meeting right now. I understand there are varying practices across the country currently around charges at halls of residence at level 4 and level 3 when students are not living in their paid rooms. I've asked for a picture of it all, as there are contracts and private provisions involved in some cases that need to be unpacked. In the meantime, I'll repeat: the Prime Minister's asked that we show compassion to each other in an unprecedented time. | |
| Question No. 9—Health | |
| 9. KIERAN McANULTY (Labour) to the Minister of Health: What public health measures are the key to the ongoing strategy to eliminate COVID-19? | |
| Hon Dr DAVID CLARK (Minister of Health): By going early and going hard, New Zealand has managed to stop community transmission of COVID-19 and eliminate the unknown spread of the virus for now, but we are not out of the woods. As other countries have seen, the virus can bounce back and resume its spread. That means we must continue with our strict border controls and use of quarantine. We must continue to test widely for COVID-19 and trace all close contacts of any confirmed or probable cases. We must continue to use self-isolation appropriately and follow strict rules around physical distancing. We've proven we can do this together. We must remain vigilant at alert level 3. | |
| Kieran McAnulty: How have our health services responded to the challenges of eliminating COVID-19? | |
| Hon Dr DAVID CLARK: Can I start by thanking the doctors, nurses, midwives, and other allied health staff who have been at the front line and have continued to provide top-quality care while adapting to new ways of working. I want to highlight two areas in particular where our health system has ramped up capacity: testing and contact tracing. In total, we have completed more than 120,000 tests, and we now have capacity to process more than 8,000 tests per day. That compares well internationally and gives us great confidence that we're getting an accurate picture of the extent of COVID-19. In contact tracing, we have built from scratch the national close contact service and an information technology solution to support it. The national service can now make 5,000 calls per day, which can be scaled to 10,000, and public health units can trace 185 cases per day between them. | |
| Kieran McAnulty: How can the public continue to play their part in eliminating COVID-19 at alert level 3? | |
| Hon Dr DAVID CLARK: The public response to the challenge of COVID-19 has been remarkable, and I want to thank New Zealanders for their collective efforts and their commitment to stamping out this virus and, by doing so, saving lives. We cannot relax at level 3. While more people are now at work and there is some more movement within our communities, we need to follow the same sensible measures that have served us so well during alert level 4. Stick to your bubble, observe physical distancing, stay home if you are sick, and, perhaps most importantly of all, if you have any symptoms of COVID-19, seek medical advice and get tested. | |
| David Seymour: Can GPs expect the remaining funding promised to their sector to be released, and when? | |
| Hon Dr DAVID CLARK: I am aware that there are conversations ongoing between the Ministry of Health and the primary care sector around the nature of the costs they are facing with COVID-19, and there is a desire to work together actively to make sure that any additional costs that are being incurred are supported. | |
| Question No. 10—Social Development | |
| 10. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development: Does MSD have sufficient capacity to respond to requests for its services, and what extra capacity, if any, is being put in place to ensure all New Zealanders have access to support? | |
| Hon CARMEL SEPULONI (Minister for Social Development): During the lockdown period, the Ministry of Social Development (MSD) have continued to help very large numbers of New Zealanders. To give a sense of this, in the week to 5 April, MSD responded to more than 90,000 contact centre calls, and our case managers carried out almost 80,000 phone-based appointments and calls. In response to this demand and in anticipation of more New Zealanders needing MSD's support, since 18 March MSD has hired 279 new service delivery staff. We have also streamlined services to ensure that more can be done by phone and online, like the approvals of benefit applications. Where possible, we have worked across departments like the IRD and the Ministry of Business, Innovation and Employment to establish initiatives like the wage subsidy and leave payment scheme. MSD has worked quickly to be responsive in an environment that has changed rapidly over the past months. I will be monitoring closely as things continue to change, to ensure MSD is well supported to respond to New Zealanders during this unprecedented time. | |
| Hon Louise Upston: What is the average time between an initial call and receiving a hardship grant? | |
| Hon CARMEL SEPULONI: A hardship grant, from memory—last week, when I got information on Friday, I think 73 percent were responded to, so received it, within 2 days. | |
| Hon Louise Upston: How many calls have been dropped? | |
| Hon CARMEL SEPULONI: I don't know if any calls have been dropped recently. On Friday, also when I was speaking to the chief executive, I think that the average wait time was around 54 seconds—that might have been for the day before, on Thursday. A couple of weeks back, the demand was overwhelming. Some people were on the phone waiting for two hours, at which point they would have dropped off, and I think the average wait time during that period was around 44 minutes. So it has improved significantly from an average wait time of 44 minutes to an average wait time, which last got reported to me, of 54 seconds. | |
| Hon Louise Upston: What discussions has she had with the Salvation Army to follow up on their report that said, "People are still struggling to access WINZ and MSD online support."? | |
| Hon CARMEL SEPULONI: I respect the reports that are coming from the Salvation Army and the work that they are undertaking alongside many of the other social services that are out there. I have had at least one meeting with the Salvation Army and a range of other organisations—or Zoom meetings—and I do believe I've got another one coming up, and I think that may be part of the church leaders social service group that I'll be meeting with. I take on board any constructive criticism that is sent our way. Our intention is to do the best job that we can possibly do for New Zealanders, and if constructive criticism comes from social services, then I accept it and we look at how we can do things better. | |
| Hon Louise Upston: How many people who can't get through to MSD are turning instead to local emergency operations centres' welfare centres for support? | |
| Hon CARMEL SEPULONI: I don't think that we would have had an issue with people trying to get through to MSD in the last week at least, and potentially the last two weeks. There was just that week where we experienced a huge increase in demand, and that has petered off to a certain extent. Also, with the civil defence emergency management (CDEM) response on the ground, what we have an agreement on with those localised efforts is that when they do the outbound calling or when they take inbound calls, they do establish whether or not people are eligible for MSD support first and then put them in touch with MSD. In instances where they say that they haven't been able to get in touch with MSD, I've heard of cases where they've said, "Well, let's try. Let's do this now.", and where the CDEM efforts are actually doing that. | |
| Question No. 11—Tourism | |
| 11. Hon TODD McCLAY (National—Rotorua) to the Minister of Tourism: What official estimates has he received, if any, of business failure and job loss in the tourism and hospitality sector as a result of the COVID-19 level 3 and 4 restrictions? | |
| Hon KELVIN DAVIS (Minister of Tourism): Treasury has clearly outlined the various unemployment scenarios that could be possible as a result of COVID-19. Many of those job losses will come from the tourism sector. At the moment, Tourism New Zealand is undertaking a stakeholder survey, which will provide more of an insight into the current state of the sector—how we work together to respond, restart, and reimagine the tourism sector into the future. | |
| Hon Todd McClay: Is he concerned that the Government's wage subsidy doesn't go far enough to protect jobs in industries like tourism and event management, where business has been entirely closed for an extended period of time? | |
| Hon KELVIN DAVIS: Preliminary results from Tourism New Zealand stakeholder surveys show that 1,382 respondents, or 87 percent, had accessed wage support, including the wage subsidy and essential workers leave payments, as well as 18 percent of respondents who had accessed tax relief measures and 11 percent who had accessed support to assist in assessing finance. We know that businesses are hurting, and businesses in tourism are hurting, but the Government has done the best it can to try and cushion the blow. | |
| Hon Todd McClay: What reports has he heard of tourism businesses like Ngāi Tahu or Skyline or Te Puia having to close or reduce staff despite the Government's wage subsidy scheme? | |
| Hon KELVIN DAVIS: As the Minister of Finance has often said, the wage subsidies in the business assistance package were there to cushion the blows. And he's also been very clear that we will not be able to save every job. | |
| Hon Todd McClay: What specific action is he going to take now to help the tens of thousands of workers in the tourism sector who are facing job losses irrespective of the job subsidy? | |
| Hon KELVIN DAVIS: Tourism New Zealand has been tasked with the job of reimagining the future of tourism. They're working alongside the Ministry of Business, Innovation and Employment and the Department of Conservation and stakeholders. A plan is coming together, and the member will have to wait and see exactly what that plan is in terms of us supporting the tourism sector into the future. | |
| Question No. 12—Finance | |
| 12. Hon JAMES SHAW (Co-Leader—Green) to the Minister of Finance: Will the investments the Government makes to create jobs in the short term also help resolve long-term challenges that impose costs on future generations, such as the climate crisis and the affordability of housing? | |
| Hon GRANT ROBERTSON (Minister of Finance): The investments this Government is making as we position the economy to recover from COVID-19 will not only create jobs in the short term but over the medium and long term as well. That's because our plan is focusing on sustainable job creation across a range of industries. This Government is taking an intergenerational approach to how we decide what to invest in, through our wellbeing approach, and that will continue as we look to the challenges that lie ahead. | |
| Hon James Shaw: Does he agree with the World Bank's vice president for infrastructure, Mr Makhtar Diop, that boosting low-emissions transport through post-COVID investments will "not only benefit the climate but also support long-term economic growth, create quality jobs, and connect more people to opportunity."? | |
| SPEAKER: Any one of those. | |
| Hon GRANT ROBERTSON: Well, I can agree with that, and, indeed, irrespective of COVID-19. While the recovery from COVID-19 allows us to do a stocktake of how we go about what we do and how we do it, I would stress that the Government is already ahead of the curve when it comes to these types of investments. For example, the New Zealand Upgrade Programme announced at the end of January—it ensured that a number of unfunded ideas for transport projects were futureproofed into concrete plans by the current Government, to take into account the need to allow all forms of transport, including public transport, walking, and cycling. | |
| Hon James Shaw: Does he intend to incorporate advice from the Climate Change Commission into his post-COVID economic planning, and, if so, how? | |
| Hon GRANT ROBERTSON: Yes, indeed. A wide range of advice is needed for the Government to be able to come up with the plan that will support all New Zealanders through this and position us for recovery. I think in New Zealand we're extremely lucky to have a wide range of experts—both economically, scientifically, and otherwise—who can help us look to the future. And I've already seen Dr Rod Carr's comments in that regard. | |
| Hon James Shaw: Does he agree that as well as job creation and environmental benefits, investing in renewable energy—like solar, wind, and geothermal—to electrify the vehicle fleet could also help our country not spend more than we earn overseas by reducing our approximately $5 billion to $6 billion annual bill for oil imports? | |
| Hon GRANT ROBERTSON: I believe the member is referring to balance of payments, and I congratulate him for raising that particular topic in the House today. The Government is already encouraging greater use of renewable energy, uptake of electric vehicles, and other measures, like greater investment in hydrogen, to increase the use of renewable energy, and that work will indeed continue. Reducing imports does help to improve our balance of payments, but we shouldn't just stop there. New Zealand is in a strong position to build up our exports of products that are produced using renewable energy, which would also help the balance of payments. | |
| SPEAKER: I should indicate to members that I have apologised to the Prime Minister for not calling her for her reply to the earlier debate. I apologise to the House for my error in that as well. | |
| STANDING ORDERS | |
| Suspension | |
| Hon GRANT ROBERTSON (Minister of Finance) on behalf of the Leader of the House: I move, That the 4-speech limit for each member, in the debate on each Part or provision during the committee of the whole House stage of bills, be suspended, and that Appendix A of the Standing Orders be read accordingly. | |
| The Standing Orders impose a limit of four five-minute speeches per member on each question during the committee stage of any bill. This motion abolishes that limit. The effect of the limit has been that members try to fill the full five minutes each time they speak. Abolishing it is intended to encourage shorter, more focused speeches. It is also intended to promote more exchanges between members and the Minister in charge of the bill. | |
| The House's agreement to this proposal today will allow the annual review debate to proceed in a way that is more appropriate for the unusual circumstances in which it will be conducted. It will mean that the limited numbers in the Chamber will not diminish the level of scrutiny that the debate is intended to provide. Implementing this change now will give new rules a trial run so that the Standing Orders Committee can judge whether to recommend that it be made permanent when it reports to the House in a few weeks' time. | |
| Hon GERRY BROWNLEE (National—Ilam): I think it's no secret that from all quarters in the House there has been a concern for a long time that the financial review debates and even the Estimates debates become somewhat perfunctory, a bit of a "knock 'em over, drag 'em out" type of fare, all inside the space of five minutes, designed to get a Minister into a position where they are so concerned about the time that they don't bother to answer questions, and therefore we see just a utilisation of the House's time to no good purpose at all. The Standing Orders Committee had considered this matter prior to the events that have transpired over the last five weeks, but I think it is timely that we make the change today in time, right in front of the review debate that we will have shortly. | |
| The intention is that if an Opposition member is raising an issue with a Minister, the Minister may be able to take the floor, deal with that particular issue, and then the person who was asking that question would be able to resume without particular loss of time or opportunity to speak. It will be somewhat iterative over the next couple of days, and I do encourage the presiding officers to be slightly creative. We are living in more creative and innovative times at all sectors of the country and in the endeavours of New Zealanders because of what is in front of us. It's appropriate, then, that Parliament seeks as much information for people inside the parameters of the Westminster system that we operate in, and in a way that I think will become the norm for the future operation of these two debates, the annual review debate and the Estimates debate, which will follow the Budget. | |
| Motion agreed to. | |
| ANNUAL REVIEW DEBATE | |
| Setting Aside Standing Orders | |
| SPEAKER: A point of order, the Hon Grant Robertson. | |
| Hon Grant Robertson: No, I don't believe I have one, Mr Speaker. I was standing up to take the chair. | |
| SPEAKER: I think someone is going to take a point of order in relation to Standing Order 349(2) and (3) being set aside for the annual review debate. | |
| Hon GRANT ROBERTSON (Minister of Finance) on behalf of the Leader of the House: Just one moment, Mr Speaker, and I will attempt to do that for you. Following discussions in the Business Committee, I seek leave for Standing Order 349(2) and (3) to be set aside for this annual review debate. | |
| SPEAKER: Is there any objection to that course of action being followed? There is none. | |
| In Committee | |
| CHAIRPERSON (Hon Anne Tolley): This is the debate on the financial position of the Government and the annual reviews of departments, Officers of Parliament, Crown entities, public organisations, and State enterprises as reported by select committees. In accordance with a determination of the Business Committee, the time allocated for this debate is five hours. In accordance with the leave of the House, Standing Orders 349(2) and (3) have been set aside, so there will be no sector specific debates. | |
| All annual reviews are available for debate, but only specific Ministers will be available each day to respond. The Government has indicated that the Minister of Finance and the Minister of Health will be available today. A motion to report progress on a bill must be moved on a call, not a point of order—Speaker's ruling 77/5. When a member moves to report progress in this annual review debate, the presiding officer will call on that member first when the debate resumes. This is a similar process to that followed in other debates when they are adjourned. At the conclusion of the debate, questions will be put noting the committee reports on annual reviews and on the provisions of the Appropriation (2018/19 Confirmation and Validation) Bill. There is no amendment or debate on these questions. | |
| Also, to maintain our social distancing, I remain here in the Chair and the Minister can remain in their seat. The question is that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the previous financial year be noted. | |
| Hon GRANT ROBERTSON (Minister of Finance): Thank you very much. I'll only speak briefly at the start here to enable the kind of dialogue that the shadow Leader of the House was referring to in his contribution before. I just want to note at this point that obviously this is the annual review debate and therefore is a backward-looking debate. But I'm conscious of the fact that there is clearly a very significant economic shock that the country is facing, and so current matters will no doubt enter into the debate. | |
| But if we do look at the 2018-19 Crown accounts, they do show the Government's books in good shape going into this fiscal year. This is thanks to a responsible fiscal management approach and a healthy economy supported by hard-working New Zealanders. This has meant that we are in a good position to take the necessary actions to respond to the impacts of COVID-19. | |
| The surplus of $7.5 billion in these accounts was $4 billion higher than forecast at Budget 2019. It was mainly the result of some one-off positive changes impacting the operating balance before gains and losses (OBEGAL); the two key ones being tax revenue, partly due to the way that tax revenue has been recognised, and the change in the valuation of our rail network. | |
| Net core Crown debt as a percentage of GDP had decreased to 19.2 percent, below the 20 percent target figure of the Budget responsibility rules and within the new range of 15 to 25 percent. The Crown's assets had increased by $25.8 billion, slightly offset by an increase in liabilities of $15.1 billion, resulting in an overall increase in the Crown's net worth of $10.7 billion. | |
| Nominal GDP grew by 3.6 percent in the year to June 2019, resulting in annual nominal GDP reaching $300 billion for the first time. Real activity was supported by population growth, with New Zealand's population growing 1.6 percent in the year to June. Both nominal private and general Government consumption expanded by 5 percent in the year, while residential investment increased by 7.9 percent. Nominal business investment growth slowed to 2.9 percent. Consumer spending has been supported by higher wage growth, with average hourly earnings increasing 3.5 percent in the year. The Budget forecasts included an acceleration of real GDP growth to around 3 percent. Recent indicators and developments both domestically and abroad suggest that GDP growth is more likely to move significantly lower over this year. | |
| Tax revenue increased to $86.5 billion for the year ended 30 June 2019; a $6.2 billion and 28.8 percent of GDP. There were two key drivers of growth in tax revenue. Growth in nominal GDP led to a rise in core Crown tax year on year through higher employment, higher wages, more domestic spending, and higher corporate profits. The recent transition to the new system for corporate and individual tax brought forward the recognition of some tax revenue. Tax revenue was ahead of forecast at Budget 2019 by $1.8 billion. | |
| As a share of the economy, core Crown expenses increased to 29 percent of GDP as compared to 27.8 in 2018, but below their long-run historical average of 30 percent as is in line with the Budget responsibility rules. The 2018-19 financial year is when we start to see the real impact of decisions made by this Government in the 100-day plan and Budget 2018. The OBEGAL surplus, as I've already said, at $7.5 billion was an increase of $2 billion over the previous year and $4 billion higher than forecast at Budget 2019 for the reasons that I've mentioned before. | |
| I do want to mention briefly the change in valuation approach of KiwiRail, because it was the subject of some comment at the committee. With the Government seeking wider benefits than just commercial returns from the rail network, this has resulted in a change in the way the rail network is valued now that we recognise that rail contributes to national and regional economic growth, reduces emissions and congestion, reduces road deaths and injuries, facilitates wider social benefits, and provides resilience and connection between communities. The change in valuation approach resulted in an increase in the value of the rail network of $5.3 billion in the current year, with a $2.6 billion positive impact on OBEGAL. This new valuation method was signed off in the accounts by the Auditor-General. | |
| Capital investment was a feature of the accounts, totalling $6.7 billion for 2018-19—an increase of $800 million from 2017-18. In addition to this, the Government has signalled its intention through this process to the $12 billion New Zealand Upgrade Programme. | |
| Overall, what the accounts show us is that this Government had us in a strong position leading in to the COVID-19 shock. | |
| Hon PAUL GOLDSMITH (National): Well, thank you, Madam Chair. This debate, as the Minister of Finance has said, is one that obliges us to cast our minds back prior to the events that have dominated everything for the last couple of months in terms of the economy. The Minister has just said that we went in strong, and the point that we would make is that the facts don't really back that up entirely. In fact, the GDP growth of the country had slowed to 1.8 percent year on year in the December 2019 quarter. It is worth remembering that. The Government had inherited two years ago an economy that was growing rapidly, over 3 percent—it had been nearly 4 percent in 2016—and there has been a sharp slow-down in growth prior to what happened with the COVID crisis. | |
| The other thing, of course, is he's very proud—and, naturally, all New Zealanders are proud—that Moody's came out this morning and said we've got the Aaa rating. That's something that New Zealanders should be proud of, and it's something that is the result of the successive efforts of many Governments to keep debt at relatively low levels. | |
| I'm sure the Minister would acknowledge the work of the previous National Government, which came through the period of the global financial crisis and the Canterbury earthquakes, where we increased borrowing by $50 billion through that period and yet managed to turn that around in a short period of time to get our debt under control and to run Government surpluses—again with the efforts of all New Zealanders focused on careful spending and actually growing the economy. | |
| So that's the inheritance, but, of course, what matters now is not so much what the inheritance was but it's what's the future way out. So what we had prior to COVID, as a result of the policies outlined in all the financial reviews of the Government departments and all the Government decisions that were made, that led to a slowing economy and the evaporation of the surplus—because the Government inherited massive surpluses when they came in two years ago, and before this COVID-19 crisis hit New Zealand, it was projected that we'd be back in deficit already. | |
| Before we look at today's events, let's just contemplate some of the big Government policies that were the focus of Government attention. People might—it's almost sort of a funny thing to—remember KiwiBuild, which was the key plank of this Government's effort prior to COVID-19. They were going to build all these 100,000 houses, and then they had to admit that they had failed completely in that. | |
| Then there was the infrastructure. We started off this year with $12 billion that was promised to be spent on transport infrastructure in this country, which was an admission that two years into Government this Government had not actually made any progress on infrastructure because they'd come in and Phil Twyford—and Julie Anne Genter, who was focused on not giving in to the "car fascists"—had changed and thrown out most of the projects that the previous Government had laid down—thrown them all out, put them on to the fire—to be replaced with the slow tram down Dominion Road that Phil Twyford still talks about. Two years later, they realised that nothing had actually happened—that the slow tram still was on the drawing books and nobody had worked out what the purpose of it was yet—and nothing had been done to make real progress in moving people around. So two years into Government, they adopted, pretty much, a truncated list of National's transport plans. | |
| So I would be interested to hear from the Government Minister as to why it took them two years to figure out that the National Party transport projects were the ones to follow up. | |
| And then the other big one was the Provincial Growth Fund. Again, I'd be very interested to hear from the Minister as to how many jobs—new jobs; new full-time jobs—had actually been generated so far out of the nearly $2 billion allocated for the Provincial Growth Fund. Who knows what's happened to those jobs in the last month or so, but, prior to that, just how many jobs had been created. It was very difficult to get any answers out of Shane Jones on that topic. | |
| So there's a couple of questions for the Minister first up. | |
| Hon GERRY BROWNLEE (National—Ilam): I'm sorry that in the first opportunity for an interchange in this debate that the Minister didn't leap to his feet to engage in the way that he was so enthusiastically speaking of just a few minutes ago. I've only got a short question for him, and it's how does this tax clawback work for small business—because it doesn't look, on the face of it, to be as friendly as is being projected? | |
| So a lot of businesses will face a tax bill on 7 May—literally a few days' time. To avoid that, they're going to have to forecast a 2020 loss that would offset the payment that they have to make. Now, the problem with that is that, effectively, they are going to have to project or endure a 133 percent loss of profit by the end of 2021. Now, it seems to me that a lot of businesses would be able to manipulate their circumstances to actually fold up early, because if you're going out of business it's good value, but if you're continuing it's not a huge amount of help. | |
| One of the problems—well, the Minister could shake his head—with it is that most businesses facing a 133 percent profit loss don't survive. How many banks are going to be happy for a business to wander in and say, "I need one of these loans to keep me topped up."? Oh yeah, the Minister agrees: it's not going to happen. So there are a lot of aspects of this that I think do need to be clarified. I look forward to the Minister perhaps being able to positively clarify some of these today. | |
| The other point I'd make is that for small business in New Zealand, the largest number of small businesses in New Zealand are sole traders—sole traders who pay themselves a salary and pay their PAYE out of that. What do they get? Absolutely nothing. | |
| So it's great for big businesses—for great big businesses it's fine. Air New Zealand will benefit from this enormously, over and above all the other assistance that has been given to them—and other businesses of that size will benefit from it. But your small to medium enterprise that does function in a company structure, that does have perhaps multiple shareholders, they are going to find this extremely difficult to get the greatest benefit from, and sole traders miss out. | |
| Now, Minister, if I've misinterpreted or misread the information that's been put out, please correct me. | |
| Hon GRANT ROBERTSON (Minister of Finance): Thank you, Madam Chair. I'll endeavour to—I thought I'd just— | |
| CHAIRPERSON (Hon Anne Tolley): I think if we try and keep it—if you're answering a question, just stand up and— | |
| Hon GRANT ROBERTSON: Yeah—yeah, OK, thank you, Madam Chair. I'll just endeavour to try and answer the questions or the points that Mr Goldsmith raised, as well as Mr Brownlee. In terms of Mr Brownlee's point on the loss carry-back scheme, the first thing I would note is that yes, for some sole traders who, effectively, operate off their own bank accounts, essentially, clearly it will not be a system that they would be able to access. They are able to access the wage subsidy scheme. There is the ability for them to take advantage of the other tax changes that we've put in place, including the write-offs around the purchase of small assets and other provisional tax changes, including the lift in the threshold for the payment of provisional tax. So there is a place for those sole traders within that scheme. | |
| In terms of the overall value of the scheme to other businesses, the Inland Revenue Department have estimated it's got a value of $3.1 billion. That represents a very significant amount of money returning to businesses to give them cash flow. Now, yes, it does involve needing to make a projection of what will happen in the losses of this year. We know from talking to tax accountants and the tax experts who we engage with when we're designing policies like this that they are strongly of the belief that firms will be able to sit down with their accountants, work out and project forward. They may well be relatively conservative about the loss that they project forward because they don't want later on to face a bill, but if they were a profitable company going into this, the scheme will work for them. We did say, at the time of announcing this particular scheme, the focus of this particular bit was around vulnerable but viable businesses. So it does recognise that the people involved were ones who had made a profit in a previous year, had paid tax on that, and were now able to look forward to a year in which perhaps they wouldn't and carry that loss back. | |
| In terms of Mr Goldsmith's questions, they were largely of a political nature, but I do want to indicate, as I did in the House here before we went into the level 4 lockdown, that the tradition among finance Ministers such as Sir Bill English and Sir Michael Cullen of ensuring that New Zealand was ready for a rainy day is one that I took seriously upon becoming the Minister of Finance. It meant that we have gone into this crisis with one of the lowest levels of net debt of any country in the world, and that will stand us in good stead given the large sums of money that the Government has spent and that the Opposition continue to encourage us to spend. So that is something that New Zealand Governments going back over time can be proud of, and I'm happy to say that we are as well in terms of the work we did. We inherited a net debt position of around 22.7 percent, and as I've just spoken about, we ended up at 19.2 percent. | |
| As for the member's questions around the New Zealand Upgrade Programme, I'm very pleased to say that we have actually funded those projects; we've futureproofed them as well in order to make sure that they are truly multimodal transport projects. I think the New Zealand Upgrade Programme as a 25-year investment is an excellent one. | |
| Hon Gerry Brownlee: Madam Speaker. | |
| CHAIRPERSON (Hon Anne Tolley): Goodness! Do you want to carry on? OK, we'll get a conversation going. | |
| Hon GERRY BROWNLEE (National—Ilam): Thank you. I don't know how we're going to work the clock yet because we had about two minutes or something left to go. But all I really want to focus on, finally, is the issue around support for businesses that find themselves probably not able to continue for various reasons but had rental payments or lease payments that are personally guaranteed. | |
| Now, this is a very big problem because where there's a clear case their business—perhaps a travel agency or some other such—is not going to be all that viable going forward due to the current crisis that the world is facing, if they have got a personal guarantee on that, that's a pretty rough position to find themselves in. We need to have something that balances that against the surety that landlords want and should expect and that their lenders require of them. But it's something that I think should be looked at because it's an unexpected circumstance for those people to have to deal with—and they can, in most cases, face the loss of their home and other personal assets that they would never have expected to have on the line. | |
| Hon GRANT ROBERTSON (Minister of Finance): Just in the nature of the fluidness of this debate, I'm going to ask my colleague Andrew Little, who's the Minister of Justice and responsible for the property Act under which commercial lease arrangements are dealt with, to say a few words about this. But in terms of the very specific example that Mr Brownlee is giving, he actually did raise that previously. Obviously, the issue of personal guarantees in this current environment is hugely challenging, because, as the member notes, people making those guarantees had no concept that this kind of activity could take place. But on the more general issue of the approach to how we can manage commercial rents, I'll get Mr Little to comment on that. | |
| Hon ANDREW LITTLE (Minister of Justice): Thank you, Madam Chair. The Government is acutely alert to the stresses and strains being faced by small business and, actually, for that matter, by some landlords too. Some landlord-owners of big properties are small businesses themselves and have as their tenants large multinational corporations, so this is not a one-way street by any stretch of the imagination. One thing we have been very alert to is to make sure that the kind of support the Government provides and the kind of intervention we do doesn't end up becoming a subsidy to the landlord to maintain their incomes at a level that they're used to, in a way that virtually no other person experiencing this crisis is enjoying. | |
| Pretty much everybody is taking a hit in their income in one way or another. So our first response was to announce that we intended to amend the Property Law Act, admittedly retrospectively—it's not a very good thing to do; it's a pretty ugly thing to do. But it would provide some extra breathing space for the parties to commercial leases rather than give the notice and 10 days later, that's it, and everything follows from there. It provides some breathing space, and we expected there'd be some sensible, mature negotiations to allow the parties to come to terms with the exigencies of the current circumstances and work out something for the medium to longer term. | |
| The reality is, for landlords who think there's an opportunity here to get rid of a tenant who hasn't paid their rent on 1 April, there isn't a very long queue of substitute tenants lining up behind them. Most landlords, I think, have responded sensibly to that. There are some who haven't, and I've seen the correspondence and I've seen the correspondence from the Property Council, and they've given good evidence that there are some parties who just do not seem to respect the current circumstances that are facing everybody. So the Government is now actively considering a further intervention that would provide or allow, or at least require, those parties—where certain material circumstances have arrived, such as a substantial loss of revenue, the failure to gain access to commercial premises from which a business is run—then to enter an agreement that would manage the issues associated with rent. It might be as much as a rent waiver for a period of time, it might be a discount of varying levels over a period of time, to apply during the period in which premises cannot be accessed and/or the business is suffering a material loss as a result of COVID-19 and the measures the Government has taken to ensure physical distancing and generally looking after the public health needs. That is under active consideration. | |
| One thing we are very clear about is we're not interested in providing a subsidy to landlords so that they maintain their incomes when nobody else in the country is. So it is about everybody sharing the burden. It is about everybody coming to the party, and we look forward to the work and talking to colleagues around the House and, indeed, in the sector to make sure we come up with an answer that means that everybody is treated fairly, that everybody gets through this, that good businesses get to survive, and that landlords understand their contribution but that everybody is treated fairly. | |
| DAVID SEYMOUR (Leader—ACT): Thank you, Madam Chair, and I intend to ask a very succinct question in the hope that you will consider that in the allocation of future calls. | |
| To the Minister of Finance, I see the Government's loan guarantee scheme—there's a few aspects of it I wonder about. One is that the floor on the amount of turnover that a company can have, at $250,000, has excluded a lot of small to medium sized enterprises, including some that spoke to the Epidemic Response Committee this morning. I wonder if you could address why that $250,000 floor is there. | |
| Secondly, I've had correspondence with people who have said that they have been asked to give a full personal guarantee for loans, and they ask why is it that if the Government is covering 80 percent, they should have to guarantee more than 20 percent. They've subsequently been told—and I've heard from representatives of the Government—that, actually, the Government only will cover 80 percent if the bank has used all other avenues to recover the loan, including personal guarantees, at which point some people might ask "Well, what exactly is the point of the policy?", because it really, effectively, guarantees nothing. It's the last guarantee to be used, or at least that's how it appears. I hope the Minister can give an explanation. | |
| Finally, perhaps to put a lot of the speculation around the scheme to bed, it would just be helpful to know how many loans and what aggregate quantum has been taken or loaned under the scheme, because I think if people could understand that, we could get a sense of is there a point to it, is it working, and is it helping the right people? Thank you. | |
| Hon GRANT ROBERTSON (Minister of Finance): Just to address the last question first, the New Zealand Bankers' Association will be producing regular data on the uptake of the scheme, and I believe the first of that data will be later this week, but it may be next week. I can check and confirm for the member. The scheme itself has not been fully operational for that long, so the initial numbers will not be that large. | |
| Also, what banks have reported to us is that they have lent between $5 billion and $6 billion—or a combination of their lending and their changes to existing things like mortgages moving to interest-only, and so on—since 20 March. That's because, obviously, the banks have got existing relationships, often existing lines of credit that are available to businesses. The business loan guarantee scheme was set up to ensure that there was a window of opportunity available to businesses who felt that they needed this kind of working capital and were able to access it. The guarantee element of it—and I'll return to that in a moment—coming from the Crown was to give security to both the banks and those borrowing. | |
| In terms of when the scheme will find its greatest utility, it may be that that moment is still to come, as businesses begin to take stock of how they're going to be able to trade under the different levels of our framework, as they get confidence as we move towards level 2 that they're back trading and they're prepared to take on a debt such as that. So in terms of how the scheme will shake down, I feel like it's probably got some time to run, and we'll have the numbers as to where it is right now in the coming days. | |
| In terms of the question of guarantee, this is a matter the member has raised separately, and I understand the concerns that are being raised. Personal guarantees were not to be part of the scheme. What there are, though, are what are called general security agreements. And if—in the case of, particularly, sole traders or those from very small businesses—they don't have other forms of security, it ends up, potentially, turning into a personal guarantee. We are meeting this week to discuss—as we said we would when we announced the scheme—what tweaks or changes might be needed. I certainly take the point that in establishing the scheme we were trying to avoid personal guarantees, but the way that general security agreements have ended up working, particularly for those smaller businesses, it has ended up potentially, for some of them, being turned into those personal guarantees. So we will take that on board. | |
| In terms of the member's first question, the $250,000 floor was around the fact that most of the people who had turnovers around or under that level tend to be those sole traders who were actually eligible, and did take up the 12-week wage subsidy scheme, which really was thought to be a more appropriate vehicle to provide assistance to those businesses, rather than a loan scheme. But again, as we said we would revisit the scheme to make sure it's fit for purpose and working. I've heard that feedback, just as I have about personal guarantees, and we'll now take that into account as we review the scheme. | |
| Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. It was refreshing to hear the comments from the Minister of Justice that the Government is acutely aware of the pressures on small and medium sized enterprises. That has been a little bit in doubt over the last week or so, with the comments of MP Deborah Russell, which a lot of small businesses interpreted as being "If you can't survive five or six weeks, maybe you shouldn't have been in business." The sense was that it was a widespread held position. Then Willie Jackson followed up immediately with the comment that he made, which was in relation to an extra week wouldn't make much of a difference. Then the Prime Minister, at the same time, said when she extended the lockdown that it was only two working days, which came as a great shock to many businesses that work over the weekend and have always worked in that way. Then, of course, it also comes on top of the Government's decision to press on with increasing the minimum wage on 1 April, right in the middle of a crisis, when businesses had no revenue whatsoever and no ability to do anything, but they still continued on regardless with that increase. | |
| There's been a real concern that while there have been all kinds of kind words made, there hasn't been clarity around an understanding of the needs and pressures of small businesses in this country. So the questions that we heard this morning in relation to the relief given to those businesses were that the insistence that continues to be made from the Minister and the Prime Minister that small businesses have received the wage subsidy is a misnomer, because in most cases, the wage subsidy is going to the workers, the employees of those businesses; it's not just money going to the small business for them to spend on whatever they like. Most of those small operators that have been told, in the interests of public health, that they can't operate and they have to close down are then left wondering how they are supposed to survive. | |
| What we've heard is that the loan scheme isn't really working, in effect, and we understand there's been a lot of pressure put on by the Minister of Finance for banks to lend out the money, but the rules set up by Treasury are quite clear that normal business lending criteria should apply. So it should come as no surprise to the Minister that personal guarantees are required and it's actually difficult for businesses to get access to that money. How he could possibly be surprised by that is beyond me. | |
| Then when we look at the question of rent, we heard promises five weeks ago from the Minister that they were working on it and that something was on its way, and there was a thought that something would come out before Easter. Eventually, the only thing that we've seen so far is some extension to termination of contracts. Well, that's not what people had in mind. But the only point I'd be making here to the Minister is some encouragement to actually—and I don't doubt for a moment that he as Minister is focused on the issue of small and medium sized businesses. I just encourage him to go further and to recognise that, in the interests of the broader community, a lot of the pain is falling on that particular sector, and encourage him to look for ways, particularly given the extension of the lockdown longer, to provide effective relief to those businesses and acknowledge that we would support him in doing that if he can find practical and effective ways to offer that support. | |
| ANDREW BAYLY (National—Hunua): Thank you, Madam Chair. There have been three themes that have been running so far. And so I just wanted to, first of all, pick up on the theme that my colleague the Hon Gerry Brownlee spoke about, and it relates to the issue of the small-business tax package—and the Minister of Finance referred to it before. The first thing, I want to compliment the Government for actually changing the rules around the tax continuity rules so that small businesses can raise additional cash without having to actually go and worry about the shareholding arrangements, because under the current arrangements, if you raise new lots of cash from different shareholders and you breach the 49 percent continuity of the same shareholder rule, then you lose all those tax losses that small companies—when they're in their start-up phase. So that's a good measure. | |
| But the issue I really want to pick up, and it was the one that Mr Brownlee spoke about, is this was the grandly announced tax package saying that the Government was going to make available $3.1 billion of savings to the community, to the business community, in the form of a tax loss carry-back scheme. And again, we heard the Minister just before talk about the $3.1 billion and quote the Treasury estimate of that figure. I found at the time when the announcement was made and I still find now, hearing the phraseology that is used, that in my mind that gives the impression, the way that the Government has announced it, that it is the Government giving businesses cash to the tune of $3.1 billion and that is patently wrong. There is no cash handout, free cash handout, to businesses to the tune of $3.1 billion. | |
| What the tax loss scheme is about is for those businesses who are going to make a loss in this current financial year, and we're just entering that financial year now—and there will be a lot of those businesses—in the ordinary course of events, they would have claimed those losses in the year that they incurred it in the next financial year, i.e., they would have offset it; the 2020-21 year would have been offset against the 2021-22 year. The measure that the Minister announced was to offset it actually against the previous financial year that has literally just ended, the 2019-20 year. So the only benefit that businesses have achieved is the timing of when they could actually use that tax loss and minimise their tax payments. There is no forgoing of tax by the Government. That is the—if I can use the word—in my mind slightly misleading way it was presented to the New Zealand public and to the business community in particular. | |
| All that has happened is the Government has chosen to allow businesses to access last year's profits and offset with their projected loss for this year and, in effect, get a refund. But, of course, the provisional tax payments are not due until May, and then again in August, and then the following year in the early part of 2021. So what has happened is all the Government has done is provided the ability for those companies to get cash at an earlier pay stage and use that. But there is no subsidisation. There is no free granting of money to the small businesses or large businesses, or even to that effect, of the $3.1 billion, and I find the way that the Minister has talked about it in his press releases slightly off-putting, and I hope he's going to correct it today and confirm that that is the situation. There is no free money to the business community. It is merely a tax offset which they would have otherwise been able to do in the next financial year. | |
| The other thing I want to turn my mind to is the issue of the loan scheme that my colleague from ACT, Mr David Seymour, raised. I think the Minister should be upfront. The loan scheme that the Government has introduced was nicked from the UK. The UK was the one that thought up this loan guarantee scheme. That's where it came from and the New Zealand Government merely went and grabbed that and applied it to the New Zealand situation. There is no creativity in that. That was a scheme that was in operation. And, as the member for ACT has noted, there is an 80:20 rule around guarantees, so what is meant to happen is that the Government is meant to stand behind 80 percent of the guarantee when it came to a position of last resort at the end of the funding round, but in the meantime, the scheme is to be operated by the New Zealand banks, and they were potentially at risk for 20 percent of the loan. | |
| But as the member quite rightly points out, many of us have been approached by small businesses trying to access these types of loans and have found in some cases that the banks have taken a view that they have looked at the loan in a traditional lending sense and have decided to apply normal lending criteria. And the difficulty they are having is that they cannot actually get the loans. They have not been able to get the loan that you would have thought was possible with the easing in the credit conditions with—in effect, it would be an 80 percent guarantee underneath it. That is the anecdotal evidence that many of us are getting, and I'm sure the Minister of Finance has had many emails to that effect from small-business owners who are saying that their personal bank is one—in many cases they've had a longstanding relationship where they have said, "We will require certain security." | |
| The Minister talked about a GSA, a general security agreement, and, as the Minister will no doubt know, there are two forms of security that's taken for loans, particularly for businesses. The first one is a general security over the business, and it may be over specific assets of the business if it has hard fixed assets. In most cases where companies have an existing loan with a bank—and I'm not hearing of examples of banks choosing to lend to new customers, so we're talking about existing lending arrangements—in those cases, they will have adequate security over those company's assets. So there shouldn't be anything new. | |
| But what we're finding with these business owners going to their existing bankers is they are not only making sure that they've got their security over the assets of the company, but they are also seeking to enforce personal securities and also PPSRs, personal property security registrations. Those are the things that many people are finding very difficult because in their hour of need, they're finding that in some cases the banks are not providing or being flexible about the security arrangements. The counterargument is that if the Government is standing around 80 percent of the loan, the bank shouldn't require additional security, particularly at a personal level levelled against the owners of that small business. That is the issue that Mr Seymour so correctly highlights, and I just hope that we're going to see and hear more from the Minister of Finance. | |
| I find it slightly inconceivable that in terms of relying on how the banks are operating, he's going to rely on the Bankers' Association to provide those figures. I would have thought at the very least—and my question to the Minister is: has he actually spoken to the Reserve Bank and requested those numbers? I think it's a very important differentiation. If the banks have spent $5 billion, as the Minister quoted before, since the start of the COVID crisis, if that has gone into residential lending, which is the best form of lending from a banking perspective because that offers the highest and most flexible security arrangement, i.e., a house, that is largely unproductive lending and that is not going to support New Zealand businesses getting through this time of need. | |
| What we really want to hear from the Reserve Bank and, hopefully, the Minister of Finance is to what extent the lending, the $5 billion, has been directed into the areas where we really need it. And that includes areas such as the important farming community, which is now underpinning many or much of our exports, as it always has, and also at a general small-business level, which is what I was just talking about before, because without the support of those 520,000 small businesses that make up most of the employment of New Zealand, without them being able to get the lending at this critical juncture, that is the most crucial figure. | |
| I certainly asked the Reserve Bank Governor before the COVID crisis about the increased liquidity he's provided to the bank, but I'm just hoping the Minister is going to respond. Has he requested those figures? When might he be able to present them to the House around the new lending and making sure that they've been directed to the proper areas of the economy where it's most needed and not into the unproductive areas of the economy, which is not going to help to grow New Zealand out of this financial mire that, unfortunately, we find ourselves in. [Interruption] | |
| CHAIRPERSON (Hon Anne Tolley): I'll let the Minister respond. | |
| Hon Grant Robertson: Why don't you go and I'll sum up. | |
| CHAIRPERSON (Hon Anne Tolley): Oh, OK. | |
| Hon TODD McCLAY (National—Rotorua): Thank you. Madam Speaker, thank you very much. It's very kind of the Minister; I appreciate it. It's the first opportunity since Parliament's come back for me to speak, other than at question time, and so I want to make the case to the Minister very strongly about what is needed for the wider business community, particularly small businesses in New Zealand and landlords. It's not just only here where support is needed; this is a subset of great concern and economic harm that's been done throughout the world, but in this case in New Zealand, as a result of the effects of this virus and the effects of the economy having been shut down. | |
| I do so because for every single small business in New Zealand and every single landlord that's finding it tough, behind them are the people that they employ, or just them themselves. And I want to be very clear that when we talk about business, sometimes, if someone reads about it in the newspaper, it sounds like we're talking about large corporations—actually, the heart and soul of the New Zealand economy is small business. We have more small businesses per capita than almost any other country, at least in countries of the OECD, and these are the people that put their lives, their hearts, and their minds into working hard every single day to provide for their families, for others, who are being so hard done by by the effects of this virus. | |
| So when we talked to the Minister of Finance five weeks ago in the committee around what was needed around businesses, and particularly the interaction with landlords, he did say at the time that he was working on it, and the next week would bring forward some things that would help and assist. There was an announcement about two weeks later, but I would say to him that I don't think it's landed as well as it needs to. I'm not being political here; what I'm saying is that there are so many businesses and landlords who are struggling and have uncertainty, and they can't wait for another two or three or four weeks. They need to have the certainty of what support is available to them today as their debt grows, and for many of them they haven't traded for five weeks, and won't be able to trade for the next two weeks. Even after that, if level 3 is lifted in two weeks' time, the amount of trade that they will have through their doors will be significantly less than it was before. Some of them will be facing drops of 50, 60, 70 percent of their turnover, but at the same time their costs have not gone up. | |
| I do recognise, and National supported, the subsidy that was given to employers for employees, but that money has gone directly to the employees, as they sit at home. As we heard on the committee today, people who have been at home have been supported by the taxpayer during the lockdown—which is important; they needed that certainty—but for their businesses, that hasn't been productive, and, ultimately, their costs have continued. | |
| We heard today from people who said the rent is still there, even though they've negotiated with their landlord and the landlord has done everything that they can. Their rent is still there and the hire purchases are still there, and all of the other fees and costs that they would have have remained, and they're building up. So for small businesses in New Zealand, we know that they'll be facing tens of thousands of dollars of debt over that four or five weeks, and for anybody in retail, that debt continues to increase, and for many of them—that were viable businesses, that were good businesses before—that debt will be too much for them to continue, and we will lose small businesses in New Zealand where we could otherwise avoid that loss. | |
| When I talk about job losses in this House, I'm talking about people that own businesses, who might employ a few, who have borrowed previously from the bank to finance their business and they have put up personal financial guarantees, and they have put up their homes against the debt that that business now has incurred, and if they don't lose their business, they will, many of them, lose their homes as well. | |
| So I say to the Minister that, actually, as he talks about moving away from support for everybody to more targeted support, we need to stop talking about the landlords as if they are bad people. We heard from Reg Hennessy in Rotorua that all the landlords he knows in Rotorua are individuals—perhaps a couple who have invested and they own a property that is rented out and the business they've rented it to is struggling because of the lockdown. These aren't big companies that own a lot of properties; these are people who have invested their life savings and they need support as much as the workers have had support—these small businesses need support. It is direct financial cash support that's needed, not things through their tax that eventually might happen; it's not about depreciation, which will help some, but for today it won't do anything because the banks are not lending in the way that we hoped that they would. There is a cash-flow problem coming, and for the landlords, actually, nothing has been done except for some demonising and people saying that they're not doing everything that they can. | |
| I don't accept that. I think the landlords I know are working very hard, have been as generous as they can be, but they are facing challenges in exactly the same way small businesses are, and they need the finance Minister to step up and help them. | |
| Hon GRANT ROBERTSON (Minister of Finance): We are, as I understand it, by agreement, coming towards the end of this particular bit of the debate, so can I thank members for their questions. | |
| In terms of Mr McClay and the comments he's just made, he—I'm not allowed to refer to that, but Mr Little responded to earlier questions around this, around the ongoing work that we are doing with regards to commercial property space. I do note his comment right at the end there about the fact that many landlords are, in fact, themselves, quite small businesses actually. That's been recognised by the Government and one of the reasons why we wanted to make sure that we had a balance here. I've seen excellent reports from around the country. One that springs to mind was one that was in the Nelson Mail a couple of weeks back around the cooperation and collaboration and exactly that situation that has gone on. We continue to encourage that but we also understand that there are pressures here, and, as Mr Little said, solutions to that are under active consideration. | |
| In terms of Mr Bayly's comments—in particular, about the business loan guarantee scheme—I did scribble some numbers down of the amounts of money that the banks are claiming to have lent in this period of time. It doesn't separate out in the way that Mr Bayly asked around the difference between consumer and business lending, but it does include up to 46,000 people having either interest only payments or deferred payments, and around 24,000 people to the tune of a couple of billion dollars, as at 24 April, of new lending. | |
| Now, I am not here to defend the way that the banks have gone about what they've gone about; what I do want to do, though, is make sure that the scheme we designed works the way that we wanted it to. So we've listened carefully to the concerns that have been raised. We have ongoing meetings with the banks and, indeed, with the Reserve Bank to make sure that that scheme actually operates the way that we want it to, and we'll no doubt have more to say in the coming days on that. | |
| David Seymour: Madam Chair. | |
| CHAIRPERSON (Hon Anne Tolley): Quickly, yes. I think we are looking to move to health, but— | |
| DAVID SEYMOUR (Leader—ACT): No problem, Madam Chair. There's still a very important job to be done debating the Appropriation (2018/19 Confirmation and Validation) Bill, and particularly picking up on comments. I'm amazed that we didn't hear any of this from any of the National members. The Minister's comments in relation to the revaluation of KiwiRail—this does deserve some attention. | |
| It's a pity that Paul Goldsmith can't hear this, but let me give a potted history of the trouble with rail— | |
| CHAIRPERSON (Hon Anne Tolley): I'm sure he's listening. | |
| DAVID SEYMOUR: —in New Zealand, because it started off—I recommend to you, Madam Chair, James Belich's Paradise Reforged, where they talk about a bigger prism. This country was supposed to have 50 million New Zealanders, and that was the justification for building a railway line from the Bay of Islands to Southland. As it turned out, for a variety of reasons I don't have time to go into, the population growth did not arise, and New Zealanders ended up being a group of people scattered over 1,500 kilometres who, mainly, want to drive. | |
| When you live that far apart, you love your cars. New Zealanders are some of the biggest buyers of cars and owners of cars in the world, and, yet, political leaders from Benito Mussolini to Julie Anne Genter—they love trains. They want trains to be everywhere. So the Government in its various forms has done everything—gone out of its way—to prop up various kinds of rail network in New Zealand, under all sorts of different ownership vehicles, and the only thing that's stayed the same is that it's not viable. | |
| Running trains from Auckland to Whangarei, losing $15 million a year—just that one operation. The Government recently opened a mothballed railway on the East Cape, and I understand that in the first three months, they ran three trains—three trains. I think Madam Chair is just saying I've got three minutes left—but three trains were able to pass that railway line, and that is why it's not viable. | |
| It leads to a rather difficult point in the Government's books, or at least it did, which is this. A commercial valuation: how much would a person pay to buy the stream of value produced by KiwiRail—that is, a billion bucks. About a billion dollars—that's all someone would pay to own KiwiRail. Then, if you wanted to replace KiwiRail—if you wanted to rebuild the tracks and replace the rolling stock and do all the things that KiwiRail has—that would cost $6.3 billion. | |
| Most people would say, "This is not a good situation to be in—owning something that costs me $6.3 billion but is only worth $1 billion." Most people would say, "I'm $5.3 billion in the hole, and it's time to cut our losses." But not this Government—oh no, no, no. They said "Let's call it a community benefit, and then we don't have to worry about how valuable it is to anybody. We're going to put on the books the cost of what it would be to replace it.", and the amazing thing is that this Government, by owning something next to useless that would cost six times more to replace than the value it's actually worth, has managed to give itself a $5.3 billion bump in the Government Budget by revaluing it. So they turned a very bad situation for most people into a very good situation. It turns out that owning a useless asset made the Government $5.3 billion wealthier. | |
| If only people in the commercial sector could get away with that. I thought it was important to put on record in this debate in this committee that the sophistry the Government has carried out revaluing, or at least re-describing, an asset that it should have just sold is a perfect example of why Government cannot be trusted as an institution. It never plays by the rules that the commercial sector has applied to it each and every day, and it should be reduced in its scope and scale of activities at every opportunity. Thank you, Madam Chair. | |
| CHAIRPERSON (Hon Anne Tolley): I think the time has come to move to health. Are you going to speak first, or are you going to—I call the Hon Dr David Clark. | |
| Hon Dr DAVID CLARK (Minister of Health): It's a pleasure to speak to the health part of this process. I'll make a few brief comments at the outset, as I've observed my colleague do, and then focus on answering the questions from the Opposition. I think this format, in my observation, for the House is working well. | |
| The Government is focused on rebuilding a health system to ensure New Zealanders can access the services that they need and deserve. I'm very proud of our health services right now, and, in particular, at the outset of my few comments, I want to thank the doctors, nurses, and allied health workers who have been at the forefront of our COVID-19 response as a country. They have stepped into new ways of working, they have stepped up, and they have supported a response which I think, as a country, we can be very proud of. Going hard and going early has put us in a good position, and what we're doing is working, and I think the numbers speak for themselves. Now is of course the time to lock in the gains that we've made and not allow the virus to bounce back. But their success and our success as a country has been built on the back of the incredible efforts of what has been a long-stretched health workforce and the incredible response of all New Zealanders. | |
| As a Government, as I said at the outset, we've been focused on rebuilding our health services, and we know that they have been challenged. A symptom of that has been the deficits in the DHB sector since 2013, when many of the balance sheets became so stretched in our health system. Our first two Budgets made the biggest ever investments in our DHBs—$2.8 billion in the last one—and also significant record investments in capital spending to rebuild those hospital buildings, to increase capacity and make them fit for purpose, including addressing issues like sewage in walls of buildings and buildings that were just past their use-by date in our mental health services. | |
| On top of that, in our last Budget we put a $1.9 billion investment into taking mental health seriously—an unprecedented investment in mental health services. As a country, we have not previously provided services for folks struggling with mild to moderate mental health challenges, and now we are proposing to roll out, and are rolling out, a programme that makes those services free to access. | |
| All of those things have been occurring within the frame of the last year, and before that, even, we were rolling out, of course, the Piki programme for mental health services to young people; the Mana Ake programme, that 5,000 kids in Canterbury and Kaikōura have accessed in response to the quakes; and nurses in schools. More recently, in the time of the COVID lockdown, programmes that support people in self-isolation—the Mentemia programme, developed by Sir John Kirwan, being rolled out; the Melon programme, developed by the Piki folk; and also the Wise Group's Staying on Track resources—were all launched during the lockdown period to help people wrestling with the challenges of self-isolation and the unusual times that we're in. And, of course, All Right and the Sparklers programmes were also developed for COVID response across the country. So I want to thank all of the people involved in those mental health responses, in particular, that build on that unprecedented investment that the Government made last Budget of $1.9 billion into mental health. | |
| I want to leave my opening contribution there, because I do want to leave time to focus on the questions that the Opposition will put. | |
| Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. Before I get on to the substance of this debate, I do want to join with the Minister of Health in thanking our health workers across the country, who he described as stretched, and, indeed, some of them very much are. I also want to thank the 5 million New Zealanders who have helped us achieve the goal that we have got to so far. We are not out of the woods yet, but we are certainly progressing well, and I want to acknowledge the efforts of the Government in ensuring that that's the case. | |
| But I have been reflecting, actually, on the way in which this has been done and actually casting my mind back to the fourth Labour Government, who enthusiastically adopted the Thatcherite-Reagan - type mantra of "there is no alternative". I've been thinking about the way in which the Government has approached level 4 lockdown and its extension and portraying this as the only thing we could have done. I was further reminded, actually, of an alternative acronym that came out, I think, from the Post Primary Teachers' Association a few years ago, which was TIAARA, and that is something like "there is always a reasonable alternative". That is going to be, I think, very, very much the subject of debate now in terms of where we're at and the parlous financial state that our health system, at least, is in and the significant investment that needs to be made to—well, I was going to say protect people. Well, people are far from protected by the loss of their jobs and going on jobseeker support, for the duration of which we just don't know. | |
| But the reality is there were alternatives. There were other ways. We know that around the world, there were alternatives to the very strict lockdown we had, and the non-COVID health impacts of that are going to be severe. We had Dr Chris Jackson on the TV this morning saying that as many as 400 New Zealanders could die prematurely from their cancers as a consequence of this lockdown. That is a massive, massive cost that is not presently counted in the thinking that's going on. Our screening has stopped—our cervical screening, our breast cancer screening, our bowel cancer screening has stopped; cancer has not. That's the same with diabetes and heart disease and other non-communicable chronic conditions—that we have a stretched system, as the Minister has portrayed—and they are not going away. We've heard from dentists and GPs and allied health professionals that they can be working safely and they can take pressure off the health system, and we are now at the point—well, depending on which definition Dr Bloomfield or the Prime Minister uses—of elimination, whatever that means, and, yet, we are still not allowing these people to practise the healthcare that New Zealanders need. | |
| I say stretched—I'm disappointed at the Minister for articulating yet the broken record of stretched balance sheets dating back as far as 2013 and sewage down walls, a situation that was not only rejected but refuted by the very DHB that was the subject of that story, because, actually, things got a lot worse on this Minister's watch. My question to him is, rhetorically, if he is so good, why are things so bad, because they have got terrible on his watch. The Health Committee heard in an annual review of financial ruin, parlous situations of just about every single health organisation in his stable. I am now in possession—because it's on the website, quietly uploaded again through the COVID crisis—of the latest financial report, the combined financial performance of our DHBs, which is now—and I keep using the term "eye-watering". I don't know how often I've said that. I sound like David Clark, I'm that regular. Three hundred and four million dollars now in just seven months of this financial year—that compares with $230 million last year. And remember what we got to last year? We got to $432 million of combined fiscal deficits, excluding the non - one-off costs. We've got a really, really big problem with the Holidays Act; I would like to hear from the Minister about that, but most of all, I'm very interested in understanding what he is doing to remedy the tanking financial performance that continues for the third year in a row on his watch. | |
| Dr SHANE RETI (National—Whangarei): Thank you, Madam Chair. It's a pleasure to speak at this annual review, and it's particularly useful to be able to look back through the annual reviews and ask the question: what do we know now? Why we can do that is because when the annual review questions went in, which, as I recall, may have been around November last year, we asked a whole sequence of questions around infectious diseases. We asked a whole sequence of questions around meningitis, measles, and influenza. In fact, we asked 19 questions around that, which leads rather nicely into the discussion which we can have today, basing it off what we learnt last year. What did we know last year—were we ready for what we have today? And we can answer that question by some of the information we got back from the annual reviews. In fact, it lets us talk about several parts. It lets us talk about infectious disease supply chain. It lets us talk about infectious disease contact tracing. It lets us talk about general practice robustness, because we asked all of those questions in the annual review, some of which I will read. | |
| I want to start with the supply chain. Remember, the question I'm posing to the Minister here today is: were we ready? Did we learn from our exposure and experience to infectious diseases last year? Were we ready? If not, why not? So what we know about the supply chain—to start with that, first of all. We had the situation with the measles vaccine, and, indeed, with the flu vaccine last year, where we were told there was not a supply problem; it was a distribution problem. Boy, we've heard that again with coronavirus. We heard it in the issue of personal protective equipment (PPE), primarily: not a supply issue; a distribution issue. This was the wisdom from the Minister and from those that we were posing those questions to. | |
| We asked exactly that question to every single DHB. We posed it in the frames of the measles vaccine: "During the current measles outbreak from January 1 2019,"—and this is from West Coast DHB, by way of example—"has the DHB ever had a shortage of supply or supply issues for the measles vaccines, and, if so, on what dates?" West Coast replied, "The West Coast has experienced a shortage of supply of measles vaccines since early September 2019. The National Health Coordination Centre put a hold on measles vaccines orders between the 5th and 8th of September while a stocktake was undertaken." So just like we've been told here, supply is not an issue—that was what we were told last year. Yet, clearly it was, for at least one DHB. In fact, about five DHBs replied in a similar tone, as did—I think this is—Whanganui. We asked the same sort of question: "Did you have a shortage of measles supply?" "Yes.", dated 12 September 2019. | |
| We were sort of interested in drawing together, like we've done here with coronavirus, other health professionals who could help us with the emergency that was in front of us. So we asked questions around "Have you ever authorised pharmacists to give the measles vaccines?" Whanganui: "No, due to lack of vaccine supply." I won't make my way through the Whanganui example—although it talks about influenza in the same sort of breath, I would add—but consistently we were told last year there is no shortage of vaccines, and, yet, there clearly were. We've been told here now there is no shortage of PPE, and I contend there were. | |
| So what did we learn about supply chains from last year around measles vaccines and influenza vaccines? Were we ready? Had we figured out that no matter that it may be in central stores; it's not getting out to regional areas? Now, I know there have been some changes made, and I think they're actually correct—that is, to take PPE out of the hands of regional DHBs and centralise them. We maybe could have learnt that, or maybe we were doing that and it wasn't effective—I don't know. The Minister can address that, but maybe we should've brought those smarts to the table a heck of a lot earlier than we did. So I think this was a learning that we clearly had out of infectious disease last year, that DHBs were telling us that we should have been ready to do. We should have had the supply chain of PPE. If we ever get a vaccine, please, goodness, let us have a supply chain that makes sense and can deal to that. I've put that question on the table: supply chain and were we ready; did we learn from infectious diseases last year? | |
| I have two other questions: infectious disease contact tracing and general practice robustness—again, coming out of annual review, but in the context of what we're wanting to do here, I'll stop here now. | |
| Hon Dr DAVID CLARK (Minister of Health): I'll take the opportunity to address a few of the issues that have been raised so far. Michael Woodhouse, the member, raised the issue of elimination—"whatever that means". I think it is important that we are clear what we mean when we say "elimination". It doesn't mean zero cases; it means zero tolerance for cases. It's a technical term used by the World Health Organization to mean, essentially, stamping out the virus and knowing where the cases arise from, through good contact tracing and the like. That doesn't mean that we won't get any cases, but it means, essentially, that we have the situation under control. | |
| When I also respond to Mr Woodhouse's question about the historic one-off costs and the $432 million deficit last year, I would point out, because he's invited comment on that—unspecified—that the majority of deficits last year, those one-off costs, were, in fact, legacies of the previous Government. In particular, the Holidays Act back-pay issue is one that this Government has inherited and we are determined to sort out. Yes, it is the bigger part of the budgets, as well as an IT project gone wrong that we inherited from the previous Government, but those things are things that we do accept we have inherited and we will sort out. Those are things we are committed to doing. The Minister also referred to the pattern of deficits since 2013, which I think is a matter for the record. | |
| The member Shane Reti raised the issues around supply chain and were we ready. I think it's important, in the context of measles, to acknowledge that, as with any response, there will be details people can pick out and be dissatisfied with, but the overriding result is that we have managed to eliminate measles, and that is the result of combined New Zealanders' activities but particularly those public health units—many of the same people involved in the response now, that has been so successful. | |
| During 2019, a significant effort was made to increase our overall immunisation coverage, with 370,000 MMR vaccines distributed compared with 150,000 the previous year. Our vaccination rates actually went up quite significantly in response to the measles, and I want to thank those public health staff, who have stepped up. We know that young adults here have much lower immunity rates to measles because many were not immunised as children, and later this year there is going to be an MMR immunisation campaign to target the approximately 300,000 young adults aged between 15 and 29 who are not fully protected against the measles. | |
| So there has been some learning—again, some challenges we've inherited as a Government, but I'm proud of the health system response, but I'm also proud of New Zealanders who have come forward for the vaccinations, who have made sure that we are getting those immunisations out there. | |
| In terms of the personal protective equipment (PPE) issue, also raised by Mr Reti, it is important to note that the Government has set up a national distribution chain in a matter of a few weeks ago to reflect the challenges faced by private enterprise in securing PPE. The PPE situation historically, of course, as Mr Reti has described, was a distributed one. We are the first Government to centralise that distribution process, as best I'm aware, in New Zealand. That has meant that now those private providers that would normally have been expected to compile their own health and safety plans, that would normally be expected to supply their own PPE, are now supplied by the Government with PPE. I've requested a rapid stocktake and expect some initial results this week so that we can get a really clear picture of where that might not be happening, what complaints they've received, how much PPE they've distributed, and so on, because I want to know the answers to those questions. It's a new system, and we want to make sure that it is working properly. | |
| In terms of were we prepared, again, raised in question time was the question around being able to do contact tracing and track results. Again, we have moved to set up a system that is connected across the country. As a Government, we are the first Government that has put in place a service that is a national service. That will ensure that we have good, detailed data on our contact tracing. We've done what no Government has done before, putting $70 million into public health and contact tracing. We've seen the National Close Contact Service established, with a staff of more than 200, and a new national IT solution set up, and we're also adding surge response of 300 full-time equivalents to our public health units. That represents a huge scaling up. | |
| Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. I appreciate the answers that the Minister has given. I would just, in reply, ask for further clarification on two points that he made. One is on the definition of "elimination". I am not confused about what the definition of "elimination" is, albeit that it did change last week when the Prime Minister talked exactly about what the Minister said about zero tolerance. What I am confused about is what the Director-General of Health said today when he simultaneously said in the same media briefing, "We have achieved our goal of elimination under level 4; it remains our goal under alert level 3." and then said, "[To] clarify, we haven't eliminated.", which suggests that there is a different definition of "elimination" at level 4 than there is for level 3. I don't believe that's what he intended to say. As the Prime Minister said, we're all having to dive into the language of epidemiology. I would suggest that, actually, it should be the other way round. Epidemiologists and the director-general—a very good public health physician—should be helping to translate from epidemiology to plain English. I'm afraid today it didn't go so well. The New Zealand public want to know what good looks like, what they need to do to achieve it—I think we have—and how they can continue to achieve that in level 3 lockdown. That's where the confusion rises, Minister, not about the strict definition of what "elimination" means. | |
| Now, secondly—and I do want some feedback on this—matters in respect of the Holidays Act, because he described this as a legacy of the previous Government. So my question to him is this: has he had any advice from his officials that the previous Government were warned about the risks to the DHB balance sheets from the Holidays Act that the previous Government did not act on? Is it also the case that these issues date back prior to the 2008 general election, and, therefore, one could argue, are a legacy of the Clark Government? Indeed, it was the Clark Government in 2003 that passed the Holidays Act into law against the warnings—including from me as vice-president of the Private Hospitals Association—that it would be a complete dog's breakfast. So if we're going to talk legacies, Minister, please advise the committee how far back that legacy goes, because I reckon that for 17 years, people have been underpaid on a technical reading of the Holidays Act. It wasn't known to the Clark Government. It wasn't known to the Key-English Government. The Minister smiles and shakes his head—that's my question to him. | |
| My challenge to him is actually to tell the committee what advice that previous Government got and why his own ministry, as recently as May and June 2017, were still telling the previous Minister of Health, the Hon Dr Jonathan Coleman, that there was no problem big enough to warrant a contingent liability being quantified on any of the DHB balance sheets. In fact, they said they had undergone a diligent and rigorous examination of DHBs' compliance with the Holidays Act and there was nothing to report, they confidently reported back. I know this. I was Minister for Workplace Relations and Safety on a committee that sent Chai Chuah, the director-general, off to ask those questions. Because I was also Minister of Police, I knew that if Police had a $33 million problem, DHBs would have an exponentially larger problem. And so it has transpired, probably—what, $700 million and counting—$750 million? Something like that. | |
| It was a question the previous Government asked, and to say that it was a legacy of their failure to act is a disingenuous rewrite of history. So I ask the Minister to provide this committee with evidence to back up his claim that the previous Government had advice and did not act on it. | |
| Hon Dr DAVID CLARK (Minister of Health): I'm delighted to respond to that member's questions. In terms of the Holidays Act, his assertion that perhaps this goes back to the prior Clark Labour Government is, I would say, inaccurate. The previous National Government recognised that there were challenges with the Holidays Act and passed law to change the way in which it worked. So they recognised the challenges that were in there and the mounting liabilities which needed to be addressed under their watch. They did it in a way that was ineffective, that didn't come through successfully, and then, as it became apparent that Government departments under the previous Government's watch were not paying their employees adequately—and I got to prosecute this as the Opposition economic development spokesperson, so I present as evidence those questions that I asked in the House in respect of the software they were using and their compliance with the law. It was discovered that the Ministry of Business, Innovation and Employment was not compliant under the previous Government's watch. It was also clear that the Police had not been compliant. Those things were beginning to be addressed under the previous Government's watch. They began to rectify them. Steven Joyce, when he took over, began to rectify those things. I also saw, under the Official Information Act, the advice provided to the previous Government on what they could do about the situation, including comply lawfully with the law, and it was advised against—a curious situation they found themselves in. | |
| But I would say that that previous Government was very well aware there was a challenge there. | |
| Hon Member: Rubbish! | |
| Hon Dr DAVID CLARK: They did not—I've just supplied evidence. And I challenge him to go back and read the transcripts from question time, pointing to the very software used by DHBs, which was the same as that which was pointed out to be non-compliant in other areas of the economy. | |
| So the member asked the question and probably should not have asked it given the answer which is able to be supplied. They have failed to address the Holidays Act, and, therefore, the majority of the deficit we faced last year is something that we have inherited from the prior Government. Now, I don't want to make too much light of that. I do want the facts on record. We've accepted that that's a problem we've inherited from the previous Government and we think it's right to make sure those workers are paid correctly. So that's what we intend to do as a Government. | |
| MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. You know when a Minister's not very confident of his recent announcement when there is no patsy question at the next question time from the Government backbencher that highlights that announcement. Of course, the Minister announced his primary care new front-line mental health service, a service that was first published when they were in Opposition in 2017. It got delayed by the mental health inquiry in 2018, it was announced in Budget 2019, and now we find out, in 2020, they're at the request for proposal stage, and in 2021 there will be a roll-out—a partial roll-out—of another 100 sites. | |
| Now, this is a front-line mental health service that will provide much needed psychological therapies in GP practices. We have 1,400 GP practices in New Zealand. By the middle of 2021, this programme would have rolled out to less than 10 percent of those GP practices. It's currently delivered in 22 sites. I'd hazard a guess, if I asked my colleague Shane Reti, it probably was provided in those 22 sites before this announcement was even made by the Government—less than 2 percent of current GPs. | |
| This is in a time—I know we're talking about annual reviews—when we know it's hard not to be moved, as a local MP, by hearing the stories of hardship out there in response to COVID-19 and the upcoming economic downturn. We do know that mental health is going to be a big issue. GP Dr Baddock, New Zealand Medical Association chair, highlighted it last week in the Epidemic Response Committee. GPs are feeling the brunt of this wave of mental distress already, and we have a Government that's caught on the back foot. If the Minister wants a flavour of what the DHB annual reviews were saying, there were quite telling comments by DHB officials about this highfalutin $1.9 billion. I do hope the health Minister does tell his colleagues to make sure they don't slip into the trap that the Hon Stuart Nash did recently at a presentation I was at when he said $1.9 billion for mental health services, because, as the Minister knows, it's not all for mental health services. | |
| But here we have the DHB representatives saying they couldn't point to where the money is exactly, and they don't think the $1.9 billion hasn't flowed out yet. Why that is important in mental health is because DHBs control the funding. DHBs control the funding for the whole mental health sector, and if they're telling us the money has not flowed out, we're in trouble. We've got a huge wave of mental distress coming at us from COVID-19 and the upcoming economic downturn. In the last annual reviews, the DHBs said they couldn't point to where the money is. I tell you why that's concerning; I'll give you one metric: child and adolescent mental health services. Under the former National Government, wait times had remained static and were declining. In the last two years, under this Government, child and adolescent mental health services wait times have ballooned out 45 percent. In the last district health board annual review, the one we're looking at now, over 75 percent of DHBs reported longer waiting times. That's concerning. | |
| We have a Government that's raised huge expectations. This is not the level of service New Zealanders were promised in Budget 2019 for mental health. This annual review is the canary in the cage starting to sing, and telling us the stories. Yes, the Minister will talk about Piki pilot, the Minister will talk about Mana Ake—great programmes; Mana Ake in the Canterbury District Health Board and Piki pilot up here in Wellington—but that's one district. We have 16 districts. They've rolled out those programmes to one region in New Zealand, 15 more to go. So they're the questions for the Minister: why is he putting figures out there but the people on the ground are saying they haven't seen the funding? | |
| Hon Dr DAVID CLARK (Minister of Health): It's helpful that the member phrased that question right at the end of his contribution. Where is that money to be seen, the $1.9 billion he refers to? I think it's very important to remind the member that that is a five-year programme. It is not $1.9 billion that rolls out the door within six months of the financial year beginning, or even one year of the financial year beginning. What that $1.9 billion is a recognition of is the need for mental health support across the board in New Zealand, as a result of neglect over many, many years of our mental health services. | |
| It's so important, in my view and the Government's view, that people are able to access mental health support. In particular, the centrepiece of that Budget announcement was the access and choice programme in primary care enabling access for New Zealanders with mild to moderate mental health challenges to access services for free, a programme worth $455 million over those five years. Of course, we can't roll those things out on day one because there are no workforces sufficient to do that on day one, because workers haven't been trained under previous Governments. Of course, nurses take a number of years to train, and certainly before they become senior nurses, we've got years and years to wait. We've got psychiatrists that take, you know, 10 years to train and the like. So it's not a case that you could just overnight suddenly magic up all of these people that the previous Government had neglected to train for this need. | |
| However, we're not accepting that as a limitation, and we are determined to train up workforces to take advantage of those who have experiences of mental illness, who want to support alongside, to build on the skills of those who are already health practitioners like nurses and other health experts, and give them additional training so that they can be a part of providing those services with a short course. That is the kind of strategy that we're putting in place, and we are rolling out a new workforce. We've just announced over the recent period that 100 new practices will be brought into that scheme over the next year. That, of course, extends coverage to 1.5 million New Zealanders for that free access scheme. Now, that is, of course, the first steps. We've got more to roll out in that five-year programme; that is taken for granted. | |
| But I do want to thank all of those who have been involved in that initial roll-out—the doctors, the nurses, the allied health workers—and also those with lived experience who have stood alongside others coming forward with those challenges. Together we can make a meaningful difference in terms of addressing the mental health need that has amassed in New Zealand while our services over many, many years have been left to languish. | |
| MATT DOOCEY (National—Waimakariri): Thank you very much, Madam Chair. Quite rightly, the Minister of Health outlined that the new front-line mental health service is, over four or five years, $455 million. Can I tell you what? The public would not expect that as of February this year—through written parliamentary questions—there has only been $3.2 million spent on that roll-out, out of the $455 million. How have we got in a position—and I hope the Minister will answer this—where out of the $455 million allocated—yes, over four or five years, a much needed front-line service that was announced with big fanfare—only $3.2 million has been spent? And then the Minister pulls out the card, as he did on Newshub Nation on Saturday, "Oh, the delays are because of the GP practices themselves or the workforce." | |
| So why am I—and I'm sure the Minister is as well—receiving several emails from DHB counsellors, New Zealand Association of Counsellors (NZAC) accredited? The last one I got today. She's an NZAC-accredited DHB primary care counsellor who works in the Nelson DHB, who has been told by her DHB that there is no funding available to respond to the growing number of referrals due to mental health and COVID-19 and the upcoming economic downturn. So I'd like to ask the Minister: why does he say there is no workforce when we have 3,000 counsellors who were ready to go, and they've been told there's no funding? Yet the Minister is saying that, in fact, this has been stalled by no available workforce. It doesn't add up. Only $3.2 million spent to date. We have a workforce that is there ready to go. | |
| What I'd like to do today is call on the Minister—like the last former National Government did post-earthquakes, with Ministers like the Hon Anne Tolley, who announced when she was a Minister for the Ministry of Social Development 50,000 free counselling sessions that were accessed through GPs for the many Cantabrians that were suffering from the Christchurch earthquakes. I think the Minister should be announcing a policy like that for New Zealanders who are suffering because of COVID-19. | |
| Hon Dr DAVID CLARK (Minister of Health): I'll try and keep this contribution short, but I acknowledge that the member's figures are out of date. Of course, there are thousands of counselling sessions that have already been offered under the programme of access and choice, and, of course, something I've failed to mention so far in the debate, the 1737 number, which has really ramped up during this time to ensure that while people are under lockdown, they can access telehealth services to support them if they're facing challenges. So I want to just put on record, of course, that the programme will continue to roll out. We will continue to build and access the workforces, but we're starting from a situation where the need had grown quite dramatically over the most recent decade and the services had grown by roughly half the growth in need. | |
| DAVID SEYMOUR (Leader—ACT): I was under the impression that the committee was only going to sit until 5.15, but I'm pleased to see there's always time for more democracy. | |
| Hon Andrew Little: We hadn't heard from that member yet—of course we had to hold on. | |
| DAVID SEYMOUR: Well, thank you very much, Andrew Little, for your incomprehensible interjection there. One should try to open one's mouth fully to let the words get out completely. | |
| I wanted to address the very serious topic of the structure of the healthcare system, because it seems to me—in fact, it seemed for quite some time—that it is nonsensical for such a small population to have so many DHBs and for the DHBs to play the dual role of being a purchaser of services and a provider of services, and the conflict of interest that that often leads to has led to much frustration on would-be contractors and also to, I believe, inefficiency in the delivery of healthcare for patients. | |
| What this recent COVID-19 crisis has done is that it has brought a lot of the inefficiency and the chaos that many people have known about for a long time to centre stage, to the first item on the 6 o'clock news. I'll just give a simple example. That is the question of how much personal protective equipment (PPE) is available in New Zealand, where is it, and what are the criteria for people accessing it? For about 3½ weeks, nobody anywhere could answer those basic questions. Now, that's not a criticism of the Minister—I don't think it would've mattered who was in charge. The simple fact is that no matter who was elected to be in charge of this system, no one had the information. | |
| I would counteract or compare that with, for example, The Warehouse Group. I guarantee you, if you went and asked The Warehouse Group, they could tell you where every single Tonka toy in their distribution system was right now, and in 10 minutes' time, and this time tomorrow. Yet the Ministry of Health wasn't able to track vital personal protective equipment in the midst of a crisis, and it's difficult to avoid the suspicion that the structure of the healthcare system, of having so many DHBs that are sort of almost feudal overlords of their particular patch, each making their own rules, each with their own protocols, each with their own personalities—it's difficult to avoid the suspicion that that didn't have something to do with the fact that when it really mattered, for a long period of time, confusion reigned up and down the country about where the PPE was, who could get it, who was allowed to wear it. | |
| We had the Prime Minister and the Director-General of Health saying, "Hey, look, if you need to wear it, you can, and there's lot's available." Then I had constituents in the Epsom electorate who told me that they were threatened by their DHB employer because there wasn't enough to go around, and even if they wore their own personally purchased PPE, they would be setting a bad example that would put pressure on the DHB to have to give away what they had. That's a snapshot of our healthcare system through the lens of one, you would think, fairly simple and vital thing, and that is PPE, through a crisis. | |
| So the big question that I want to ask the Minister is: what is his vision for the structure of the healthcare system? But I also want to turn quickly to the provision—or production, rather—of PPE, because I've had people, members of the public, come and say to me that the Government contracts the factory in Whanganui to stockpile materials on the understanding that if there's a pandemic, then the manufacturing will happen and the PPE will be produced fresh. I wonder if the Minister could confirm that that's roughly the arrangement. | |
| Second of all, they said that the Government didn't put in the request for manufacturing to begin until well into March, when it was obvious from February that this might just be the time that we needed that kind of contract, and that the reason we've had such a shortage has been, in part, because the Government didn't properly utilise its contract for on-demand manufacturing. I wonder if the Minister could confirm if it's true that it has such an arrangement and when it actually invoked the clause that required the manufacturing to occur. Thank you, Madam Chair. | |
| Hon Dr DAVID CLARK (Minister of Health): Very quick response to those issues. I think I've heard it all. I'm equal measure, I think, bewildered and delighted to hear the member David Seymour saying that a distributed system run by private enterprise is inadequate, that we need a more centralised system with a nationalised process for the distribution of goods. I do pledge in response to continue to grow and strengthen a healthcare system with a more centralised, directive approach to ensure that New Zealanders get the services that they need. | |
| David Seymour: Well, Madam Chair—Madam Chair. | |
| CHAIRPERSON (Hon Anne Tolley): Just quickly. | |
| DAVID SEYMOUR (Leader—ACT): It will be fairly quick. What a sophistry, and it worries me that someone could be the Minister of Health with such a shallow view of public policy. The question is, if the Government is going to—[Interruption] A hell of a cyclist, though. If the Government is going to be responsible for providing a service, then there are legitimate questions that occur equally in private organisations as in public organisations of what the correct economy of scale and structure is. So this is not a market versus Government question; it's a question of getting your organisation done right, regardless of who owns you. Yes, there should be a lot more private provision of healthcare— | |
| Hon Julie Anne Genter: Working very well in the United States, David! | |
| DAVID SEYMOUR: —but isn't it incredible just to see how bad the Minister of Health's grasp is. | |
| Madam Chair, I was going to end my contribution but I just heard some moronic comments from Julie Anne Genter. The irony is that her comments— | |
| Kiritapu Allan: You may as well wrap it up. | |
| DAVID SEYMOUR: —and Kiritapu Allan very kindly said, "That's all we ever hear." The crazy thing is that the moronic comments were made about the United States, and Julie Anne Genter seems to think that the problems in the United States' healthcare system are caused by the fact that it's private. Well, she might like to know that Medicaid and Medicare, two Federal Government programmes in the United States, spend far more per capita than New Zealand spends on healthcare through its public system. That's the first thing—the first fallacy. And then she might like to know that distortions introduced by the Federal Government, through its tax code, have ensured that you don't buy your insurance directly. Your insurer does it—your employer does it, through a tax deduction, to your insurer, who pays your doctor, who treats you. | |
| So by Federal Government decree, which came out of World War II, the United States has some of the worst incentives and structure in its healthcare system that you could possibly imagine. Nobody has the information; no one has the incentives. It's shameful that I have to stand up here and correct Julie Anne Genter about the most basic facts of the American healthcare system, but I'm happy to do it. | |
| Hon Andrew Little: What about debating the New Zealand system? | |
| DAVID SEYMOUR: We're getting asked by Andrew Little: why don't I talk about the New Zealand system? I did, and then I heard this barracking from Julie Anne Genter and I felt compelled to answer it. | |
| So there are two good reasons why— | |
| CHAIRPERSON (Hon Anne Tolley): Can we possibly relate that to the annual reviews? | |
| DAVID SEYMOUR: It was as related to the annual reviews, Madam Chair, as Julie Anne Genter's barracking was. She set the tone, and maybe the lesson is we shouldn't follow the example of Julie Anne Genter. With that, Madam Chair, which was the point I was really trying to make, I'll leave you to it. | |
| KIRITAPU ALLAN (Assistant Whip—Labour): I move, That the committee report progress. | |
| Motion agreed to. | |
| House resumed. | |
| Progress reported. | |
| Report adopted. | |
| SITTINGS OF THE HOUSE | |
| KIRITAPU ALLAN (Assistant Whip—Labour): I seek leave for the House to adjourn early and resume tomorrow at 2 p.m. | |
| SPEAKER: Is anyone foolish enough to object to that? No. The House is agreed. | |
| The House adjourned at 5.34 p.m. | |